TXN - Texon Petroleum

[philly]

Augusta said a few days ago

"So today I think TXN is at a point of developing the EFS acreage similar to where AZZ and AUT were 1 year ago. Yet today I see more similarity between TXN and AZZ. Same county. Same big WI. Same initial big IP. Same 'in-house' approach (no big operator). And same disappointing first report of a decline."

and MIR agreed 100%

Two folks with great knowledge of eFS from way back.

Be wise to balance those opinions against a lot of TXN propaganda based on chesapeak.

My concern is aZZ tought us all the danger of expecting well results to resemble thier neighbours. AZZ are surrounded by good results, yet thier results smashed the company and its sp.

The other thing is so far TXN has more in common with AZZ then Chesapeak. Its first decline is very similar to AZZ.

Its a speculation and if they work out ok, great money will be made, if not it runs the danger of the sp tanking.

I, MIR and AUgusta are not saying its not going to be a winner. We are just expressing the fact its way too early to tell and might get hammered if things turn sour with 60day results and well 2.

As esteon said recently "no one judged AUT on Kennedy alone, as kennedy wasnt exactly the most impressive result" and hes dead set right.

But be cautioned about basing beliefs on chesapeaks results.

hey Condog, r u looking for a cheap entry point
I agree with you and others that ATM it is far too early to know what is to come.
TXN have only drilled 2 EFS wells and only one is flowing with the other to be fracced in March. At this point whatever view a holder has is based more on speculation than fact. Its the time ffor all holders to be patient.

 

[condog]

No im definitely not looking for a cheap entry point. I just dont want to see people get burned by a share thats being pumped so hard, before its showing signs that make it an investment rather then a speculation.

Will i buy, well certainly not yet , and possibly not, i am able to sell some my other company at any time now as my cGT dates are passing. But no i would likely enter another or stay in the one im in.

PErhaps if they sure up some really good declines and flows i might get interested, but believe me you will know long before i buy that i think the situation is changing.

I say it as i see it , and am prepared to bag the shares i own if i see fit. Anyone whose on multiple forums would know ive given my favourite a right flogging in the last few weeks over CR prices and ambiguous release info.

I just believe in honesty and transparency, And my comments are my honest assesment of the situation.
When AUT had one well , kennedy it was around and under 30c which was mcap of 60M, with twice the acerage of TXN. It genuinely concerns me that some are gunna get burned, as this is 4x as expensive on a net acre pricing, so early, especially given the similarities so far with AZZ, which Augusta summed up so well. Same county, same big WI, same initial declines.

I look at the comments on this stock and i compare them to the comments on AZZ and lets just say the story is unfolding with a lot of similarly, but being the song being sung about this stock is with extreme praise imo.

Id rather have some of my comments not liked by holders then see people potentially lose money or only hear one side of the argument.

We must rememeber discussion is healthy, as uncomfortable as it is and sometimes repetitive, if people are cross examined and thier comments discussed from both sides surely everyones understanding of the stock will be far deeper then if we all simply agree and rave on like blind penguines heading for the cliffs together.

While this thread has an abundance of information its depth of discussion into the reality of the situation, particularly since the declines where publiswhed has virtually been totally ignored imo by those who have significant knowledge on the topic. Enough to have voiced at least concern.

As stated previously im not saying this is a winner or loser, but we have virtually no information on the actual TXN play . Secondly the information we do have which was the impressive IP followed by the concerning decline is of concern. Its only the first well so it certainly doesnt spell success or disaster. And thats my point, we absolutely dont know, yet its four times the price of AUT at the same stage in its development.

It probably deserves to be dearer then AUT was, but surely not 4x the price. ??? only you can make that decision, but its worth knowing and discussing. Another share was 3 times the price of AUT at a similar stage in development at just under 90c, things turned bad for it in McMullen and its now 37c, known as AZZ. I wouldnt like to see that repeated, and im not inferring it will be. But the reality is right now it s a dead set 50/50 which way it will go, and that at least needs to remain in peoples minds and discussion.

 

[Ramblin Round]

Condog,

As a novice investor and landowner in the EFS region I'll share a recent observation. If it says EAGLE FORD SHALE PLAY or even sounds like it may be near an EAGLE FORD SHALE PLAY then it usually turns to gold. I can literally write down the names of companies off of service trucks going down the highway and watch the stocks jump before news is let out of contractual deals in this region.

Now, the downside is that everyone including Wall Street has tunnel vision on EAGLE FORD SHALE. Look folks......... the Olmos sands, Pearsall, Wilcox, Austin Chalk, Edwards trend, etc. is all and still a part of the EFS region. Don't fall into the close-mindedness that EFS is the only money maker when this play is still broadening its footprint in Texas.

Do your DD on this one and dig a bit deeper if you will.

Texon is more cautious than most, and part of that has probably led them to miss out on some opportunites in this area. But truth be known it's better to be cautious than to just try to buy up Texas. I see a careful thought process with shareholders' best interests in mind with this company. I see a precise methodology of target areas and contracts with good rigs and frac crews. That folks is not cheap and it's one of the things I have said before that led me to invest. I believe that Texon are not playing around here like many smaller companies in the past that could not make it in Texas.

I'm just a little fish. I'm sure others have much more to share/lose than I so don't accuse me of being a pump and dump. I hold enough of Texon to feel the sting of failure, but would also like to see the success of another stable stock choice. Guess I'm still learning.

 

[Agentm]

permits for efs wells around texon acreages just for the last 90 days

likes of chesapeake, xto (exxon) eog, murphy, talisman, tidal, commstock, swift, cabot, petrohawk...

all of course making grave mistakes in investing in the efs .. lol

 

[condog]

Nowsee Rambln thats what im after some quality discussion and posts rather then all this mind numbing ramping using chesapeak and other neighbours. Its so god damn boring and sucks in poor newbies like blind moths to spotlights.

Weve been there dont that with AZZ and lots of people got burnt.

Good post Ramblin and long time no see. Have you managed to get one of them to lease your place yet.

Id suggest you read a few more of my posts, im looking at this one with an open mind, it seems some others might not be.

What do you think Ramblin about the fact of its similarities to AZZ with its IP and declines and proximity.

Also what do you think about its pricing, the fact its similar to where AZZ was, 4 times the price AUT and ADI where when Kennedy was drilled. Doesnt that concern you, when looked at relative to the decline news we just recieved. Or do you think the Olmos will save them should their EFS horizontals not work out to be economic.

 

[Ramblin Round]

Olmos has definitely begun to peak the interest of many operators and investors alike. I attended a seminar and listened to a speech from a retired geologist in which had been a behind the scenes reviewer for over two decades.

His final comment at the end of the presentation was that the EFS is nothing compared to what play is about to be had in Texas when the technology becomes available to get to it and extract correctly. My research leads me to speculate that that play is going to be either the Olmos or Pearsall.

What I also see is some experimentation with different chokes still being employed. I mean, at this point in the game you'd think somebody would have just nailed the method already but that does not seem to be the case. Not speed issues but quality production issues are the norm now.

One of the largest problems is the monkey-see/monkey do thought process between Petrohawk and Pioneer's frac methods. COP too. As others have stated they are all doing the same thing over and over again, and most of the largest failures are technical directives with a few exceptions of the gas being just too damned pressurized to control safely (Pickett 1H for example). Failed perforations, wrong level perforations, multi-stage frac failures and mixed results and IP rates. And they're still playing with coiled tubing that can't get past 6500ft !! It's seems at frac time it's a 10 million dollar hit or miss with every well and with all the technology it shouldn't be. 3-D subterranian DOES NOT LIE !! Look at some of the AZZ or AUT presentation slides to see what I mean. Sure they can drill it and get in it, but then what ? That's the problem around here. The definition of insanity is doing the same thing over and over expecting different results.

On a positive note, I also see an economically manageable well with the multistage laterals employed in this play. Frac a few levels, come back a decade later and frac a few more. The decline of the inital IP's will be offset because there is truth in numbers. It shouldn't just drop off the cliff like the Haynseville did with the new chokes they are experimenting with. Oh and I'm sure there's also a number of tricks being employed in the reporting of IP rates too. Don't believe everything you read until you talk to people in the doghouse. Most everybody's puffing down here when it comes to initial IP's. It's a Texas thing.

I wasn't onboard for AZZ and really can't comment fairly because of that. But I kept up with AUT. I wish I would have had enough $$$ to play all three back when Adelphi got bought, but I got in cheap with ADI and ran with it. I don't think they [ADI] were deserving of what happened to them at all but hey, that's life.

After I sold out of ADI I spread the wealth to HK, Halliburton and most recently to Texon after researching their contracts, drillers and their position for growth. I think they will bring new ideas and a precise targeting method that others will look at and wonder why they hadn't thought of that. (insert forhead slap here) They play their cards close but many things are happening in the background with Texon. I view all of these things as positive ones and I think the recent speculation on the stock price is easily attainable and even a bit underpriced. If they would just HURRY UP already. It's the most ultra-conservative approach to oil and gas I have ever seen in Texas.

This all of course is in my honest opinion. I'm no expert; just a novice investor. And yes we're happily leased.

 

[condog]

Some interesting declines out this morning for AUT, that will allow you to compare the declines for TXN

Franke we dont have an IP, but its intitial flow was reported at 760 on a restricted choke and its 30 day flow is now at at 683

Turnbull 4 had an ip or early flow of 1260 on a restricted choke with 30 day flows at 1244.

Use that as a reference point or benchmark of best practice. So far.

 

[Agentm]

hey ramblin

olmos is interesting, i was reading the swift research recently, they like it best in the awp field as its shows its best consistency and can be drilled with horizontals in certain parts. verticals are proving very effective

the pearsall is also a play of the future, i know of quite a few wells which i am keeping tabs on, but primarily its been gas thus far. but there is no doubting the play at all imho. a good friend of mine just worked on a few completions out carizzo way..


the giant exxon mobil have a presence in mcmullen just south of the texon acreages, they are flowing their first efs lateral.. its a nice well for them

 

[philly]

2 ASX announcements today:

1. The 45 day production rates for the 1st EFS well is 671 boepd [cf 30 day rate of 655boepd] and

2. The 8th Leighton Olmos well has reached TD and will be fracced in March and brought into production thereafter. The rig is now being moved to the Peller #2 well site

SP slightly higher on news
I am a holder

 

[adobee]

whats the thoughts on the middle east Egyption drama.. articles I have read seem to have this as a result of todays loss on the asx.. will this actually be good for oil & gas players if it pushes the price much higher ???

 

[Kremmen]

When AUT had one well , kennedy it was around and under 30c which was mcap of 60M, with twice the acerage of TXN.

That might be a disingenuous comparison. AUT had a 10% interest in the early wells. TXN has 82% WI and 61.6% NRI. Even at the current flow rate, it took about 6 wells for AUT to have similar income. TXN's one well has about 40% of AUT's current NRI production share. Seems to me that that puts TXN in a much better position than AUT a year ago.

I hold both AUT and TXN.

 

[condog]

No one wants to profit from anyones suffering. But realistically any tension or unrest in the oil producing middle east will cause oil prices to rise. A democratic govt in Egypt might not be as nice to the US, as its appointed dictator has been.

Nice news out for TXN today. The change in ratio from 12:1 to 6:1 makes it harder to compare apples, and in some respect makes the result look better then it was. But the result was better then most expected.

60 days will be interesting as it will come out in 6:1 or 12:1 and be directly comparable. Good news on the olmos front. Will be intersting to see how it flows.

 

[Ramblin Round]

I agree Kremmon, with the WI for the TXN wells it about equates or at least makes up for the loss of the IP's. Although it would be nice to see stability at or above the 800 boepd range and not in the 600's so early out of the chute. But I'm sure we can all remember the days one would even hope to hit 600 and stay there in the shallow plays of days gone by.

 

[Agentm]

whats the thoughts on the middle east Egyption drama.. articles I have read seem to have this as a result of todays loss on the asx.. will this actually be good for oil & gas players if it pushes the price much higher ???

adobee

it has the 100% focus of the USA

egypt is the second only to isreal in terms of us aid and military support

the canal is critical.. its so imperrative that the impact on the oil prices is a consequence if the usa cannot get another puppet government in place pronto

currently the egyptians themselves are maintaining law and order and protecting their own homes themselves,, i expect they would want reform, whether any is given in return for them to hand the streets back is the question.

its a wait and see

 

[Ramblin Round]

Egypt's unrest will certainly drive market prices up, not that they weren't destined to do that seasonally anyhow.

the canal is critical.. its so imperrative that the impact on the oil prices is a consequence if the usa cannot get another puppet government in place pronto

Agent you are right. ANYthing that threatens the canal has a cause and effect result on our market.

 

[Mofra]

Forgive my ignorance, but the access to the Canal's impact on the price of oil would be more sentiment based wouldn't it? I was under the understanding that modern supertankers which carry the bulk of the world's oil trade by volume are too big to fit through the canal.

If the Egyptian crisis spreads (and dictator or not, Mubarak was one of the US's most staunch ally in the Arab world) then we could see supply contraints hit the market and drive prices higher - although it's hard to see anything happening in Iraq where largely US interests control supply, and the House of Saud which is very US friendly.

 

[Agentm]

Forgive my ignorance, but the access to the Canal's impact on the price of oil would be more sentiment based wouldn't it? I was under the understanding that modern supertankers which carry the bulk of the world's oil trade by volume are too big to fit through the canal.

If the Egyptian crisis spreads (and dictator or not, Mubarak was one of the US's most staunch ally in the Arab world) then we could see supply contraints hit the market and drive prices higher - although it's hard to see anything happening in Iraq where largely US interests control supply, and the House of Saud which is very US friendly.

just dropped my wife home, and square in front of my place i had this lunatic bashing the crap out of a chick in the back seat of this twin cab.. tearing her hair out and smacking the crap out of her face.. so i stopped in front of his ute and got into this guys comfort zone,, real close.. little weed got real scared jumped into his ute

little dog took off with the half unconscious chick out cold on the back seat.. man its a weird planet.. reminds me of how you think good people turn on you in a heart beat.. seen a lot of that of late

chased him for a while and left the rest for the cops to sort out ,,,,


mofra...

Oil hits $US101 a barrel as Egypt rages
February 1, 2011 - 9:06AM

Oil prices smashed through $US100 a barrel overnight for the first time since the 2008 economic crisis, as traders worried that unrest in Egypt could disrupt oil flows through the Suez Canal.

Oil prices surged to $US101 a barrel for London's main Brent North Sea crude contract, as protesters gathered for a seventh straight day amid threats of a general strike.

Egypt is not a major oil producer, but is home to the vitally important Suez Canal, which carries about 2.4 million barrels of oil a day - roughly equivalent to the daily output of Iraq or Brazil.
Advertisement: Story continues below

Egyptian authorities insist the canal is still working at full capacity, but unrest has caused major shipping giants such as AP Moller-Maersk to halt operations in the country.

The threat of delays have prompted some normally reticent oil industry honchos to sound the alarm.

OPEC secretary-general Abdalla Salem El-Badri warned "there could be a real shortage" of crude oil passing through Suez.

While stressing that the market was still well supplied, El-Badri said "if we see a real shortage, we will need to act."

The Organisation of Petroleum Exporting Countries pumps about 40 per cent of the world's oil, with the bulk coming from member Saudi Arabia.





imho its a real important seaway..

 

[Mofra]

chased him for a while and left the rest for the cops to sort out ,,,,

Good on you for stepping in agent

Egypt is not a major oil producer, but is home to the vitally important Suez Canal, which carries about 2.4 million barrels of oil a day - roughly equivalent to the daily output of Iraq or Brazil.

I stand corrected, cheers for the article, much appreciated.

 

[Agentm]

yeah, i was thinkin how no one does that.. most people let thugs run all over them, or let them do their thing and dont care.. i decided to make it as uncomfortable as it can be. being 110 kg and 6 foot 5 helps.. but he just wound the windows down and abused me as he sped past.. i was gesturing him to come on back please.. happy to take it to him..

i had my sister whom is recovering from severe brain injuries in the car next to me and i was dropping my wife home after a morning coffee with both..

i spent about 2 minutes trying to keep close to this car, but he took off at speeds i couldnt risk. then about 10 minutes more realising i had lost him right there.. but rego was noted and passd on..

whats amazing is that despite the whole episode, man beatin up a women, her basically completely punch drunk in the back.. probably not conscious to any degree.. and the cops take the info and never call back.. although i saw several cars just cruising with lights on speeding thru traffic probably lookin for the car..

still lamenting he got into the car so fast and i couldnt get the keys as planned


but on topic..

i see in twittersphere they are trying top organise things but the government had stopped the rail system as well.. so its a case of shutting down more and more systems. mobile networks and transport..

they have a fight on their hands still.. the streets belong to the people, the government will i guess stifle them and starve them into submission ..

looks pretty nasty imho..

 

[Agentm]

anadarko has put out its 4th quarter and full year review

anadarko has some very very impressive results to the west of the texon acreages. some of the more wells i have studied are staggering to say the least

these are comments noted thus far

Anadarko's Eagle Ford production, which is about 75% oil, gave a clear indication of the potential in North American shale regions, according to analysts at Tudor, Pickering Holt & Co. It's also one of the first signs that output from unconventional resources onshore the U.S. could have a significant impact in North America oil supply in years to come.

Anadarko Chief Executive Jim Hackett said the production growth the company has seen in areas such as the Eagle Ford is "phenomenal" and that current high oil prices are making drilling there highly profitable. Anadarko has identified more than 2,000 well sites and it plans to ramp up to 10 rigs by the end of the first quarter of from two rigs at the beginning of 2010, Hackett said. Anadarko has dramatically improved production from the Eagle Ford in part because its drilling operations have become significantly more efficient, he said.

The head of Anadarko said the company is progressing talks to enter into a joint venture agreement with an undisclosed partner in the Eagle Ford. The deal is expected to be similar to the $1.4 billion agreement the company completed in the first quarter of last year in the Marcellus Shale in Pennsylvania, Hackett said.


************
now when hackett says improvements and dramatic... i have to agree.. what they have done over there is off the dial!!

***********


Anadarko's record production of 235 million BOE was primarily driven by an 11-percent increase in sales volumes from the Rocky Mountain region, growth in the company's liquids-rich plays and accelerated activity in the Marcellus shale. With existing infrastructure and service agreements in place, Anadarko has established itself as the largest producer in the Eagleford Shale with current gross production of approximately 27,000 BOE per day. The midstream expansion in the Marcellus Shale during the fourth quarter of 2010 enabled the company to nearly double its gross daily sales volumes from the end of the third quarter to approximately 330 million cubic feet per day (MMcf/d) at the end of the year, while being carried on its capital costs through the joint-venture agreement announced earlier in the year.

"The success of Anadarko's worldwide exploration program, coupled with the results of our evaluation and development activity in the U.S. onshore, has continued to add differentiating value for shareholders," continued Hackett. "Our offshore exploration drilling program achieved a success rate of approximately 60 percent, while also continuing to safely advance existing deepwater discoveries toward potential future development, with a 100-percent success rate on a total of nine appraisal wells in 2010. In addition to these industry-leading results, the further evaluation and development of our Marcellus and Eagleford shale programs -- where we amassed large fairway acreage positions at attractive costs in the early stages of exploration -- enabled us to establish a net risked resource potential of 1.5 billion BOE in these two major growth areas."