TXN - Texon Petroleum

Today in general oil shares have taken a slow dive with some exception.

However with such a strong potential for TXN I fail to understand why it is continuously trying to reach the SPP price 68 cents

does the slide in price is justifying the sales by the directors ?


Until 1.36 PM from ASX on 4 May 2011

TXN 0.695 -0.010 0.695 0.700 0.690 0.720 0.690 562,621
03 May 2011 0.705 [B]-4.08%[/B] 0.740 0.700 546,369
02 May 2011 0.735 -2.65% 0.760 0.720 587,534
29 Apr 2011 0.755 [B]-4.43% [/B] 0.795 0.745 1,514,080
28 Apr 2011 0.790 0.64% 0.805 0.785 495,490
27 Apr 2011 0.785 -4.27% 0.835 0.785 589,767


DYOR

TXN is sliding down with the market. Over the last week my shares have been going down 3-4% a day on alot of occasions.

The SPP price was 65 cents by the way, not 68. I'm keen to buy a few more so I wouldn't mind these prices holding for a few more days.

What I really like about TXN is the quick monetization which the company will experience through the large working interest EFS wells.

Obviously the downside to that is the large capital expenditure, but TXN is very well funded at the moment and the upside to the highest working interest is much greater than the downside!

txn sp is looking healthier today.
can someone explain to me the point of a bot? i notice that it picks up 1 share here and there all the time.. why do they do that?

geelongfan said:

txn sp is looking healthier today.
can someone explain to me the point of a bot? i notice that it picks up 1 share here and there all the time.. why do they do that?

Click to expand...

I like to think of them as can collectors.

http://www.abc.net.au/news/stories/2011/05/09/3211836.htm
the linked news is probably true for all petrol based shares.

Those in coal seam will be also affected.

However it is strange the quietness in TXN thread for a while.

Gone are the days the high acrage, high eagle stories were obvious in this thread.

What is happening really in TXN ?

Share price slightly rose to rise about 80 cents.

Let us see how low petrol price affecting TXN and other oil shares

Cheers

Miner,

The blistering performance of the A$ must have some affect on prices for a commodity priced in USD anyway.

With annual global consumption running at about 3.1bn bbls, and rising, there is only one direction for the oil price in reality. The companies like TXN operating in the shales benefit from very low exploration risk, low costs of getting the product to processing plant and distribution centres and relatively low drilling costs but that is far from the norm. Exploration offshore, in the Arctic, off the Falklands etc is hugely expensive and that requires a high oil price to make it commercially viable. If the oil price collapses, it will be short lived because, as we saw a couple of years ago, capital budgets are slashed. That would change the view of supply/demand balance going out 3 - 5 years and the futures might well respond.

In the UK, if you strip out the duties, a litre of petrol is cheaper than a litre of branded bottled water. There is plenty of room for upward price adjustment.

Perhaps ABC news should suggest to car owners that they can hedge their tank filling costs by investing in TXN...every increase in the oil price would then bring a smile to their faces.

Esty

That's my strategy. When I fill up the truck I wish gas was 8 dollars a gallon instead of 4. lol.......... Just tell people life's about perspective. It all depends on which side of the pipeline you're on.

estseon said:

Miner,

The blistering performance of the A$ must have some affect on prices for a commodity priced in USD anyway.

Perhaps ABC news should suggest to car owners that they can hedge their tank filling costs by investing in TXN...every increase in the oil price would then bring a smile to their faces.

Click to expand...

thanks Esteon for your very thought provoking thoughts on TXN, oil price and hedging suggestion.

condog

i think the issues in karnes are really on the ability for the region to cope with the massive progress all operators have there.. the sugarkane is a very lucrative play, conoco and tcei put forward 1300 acre spacing to secure leases, but its a real battle for the operators to hold acreages by production there. many are losing acreages and topleasing is always happening. there are many many operators in the county now, and a massive shortage of everything needed to make it all happen..

my views on the karnes dewitt region is that its unable to deal with the capacity in terms of pipelines and we see a lot of operators choking back the wells just to hold the acreages

my discussions with a few major holders in aut just recently has brought some confidence that hilcorp may perform a miracle and hold the acreages that aut have a % WI in.. but i am sceptical

the efs play is really a nightmare for some operators due to the leasing on such small time constraints, i was on one ranch and conoco had just paid $1 mill for not drilling on time, they had 5 well to drill on the ranch and only one completed, and the delays for rig availability even for conoco is costly, these are not small operators, conoco nad amny of the larger players are suffering severe problems and bottlenecks..

i dont think anyone, including myself, could have anticipated how hard it would be, and in the same context how amazing it is to be in the efs.

be cautious in the sugarkane i think. its a tough place to hold acreages and very high leasing prices are the penalty should you fail to hold by production. i have no doubt hilcorp is aware of it, but sometimes things are going to be out of your control on the oil fields..

this play is a monster..

looking around there are demands for cres to go to other plays, and although the landrigs have the offshore guys on them to fill i nthe missing gap of experience horizontal drillers, the other plays, shale plays, are demanding crews away from the sugarkane.. and offshore drilling will see a huge vacuum in terms of experienced crews.

its an interesting play, with lots of plots and twists,.. things change day to day week to week.

there are factors to look out for, pipelines are in many cases years away still to deal with capacity.

cheers


http://www.einnews.com/247pr/212393

Agent you need to listen to who and what counts.

AUT have stated several times in recent announcments that they are on and ahead of targets to retain leases. So much so that they are going to be playing with reduced well spacing. They have 4 full time drill rigs, 2 full time frac crews, they have secured a part time 5th rig and 3rd frac crew.

That speaks volumes more then rumours. I appreciate youve been on the ground talking to people in the know. But the evidence forthcoming and the results rolling in tell a far different story to the rumours and inuendo.

It is infact operators like TXN that are having trouble with delays, not AUT.

So far Hilcrop and AUT have had minimal delays and they have done a brilliant job with strategic preparations for both well construction and flows to sales.

condog

i dont need to do anything you say i need to do, the forum is about discussion not ordering people to do things.

there are not many small to mid cap oilers doing full field development, its a very expensive model to run. i can see that in many years time there will be payback for aut, but the staggering costs to run a project to completion is something many have considered in their risk profile.

i think the texon small cap have an interest in the shale play, and it is to maximise shareholder returns on a prospect, and i feel when your an operator like texon is they have the ability to hold out acreages and maximise return and control the costs all along.. i really like the texon model and have invested accordingly. i see far fewer reasons to dilute in texon as opposed to the massive dilutions that you see in the farm in scenario, the majority of the sugarkane farminees were not looking to go full field but hoping to not dilute and get maximum return to shareholders through proving up the play.. if your appetite is to invest for full field as a farm in partner then so be it.. hilcorp is an exceptional operator, i have met a few of their associated oil field personnel. but i think ultimately hilcorp is a company looking after its interests first and foremost. i expect that to be paramount in all their decisions on which part of the oil field to exploit for near term and long term exploration and development. and which wells will be experimental wells and which wells wont be. its a big project to bring on stream, needs very clever people to stay with you and run the operations.. things change day to day and things change week to week in texas.. all things have dramatic effects on how projects move and how resources are utilised in the oil industry.

hope that helps a little

texon is expanding as an operator, its looking for low cost high gain shallow oil targets, wilcox is on the menu it seems, in the mcmullen acreages and in the collangatta and scarborough targets



just keeping an eye on the region a little

apart from those staggering wilcox wells real close by to the
texon acreages in mcmullen, its noteworthy also that
enerquest has a quiet little austin chalk vertical experiment
going on quietly near by for the past 3 years or so

interesting little well imho

Straight from AUT latest presentation

Early mover advantage of highly contiguous
acreage is excellent for development
 Well locations are being drilled in order of
lease expiry – leases currently expire
uniformly through to 2014
 The proposed drilling schedule will result in
all leases being “held by production” by
mid 2012 – well ahead of expiries

Click to expand...

I tend to trust Jon Stewart and company presentationsover rumour.

2 years ahead of lease expireys. What drugs are the people on you are talking to that think AUT will not meet lease expireies. I want some of it. If we could bottle it we could probably make Julia gillard look like a good Prime Minister, and Tony Abbot a good alternative. LOL

Extract from Commsec ; 18 buyers and 61 sellers. About five times more units available for sale.

The way TXN has been moving, I am waiting for the price to go down to SPP price 65 cents for another buying opportunity.

Thankfully for the first time I could smell the fish with TXN and sold out at average 82 cents.

I still believe TXN is a good scrip with fundamentals right excepting the current price is not right (for me). DYOR



Share Quote as at 6:51 PM Sydney Time, Saturday, 14 May 2011
TEXON PETROLEUM LTD FPO

Code Bid Offer Last Change* % Change* Open High Low Volume Trades Value News
TXN 0.695 0.720 0.700 -0.005 -.71 0.705 0.710 0.690 286,828 69 200,091

Buy | Sell | Add to Watchlist | Research | Chart | Course of Sales

18 buyers for 336,770 units 61 sellers for 1,532,909 units

Miner said:

thanks Esteon for your very thought provoking thoughts on TXN, oil price and hedging suggestion.

Click to expand...

It was in response to yours and the news item that you flagged.

As to the likely price performance and the relevance of the weighting of buy and sell orders, we will have to wait and see as the operations news is progressively released. As the potential is quite substantial, 5c saved on the purchase price should make little difference. If I did not believe in the potential, I'd not purchase it at 65c or 55c for that matter.

Still, everyone to his own view.

As regards the general point on farm-ins, without knowing the contractual terms of the farm-in agreement, which might be specific about the strategy for field development, it is reckless to make any presumptions about how free the operator is to act.

TXN may be happy and able to proceed (pretty much) alone (except in the case of the Pearall), but it is substantially bigger than was AUT at the time of the farm-out to Hilcorp. AUT was less than half the size and had twice the acreage holding with leases getting ever closer to expiry.

from rbs

courtesy riche

Double Blessed ST Buy

The Daily Edge

Texon Petroleum Limited (TXN)

After posting a record high of $0.97 and strongly overbought momentum readings in mid April 2011 a pull back to unwind the overbought conditions took place. The price retraced to its static and dynamic support of $0.65, which is likely to hold once again. The RSI indicator completed a double bottom pattern, suggesting that a short-term rally is likely to unfold. A small bullish divergence between the price and the stochastic indicator has formed throughout May 2011, pointing to a short-term rise. On Thursday the price broke above the down trend line from the April 2011 high, showing that the down swing is losing momentum and is likely to reverse. Given the proximity to support and bullish prognosis from momentum indicators, we recommend buying around current price levels. The first potential upside price target is towards $0.90, however higher price levels are achievable over time.

Concerning declines out on EFS#2
it had IP of 1105 and 30 day average of 551boepd

When you consider the first 10 days or so would have been up round the 1000 mark, the last few days of the moneht must be round 300boep possibly up to 400 max imo.
This again is a concern. Hopefully just like Tyler the 60days will be better.

condog said:

Concerning declines out on EFS#2
it had IP of 1105 and 30 day average of 551boepd

When you consider the first 10 days or so would have been up round the 1000 mark, the last few days of the moneht must be round 300boep possibly up to 400 max imo.
This again is a concern. Hopefully just like Tyler the 60days will be better.

Click to expand...

Offhand, what were Tyler's 30 day and 60 day figures? Since it's in the same area, we could estimate a similar outcome after 60 days to Teal.

That's also assuming there was no day of interruption.

bbker said:

Offhand, what were Tyler's 30 day and 60 day figures? Since it's in the same area, we could estimate a similar outcome after 60 days to Teal.

That's also assuming there was no day of interruption.

Click to expand...

IP 1200 boepd

30 day 655 boepd

60 day 632 boepd

Im sure there where interuptions, but the maths averages dont lie. Lets hope 60 days are in excess of 500boepd.

One thing I do like about Texon as an operator is that they appear to consistently report true and honest averages. Not a hyped up 48 hour "take this number and run with it" average like others have been known to do in this play.

If that were my well I'd dance a jig @ 500-1000 bopd with today's prices. They drilled it, fracced it and brought it in successfully. You know how many people I've seen who can't even do that ? lol........

I think market (or some of the operators) already knew about one month delay of rig arrival and discounted the price.

Hopefully TXN will have some higher Mach Number to lift the sinking plane upwards from June.

The silver line is today's news has hardly impacted the SP much and it closed at 69 cents. If it was a surprise then the SP would have gone much lower and volume would have been significant too . Who knows .

Good luck holders and I will reenter when get more confidence on the movement.