Since thatguy asked me which energy stock i chose..... ADELAIDE ENERGY (ADE) Deals with gas and shale exploration. Partnership with Beach Energy. Market cap 40m+ This is my only holding at the moment which i bought in at 11c this week. I previously bought it at 15.5c but i sold at 14c before the 2 months of pain in the general markets. I myself am quite confident of this one and it represents 90% of my holdings with 10% in cash. Why am i confident? This is an asset play and i believe ADE will sell it in the future or be taken out. Main Assets: PEL 218, ATP855 Others: Otway projects, Gas plant, Does gas sales and is generating money to fund explorations, Potential gas storage business which if it should eventuate would be worth as much as its market cap. Best to read the research report first by pattersons http://www.adelaideenergy.com.au/documents/ADE_110511.pdf and additional morgan stanley report on Beach Energy (Focus on the Cooper basin which is where PEL218&855 are located) Okay now look at figure 6 on page 5 of http://www.adelaideenergy.com.au/documents/ADE_110511.pdf Decent shale fields can sell for a middle case of 5k an acre. Given the acreage of ADE which amounts to 122512... that is worth 600m... Almost a 15 bagger at these values. Even at a horrible outcome... 500$ an acre is worth 61m which is more than the current market cap. I don't dare to dream about 10k per acre as that is worth 1.2billion. I can retire. hahhaa. I am happy with 3k per acre. So far the cores which have been drilled indicate they are favorable to the shale fields seen in the USA. Fracking is successful and there is no water. I stress this point as this is a key risk to most shale plays and it has been derisked by recent developments. The shales are also found to be thicker and over pressured. most of you wont understand what i am saying so if you are confused make sure you read the Morgan stanley report. Plus... ADE owns 10% of pel 218 and is free carried for explorations by Beach energy which is a ASX200 company... this means they do not have much risked. More importantly... ADE bought back 20% of ATP855 recently which is the land next to pel218 for 5m. They did a capital raising for this. What most people don't know is that Icon Energy (ICN) and Beach Energy have gone to court recently as both parties want ATP855. Which party is right or wrong i dunno. But that signals that it is a valuable land both parties are willing to go to court for in July and we own 20% of it. Given the success of fracking in Pel 218, ATP855 is a very valuable asset. To make the shale gas industry as successful as the ones in the USA it has to be done on a massive scale so one of the big boys will probably consolidate companies in the Cooper Basin to snap up as much acres. Initial flows from the well will be expected in 2 weeks. This is only a test run and they do not expect massive flows. However given that the shale is twice as thick, just as overpressured as the ones in the USA and responded well to fraccing, i am expecting good flows. Make sure you read the 2 reports or else you are not gonna see the true value of ADE. Feel free to ask questions or point out any negatives about this company.
oops forgot to paste the morgan stanley report. Here it is http://www.barakaenergy.com.au/pdfs...ey_Oz_Energy_Shale_Gas_Research_June_2011.pdf
Big move up today to 13.5c . +8% on above average volume. Up 23% since i bought in at 11c But the big day should be next week when initial flow results are out. Beach energy has 180m cash but still went for a 150m debt facility. Takeover rumors surrounding many companies in the cooper basin. ADE market cap of 50m easy target Still value at 13.5 c. Last capital raising was at 14c.
Trading Halt. Same goes for Beach Energy (BPT). Could swing anywhere now. But volume on Beach energy last friday was the highest ever in 5 years. Fingers crossed good results. Good day to have a trading halt as markets are down due to the carbon tax and china. Lets see if gas will reign over coal in the nxt few years.
Success!!! Flows of 2mmcfd were reached which exceeded their targets. This is just a vertical well and their aim was to see if gas flows and upon success will drill a horizontal one. Market does not understand what asset this means at the moment. I made 10k already. Sweet. But holding as I expect a 4 bagger at least when market conditions improve. A 2-5mmcfd horizontal well can get at least 2k$ per acre. This is just a vertical. I'm expecting 8mmcfd when the horizontal is done. If we can get 5k per acre it is worth 600m. Market cap ATM 65m? Lolololol. Just typing this on my phone. Will do a better write up tonight. The shale success is here
Given the recent disappointing quarterly.. it points to them being low with cash. I have talked to management and it seems they can get through it without a CR but u never know. I think it is still great value but have cut down on it because of the bad market. If you notice other players like NSE, ICN, DLS have all suffered massive drops of late because of the debt crisis. LT prospects are good. Lang walker owns 20% of it and he told the Carl to ignore SP and keep building value. If you have followed recent shale news, there has been a lot of activity with BG and Cononco making a move on smaller shale companies. Problem is you never know when this will happen. Given the SP.. it is oversold due to fears of a CR and the bad market of late. Resource booking results out next week. I expect little reaction to it (even though it is significant news). BUT this gives other big majors some numbers to work with if they want to make a move on ADE.
If you have access to us markets buy kmr and eeq (mlps without withholding tax because pay dividend in stocks) and all year increment the dividends to see look at kmp and eep (pay dividends in cash but withholding tax) kmr and kmp are equal. Eeq and eep too. I have the two but i like more kmr. And yesterday i add a lot more. http://www.dividendinvestor.com/historical.php?no=20712
Yup agree with that. Once it bottoms out should be a great buying opportunity. Should note that during the bottom of the GFC... most of the majors made a move gobbling up Coal-seam gas juniors. Most likely see the same for the shale industry. But for now i think best to sit aside and wait for a positive signal of an uptrend.
Trading Halt * Beach define 2TCF (using 1/16th of tenement area) approx 330M barrel-equiv. * Beach invest in ADE $12m * --> (14 million @ 16.5 cents) * --> 75M options @ 40c * --> shareholder approval for 59.5M shares * ---> beach to effectively own 19.95% of ADE
also "Somerton Energy Limited (SNE) wishes to advise that SNE and Adelaide Energy Limited (ADE) have commenced preliminary discussions in relation to a potential merger of the two companies. These discussions are incomplete and no concluded agreement has been reached in relation to the price or terms at which a transaction might occur. Although there is no certainty that a transaction may be concluded, SNE and ADE wish to advise the market that negotiations have commenced between the management of the two companies having regard to recent events whereby Beach Energy Limited, a major shareholder in SNE, has agreed to take a placement of a substantial shareholding in ADE. " Let the games begin hey...
beach got a very good deal for it. Guess with Beach backing this... wont have to worry too much about it sinking down below 9c anymore. Probably double your money or more in 1 year or less. The atp 855 region is expected to have more gas than pel218.... and we have 20% of it....
Something big is happening... with the asx down almost 3% today.. its pretty rare for an energy stock to move like this.... on no news. Up 30%.... Geez maybe i should have stuck with adelaide energy haha.
