TXN - Texon Petroleum

[Agentm]

After completing this well in the next few days, the rig will move to drill Texon’s first Wilcox oil test which is expected to spud in about a week.

illuka has 38 feet of pay..

well moves to teal pad and drills away in the coming week

flow rates wont be far off for the 3rd EFS well

plenty of news flowing right now

 

[Agentm]

obviously missed by txn holders here, but a very outstanding drill result was announced yesterday

Third Eagle Ford Well 1,488 bopd

Texon announces that its third Eagle Ford well (Tyler Ranch EFS #2H) has tested oil and gas at the rates of 1,488 bopd and 700 mcfgpd (combined 1,605 boepd (6)) through a 16/64” choke at a flowing tubing pressure of 3,000 psi.

The well is located just to the north of the Company’s first Eagle Ford Well (Tyler Ranch EFS #1H) - please refer to the attached map.

The test rate from the third well is more than the 1,200 bopd initial rate from Texon’s first EF well through the same sized choke. The third well also has a higher flowing pressure which indicates the well may perform better than the first well.

As the ownership of our first and third EF wells is the same, the third well is already connected for oil and gas production through the EFS #1 production facilities.
Texon has an 82% Working Interest (61.6% Nett Revenue Interest) in the Tyler Ranch EFS #2H well.

Texon’s CEO, David Mason said “this is a very good result for the Company. The EFS #3 well is expected to add new Proved, Probable and Possible locations to the Company’s inventory of firm Eagle Ford well locations and highlights the quality of Texon’s Eagle Ford acreage.”


texons sp has risen from .36 on the 9th august to a .61 close on the 31st of august

some good momentum to come and value perhaps as the well result and recent reserves upgrade sink in..

wilcox well will commence in the next few days.. watch out for that one, its very hard to see how that well would not flow given the readings in the teal ranch efs 1h.. will be watching out for a good result there with a little bit of good fortune..

good luck to all holders

 

[Agentm]

texon put a smaller choke size in and gets a massive spike and an increase in the production


Third Eagle Ford Well

Production Information

On 31st August, Texon announced that its third Eagle Ford well (Tyler Ranch EFS #2H) had flowed at the rates of 1,488 bopd and 700 mcfgpd (combined 1,605 boepd (6)) at a pressure of 3,000 psi through a 16/64' choke.

The well has been choked back, which typically results in a reduction in production, however over the past 24 hours on a reduced 9/64' choke at and a pressure of 3,700 psi, the well has flowed at a rate of 1,786 bopd with 322 mcfgpd - an overall rate of 1,840 boepd.


Dave Mason (CEO) "This is a pleasing result and continues to highlight the value of our Eagle Ford Shale acreage. Our next production announcement on this well will be the flow rate for the first 30 days in a few weeks time."

Please refer to our earlier announcement dated 31 August and the location of the well is shown on the attached map.

Fraccing operations and testing of the Companys fourth Eagle Ford well are scheduled to begin in the last week in September.

 

[AngusSmart]

30 & 60 day rates will get me excited, going from previous reports from texon,

however.. things are looking alot better this time..

probably should have highlighted that the fraccing of the 4th is pushed forward too

 

[Agentm]

wilcox is demonstrating potential

i see wilcox activity all around the acres, with 1 mill bo from sophia, a few thousand feet from the texon leases

this from swift a few days ago

 

[Agentm]

this is how the wilcox looks in the region

primarily the play of the awp field was olmos sands and
the wilcox

then the efs more recently

but the wilcox fields there have been around for a while,
and imho what texon and nutech are alluding to is that the
wilcox is oil saturated and very soon a production run will
be commenced on the hoskin vertical

i am posting up another regional map, this time the
highlighted red circled zones are the various wilcox wells
and fields

next to them are numbers, which correspond to the leases
production (some are joined)

colour scheme on wells is explained in on the right

 

[boff]

Agentm,
Just wanted to thank you for your continued news flow and analysis - it's appreciated. I've sold out of a lot of stocks over the last few weeks (need dry powder), including MAD (another Texas play) but I believe that even if we have a continued slump in oil price that TXN can still move a lot higher over the next 6 months given the potential of the Wilcox.

 

[Agentm]

Agentm,
Just wanted to thank you for your continued news flow and analysis - it's appreciated. I've sold out of a lot of stocks over the last few weeks (need dry powder), including MAD (another Texas play) but I believe that even if we have a continued slump in oil price that TXN can still move a lot higher over the next 6 months given the potential of the Wilcox.

thanks boff..

there are the usual suspects whom have no understanding of the efs, awp olmos or awp wilcox.. and blast anything i post, but i still dont see them posting any research to back up their allegations..

i research the efs, the olmos and the wilcox in the awp field, and along with texon, i see the results coming in that keep me convinced that there is oil in the wilcox, olmos and efs that is very very valuable, far more than the market is prepared to price texon today..



we are all convinced texon will be monetising the efs asset

once the 4th efs well is flowing and possibly a further well will be drilled early next year..

many holders of the share i talk to are convinced that texon would be moving on that even at this moment, and that it could be a work in progress. pure speculation, but its on their minds

i am convinced texon, and more to the point, john armstrong has made it perfectly clear that they are absolutely going to achieve the best value for the efs they can for the shareholders. i know of no one that is objecting to it..

if you do the rough maths on the latest efs acreage moves in the past month alone, you will see the worse case scenario on the price per acre would make things very interesting for texon should things happen today and texons sp remained as it is..

this from riche on another forum

Interesting to see RBS grabbing hold of the chariman's comments in the AGM about possibly realising value with what I can only assume would be a land transaction. (I've been watching the share registry and there is no evidence of a hostile attempt and a freindly would require more that a 30% premium to the current market price or RBS would torpedo it = nothing left but a land sale or farm in). I've seen them refer to John's comments in a number of recent communications.

I've been pondering about what the price would/could be:

With 4 producing horizontal wells (assuming #4 comes on line next week...) the cost of each is say $8.5m and an EUR of 425-475,000 boe - I'd have thought the minimum you'd accept for them is say $10.5m each? = $42m

Then the rest of the EFS acerage = 5900 - 320 (4x80acres for each of the wells above) = 5,580.
Then given that recent transactions have been trending towards $24k/a (and regardless of the fact that these are mostly PUD which I'd have thought would command a higher premium) =5,580 x $24,000= $134m

total = $134m + $42m = $176m
Tax would be interesting = usually 30% but there are a rack of tax losses in the company that may be able to offset some of the gain. Don't have enough info on that so I'll leave it out for this calc:

With 245m shares thats just under $0.72 per share. And then we've still got wilcox et al + seitel data - oh and $25m odd in the bank!

Crazy compared to the current share price. If the company does pull off a transaction the rerating will be fun.

Obviously nothing but my ponderings ... just thinking out loud.


what riche points out is all very interesting indeed.. texon is around the .47 mark right now, so a sale of the efs on just 24k an acre means cash alone to the value of .72 per share!!! wow

there is conjecture that given the amount of wells in place, that texons field development of those efs acres may be able to achieve value far north of the 24k per acre riche discusses

i hear a lot from my texan friends that there are all sorts of different types of players looking at the efs, from various types of financed investment platforms and groups, to mid tiered oilers expanding their boundaries and of course we see the majors soaking up more acres, and some heavy hitters have been arriving on the efs in the past few years..

makes for some intriguing days ahead, could be weeks, could be months, who knows!!!

my view on texon is that i could never sell a single share now.. i absolutely believe that the value in the share is not being seen. with risk being so heavy a factor in the markets right now, texon is really standing out and trading as a highly speculative share still today despite its amazing recent results.

i have full confidence in the board, and i think texon will deliver upside for me.. plenty out there are selling the share down bigtime and we know the top 50 are only adding.. except 1 holder.. interesting that the top 50 are not abandoning this puppy with a meltdown out there..

so how will it pan out for the investors? imho texon can deliver some pretty healthy value in the very near future, and i am very keen to see how it all ends..

best of luck to the holders on the share..

cheers

 

[PinguPingu]

Indeed, +1 gratitude for the extensive posts. I am still a holder after originally buying in the 70c's but still hold because I think this company is still great and is holding it's own in a volatile, negative market. The third well result looks great and I'm quite miffed at having any capital to buy back in again when this was in the 40c's.

 

[alexc2005]

Indeed, +1 gratitude for the extensive posts. I am still a holder after originally buying in the 70c's but still hold because I think this company is still great and is holding it's own in a volatile, negative market. The third well result looks great and I'm quite miffed at having any capital to buy back in again when this was in the 40c's.

I used the crazy market sentiment to average my buy price down.

Albeit i only brought it down to about 60c, it's better than the 70c odd price i had before .

If you have faith in the company, silly sell offs are a great opportunity to average down. I'm pissed i didn't grab some AUT at 2.20, SUCH a recovery it has made!

 

[Agentm]

30,000 boe for 30 days

very interesting figures, when you have dilworth being the bets well so far at 23,000

dilworth was a schlumberger frac, very interesting that they achieved a 37% increase in the production from their slick water fracs in the same rock.

texon has achieved a 50% increase from the first well and 30% more than the dilworth flowed at its peak..

the workover will arrive on the wilcox well shortly and the 4th efs well is flowing to sales now, results in a week

3000 bopde is what they could be doing in october-november...

 

[mrthong]

entered at .48, exit at .62 now its .68

 

[PinguPingu]

This is the exact situation that happened the first time I bought TXN. :flush:


Watch it start sky-rocketing every time I want to buy in (as is now) - but I waited till it hit 98c till it dropped to 70's, bought, but only to see it dropper further in the coming months. Tis the way.

 

[Agentm]

just think what 5900 times ~ $60k is

thats the upside potential cash bonanza this share can achieve short term

i am only accumulating myself..

nothing wrong with making a profit from your entry point,, well done imho

 

[Agentm]

spectacular result again for texon!!

Fourth Eagle Ford Well

1,400 bopd

Texon announces that its fourth Eagle Ford well (Hoskins EFS #1H) has flowed oil and gas at the rates of 1,408 bopd and 922 mcfgpd (combined 1,562 boepd (6)) at a pressure of 3,050 psi through a 18/64” choke. This is a similar flow rate and pressure to the Company’s #3 Eagle Ford well, but on a larger choke which is encouraging.

The Initial Production results from the Company’s four (4) Eagle Ford wells are:

The locations of the wells on Texon’s 5,900 WI acres of Eagle Ford leases are shown on the attached map.

Texon has a 92.6% average Working Interest in approximately 6,387 gross Eagle Ford acres (5,900 acres to Texon’s WI) in these lease areas.

The Company now has four (4) producing Eagle Ford wells each at a carefully selected location geographically spread across our leases to maximize reserves and information about Eagle Ford productivity.

Our Eagle Ford #1 (15 stages) and Eagle Ford #3 (17 stages) wells are on Lease Area A and the results of these wells, together with successful nearby Eagle Ford wells by other operators, confirm the presence of highly productive Eagle Ford throughout this area.


Eagle Ford wells #2 and #4 are on Area B. In the second well, three (3) of the 15 stages did not frac properly with a reduction in productivity as evidenced by the production for the first 30 days from this well.

Wells #1 and #3 with more contributing frac stages have performed better than well #2 and they provide a sound basis for planning multi-stage layouts in future Eagle Ford wells on Texon’s leases. New Eagle Ford wells with more stages in the vicinity of #2 are expected to perform more in line with the #1 and #3 results.

Area C is part way between our #3 well (1,488 bopd) and an
Eagle Ford well which had an initial rate of 2,200 bopd.
When Eagle Ford wells are drilled in Area D to the South East of our #4 well, it is expected that they will produce in line with our #1, #3, and #4 wells.

On the basis of 80 acres per well, Texon’s leases have the potential for a further 75 Eagle Ford wells.

Texon’s CEO, Mr David Mason said “an initial production rate of 1,562 boepd from our #4 well is very good for the Company, supporting the likelihood that high productivity Eagle Ford occurs across the Company’s McMullen County leases”.

Having established four (4) successful Eagle Ford wells, which in turn are indicative that further Eagle Ford wells on Texon’s leases are likely to have productivity similar to and possibly better than the average of the above four (4) wells, the Board now plans to assess our Eagle Ford project to consider how to optimize value for the Company.

 

[Kremmen]

The new Chairman and CEO of TXN was Senior VP for Exploration for Petrohawk 2006-2008. Petrohawk was very successful and managed to get itself taken over recently at a significant premium by BHP.

Also, Mr Foss gets a total of 7 million options. 70c exercise, but only if the SP is over $1.05. He's not getting much salary (by CEO standards) unless he achieves that.

 

[Mofra]

The new Chairman and CEO of TXN was Senior VP for Exploration for Petrohawk 2006-2008. Petrohawk was very successful and managed to get itself taken over recently at a significant premium by BHP.

Also, Mr Foss gets a total of 7 million options. 70c exercise, but only if the SP is over $1.05. He's not getting much salary (by CEO standards) unless he achieves that.

Out of interest, what's the expiry date?
I've held a few other stocks with similar targets - they tend to all hit the price target or get very close

 

[PinguPingu]

Tranche I - one million unlisted options exercisable at 70 cents per option for a term of five (5) years, but only if the volume weighted average price (VWAP) of the Company's shares on the ASX is 150% of the exercise price for a period of 20 consecutive trading days (Price Target).
If there is a change of control of the Company or if the Company disposes of more than 50% of its assets then the Tranche 1 options may be exercised without the Price Target being achieved.
Unless already exercised, the Tranche I options will terminate if Mr Foss commits a material breach of his employment contract, the Company terminates Mr Foss' employment for serious misconduct or bankruptcy or if Mr Foss elects to terminate his employment with the Company within six months of 1 December 2011.


Tranche 2 - six million unlisted options exercisable at 70 cents per option between 1 September 2012 and the date that is five (5) years after 1 December 2011, but only if the Price Target is achieved.

- CEO Remuneration 30/11/2011

 

[Ramblin Round]

From what I see Texon has set the stage to see much growth and continued success in the Texas EFS industry. Hopefully more action items will come from the new CEO than from when Mason was in charge. I had always said that they are/were far more reserved than need be in such an agressive market here.

Just my $0.02

 

[philly]

From what I see Texon has set the stage to see much growth and continued success in the Texas EFS industry. Hopefully more action items will come from the new CEO than from when Mason was in charge. I had always said that they are/were far more reserved than need be in such an agressive market here.

Just my $0.02

This was posted on 8 December 2011 and no one has added anything since.
The SP hasn't moved
From the Dec 2011 Q we know that:
Eagle Ford is producing from 4 wells
there are no bidders for the Leighton/Olmos field
It seems that the new CEO IS treading water if he doesn't get a move on then his options exercisable when the SP is $1 may not be worth the paper they are printed on.
I expect more from an Eagle Ford explorer and producer