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ian_whitchurch

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Everything posted by ian_whitchurch

  1. ian_whitchurch

    GOG

    I really dont like that phrase 'gas anomalies' in the report, I'd be much, much happier with 'gas shows'. I think Smegsy doesnt have commercial flow rates of gas in it. Ian Whitchurch
  2. Flash, From what I've been told, you get almost exactly the A$ WTI price ... you get a bit extra because Cooper Basin oil is light and sweet, then you get a bit less for pipelines and Santos' cut. As I understand it, the STU and COPE are waiting on Worrior-2 before the final pipeline decision gets made, which fits with Stuart's general 'greedy but smart' policy. There's oil all over the Med basin ... it's rank wildcat country, but the interesting thing is that if a 2 well program costs US$30 (and thats a SWAG ... if people could tell me what Tiof and Chinguietti cost to drill we could use those numbers), then Cooper can cut a cheque for their 20% ... Pancon and probably Afrex will have to dilute down, but Cooper can say 'We can meet the cash calls as and when they are made'. I think you're underestimating the costs of running small oil wells in the Cooper ... I tend to talk 'net free cash flow' ie revenue net of production costs and royalties. Production costs there, including trucking, are about A$20-24 a bbl, and royalties are 11% net of production costs. So at A$60 a bbl, thats call it A$36net, take out the royalty for A$32 net of royalties and production costs. This is a little bit conservative, but it seems to match Stuart's and Cooper's declared quarterly cash flows (nb oil revenue tends to be delayed a couple of months, so following the money aint a straight-line process). So, at 500 bopd Cooper do get A$30K or so in revenue, but they only net about half of that. That $15K means that in the 14 days it takes to mobilise the rig, drill the well and demob, Cooper has got $210K in revenue, as compared to the $350K or so that is their 25% share of the $1.4m cost of drilling the well ... basically, at current prices they can pay for a well a month out of cash flow. Cooper's a great little company, and I'd like to buy some, but at the moment all my cash is tied up in Merlin http://www.ShareScene.com/html/emoticons/smile.gif Ian Whitchurch Accelerated Farmins Australia Prefloat Consultants to Merlin Petroleum 0421 864 278 ianw@acceleratedfarmins.com.au This is not investment advice, and before investing in any of these stocks it is important to read and understand all documentation and seek professional advice.
  3. Not if you look at the CVs of the new team. They got hired to do deals like this. Note that actually earning the 20% will cost Cooper a mere A$500K or so, or about a months net free cash flow. This wont be the last deal that gets done ... Pancon doesnt have cash, and Cooper does. Pancon has got the Kenya acreage that Woodside walked away from, and Eritrea, and some other bits and pieces. Basically, they could sign up 6 deals like this, leave A$7m in the kitty for drilling the best one, farm down the rest, and keep the Cooper ticking over from their circa $17K a day cash flow (which will rise if any of Worrior-2, Seillicks-2 or Christies-2 come through). There are also other deals on offer that have a better prospect of cash flow eg Kufpec is selling down in Oseil and Nido needs a partner with cash for Galoc. Ian Whitchurch
  4. The cash. Dont forget the cash. Eleven freaking million dollars. As far as capex on Chrsites and Sellicks, yeah, thats why they've scheduled step-outs. At 700 bopd since Jan1, thats about 100 000 barrels off the reserves ... still leaves a decent amount. I'm expecting a reserves upgrade after Worrior-2, and the pipeline there will allow it to be cranked up to full production of circa 3000 bopd. At the moment, the problem isnt producing it, it's trucking the damn stuff away/ They are likely to get a small chunk of Arwon (*drool* Arwon my first love ... I saw you, and I knew I had to have you, but grim fortune stood in my way. Alas, alack). The key question is what are they going to do with the pile of cash ... I suspect they are going to be involved in farmin deals away form the Cooper ... their new guys are all offshore guys. Also, flasherman, could you drop me an email at ianw@acceleratedfarmins.com.au ... I'm going to want to stay in touch with you in the future about stuff. Ian Whitchurch
  5. In my opinion, Matthew Simmons is the guy to read about this. People shouldnt go overboard about "proved" reserves ; what you need to know is the spread of all the numbers. Lobby for companies to release Proved, Probable and Possible numbers, and location data as well. An example is Santos' recent reporting of 1.06 billion Barrels of Oil Equivalent. Nu-huh. Nope. It's standards-compliant, but it just aint useful, because a lot of that (and I'm not going to hazard a guess without lots more work) is Cooper Basin gas ... and 8 million feet of Cooper gas do not sell for US$40 a barrel, which is the conversion factor they are using. BTW, the amazing guys at PIRSA put out the PEPS database on CD, which has production, water cut etc details on every well drilled in South Australia. It's pretty much essential if you play this game really hard. What I'd like to see is that if a field is material (ie >5% of company production or reserves), it gets reported based on ... # wells in the field # non-producing wells in the field Current average daily production Average daily production 12 months ago Current average daily water production Average daily water production 12 months ago Current P10/P50/P90 reserve estimates Cumulative total field production Sale market (gas) or Benchmark comparison (eg Tapas, Brent, etc) Water cut data is critical. Once that starts going up, your field is in trouble. I'm going to give a plug for Cooper Energy at the moment, for putting this kind of data on their website (www.cooperenergy.com.au) . Show solidarity for a company that goes above and beyond reporting requirements and Go Buy Some. Ian Whitchurch (who does not own any Cooper Energy)
  6. After gliontos asked me about OEX vs RPM on the INP board here, I posted this ... I dont know as much about the Qld side as I do about the SA side, but in general, I dont like the Eromanga/Surat, which is Oilex's country (the Cooper and Surat basins both sit on top of the Eromanga). Basically, in my view the Surat isnt as prospective as the Cooper Basin, where even though you do tend to be drilling smallish targets these days, you know there is decent oil and gas in there somewhere. In addition, Oilex have only about $2m in the bank, or about 1.5 drills worth, or about 4 years admin expenses. Basically, they are either going to have to keep having their hand out for money, or farming down their interests, or both. Of course, if Connolly comes in, then all is good in Oilex land. But they are assessing Connolly as a 30% chance, and it's wildcat country (not thats there's anything wrong with that), and they paid a little bit less than 2:1 for it. If you like the Surat, I'd be looking closely at Roma, who are the ones getting carried at Connolly ; if they hit, they'll look at some serious appreciation as well, but if it misses the market will go 'Ah well, it was Oilex's money'. Ian Whitchurch Accelerated Farmins Australia PS Disclosure time : I'm working as a promoter for the about-to-float Merlin Petroleum, and Roma are part of the consortium we are drilling with in the Cooper. I dont own any Roma or Oilex shares PPS If there's anyone out there who is looking to farm in to some wildcat country at 2:1, we need to talk.
  7. ian_whitchurch

    GOG

    Given the bad news about flow rates not being sustained at Nutmeg, I would be expecting substantial ugliness if Smegsy doesnt come through. At that point, Paranta (and their $4m cash) is going to carry the bulk of their valuation ... if they get a contract to sell it, Paranta's gas flow at 1.85 mmcf/day plus some condensate should be worth about $3K a day, which covers their admin costs and keeps them in play. Ian Whitchurch
  8. ian_whitchurch

    ACN

    I dont know as much about the Qld side as I do about the SA side, but in general, I dont like the Eromanga/Surat, which is Oilex's country (the Cooper and Surat basins both sit on top of the Eromanga). Basically, in my view the Surat isnt as prospective as the Cooper Basin, where even though you do tend to be drilling smallish targets these days, you know there is decent oil and gas in there somewhere. In addition, Oilex have only about $2m in the bank, or about 1.5 drills worth, or about 4 years admin expenses. Basically, they are either going to have to keep having their hand out for money, or farming down their interests, or both. Of course, if Connolly comes in, then all is good in Oilex land. But they are assessing Connolly as a 30% chance, and it's wildcat country (not thats there's anything wrong with that), and they paid a little bit less than 2:1 for it. If you like the Surat, I'd be looking closely at Roma, who are the ones getting carried at Connolly ; if they hit, they'll look at some serious appreciation as well, but if it misses the market will go 'Ah well, it was Oilex's money'. Ian Whitchurch Accelerated Farmins Australia PS Disclosure time : I'm working as a promoter for the about-to-float Merlin Petroleum, and Roma are part of the consortium we are drilling with in the Cooper. I dont own any Roma or Oilex shares PPS If there's anyone out there who is looking to farm in to some wildcat country at 2:1, we need to talk.
  9. Chris, Make 2 lists. On the left hand side, list Beach's misses in the last 2 years. On the right hand side, list all the wells Beach have hit in, and their share of theose wells. Then decide if you want to back Beach ... Ian Whitchurch
  10. ian_whitchurch

    ACN

    I know my stuff in the Cooper *grin* Ian
  11. If I was them, this is what I'd do ... Make a takeover offer (preferably friendly) for Nido Petroleum. Offer 1 COE share for every 8 Nido shares (ie about a 20% premium), and then use COE's cash pile to develop Galoc etc while participating in their Cooper farmin areas using cashflow from Worrior (Christies and Sellicks get to pay admin costs). Nido has a market cap of about $7m even with the takeover premium, so it wouldnt dilute COE too much, and it gets them access to the bigger OS targets they are looking for. You save a bit of money on Nido's Oz offices, and Cooper/Nido is then able to negotiate from reasonable strength with farmin partners, as the company can pay cash for at least some of the development costs (remember that Unocal were quite up-front about there being 60 mmbl in Galoc). Works for me http://www.ShareScene.com/html/emoticons/smile.gif Ian Whitchurch
  12. ian_whitchurch

    ACN

    That would be a mistake, I think. The Tirrawarra is one of the three main Permian resevoirs in the Cooper, and has been productive in many to most of the producing wells in the basin (the other two are the Patchawarra and the Toolachee) This PIRSA web page has a good diagram of the various layers, and will help assess what wells are aiming for, especially when the discussion turns to Permian, Triassic and so on ... http://www.pir.sa.gov.au/pages/petrol/acre...co2003_a_ds.pdf
  13. ian_whitchurch

    ACN

    The tight sandstone in Yarrow is very very bad news for INP shareholders. The rule of thumb is you need 1 gas step-out well for every 8 bcf of gas. If the sandstone in and around Yarrow is intermittently tight, then you'll need 2 stepouts per 8 bcf of gas, because 1 in 2 will hit tight sandstone. Therefore, rather than needing to pay $2m in capital costs per $14m of gas (assuming gas prices to be about $1.7m/bcf), you need to pay $4m. But in the case of Innaminka, we have the 12.5% Directors Cut - the overriding royalty that company management wrote themselves pre-float. This means they have to pay $1.4m (35% JV share of $4m for 2 wells) up front for 35% of 8 bcf of gas $4.3m ($14m*0.875*0.35) over many years (at a flow rate of 5 million cubic feet a day, it takes 1600 days to exhaust 8 bcf of gas). Ian Whitchurch
  14. Prospectus is coming out tomorrow (ie Wednesday) ... a couple of typos slipped in during typesetting. The first well is going to be Hornet, which is not in Merlin's farmin area, so an Enterprise-type situation will be unlikely to occur. Ian Whitchurch Accelerated Farmins Australia Prefloat Consultants to Merlin Petroleum
  15. ian_whitchurch

    STU

    This is a repost of what I put on Hot Copper ... Not a lot unexpected here, except for the Hughes farmin deal. Production at 328 000 bbl for the full year, or 84 900 for the quarter. Worrior at 1500 bopd at the moment, with Acracia doing 23 000 for the quarter (note that although rain affected, Acracia aint doing 1000 bopd any more). Derrilyn looks like it'll do 1500 bopd in production, with about a mmbl of oil in there with STU having 35%. Harpoono looks like about 0.5mmbl, with Stuart having 2/3rds of that ... it's an Aldinga to hold and hug and call their own. They reckon it'll do 500 bopd on pump, but that got said about Sellicks and Christies as well. Regg Sprigg West looks nice, but no reserves estimates yet, with STU having 18.25% of it ... call it at 1mmbl, and thats another 200kbbl for STU. Next, STU bought in to Beeville block in PEL105 for 20% at 1:1, but only if they operate. Beeville-1 is about a mmbl ... 105 is owned by Hughes, who are a small Texas oiler. By getting STU to operate, they avoid needing to set up an Oz office, etc. Considering that the going rate in the Cooper is 2:1 and up, thats a nice deal for Tino and the boys. Finally, Arwon still looks Pretty Darn Nice, and will be drilled in August. OK, so this is my view of STU's reserves picture Worrior ; 70% of 3.4 mmbl = 2.5 mmbl Acracia ; 75% of 1.4 mmbl = 1.0 mmbl ... but I'll make a call here and drop that to 0.6 mmbl because of the water cut issue. Derrilyn ; 30% of 1 mmbl = 0.3 mmbl Harpoono ; 66% of 0.5 mmbl = 0.3 mmbl RSW ; 18% of 1 mmbl = 0.2 mmbl (my guess) Call it 3.9 mmbl. With 60m shares on issue, and 2P reserves worth A$15, then thats call it a buck a share in reserves, with exploration acreage worth nada nil nothin, and nothing for Arwon (which is next to Worrior, going back to the oil source along the migration path) or Worrior-2. Go buy some. If it's less than a buck in late August, I certainly will be doing so. Ian Whitchurch
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