i notice no one seems to be following this stock or am i wrong?
be interested to hear others' views
i notice no one seems to be following this stock or am i wrong?
be interested to hear others' views
EPG starting to get some press. Not often that a small aussie explorer is mentioned in the same article as Gazprom
Mate that article's written over a year ago...you'd be pleased if you'd bought and held it since then
I hadn't noticed that. I was just searching for info and it came up as a hit and I looked at the banner date and not the date embedded in the article.
Incidently I have owned EPG for about a year bought in high 60;s low 70's.
It just shows how slow development can be. Shouldn't have to wait too much longer before they begin to drill again.
Thanks mousie for picking that up!
EPG announce Gazonor purchase and financing completed.
This is significant for the below reasons
Gazonor is a producer in France with average sales of 2PJ at 6Euro/GJ last year. This will help EPG gain production licenses over other exploration permits as governments always look more favourably upon preexisting producers (assuming they are good boys)
Gazonor has currently 30PJ of booked 1P reserves and a Gas in Place(3P approximated 390 PJ). Purchase price of 80 euro cents/PJ is cheap considering major infrastructure in place and production already exists.
By memory Santos and AGL were bidding for QGC at $1.50/GJ of 2P reserves not the 1P that EGL bought and then there was major infrastructure investments post bidding. No 2P reserves have been booked for Gazonor but 200 PJ should be relatively conservative. this would mean the purchase was at 21 cents AUD/2P reserves
Reserve pricing in Europe is worth a lot more than in Australia. Gas prices in France currently 7 Euro/GJ = 11.47AUD/GJ. Australian prices range from $2-3/GJ. ............3.8 times that of Australian gas therefore on like for like earnings from reserves the reserve cost of 21 cents/2P could be divided by 3.8 which would equate to 5.5cents/2P estimated reserves.
(If this was here in Australia and AGL/Santos were bidding for it they would have been willing to pay nearly 30 times what EPG paid given the bidding on QGC as a benchmark)
All reserves are based upon worked coal seams in mines. There has been no reserves placed upon the virgin coal seams that exist in the permits. Given time EGL will be able to bring CBM techniques into the permits owned by Gazonor and significant CBM reserves will be booked
Gazonor was part of CdF the french nationalised coal company and so as part of any socialist company significant improvements to production and profitability will be available. One example of this is the sale of gas in preceeding years. Gazonor would sell gas to local companies at significant discounts. Average sale price last year was 6 euro/GJ yet benchmark prices were as high as 8Euro
Qrt Activities report for the first time shows the impact of being a gas producer - sales for the qrt were 111,238 MWH @ Euro 20.83 per MWH and a cash cost of Euro 8.71 per MWh. This adds + Euro 1.4m per qrt to the EPG cash position which will be used to fund various European ventures.
Now per Qrt Activities, Gazonor production was 111,238 MWh = 0.4 Petajoules. Gazonor still has reserves of 32.4 Petajoules plus estimated reserves of 395 Pj. Then there is all the other projects in France, Italy, Luxembourg etc. I am getting excited about owning these even though they have zero profile.
Finally the seller over the last fortnight is reviewed - FMR LLC & FIL Ltd. They have reduced their stake to under 5%. Who are they - well a Hoover search reveals the following about FMR: 'The financial services conglomerate, better known as Fidelity Investments, is one of the world's largest mutual fund firms. Serving more than 23 million individual and institutional clients, Fidelity manages more than 300 funds and has more than $1.5 trillion of assets under management.
Off-setting this is Henderson Global Investors who took a 10% stake last month. Who are they you ask? 'Henderson Global Investors runs the investment gamut, providing equities, government and corporate bonds, property, private capital, hedge funds, and portfolio management. Established in 1934, it has some $115 billion in assets under management and serves institutional clients, as well as retail clients and wealth individuals.'
What does this mean for EPG? Faarrk knows but it proves the compnay is on the radar of the big boys. Up 8% today now that selling pressure from FMR LLC has been removed. C'mon, IMO it produces gas at a whopping margin so a re rating is due as it increases the size of its European reserves.
I know I am largely writing to myself on this thread but I think we might be seeing aturn around on this one.
One trade went through for 6m yesterday at 70 cps - today the buy depth, for the first time in a month, is deeper than the sell depth.
This is a producing coal bed methane play. The only difference to all the mickey mouse Aussie explorers is it is in continental Europe with a focus on France. Now think about it - France has a population of 50-60 million. There gas consumption is forecast to increase. They have billions of tonnes of abandoned coal mines which were abandoned as they had too many explosions (caused by methane).
Cashflow is 2m EURO at the moment from Gazonor. Margin is great (see earlier posts). They are about to launch a serious exploratuion program (see last investor presentation).
So my hypothesis is the sp is going sideways because -
1. it is not in Australia;
2. uncertainty about the CAC listing;
3. people only look at the glossy investor presentations, not boring old cashflow statements; or
4. I have it all wrong and need a holiday in the mountains for some fresh air.
Which will it be? DYOR
I bought in at .46 on a money week recommendation in 2006 . I also bought Arrow energy at same which has done over 400% versus 60-70% for EPG
Money week still seems to be plugging this stock in a recent article yesterday.
I was thinking of buying more for long term , however I'm not sure how to technically make sense of EPG prospects for future, in layman's terms as other people on this forum obviously have experience in the industry and from reading above its not entirely clear.
Ok i was wrong about the timning of the turn around.
There has just been an 50% Gazonor 1P resource increase with an inaugral 2P and 3P reserve announced.
1P - 49 PJ
2P - 140 PJ
3P - 380PJ
This ignores unexplored Gazonor holdings plus any increase to production capabilities. Remember Gazonor is currently a producing field.
Also Folschivler (sp?) well announcement a week before hand sounded promising.
Hopefully we will see a re-rating over the next 6 months, God and the Yanks willing.
DYOR. This stock will kill you if you are after quick gains. However company is doing some good stuff exploration anf acquisition wise. Also its gas, near infrastrucutre, in France; not out whoop whoop in Australia. If I was them I would list on the CAC and receive fair value for this deposit. Gawd damn xenophobic Aussie instos!
This unloved European CSG player is a real sleeper imo
200m shares at 17c = $34m mkt cap
Cash $6m but here's the crap part they have $70m in outstanding Conv Notes
They have the following reserves 1P 46bcf 2P 131bcf 3P 357bcf
They're GIP (Gas in Place) targets are what are amazing, up to 17 TCF!!!!!
The stock is in a downtrend and there looks to be alot of selling, perhaps because a cap raising is on the way but I think this is a sleeping giant, time will tell
Note: I am not a Financial Adviser, nor are any of my posts intended to be financial advice, they merely express my own opinions
But the good is that it is producing, production will be ramped up, costs have gone down, and the contingent resource is stratospheric. Also European gas prices are 4x what Australian prices are.
The downside is they need capital to unlock exploration potential and it costs 2m euros per appraisal well to do so. They cannot raise equity at these prices so they will need a JV partner with deep pockets to raise the dough. But they have the Benelux JV and the relationship with CnP so they are well connected in Europe.
With the convertible notes, they were used to fund Gazonor. Should be money well spent in the long run. Upside is the shareholders (or so I am hoping).
Lol; I'll be hanging on to the bitter end with this one.
Anyone know what the flow rates are like on some of EPG's wells?
I've bought a few down around 13c because I reckon it has to be at or close to the bottom now- ofcourse it slipped to 12.5c a minute later! The old falling knife lesson could be coming my way again I fear.
Agree with all the comments here though, alot of potential and seems to be being completely ignored.
Did anyone note the comment from AOE's ceo the other day..very interesting he suddenly made a reference to examining European opportunities. May not be anything in it, but then again we know these guys needs a jv partner with some money and who better right now..
Fingers are crossed..
"Upon conversion, Tranche A and Tranch B would convert to 48,500,000 fully paid ordinary shares in the Company subject to the customary adjustments provisions"
So, are we only looking at a 25% dilution (currently 200mill shares) when notes due at end of 2010? If so, this doesn't seem so bad to me
I'm amazed at the MC (26mill) of this company, they're actually producing from Gazonor and were cash flow positive (albiet only just) this quarter. They do have long term debt of 50mill though. But compared to the like's of BOW with a MC of 240mill amd no 1P reserves, EPG with 1P reserves of 49 PJ seems remarkably cheap
I don't hold but looking with current drop in SP
Was doing my nightly research when I came across EPG, nice ride it has had lately. Anyone get in on it or have information on this?
"You have enemies? Good. That means that you've stood up for something, sometime in your life" - Winston Churchill
The stock is now a play on the Europe assets (owned as to 25%) and the oil and gas prospectivity of the Canning Basin in WA, as to which you should look primarily at Buru Energy (ASX Code: BRU).