TXN - Texon Petroleum

tech/a said:

Like this from a tech view

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most are seeing a near term $1 rating from any of the research notes i have viewed

philly said:

Oh Agentm, don't forget me, I hold as well
I agree that 2011 will be a big year.
As estseon reminded me recently the "forgotten" Olmos are providing a steady income stream. TXN has already planned 9 wells to be drilled in the Olmos field and the 2 EFS wells are to be fracced in March. There is also potential for more wells as there many other prospects in both zones. Hopefully the SP will surge ahead.

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hey philly, olmos is producing at very healthy rates, and january should see more olmos wells, they are quick verticals, they cost about $1mill and give great returns with oil and gas, the more they put in the greater the reserves attributed to TXN is.

on the eagleford shale wells comment,, the first EFS well is fracced and connected to sales, the tyler ranch 1h.. so immediate and very healthy income right away..

Texon has a 82% Working Interest (61.6% net revenue interest) in the Tyler Ranch EFS #1H well.

61% NRI on 1267 bopd ip.. is exceptional!!!

"Texon advises that its first Eagle Ford well, Tyler Ranch EFS #1H, has flowed 1,267 boepd(1) representing 1,202 bpd of light sweet crude oil and 782 mcfpd of gas with a flowing tubing pressure of 2610 psi through a 16/64” choke. Some of the frac fluid is also still being recovered.
The gas has a high heating value of approximately 1,250 mmbtu per thousand cubic feet(2) so at a Henry Hub gas price of US$4.00/mmbtu, the Company would receive US$6.40/mcf.
Texon’s working interest in the well is 82%. Texon’s beneficial interest (NRI) in the production is 61.6% or some 780 boepd of the above production."

the second well, the teal ranch 1h, which is called something else by texon, is drilled and ready to frac in the coming 60 days.. march is slotted in.

texon can be considered an olmos sands and EFS oil producer right now..

under the radar for sure, but the upside of short term $1 and much much more to come..

quietly quietly...

cheers

Im holding too .. (probably at the highest entry price of anyone as well !) but I dont think it will matter soon ... (Continuing to buy TXN EKA & SEA with any spare cash I get)..

adobee said:

Im holding too .. (probably at the highest entry price of anyone as well !) but I dont think it will matter soon ... (Continuing to buy TXN EKA & SEA with any spare cash I get)..

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great buying prices for all atm, but on thin volumes..

Hooley Dooley - 19,651 BOE, majority liquids

ASX RELEASE
17 January 2011
FIRST EAGLE FORD WELL
30 DAY RESULT
Texon advises that its first Eagle Ford Well, Tyler Ranch EFS #1H, has produced 19,651 boe (17,814 bo + 22,052 mcfg) over 30 days on a restricted choke. This represents an average daily oil equivalent rate of 655 boepd (594 bopd + 735 mcfgpd).
At the current Henry Hub gas price of about US$4.50/mmbtu, the Company receives approximately US$7.60/mcf for Eagle Ford gas due to its high heating value and including the value of the natural gas liquids.
Gas has been converted to barrels of oil equivalent (boe) on the basis of 12mcf of gas to 1boe. As a result each boe of gas has a sales value of some $90/boe in line with the value of a barrel of oil. Thus all of the above 19,651 boe produced in the first month have the same sales value as barrels of oil.
The Company’s share of oil and gas being produced from the well is now part of Texon’s revenue stream.
Texon’s working interest in the well is 82%. Texon’s beneficial interest (NRI) in the production is 61.6% or some 403 boepd of the above production.
Please refer to Texon’s website for announcements by the Company: www.texonpetroleum.com.au
Oil and gas futures prices (Source: NYMEX February 2011 contracts)
Oil: US$91.54/bbl
Gas: US$4.50/mmbtu (approx. US$6.3/mcf for all Texon gas- including US$7.60/mcf for Olmos and Eagle Ford gas)
-Ends-
For further information, please contact:
Dr John Armstrong Mr David Mason
Chairman Chief Executive Officer
Brisbane: 07 3211 1122 Brisbane: 07 3211 1122
Houston: +

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TXN advises that the 30 day production rates for its first EFS well Tyler Ranch was 19,651 boe this equates to an average of 655 boe per day

IMO that compares favourably with other EFS producers and represents a good little earner.

Also I believe that TXN is planning to drill 3 more Olmos wells this month.
IMHO this is all good news for TXN and for us holders

philly said:

TXN advises that the 30 day production rates for its first EFS well Tyler Ranch was 19,651 boe this equates to an average of 655 boe per day

IMO that compares favourably with other EFS producers and represents a good little earner.

Also I believe that TXN is planning to drill 3 more Olmos wells this month.
IMHO this is all good news for TXN and for us holders

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Hi philly i dont fully agree. I dont believe it is comparable.

Aut had the following.
Kennedy ip 1132 30 day 661 unrestricted
Rancho Grande 1170 30 day 1060 highly restricted
Easely ip 780 30 day 407 un restricted
Turnbull 1 893 30 day 720 restricted
Turnbull 2 526 30 day 378 restricted
Turnbull 3 629 30 day 901 restricted
May 1 634 30 day 567 restricted

On the other hand TXN had ip of 1200+ and 30 day average of 655. meaning its actual flows in the last few days are probably below 400boepd.

So whilst this is still economical and better then AZZ, i think some punters will definitely be hoping for much lower declines on thier other wells and thier 60 day declines.

Right now its still definitely economic.

condog said:

Hi philly i dont fully agree. I dont believe it is comparable.

Aut had the following.
Kennedy ip 1132 30 day 661 unrestricted
Rancho Grande 1170 30 day 1060 highly restricted
Easely ip 780 30 day 407 un restricted
Turnbull 1 893 30 day 720 restricted
Turnbull 2 526 30 day 378 restricted
Turnbull 3 629 30 day 901 restricted
May 1 634 30 day 567 restricted

On the other hand TXN had ip of 1200+ and 30 day average of 655. meaning its actual flows in the last few days are probably below 400boepd.

So whilst this is still economical and better then AZZ, i think some punters will definitely be hoping for much lower declines on thier other wells and thier 60 day declines.

Right now its still definitely economic.

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Hi Condog, you are a hard task master, lol. I accept what you say about AUT having better figures but its figures are way up there. I would think that any EFS producer would love to have AUT's figures. But I suppose that if I am going to compare producers then I have to look to and include the best. Whilst I would love TXN to be another AUT that may be unlikely but you never know. This is only the first EFS well for TXN and it has plenty of acreages and plenty more wells to drill. I am a happy holder

philly said:

Hi Condog, you are a hard task master, lol. I accept what you say about AUT having better figures but its figures are way up there. I would think that any EFS producer would love to have AUT's figures. But I suppose that if I am going to compare producers then I have to look to and include the best. Whilst I would love TXN to be another AUT that may be unlikely but you never know. This is only the first EFS well for TXN and it has plenty of acreages and plenty more wells to drill. I am a happy holder

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Then there is the ownership. It is better to have 80% of 400 than 10% of 3000. Then take into consideration the relative market cap.??? I'm happy to hold a fair number of TXN. I don't expect TXN to be another AUT but I can see the possibility that it could give the individual shareholders a better return for a dollar spent at todays prices.

philly said:

Hi Condog, you are a hard task master, lol. I accept what you say about AUT having better figures but its figures are way up there. I would think that any EFS producer would love to have AUT's figures. But I suppose that if I am going to compare producers then I have to look to and include the best. Whilst I would love TXN to be another AUT that may be unlikely but you never know. This is only the first EFS well for TXN and it has plenty of acreages and plenty more wells to drill. I am a happy holder

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What im eluding to is they had a fanstic ip of 1200+. They are running this thing on a restricted choke. Yet its decline is comparable to AUT's Kennedy which was on unrestricted and has had serious declines.

With the average of 655 for the first 30 days and having started at 1200+ , its last 5-10 days of the 30 day period must be a hell of a lot lower then 655. And whilst 300-400 is still economic its a very dissapointing decline given its on a restricted choke.

However, just like AUT, one well is not totally indicative of its acerage. Watch the second one with interest and by then you should have your 60 day flows on this one.

nioka said:

Then there is the ownership. It is better to have 80% of 400 than 10% of 3000. Then take into consideration the relative market cap.??? I'm happy to hold a fair number of TXN. I don't expect TXN to be another AUT but I can see the possibility that it could give the individual shareholders a better return for a dollar spent at todays prices.

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nice little efs well to start with for txn

agree with you on all counts nioka, the 80% of efs and operator means primarily you in the drivers seat.

swift have just in the last week released a lot of data on their mcmullen olmos efs region. the AWP

swift are saying on the olmos sands wells (horizontal completions) 3-5 bcfe on their vertical wells program they are talking 0.4 bcfe

on their efs positions they are talking these numbers

975 locations assuming 80 acre well spacing

4 - 7 Bcfe resource potential per gas

250 - 375 Mboe resource potential per liquids rich well

$6 - $7 MM cost per well in development mode

very enticing economics there for them

nioka said:

I don't expect TXN to be another AUT but I can see the possibility that it could give the individual shareholders a better return for a dollar spent at todays prices.

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Maybe its a possibility, but im not sure i agree with you yet. If TXN proves up a few more wells and can lower its declines, then perhaps. But until they do that TXn already looks expensive to me for reasons already outlined, so i wouldnt envisage it getting that sorrt of gowth on the back of yesterdays decline release.

Id be looking for growth in mid to late march on the back of hopefully better 60 day declines and new well results for thier EFS #2 well.

Hopefully those Olmos verticals will provide great economices and they imo have the potential to put a real rocket under this thing. But we will have to wait see on that.

texon is in a very active EFS region and shares the mcmullen county with some big names, i am posting a map just to fill the texon shareholders in on the chesapeake commitment to the mcmullen county, and it gives you a guide as to how the region is being viewed by the EFS operators

best of luck to all holders

Agentm said:

texon is in a very active EFS region and shares the mcmullen county with some big names, i am posting a map just to fill the texon shareholders in on the chesapeake commitment to the mcmullen county, and it gives you a guide as to how the region is being viewed by the EFS operators

best of luck to all holders

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Hey, Any chance you know the flow rates on these Chesapeake wells? or atleast the names of them? wouldnt mind finding out about other flows, and if known the Swift wells too..? or if you cant be bothered just tell me what to look for if they publish their results?


Very keen for another move with a bit of cash i got spare.. going to spread it over the Three and see who performs better..

AngusSmart said:

Hey, Any chance you know the flow rates on these Chesapeake wells? or atleast the names of them? wouldnt mind finding out about other flows, and if known the Swift wells too..? or if you cant be bothered just tell me what to look for if they publish their results?


Very keen for another move with a bit of cash i got spare.. going to spread it over the Three and see who performs better..

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MARTIN-MASON RANCH UNIT "A" is flowing..
gas oil
Jul 2010 5,161 3,194
Aug 2010 19,338 10,947
Sep 2010 24,587 13,301
Oct 2010 14,613 6,879
Total 63,699 34,321

chesapeake have only recently been adding permits for mcmullen and a good friend of mine was working on the martin mason well. they have a very comprehensive drilling program coming through.

ASX Release
19 January 2011

PRODUCTION

Texon advises that the gross production from its 12 producing wells has recently averaged 1,200 boepd (818 bopd and 4,591 mcfgpd).

Texon’s beneficial interest (NRI) from this production is about 600 boepd (437 bopd and 1,962 mcfgpd) including the recently announced Eagle Ford result. Eighty five percent (85%) of Texon gas is from the Eagle Ford and Olmos reservoirs.
Gas has been converted to barrels of oil equivalent (boe) on the basis of 12mcf of gas to 1boe. As a result, Texon gas has a sales value of some US$80-90/boe in line with the current value of a barrel of oil.

Additional Production

Additional production is expected from four (4) new wells in the next two months.

Three Olmos Wells

The first of three (3) Leighton Olmos production wells began drilling on 17 January, 2011. Each well will take about 15 days to drill, run casing, and suspend ready for fracture stimulation and production testing. It is expected that these wells will be tested and in production in March.
Texon has an average 70% WI (52.5% NRI) in these wells.


Second Eagle Ford

The fracture stimulation and production testing of the Company’s second Eagle Ford well (Teal EFS #1H) is also scheduled to take place in March this year, and the well will immediately be placed in production.
Texon has 100% WI (75% NRI) in this well.

Please refer to Texon’s website for announcements by the Company: www.texonpetroleum.com.au
Oil and gas futures prices (Source: NYMEX February 2011 contracts)
Oil: US$91.02/bbl
Gas: US$4.50/mmbtu (approx. US$7.2/mcf for all Texon gas - including US$7.60/mcf for Eagle Ford and Olmos gas)
-Ends-

Disclosure: Patersons Securities was Joint Lead Manager to the $14m Placement
completed in June 2010. It was paid a fee for this service.

The Initial Production (IP) rate of 1,202bopd and 0.782mmscf/d compared
favorable to results in the region, with Swifts wells flowing at 1,134bopd
and 775bopd.
?h The well is being produced on a restricted basis through a 16/64" choke,
which makes comparison with our modeled unrestricted type-curve
difficult. The announced production rate is encouraging and inline with our
expectations however it will be important to monitor the ongoing
performance of the well. By way of comparison, AUT has achieved an
overall 30-day average of 940boepd (on a 12:1 basis), however its more
recent restricted wells Luna #1H and May #1H achieved 30-day averages
of 888boepd and 722boepd, respectively. We would expect the results at
AUT's acreage to be higher given the high productivity of this area of the
shale.

Impact
?h Production to date from the well equates to revenue of ~US$1.8m at
US$90/bbl (the average over the period) and US$7.60/mscf (allowing for
calorific uplift), of which TXN has a 61.6% NRI.
?h Application of restricted flow rates is commonplace with major operators
reporting early positive signs for higher EUR's.
?h TXN stands to benefit from the successful appraisal of a total of 4,516 net
acres of Eagle Ford across its 2 focus areas. We currently risk the
Leighton/Sutton and Mosman/Rockingham projects at 30% and 20%
respectively, suggesting ~4 times upside from the successful appraisal of
its Eagle Ford shale and full de-risking with time.
?h We maintain our BUY recommendation with a price target of
$1.05/sh. TXN is underpinned by reserves and production from its
Leighton Olmos project area, with a further 7 development wells planned
for 2011. TXN has a busy drilling schedule across its Olmos acreage with 7
wells planned, 3 additional exploration prospects and one additional Eagle
Ford shale. Looking ahead, key catalysts will include the completion of the
fracc and production results from MR#1 and the results of Olmos
development wells plus further exploration drilling. The market appears to
be heavily risking the acreage which has been significantly de-risked
following the recent well results.

Disclosure: Patersons Securities was Joint Lead Manager to the $14m Placement
completed in June 2010. It was paid a fee for this service.

The on-line broker I use (Macquarie Edge) still have a "Strong Buy" recommendation on TXN so I'll be sitting on them for a bit longer...but

hey good vibes

very quiet thread on txn, but they are drilling 3 olmos sands wells atm, the first well commenced a good week ago

the second efs well is due for a frac in about 45 days or so at a minimum..

swift gave a very comprehensive and positive wrap for their AWP acreages which texon share in mcmullen

South Texas
AWP Olmos - Multiple year horizontal development potential

Eagle Ford (McMullen, LaSalle, Webb Counties) -Multiple year horizontal development potential

its a great position for efs acreages that texon has and i agree with your broker, and will buy as much as i can when i am permitted



250 - 375 mboe resource potential per liquids rich well

just a little to the west and south west chesapeake has a huge stake in the efs in mcmullen

these maps sow their various permits in place for single dual triple and quadruple laterals

been hearing a lot about the new drilling ideas lately

starting to see some on the permits