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Oil Stocks With Appealing Gas Assets
by: The Energy Report August 11, 2010

http://seekingalpha.com/article/219984-oil-stocks-with-appealing-gas-assets

Blue Phoenix Inc.'s Chief Commodity Strategist John Licata says BP's Deepwater Horizon accident in the Gulf of Mexico has already resulted in oily names acquiring gas names. It will soon result in more joint ventures as companies try to mitigate the risk of deepwater drilling. In this exclusive interview with The Energy Report, John tells us why he's bullish on natural gas and why he sees more M&A activity ahead. He also offers some E&P and services names that could ultimately benefit from the rapidly morphing oil and gas landscape.

The Energy Report: Just before our interview you were talking about how the BP spill had fundamentally changed the energy sector. Could you talk about some of those changes?


TER: Do you have any specific companies in mind when you talk about takeover targets?

JL: I think SM, a company I mentioned earlier, is a very interesting name. They're in the Eagle Ford Shale, which is very attractive, and they have a partnership with Anadarko, which could be increased. The natural gas liquids (NGLs) from the Eagle Ford are very attractive. I have spoken with management, and it seems like they're more willing to beef up their presence in the region. I think that makes them a little more of a target for a larger player, especially given their exposure to the Granite Wash Shale.


TER: You said the changing landscape was creating opportunities. Can you point to some specific ones?

JL: As you know, for the last two years natural gas prices have been very suppressed, and I think that has caused a lot of opportunities because many natural gas companies had to delay projects. That has caused the price of futures to be contained, but to the point where I think we're seeing some of that overcapacity start to reverse. Because natural gas has been cheap for a while, many of the coal-powered generation plants are looking to switch from coal to cheaper natural gas. The industry as a whole, which has been out of favor, is starting to get a little more attention. There's still a fear factor with natural gas, and that fear factor has been amplified by increased storm activity in the Gulf of Mexico. Even today, we were talking about another tropical storm that could possibly hit the region. So, natural gas, in my opinion, is a phenomenal play.
Many of the oil companies are going to look at these gas names and try to get involved in M&A. Some of the market caps of these natural gas companies have been hit hard over the last 18–24 months, and there are opportunities out there. It's cheaper to buy capacity than to create capacity.

TER: Are there some other names you like in the Eagle Ford and Granite Wash—plays other than SM?

JL: Forest Oil Corporation (NYSE:FST) is an interesting name. That's one I've followed for a long time. The company's based in Denver, but they are very big in the Granite Wash area, especially the northern Texas Panhandle. The company has really been trying to focus on organic growth, and it's a company that I think is a takeover target. Their location is now a sexier area that is gaining enthusiasm. When you look at that Granite Wash or even Eagle Ford Shale, those two areas are becoming much more of a hot commodity because they tend to have more NGLs on a percentage basis that can be sold back into the market. People are going to take advantage of those economics. Whether you're looking at the Eagle Ford or the Granite Wash, I think you can't have a natural gas portfolio that's not exposed to either.

TER: Do you have some price projections for gas through 2011?

JL: I haven't yet released my forecast for 2011, but I have an aggressive target of about $5.50 on natural gas for the end of this year. It's actually starting to get more into my range if you look at the back months trading on the NYMEX. I think that's very credible. As for next year, I think that's going to be very dependent on—and this relates to oil, too—the recovery of the employment picture not only in the United States but also abroad. I would like to better assess the landscape here at the end of the year before I start making definitive calls for 2011.



TER: Alright, what about oil?

JL: Yes, it's the same for oil. In January, I wrote a report that said oil was going to hit $87. Well, we hit $87, and we have come off since. Unless we get a really positive turn in the employment picture in this country or we have a storm that knocks out production, I think we've seen the highs in crude oil for this year.

don't think oil prices can be sustained above $90 this year. It doesn't seem credible, but for 2011, I would not be surprised if we see triple digits in crude oil again.

TER: Any final thoughts on the oil and gas sector?

JL: The companies involved in the cleaner side of the energy landscape are going to do very well moving forward. Natural gas historically trades at a discount to oil of between of 10–12 times; right now we're about 19 times below. That gap is going to narrow with natural gas prices moving higher. I think that prices could be comfortably higher a year from now.

And most people are not focusing on the congressional elections in November, but it's my belief that many of those races will be determined on stances related to cleaner energy.
 
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Play the ball, not the man. We are better than this........aren't we?

I didn't trade it. I was more of the opinion it would retrace. I see it has dropped back from the $1.00 mark and volumes not that hot.
I hope people locked in some profits. I Will continue to watch for the time being.

It was a legitimate question. There was a sudden drop off in chatter once resistance was broken. It seemed odd and clarification was asked for. We just had the balls to write what others were thinking, lol :D

No harm intended :)
 
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It was a legitimate question. There was a sudden drop off in chatter once resistance was broken. It seemed odd and clarification was asked for. We just had the balls to write what others were thinking, lol :D
No harm intended :)

But when in the past i posted these things you asked for the moderators?..funny that... almost........one could say...hypocritical

anyhoo glad we could clear up any concerns you may have had for our intentions in this thread

AUT has held well today by the way and holders should be happy with its performance today
 
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But when in the past i posted these things you asked for the moderators?..funny that... almost........one could say...hypocritical

anyhoo glad we could clear up any concerns you may have had for our intentions in this thread

AUT has held well today by the way and holders should be happy with its performance today

There was no need for that last little dig nun, was there? My beef wasn't with you, it was the fact you two kept bitching and moaning about who was right and who had the moral high ground and how it was detracting from thread.
 
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. We just had the balls to write what others were thinking, lol :D

No harm intended :)

There was no need for that last little dig nun, was there? My beef wasn't with you, it was the fact you two kept bitching and moaning about who was right and who had the moral high ground and how it was detracting from thread.

Ahem.

yes your posts here certainly have added value i see.

any analysis?

Anyhoo .over it....... watching AUT like a hawk once more for a break of 102 or a retest of the 87/88 line ... has performed well today and a previous gap has been closed........ some may want entryhere but me personally prefer the lower risk entry points with lower % loss on defined stop points ... no reason for longer term holders to be concerned and good luck to ya,s
 
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Its nice to see AUT only one of two greens on my entire watchlist.

Anyway as i said::D
Oil Stocks With Appealing Gas Assets
by: The Energy Report August 11, 2010

http://seekingalpha.com/article/219984-oil-stocks-with-appealing-gas-assets

Blue Phoenix Inc.'s Chief Commodity Strategist John Licata says BP's Deepwater Horizon accident in the Gulf of Mexico has already resulted in oily names acquiring gas names. It will soon result in more joint ventures as companies try to mitigate the risk of deepwater drilling. In this exclusive interview with The Energy Report, John tells us why he's bullish on natural gas and why he sees more M&A activity ahead. He also offers some E&P and services names that could ultimately benefit from the rapidly morphing oil and gas landscape.

The Energy Report: Just before our interview you were talking about how the BP spill had fundamentally changed the energy sector. Could you talk about some of those changes?


TER: Do you have any specific companies in mind when you talk about takeover targets?

JL: I think SM, a company I mentioned earlier, is a very interesting name. They're in the Eagle Ford Shale, which is very attractive, and they have a partnership with Anadarko, which could be increased. The natural gas liquids (NGLs) from the Eagle Ford are very attractive. I have spoken with management, and it seems like they're more willing to beef up their presence in the region. I think that makes them a little more of a target for a larger player, especially given their exposure to the Granite Wash Shale.


TER: You said the changing landscape was creating opportunities. Can you point to some specific ones?

JL: As you know, for the last two years natural gas prices have been very suppressed, and I think that has caused a lot of opportunities because many natural gas companies had to delay projects. That has caused the price of futures to be contained, but to the point where I think we're seeing some of that overcapacity start to reverse. Because natural gas has been cheap for a while, many of the coal-powered generation plants are looking to switch from coal to cheaper natural gas. The industry as a whole, which has been out of favor, is starting to get a little more attention. There's still a fear factor with natural gas, and that fear factor has been amplified by increased storm activity in the Gulf of Mexico. Even today, we were talking about another tropical storm that could possibly hit the region. So, natural gas, in my opinion, is a phenomenal play.
Many of the oil companies are going to look at these gas names and try to get involved in M&A. Some of the market caps of these natural gas companies have been hit hard over the last 18–24 months, and there are opportunities out there. It's cheaper to buy capacity than to create capacity.

TER: Are there some other names you like in the Eagle Ford and Granite Wash—plays other than SM?

JL: Forest Oil Corporation (NYSE:FST) is an interesting name. That's one I've followed for a long time. The company's based in Denver, but they are very big in the Granite Wash area, especially the northern Texas Panhandle. The company has really been trying to focus on organic growth, and it's a company that I think is a takeover target. Their location is now a sexier area that is gaining enthusiasm. When you look at that Granite Wash or even Eagle Ford Shale, those two areas are becoming much more of a hot commodity because they tend to have more NGLs on a percentage basis that can be sold back into the market. People are going to take advantage of those economics. Whether you're looking at the Eagle Ford or the Granite Wash, I think you can't have a natural gas portfolio that's not exposed to either.

TER: Do you have some price projections for gas through 2011?

JL: I haven't yet released my forecast for 2011, but I have an aggressive target of about $5.50 on natural gas for the end of this year. It's actually starting to get more into my range if you look at the back months trading on the NYMEX. I think that's very credible. As for next year, I think that's going to be very dependent on—and this relates to oil, too—the recovery of the employment picture not only in the United States but also abroad. I would like to better assess the landscape here at the end of the year before I start making definitive calls for 2011.



TER: Alright, what about oil?

JL: Yes, it's the same for oil. In January, I wrote a report that said oil was going to hit $87. Well, we hit $87, and we have come off since. Unless we get a really positive turn in the employment picture in this country or we have a storm that knocks out production, I think we've seen the highs in crude oil for this year.

don't think oil prices can be sustained above $90 this year. It doesn't seem credible, but for 2011, I would not be surprised if we see triple digits in crude oil again.

TER: Any final thoughts on the oil and gas sector?

JL: The companies involved in the cleaner side of the energy landscape are going to do very well moving forward. Natural gas historically trades at a discount to oil of between of 10–12 times; right now we're about 19 times below. That gap is going to narrow with natural gas prices moving higher. I think that prices could be comfortably higher a year from now.

And most people are not focusing on the congressional elections in November, but it's my belief that many of those races will be determined on stances related to cleaner energy.
 
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Sam, please lighten up and have a coffee break. Your tone is not warranted.
As a relative newbie to shares, I have found this thread most informative and very educational. I appreciate the input of everyone from all sides share trading.
There is merit in all opinions and let's keep it that way.
Please Nun, Condog and Agent, keep the info and opinions coming, there are many like me that really appreciate them.
 
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Hi folks, new investor here, been doing some research + watching all your valued posts, im in as of today - first buy of stock under $20!:eek: time to lose sleep me thinks?
 
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Hi folks, new investor here, been doing some research + watching all your valued posts, im in as of today - first buy of stock under $20!:eek: time to lose sleep me thinks?

I dont think you need to be losign much sleep. This is far outperforming most stocks above $20 and on a fundamental basis it looks set to continue. Id be losing sleep on plenty of top 50 stocks before this one.

Welcome aboard, hope its a very profitable ride for you.

Jumping in on a horrible day, just ahead of a reserve upgrade.... could be good timing, depending on the overall market?? time will tell.
 

Joe Blow

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I have cleaned up this thread a little.

From this point forward any post that is intended to provoke others or disrupt this thread will be removed and an infraction issued. AUT discussion only please. Lets keep personalities out of it and get this thread back on track.
 
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nioka

"Remember the stock market and the futures market need volatility to survive and for one trader to make money another must lose some. Give it a day of two and the news will be reversed with oil stocks falling and consumption rising, the dow getting a spurt on and back to increasing prices. Manipulation is the name of the game."

I've been following the Bloomberg energy news for the last few weeks and there has been mention of hedge fund buying of futures. They can change stance at a drop of a hat and I expect quite a bit of volatility in prices until physical demand takes command. Hopefully, that volatility will be contained within a band and hopefully the equity markets will start to detach from those prices and start to focus beyond the end of this year.

E&D budgets were trimmed down significantly during the last oil price crunch. I was watching fairly closely because EME is invested in Block A (ConocoPhilips' Live Oak acreage) and keeping tabs on investment there. That temporary reduction will have enduring consequences to the balance of supply and demand unless it is countered by levels of investment higher than trend. I don't think that we've seen that yet.

If you look at AWE's last qtly report, you will see that their production is 30% down on 12 months ago (hence the incentive to buy ADI possibly).

That is good news for the price of oil going forward so it's possibly best to disregard the current volatility. AUT is likely to be ramping up production into rising prices for the product. But maybe we will have to wait until 2011 to see it take off. But maybe not: the presentations in Hong Kong and Singapore might attract investors who look a little further ahead and they will have their own views on economic activity growth in the East over the next few years.

I bought a few more at 92c.

One final point: early in the BP spill crisis there was a lot of US baloney about blocking further offshore drilling...it's gone a little muted since. Perhaps the US administration no longer sees it as 'unnecessary risk'. Governor Terminator acted quickly on his patch out west but maybe he will focus a little on his budget deficit and reconsider his own knee-jerk reaction.
 

So_Cynical

The Contrarian Averager
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Hi folks, new investor here, been doing some research + watching all your valued posts, im in as of today - first buy of stock under $20!:eek: time to lose sleep me thinks?

ok so i removed it myself in light of below..:)

I have cleaned up this thread a little.

From this point forward any post that is intended to provoke others or disrupt this thread will be removed and an infraction issued. AUT discussion only please. Lets keep personalities out of it and get this thread back on track.
 
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RADNOR, Pa., Aug 12, 2010 (BUSINESS WIRE) -- Penn Virginia Corporation /quotes/comstock/13*!pva/quotes/nls/pva (PVA 15.28, -0.57, -3.60%) today announced that it has acquired approximately 6,800 net Eagle Ford Shale acres located primarily in Gonzales County, Texas for $31.1 million. The acquisition was funded with cash on hand.

The acreage is highly contiguous and is estimated to contain over 40 horizontal well locations, with our working interest averaging approximately 73 percent (net revenue interest averaging approximately 55 percent). We will operate and expect reserves from wells on the acreage to be predominantly oil.

This equates to 5100 net acres at $6098 per net acre.
Using these metrics and our wells this gives AUT a value of $225M + our $40M cash + the value of having a joint venture with arguably the best operator in the entire eagleford. Given we gave up 50% of our net acerage to get hilcorp , you could say that deal is worth $61M using the above deal as a per acre cost.

$225 + $40 + $61 = 326M = sp $1.18
 
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Here't the latest well locations from the TRRC.

Must be due for an announcement or two soon
 

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AUT has a real kicker run at the end of the day. $1.06 and with a reserves upgrade due soon things are looking very, very, good.
 
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Great finish today.. I think the market likes it, a whole lot of ADI investors looking for somewhere to dump there money, Eagleford looking productive as EKA takes up more acerage (obviously for a reason), reserve upgrade due soon.. There is a seller at $100 .. In my opinion EKA still looks to be the takeover target with small market cap.. Happy days for holders if US Markets rebound tonight..
 
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What is incredible is that the market still has not factored in an expected 300% upgrade in reserves. Extraordinary stuff here!

I can't believe there was doubt lingering in my mind a few weeks ago about where AUT could pull a SP catalyst from. Well here it is everyone, and things are only just warming up! :D
 
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Luna spudded on 7 Aug as reported today by Empyrean in dear ole blighty:-

Sugarloaf Project Block B Update



TIDMEME

RNS Number : 0357R
Empyrean Energy PLC
13 August 2010

?
13th August 2010
Empyrean Energy PLC
("Empyrean" or the "Company"; Ticker: (EME))
Sugarloaf Project, ("Sugarloaf"), Block B, Texas USA


Empyrean is pleased to provide the following update on operations at the
Sugarloaf Project within the Sugarkane Gas & Condensate Field, Texas.
Luna-1H
Empyrean has been advised by the Operator that the Luna-1H well was spudded on
7th August 2010 and the well has been drilled to a depth of 5,780 ft having run
and set surface casing.
The Luna-1H well is the second Sugarloaf well where Empyrean will contribute to
costs and derive revenue on a post farmout basis.
Empyrean has a post farm-out working interest of 3% in this well.

The information contained in this announcement was completed and reviewed by the
Technical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who has
over 40 years experience as a petroleum geologist.


For further information
Empyrean Energy plc
Tom Kelly
Tel: +618 9321 6988
Astaire Securities Plc
Shane Gallwey / Toby Gibbs
Tel: +44 (0)207 492 4750

This information is provided by RNS
:scratch:
 
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I traded out of AUT yesterday @ .96 cents and got back in today after my quick profits with LYC and got back into AUT at .96 cents today to enjoy the ride......lucky timing I guess :D
 
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As I keep saying

Plenty more in my opinion where this came from.

Ive been researching other junior oilers and peers of AUT all week looking for something else to invest in.

Cant find anything close with the growth prospects and fundamentals of AUT.

There are some with great fundamentals but rubbish growth prospect, others with good growth, but huge risk. But i absolutely cannot find anything close to AUT.

In my opinion and i been right so far since 25c, but it is only an opinion, AUT rise will continue while ever:

* The oil price stays above $70
* They keep drilling and fraccing successfuly
* Managment keeps looking after the company balance sheet and cash flow as they have been.

:D:D:D:D:D:D:D:D:D
 
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