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farmer fred

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  1. Looked a pretty poor quarterly to me, only 6% increase in production despite drilling 27 wells, and burning $5 million per quarter in cash.

    Don't know if Yeager will be able to reverse this in a hurry.

  2. Agree with point one, high debt will eventually get you in the agricultural sector. Not always due to the initial outlay in buying the land, often the capital improvements necessary to build up the farm to an efficiently functioning unit, especially when done to quickly are the main cause of the debt. I've seen quite a few farms with minimal debt handed from father to son, who then poured in the money to transform it into a showpiece only to succumb to that debt during a downturn.

     

    Second point agree too, but would also add that the increased costs associated with a board of directors, managers etc would never to be able to be covered by the shoestring margins that most farms work under. That's why most family farms survive in a downturn, the main manager, worker, bookkeeper etc works for practically nothing.

     

    You're right, don't agree with your third point, I don't think farms with all the associated infrastructure are all that expensive, and the market generally will find that value. I do think houses in Australia are to expensive, putting pressure on ever expanding wages, which I believe is the main cause of the problems of not only agriculture but industry in general being competitive on an international basis. Anything with little labour input will probably be ok in the long run, but I think you will see less and less of our vegetables and fruit being grown here. Our Aussie dollar doesn't help either of course.

     

    Don't actually agree with the government bailing out struggling farmers, harsh as it may be, as it is usually only the most inefficient farmers that get any help, and all that happens is they struggle on for a few more years. Maybe with the financial problems overseas we will get a little less subsidy for farmers in the US and Europe, however I think we will always be on an unlevel playing field.

    Have done quite well out of the ag sector by investing in support companies, unfortunately mainly when they get taken over.

  3. No you're right, no mention in this quarterly, had a look at the previous quarterly and found the reference to the $1.3m there.

     

    Not knowing much about accounting, I don't know if they followed good practice, but at least the figures match up.

     

    Have to agree with you, cannot fathom why this thread generates such heat, we all have differing methods of investing. I happen to like investing in beaten down stocks which I feel have good fundamental value, sometimes with good effect, sometimes not.

    I'm hopeless on technical analysis, however I quite like reading the technical comments and sometimes my slow old brain even learns something.

  4. I've often thought that having four of the top five companies on the ASX being banks is not a healthy state of affairs for our economy.

     

    Maybe thats why we have overpriced houses, resulting in overpriced wages in comparison to the rest of the world and an uncompetitive economy apart from our resources.

  5. Bought into PGI yesterday, hopefully they have all their production problems behind them now and can step up the next quarter.

     

    Despite their problems last quarter, they were cash flow positive so once they step up to design capacity will have a big surplus there.

  6. Will be interesting to see the quarterly next week as well. From the TRRC, they havent been drilling a lot of wells the last six months and production has dropped below 500bopd.

     

    Will wait a bit longer to buy back in once start to see them making a bit more progress. They certainly have enough reserves, just need to see them get that production up. May get a bit of news about that in the quarterly.

    SRX

    Interesting comments from HHL's chairman at their AGM yesterday.

     

    "Sirtex is an Australian-listed manufacturer and distributor of radioactive spheres that are used for the treatment of liver cancer. Our holding in Sirtex is the largest investment holding across a number of our funds and accounts for 13.5% of funds under management. Consistent with our long-held belief in the value of the stock, Sirtex had a strong year to 30 June 2012, rising 24% to $6.09. Since 30 June the stock has risen a further 89% to $11.51 as the strengths of the Company have been more widely recognised. Despite the very significant upside potential we see, we are managing the position in a prudent manner and have disposed of over 2.5 million shares so as to ensure that the holding does not breach our risk limits.

     

    I acknowledge that this investment represents a significant business risk to Hunter Hall, as well as a significant opportunity for shareholder returns. Long-term shareholders will recall that the success of Hunter Hall has been built on backing winners, with names such as PZ Cussons and London Stock Exchange historically having represented high portions of funds under management."

  7. Triage, I dont believe it is overpriced agricultural land that is the cause of problems in our agricultural sector. Labor and service costs have risen much more than land values, as have bank fees and government charges.

     

    Most farms are probably worth less than a concrete box down by the beach. I'm happy to stay on my bit of ground for my retirement even though it will probably appreciate less in value than that box on the beach.

     

    I think corporate farming will not be successful in Australia for the same reasons farming wasnt successful in communist countries, they dont have enough at stake. They seem to do ok in the US, but they have the farm bill there. Here it is survival of the fittest, probably not so good for the hip pocket, but I think it has served us well with an efficient farm sector overall, still dominated by family farms.

     

    I dont have any problem with overseas companies buying into our ag sector, as long as the reverse is also possible. If countries prevent us buying their farms, I cannot see any reason we should allow them to buy here.

  8. Market is no doubt waiting on finalising the Gulf agreement and production increases.

     

    They certainly let production slip over the last quarter, by concentrating on their contract drilling and concentrating on high impact targets and targets on the extremities of their acreage. They announced in the quarterly that only about one third of the wells are actively producing, so they have let recompletion from the next zones up in the wells slip. The nine extra servicing rigs they recently purchased should help increase their rate of recompletions.

    I'd expect a nice upkick when the Gulf agreement is finalised or when production is again on an upward trend.

    PYM

    Dont forget the Rabalais 35-1 well drilled by Andarko in PYM's acreage a year ago. It was a complete dud. Fortunately PYM was only up for a $1m share of the well.

    No doubt if this well is a success it will spike on the results, however longerterm, would want a bit better than one in four considering each well costs $8m.

    Still no word on closing of the loan facility from Macquarie, originally due on 1st Oct, then on 1st Nov.

  9. No set figure, but am inclined to wait a little while to see if any other offers emerge, or if Graincorp can negotiate a better price.

     

    Have a parcel I only picked up recently when the price dropped with the capital raising, plus the rights shares, which I'm thinking pretty hard about letting go at this price. At this point my greed outweighs my fear.

  10. Looks like another ag company getting taken over. Archer Daniel Midlands, a $20 billion US company making a bid.They bought a large parcel at $11.75, hopefully we'll get more of a premium than that.
  11. Gulf South Holdings, a US oil company has signed a MOU with MAD to participate in their shallow salt dome drilling.

     

    Effectively they are paying $27 per 1P barrel compared to valuation of $5.25 per 1P at present capitalisation.

     

    "Gulf South Holding, Inc. (ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Gulf SouthÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ) is headquartered in New Orleans and its management team has more than 140 years of cumulative experience in the oil and gas exploration and production business as well as sales and finance.Since 1993, the oil and gas professionals on Gulf SouthÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s management team have originated, drilled and operated a wide range of oil and gas projects in the onshore and inland water areas of the Gulf Coast (Texas, Louisiana and Mississippi) ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Gulf SouthÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Core Area.

     

    Gulf South is a full service oil and gas company; its geologists and engineers select the drilling locations, acquire the leases and manage the drilling, completion and production of its wells. Gulf South Operators, Inc., an affiliate of Gulf South, operates the majority of the wells

     

     

     

    The Wells

    Gulf South drills development wells in proven fields where oil and gas have previously been produced. Development wells offer a greater chance of drilling successful wells than ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“wildcatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ exploration wells. Gulf SouthÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s management team has a sixteen year history of drilling and operating oil and natural gas wells in the Gulf Coast area.

     

    Gulf South selects development drilling opportunities that have the potential to produce oil and natural gas from more than one geologic formation. Known as multiple objectives, these ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“stacked pay zonesÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ provide multiple opportunities to find economic oil and natural gas reserves in each well.

     

    Gulf South lets geology rather than geography drive its search for development drilling opportunities; Gulf South uses the geological expertise and experience of its management team to continually evaluate development drilling opportunities in basins outside its core area and moves into those basins only when satisfied that the opportunities provide a potential economic benefit"

     

     

    SRX

    Starting to get a bit of excitement now with SRX to triple manufacturing capacity in the USA.

     

    Should be an interesting FY result coming up.

    EXE

    I think that 7.9 billion bo might be for their shale oil, without looking it up. In the US the usual recovery percentage is 5 to 10% for shale oil.

     

    The conventional oil in place is 206 million bo at Katherine, which should have a higher recovery factor than the shale oil. Still need a bit of work to get P1 and P2 figures.

     

    Hunter they didnt get any flow rates at Katherine due to damage to the resevoir by the drilling.

    EXE

    Not much interest in these little oilers at the moment, but i bought a few last week. At these prices cant see to much downside risk but with a few positive results from this round of drilling could induce a bit of an upwards trend.

     

    More interested in the secondary conventional oil target, could result in fairly early establishment of cashflow and fund further exploration.

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