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I believe the company will be sold some day for 65-100 million dollars.
Below you will find a PR from a Canadian company I have a position in. In January 2008, they made an acquisition of a privately held Canadian company for ~$52M (Canadian). Since the Loonie and Greenback trade almost at par now, the financials do not need currency conversion. NOTE that key statistics of BOE production per day, BOE of 1P, 2P and 3P reserves and acreage are clearly shown.
Now compare this "real world" takeover with the known(?) assets of Hemi and you will see that Hemi has a ways to go on the production side to get to this valuation, imo... (~20 BOE for Hemi -vs- 1035 BOE for Seeker). The new reserves report from Hemi may be showing some favorable numbers for comparison but until they are certified and booked, we just don't know.
CALGARY, ALBERTA--(Marketwire - March 27, 2008) - Canadian Superior Energy Inc. and Seeker Petroleum Ltd. are pleased to announce that on March 26, 2008 they closed the previously announced plan of arrangement. Under the $51.2 million Acquisition and Plan of Arrangement, approximately 7,651,866 Canadian Superior common shares were issued at $3.72 a piece and $14.2 million cash was paid for the acquisition of all of the issued and outstanding shares of Seeker.
As a result of the Arrangement, Canadian Superior has acquired approximately 1,035 BOE/d (72.5% natural gas, 27.5% oil & liquids), approximately 2,073 MBOE (2.073 million) of proven plus probable reserves and approximately 1,297 MBOE (1.297 million) additional possible reserves, 55,385 net acres of undeveloped land and 102 sq. km of proprietary 3D seismic.
mortgage1 - you nailed it! perfect summary of the Hemi conundrum. I could not agree more, those that say the SP is immaterial just don't know what brings interest and buyers into a stock. Now if Hemi were going to use some of that potential $1.2M in insurance settlement money to buy back some of these "undervalued" shares, then I would agree that the current low SP is a good thing.
Somewhat have to agree wit'ya.
Sounds remarkably like the last PR after Collins. Remove the Collins reference and insert Weseloh. Would have been a great opportunity to post some production numbers for Feb-March-April-May.
The PR did at least state "on the record" that they are not issuing new shares or selling any and are sufficiently funded for the 3 well package and still cash flow positive. That is the best info to come from the PR imho.
Finally getting some heavy volume today... too bad it's mostly on the downside.
Didn't think we'd breach the nickel barrier after the last run took us up well into the teens... seems like ancient history, this stock is sure volatile... would need to measure the beta on a logarithmic scale, lol....
OH -I AGREE.... the sooner the results are announced the better. I am stating "before end of summer" based on past "new wells" and the lack of follow up to show production numbers. Can you or anyone else tell me production numbers on Sturgeon or Hemi-Tebbons #2 other than the initial meaningless "flushed in" results in PR's?
@ PinkElephant
I find your post to be "fair and balanced". You summed up my feelings about this stock very nicely. I am cautiously optimistic and am in HOLD status now that I have reached my target acquisition number of shares. There are some great assets in the company's control but there are also many things that management could be doing better to demystify the stock.
Maybe that's just the nature of Pinkies, been reading a lot of posts about other companies in OTCBB realm and seems that the only investors that ever make money are the flippers and the cycle of pump and dump. I am in no way saying that's the story about HEMI but when you choose to operate in this realm, you are guilty by association until you can distinguish yourself as not part of the crowd.
Go HEMI, lets get some good production results from the 3 new wells out there by the end of the summer, okay!!!
Wow! That's some kind of Canadian Kharma going on there, lol.
With all that going for you, I think you will do just fine on your SNG investment. Sometimes buying stock on a whim pays back more than all the DD in the world.
Thanks... I will check that site out tonight...
I have a boatload of $'s riding on both SNG and CHQ so the more info I can get, the better...
Funny - I noticed that your profile shows that you live in Trinidad, CA... That to me would be a "sign" that you gotta be in SNG as they try to hit the "homerun" to use Greg Noval's often used line. GLTY!
hillzman - I wonder where the moderator and assistant has been the last 2 weeks. Nary a peep out of them since I first posted on this message board. Maybe they flew down to T&T for a little field trip DD... lol
Kind of boring only having two people chime in to discuss this company as they near proving up 4 TCF of NG reserves.... I guess that balances out the circus over at that TX o/g company board we both follow....
@Big Mur
how do the shares get into the individual investors account if the MM is playing the transaction with "air shares"??? It would seem to me that the investor that bought the shares would be debited from their cash position by their broker but no shares would ever show up if these are indeed criminal activities.
Finally, the CanSup website daily drilling update report file has new information on it today. And it's not good news. At least they show to be drilling again at 15,271' even though the well should be at TD by now from the early May PR. My bet is that they had hole prob's again (lost circulation / stuck pipe / BOP repair / who knows?).
It is disappointing to me that CanSup hasn't PR'd this, they are acting more like a Pink sheet stock instead of an AMEX listed company on this lack of info.
The downhole prob's on Victory didn't affect the substantial gas discovery but the added drill time definately costs money.
There are footnotes in the CanSup financials that there is an ~$6M dispute ongoing with the driller over cost over runs on the first well.
Let's hope for a PR detailing an updated status report and a new target date for getting to TD.
It's been a while since I've seen one but to be honest, I didn't really pay much attention to who it came from since the return header info is often spoofed. I believe it was affiliated with some kind of investment newsletter that I have never subscribed to. Sorry I couldn't be more specific.
My number one concern as an investor in HMGP is their lack of reporting timely production figures (expenses would be nice too but I would settle for the revenue side). I have reached my target holdings in HMGP now and will not commit to any additional buys until some more info comes out.
I see no reason whatsoever to withhold monthly aggregate numbers. I can see the desire to not release production figures for individual wells (or individual leases) if one were trying to acquire further land and you didn't want the competition to know.
The Feb. PR listed the Dec. and Jan. figures but that was the dead of winter. I believe that we should be substantially higher now with more reworked wells coming on-line and warmer weather not causing pumping down times.
The tone of the board has been pretty confrontational the last few days so thought I'd attempt to inject a little humor...
Any one else notice that our Weseloh lease we're drilling this week is reflective of the trade activity the last few days?
It's a play on words here, Weseloh pronunciation guide -->> ( WE-sell-low )
I definately understand your point. The geology can change from well to well on the same lease, let alone two counties over. I just thought it was an interesting case and the history of their lease operations. They acquired a 160 acre lease, drilled some wells and found some zones no one had exploited before. Kept quiet about it whilst leasing up offset acreage until they had the land under wraps and a fuller sized field could be developed... sounds very similar to the Hemi SEK story to me - its all good!
Not sure the investors here care about the geology or the nuts and bolts of the oil/gas business but I found that water flood animation to be outstanding. Our Hemi leases (mature ones) have already been flooded so the dewatering EOR is now trying to remove the water from the pay zones to move the oil back to the original perforations and into the tubing.
Bourbon County, KS lease info...
Bourbon County is due east of Allen County which is due east of Woodson county. I estimate about 25 miles from Hemi's new leases. This company has a major waterflood project they are completing and the article lists some excellent geological info as well as reserves estimates for their Bartlesville sand pay zones. Note that the lease acreage is fairly similar in size to the Hemi Holdings and they have just increased their estimate of reserves to 10 million bbls. in place from the original estimate of 3 million bbls.
I hope no one thinks I am trying to pump up these other two companies or their project, I know nothing about them. The info helped me with some of the geological and reserves questions I had about Hemi's holdings.
Project info
http://www.nighthawkenergy.net/Newdevonoilfield.html
New PR:
http://www.oilvoice.com/n/Nighthawk_Energy_Provides_Devon_Oilfield_Update/4cfab203.aspx
um, that was actually my point also if you would re-read the post.
I was stating this same concern to Big Mur's post since Hemi doesn't seem to want to follow up with production rates they tease us with in their PR's. I believe you often refer to this as KAA's "dangling carrots".
FWIW - Over the last 12 months, I have received numerous emails to my private addresses hawking this company as a "Great O/G investment opportunity". On that one basis alone, I would steer clear of sending any $'s their way... If you have to SPAM people to market your company, that's a BIG red flag for me.
"I expect that we'll end up getting some sort of flow rate numbers from all three wells pretty close together.
The Collins got delayed in being completed, but the Weseloh and Driskell are moving ahead at full speed, so all three will likely end up being completed within a day or two of each other...
It's just my own supposition, but we should be getting a bundle of completion news when it comes."
I'm "hoping" too that we'll get some production numbers from these 3 new wells at some point although later rather than soon is more likely based on history. Remember these PR's about the Sturgeon and Tebbens-Hemi? AFAIK, there has never been an update to show stabilized production rates for these old "new" wells. Nor has there been overall monthly production totals from Feb, March , April or May 2008.
Sturgeon-Hemi well from 08/08/2007 PR:
The Sturgeon-Hemi 1 is a good producing new well with a high quality green oil (39 specific gravity) exceeding our expectations for our first new well located on the Sturgeon Lease near the town of Cherryvale in Montgomery County, KS. This new pay zone in the Bartlesville geological formation on this lease, in our opinion, still has its original gas-water solution drive. This well, that has been thoroughly logged and tested, and when the completion techniques are finalized in less than two weeks, will produce an exceptional volume of high-quality oil. We will be able to give shareholders a barrel count per day as soon as the fracing fluid is recovered and production baselined. There were also two pay Coal Bed Methane (CBM) zones of very economically viable natural gas development, we chose not to produce at this time and leave "behind pipe" for future development.
Hemi drilled a deep exploratory well on the Tebbens Lease which allowed us to discover several coal bed methane (CBM) gas and oil pay zones not previously explored in Woodson County, KS. An important new geological pay zone, the virgin Tucker Sandstone formation heretofore unknown to exist in Woodson County, had an exceptional show of crude oil. Hemi management strongly believes that when produced these gas-water solution drive wells may produce exceptional oil wells similar to the historical early 20th century original oil wells produced from the Squirrel sandstone geological formation. We will be producing this new oil pay zone once we have received the information from the drilling cutting samples and evaluated the information obtained from open hole logging. There was also an excellent oil show in the Squirrel pay zone in the deeper new well on the Tebbens lease. This deeper well will be needed as a water injection well in anticipation of ramping up multiple new well production so that we can produce oil from the new wells at the highest rate possible. We are drilling an offset well less than 100 ft. from this well so that we can produce the excellent oil show we had from the Squirrel Sandstone formation.
Sturgeon-Hemi well from 12/18/2007 PR:
The new well drilled on the Sturgeon lease earlier this year primarily showed more amounts of natural gas than oil in the lower Bartlesville formation. Given the lack of natural gas infrastructure and pipelines in the area, this natural gas cannot be economically produced when compared to crude oil. Therefore we are preparing to come uphole and recomplete the well in the upper Bartlesville payzone. This recompletion work is expected to be conducted in January, pending weather and equipment availability issues.
Sturgeon-Hemi well from 3/24/2008 PR:
Additionally, last week the company conducted a series of re-completion techniques on the Sturgeon-Hemi 1 well. The well was put back on-line on Thursday. The well has been yielding very promising early oil production results, with oil production increasing on a daily basis since the well came back on-line.
Tebbens-Hemi 2 well from 11/18/2007 PR:
The Tebbens-Hemi-2 oil well flushed in at 43 bbls per day after the fracing process was completed on our lease in Woodson County, KS. We are baselining this new oil well to maximize efficient production.
I really think that they should be showing on the website if they are indeed not updating the daily drilling reports anymore. The link keeps updating to the current date but the document has been static since May 8th and 14,415 feet.
I have been with SNG long enough to know that the Victory well went into "tight hole" status during the last section of the well bore drilling. It was clearly seen on the website that the daily updates would no longer be given until a PR was released with the results.
I have even emailed SNG several times about this and have not gotten a reply to any of my correspondence.
I would say that some type of PR will be forthcoming in the next 7 days or so since previous PR's stated that TD should be reached in early June (which is pretty darn close to NOW)
Lucky break on getting my limit order filled today... Buying HMGP has been such a crap shoot for me, guess it's my lack of experience in buying pink sheet stocks as I deal mainly with ETF's and larger cap stocks.
After having a ~9.5K buy limit order at .055 for over a week w/o getting filled, I decided to up it to .059 this morning based on Kels great field report (thanks mucho btw) and the early Hemi PR today. Stock was trading at .060 to .070 today whenever I looked so was extremely surprised tonight to get an email confirmation of picking up my order at .057 at 130 EDT today. I didn't ever expect to fill a limit order below my price on Hemi.
Is the reference to HOSS the Oilfield Service equipment that Hemi bought last year to do workovers and such? Since I am a basic subscription member at iHub, I can't search the forum for the past posts on HOSS although I see it referred to frequently.
Wow - USC, free is the cheapest commission yet! I just Googled Zecco and am reading up on all their FAQ's and such.
Big Mur - thanks! That's a very good explanation of the HEMI business model, that will help me with my disappointment of the lack of monthly production figures.
That being said, I just want everyone to be aware that actual BOE production numbers are valued much higher by an acquiring company than BOE reserves. You get immediate cash flow from production and can calculate return on investment much easier. Reserves are simply educated guesses until they turn into actual production through capital spending.
I'm giving KA my support, and dollars, to be making the right use of their limited capital to bring us shareholder value (read buyout) in the end game. If that be proving up reserves at this point rather than production, then so be it.
The monthly production rates are the "million dollar question" around here.
The KGS (Kansas Geological Survey) website and link shows these numbers (if my math skills were correct) for the 6 Hemi leases by month:
Dec. 2007 - 396 bbls
Jan. 2008 - 288 bbls
Feb. 2008 - 280 bbls
link: http://abyss.kgs.ku.edu/pls/abyss/oil.ogl5.OpLeases?f_id=1033972094
Others have posted that the KGS data is sorely incomplete and very late in posting numbers.
The HEMI PR from 2/27/2008 gave us this info: January oil production ramped up to 669 bbls from the December production of 461 bbls. There has been no PR detailing any monthly numbers for Feb-May.
Jagman - thank you for sharing your opinion on this. The amount of knowledge and willingness to share by the members here on this board is truly outstanding.
Thank you everyone for their advise on "low fee" investment houses. I think my economic stimulus check will be going into a new account where I can buy some more HEMI at more favorable fees.
One interesting note I found out this a.m. I called the rep at TD Ameritrade to find out why I couldn't buy HMGP through their firm since they do allow pink sheet stock trades. At first she was puzzled too so had to dig a little deeper. She finally found that HMGP was listed as having "special trading requirements". The special requirements did not allow the security to have shares recorded electronically. They could only be exchanged by using real paper certificates. This would add cost to the transaction and additional delays so they simply do not allow this symbol to be traded.
I wonder if this was at HEMI's request to try and put a stop to the manipulation of the stock such as naked selling and the like. Would be much tougher to accomplish this by the MM's if they had to deal with real paper cert's!!!!
Commission fee's for buying HMGP question...
Hope this subject isn't taboo on the forums, I guess the moderator will delete it quickly if it is...
I've been dollar cost averaging into HMGP for about 8 months now and the commissions are starting to really bug me. I have online brokerage acct's at TD Amer*** and Fidel***. TD Amer*** will not allow new positions to be bought for HMGP so that leaves me with Fidel***. I am used to ~$10 commissions on NYSE and NASDAQ securities with them. When buying 5-10K shares per trade of HMGP, I get hit with ~$25 charges due to the number of shares add'l fee.
This really impacts the cost of doing business since the percentage cost to trade is so high, e.g. a $25 commission on a $300 trade (5000 shares) means I'm paying 8.33%. There would be a similar exit fee when selling although I'm in for the long term so haven't exited any HMGP yet.
Who are you "active" pink sheet traders using to buy/sell without incurring this type of high percentage commissions?
oops! Of course I meant to say Victory instead of Intrepid when referring to the first well.
Thanks for setting the record straight on your knowledge of the reserves geologist.
Also, very nice post about your potential reserve calculations for the CBM.
I found this SNG board tonight whilst reading up on a pinkie stock I also own.
I've been an investor in SNG (and more recently CHQ too) since the Mariner I-85 well. I am extremely excited about the results to date on block 5C and the Intrepid results. The Bounty daily drilling update blackout on the SNG website is driving me crazy though. Are they really still at 14,415 ft. since 5/8? Are they just withholding the well status since they are entering the potential payzone areas and are in "tight hole" status?
Anyone care to speculate about what is going on out there on the Kan Tan IV? I sure hope it's just a news blackout and not major equipment or well trouble like happened several times during Intrepid's drilling.
GLTA, I think SNG's SP will hit double digits easily with a successful Bounty result.
Hey duelittle2,
Are you adding your comment about the AAPG certification as something you want to see on the upcoming reserves report or stating that the present reserves report has AAPG credentials???
Many here aren't buying the figures of the "independent reserves report" of 2.15 million BOE and probable of 3.1 million BOE.
thank you for this thorough post. you have covered all my main concerns too with the exception of one which I will post below.
What is the status of the insurance claim against the flood damage from 2007? there was much speculation here on the forum that new stock was sold last year to "pre-pay" for the repair to the leases. The insurance would then cover this when settled. what are the "true" facts regarding the dollar amount of the damage, how was the repairs paid for and what dollar amount is HEMI seeking from their policy and its current status?
Glad to hear your trip plans are still a "go". Looking forward with much anticipation to your post with the answers to questions the forum members have PM'd you. I wasn't able to get you a PM during the free happy hour so hope someone else asked my questions.
I was thinking that Craig would be too busy on-site monitoring the drilling of the Driskell or Weseloh wells to be able to give you a personal tour. Give him and the HEMI team my best wishes and hope that the drilling breaks are on depth to prognosis with good "shows".
The equipment in the photo is the oil/water separator and storage tanks. Question is though, is there any fluid moving through the pipe into it??? Until the well gets perforated, fracture/stimulated and the pump jack set up and running, this equipment just sits idly by waiting for fluids to start flowing.
There has not been any specific numbers posted in any HEMI PR regarding Barnett leases that I have seen. That is one of the frustrating aspects of this (and really all pinks) company. You get general information but without quarterly audited financial filings, you really just try and do the best with the info that is out there.
There are some great contributors on this board that actually meets with and communicates with HEMI to do their DD and readily share this with us.
I can't wait for the upcoming PR's to hopefully give us production numbers from SEK on the mature wells and the new wells. Leased acres for the Barnett would also be nice to see.
Man thats alot of gas and they have 7500 drilling locations remaining?
I wonder how many more drilling locations Devon would have if HEMI didn't have some of the acreage tied up. Remember the April 22 PR "will continue to add to its checkerboarding lease holdings in Fort Worth that will absolutely be legally required "well spacing requirements" before major oil companies can obtain a permit to drill."
The expense side has probably doubled also for oilfield services and leases. As the product (hydrocarbons) become more valueable, it also costs more for the drilling rigs, casing, completion, leases, etc. as demand for these increase.
That said, I am trusting that KA is making the best decisions with the capital he has to work with. That's why I am long the stock and am hopeful for consistent release of financials / production from the company going forward. Not as transparant though with the pinks you know.
I think Badge is asking a fair question here. It seems that HEMI has only two options for their cash flow, sell oil or sell shares. Here's my guess for cash flow since January 1 based on only the sale of oil.
The Feb. 27th PR stated the following production numbers: "January oil production ramped up to 669 bbls from the December production of 461 bbls."
For assumptions, I will say that production increases 10% each month since Jan. That would make Feb. at 739, March at 812, April at 893. This totals out to 2008 production thru end of April of 3113 bbls.
Let's assume they sold it all for an average price per barrel of $100. That's $311K gross. I read where the leases are an 80% net so after the land owner gets their 20%, that leaves HEMI with $250K. Lifting costs to cover electricity & maintenance will be guessed at $10/bbl for a total of $31K. That all leaves HEMI with new cash of $220K for Jan-April.
Is that enough money to have drilled the Collins well and complete it, buy additional Tarrant Co. leases, run their Ft. Worth office and contract for the two upcoming SEK wells and completions??? I don't know how much cash HEMI was sitting on at the start of 2008 that could also be used.
Can someone please give me the lowdown on these "T trades"? What exactly are they and how do they differ from after hour trades?
Also, what is the "AUTO" that is referred to in the bid/ask trading process.
Thanks in advance.