“Formula for success: rise early, work hard, strike oil.” - J. Paul Getty
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I haven't spoken to the company yet but intend to next week.
I do not actually have any details regarding doing any actual drilling or if they have the capital to do it. I was replying to a post someone made about drilling to see if I could find out.
I will post any DD I find.
Interesting points. As I think Bill Clinton put it there is nothing wrong with America that can't be fixed by what is right with America. I want to believe that is true.
I was equally bummed about Pokerstar getting the DOJ hammer. Hold 'em was my vice when the markets were closed! Now I just make the trip to Vegas lol.
Was huge on BEXP we made a killing on it. Now equally long on KOG been in it since a few years ago (off & on).
Haha yeah I probably love them too much I'm all about the oil patch. At times my friends say I have oil flowing in my veins :)
Yeah very bullish here as well. I think this is one any energy investor should consider for their portfolio for 2013.
I think this is a good bottom value proposition if we can expect drilling (& results) and there is a clear path on where operating capital will come from and possibly new acquisitions or drill targets.
In addition it looks like the promo fall out is about done and you are left with some longs and a lot of eyes.
Secure the developments and those eyes will turn into buyers. JMHO
The July sideways action here leads me to believe the market wants to go higher. Will be watching for a break out.
Hey wait I like when money comes not goes!
MGG have they actually started drilling? I didn't pick that up from my initial scan but I am still doing DD.
Yeah I agree I like low floaters. Had some run from $0.05 to $.20 and hold after an acquisition or reverse merger.
This one seems to have lost any momo it picked up earlier in the week but I am sure that can change. I will do more DD over the weekend and may reach out to the company for some intel.
Due to a bleak global economic outlook, oil has really taken a hit in recent months. When there is a lower demand for oil, then there is lower demand for the equipment and services necessary to extract it; so these companies are extremely sensitive to the price of oil.
But as such an essential commodity, people will continue to depend on oil for as long as it exists; and these equipment and services companies will remain vital to the industry and grow aggressively as oil prices rise again (over $90 at the time of this post)
If Warren Buffett has taught investors anything, it's this: Buy cheap. And by cheap I mean basement bottom prices, stocks at (or near) 52 week lows. One of the best times to buy a stock is when the market is unaware of its potential such as recently re-listed HIIT which is why I like this company.
When / if management follows through on their roll up strategy a tight float can turn into some serious legs in the market. & based on CEO Flemming's history of building businesses and successfully selling them I feel confident he is capable to close acquisitions and develop them.
Glad to be on board NYBob. Big fan of Suncor and their activities in resource basins in Canada's Athabasca oil sands up North. Been following closely holdings by big firms.
Mega funds together added a net 21.36 million shares in Q1 to their 358.68 million share prior quarter position in the company, and taken together mega funds held $11.00 billion or 24.4% of the outstanding shares.
The top buyer was mutual fund powerhouse Fidelity Investments, with $555 billion in 13-F assets, that purchased 20.93 million shares. Other large mega fund purchasers included AllianceBernstein (3.34 million shares), with $99 billion in 13-F assets, and the world's largest and most prominent asset manager, Blackrock Inc. (2.33 million shares), with over $3.5 trillion in assets under management.
In its latest Q1 (March), SU beat analyst earnings estimates (85c v/s 84c). Its shares trade at 8-9 forward P/E and 1.1 P/B compared to averages of 7.2 and 1.7 for its peers in the integrated oil & gas group, while earnings are projected to fall from $3.53 in 2011 to $3.35 in 2013.
I could see that from this level. It seems to have found a bottom. Let's roll.
Ok thanks for the feedback. Let's see how tomorrow goes.
Thanks for the feedback. I will do some DD and see what information I can come up with. Looks like a few of the right moves and this could get its legs again.
From most recent 10k: Producing Properties
Poston Oil Project - On May 4, 2009, we entered into a binding Letter of Intent with S&W Oil & Gas, LLC (“S&W”) to acquire a 25% working interest and 81.5% net revenue interest on all commercial production in the 750-acre Poston Prospect #1 Lutters oilfield in Southwest Trego County, Kansas. On June 16, 2009, the #1 Lutters Well was completed at a total depth of 4,400 feet, encountering both oil and gas over a 46 foot interval. Oil production on the #1 Lutters Well began on June 18, 2009, with current production of six barrels per day. On July 1, 2010 we announced completion of the #3 Lutters Well and on July 14, 2010, we announced that the #3 Lutters Well had begun production. The current daily rate of the #3 Lutters Well is six barrels per day. Collectively, 12 barrels per day is going into the tanks for sale.
On February 23, 2012, due to an increase in costs of water haulage for disposal that was affecting the net revenue to the lease and a desire to focus on the planned wells and development of our Oklahoma leases, we sold 75% of our 25% working interest in the Poston Prospect for $65,000.
North Oklahoma Project (North Oklahoma Woodford “Yale” and North Oklahoma Mississippi “Ripley” Projects) - On April 21, 2010, we entered into an operating agreement with Bay Petroleum Corp. (“Bay”) to participate in the drilling for oil in northern Oklahoma (the “Prospect”). Pursuant to such operating agreement, we agreed to pay to Bay $52,125 for all costs in connection with the acquisition and operation of the Prospect, up to the drilling of an initial test well, in exchange for a 25% working interest and 80% net revenue interest in the Prospect. We are also responsible for 25% of all expenditures in connection with the development and operation of the Prospect for drilling.
On June 1, 2010, we announced that the No. 1 well had been put into production. The current daily rates are at the eight barrels per day level, with water in the 100 barrel range or approximately 8% oil cut.
On January 4, 2011, we announced plans to drill the NOS227 Well as a direct offset to the NOJ26 Well. On March 15, 2011, we announced that the well had reached a total depth of 3,820 feet and was to be completed as an oil well. After testing and a large, multi-stage surge frack, the well did not respond favorably as we believe we fracked into a fault containing considerable water. The future of the well is being analyzed and plans to attempt additional work are being discussed.
On June 29, 2011, we announced that NOS122, a re-entry project where the well bore and casing was opened and cleaned, had begun commercial production. Inaugural loads of oil began shipping in July and current production at the NOS122 is six barrels per day. As a frack is required to maximize the oil production, engineering has deemed it to be risky to do so in a 30 year old well bore. It has been decided to drill an 80 acre offset with a new well bore and undertake the frack test in the new well. This well is planned for the second quarter of 2012. The well has been designated NOS222. We estimate that our expenses associated with drilling and completing NOS222 will be approximately $290,000. The well has been scheduled to drill in June 2012.
On March 25, 2011, we announced that we had acquired a varied working interest in an additional 2,000 acres located in Payne County in northern Oklahoma, near the Company’s Yale Prospect. The project has been named “North Oklahoma Mississippi Lime Project”. On May 16, 2011, we announced that drilling operations had commenced at the Company’s first horizontal well, NOM1H. The Company owns a 25% Working Interest in the lease. On June 29, 2011, we announced that NOM1H had begun commercial production and currently produces between 15-20 barrels per day and 100 MCF gas.
On July 18, 2011, we announced drilling plans for a total of 11 horizontal wells at the North Oklahoma Project. As of May 2012, there are nine locations left to drill on the acreage. The current drilling schedule, which includes direct offsets, involves drilling one horizontal well approximately every 90 days. Our experience has shown that the time to drill, complete, implement large frack, recover the fluids and begin oil sales involves a minimum of 90 days. We expect to drill a minimum of two additional horizontal wells on the North Oklahoma leases in July and September, 2012. The next well will be a direct offset to the NOM-1H and is expected to cost $320,000 for our working interest share of the drilling and completion costs.
On July 27, 2011 we announced the NOW2H, an 80 acre offset to NOM1H. On September 6, 2011, we announced the spud of the NOW2H well. Following a successful drilling of 800 feet of horizontal lateral, excellent oil and gas shows warranted the well to be completed. Two productive zones are present in the well. On November 7, 2011, the well commenced commercial oil and gas production. On March 26, 2012, we announced that after undergoing a second frack and the installation of a submersible pump, the well was producing at a daily rate of 30 barrels per day. Since that time the well has declined to 10-15 barrels of oil per day and 200 MCF of gas per day.
On January 9, 2012, we announced plans to drill a third horizontal well at the North Oklahoma Project, NOM3H, on the same section of land as our two previously completed producing wells, NOM1H and NOW2H. On February 6, 2012, we announced that we had drilled a total of 1,988 feet in the horizontal well segment penetrating into the 100 plus foot thick Mississippi pay zone. The well underwent a frack and the installation of a submersible pump. The NOM3H began commercial oil and gas production on March 7, 2012, with initial production rates over 200 barrels per day and 400 MCF gas. The well is currently being evaluated to determine the final stable rate after the frack load is fully pumped. The newly designed and implemented completion method appears to have been successful and all further wells will undergo a similar procedure. In 2012, we have plans to develop three additional wells on the North Oklahoma Project.
In April 2012, we sold our interest in the NOJ26 well on the North Oklahoma Project, yielding net proceeds of $41,000, which was used as partial funding for the SOM-1H horizontal well on our South Oklahoma Project.
Let me see if I can find the most recent number.
Here is an excerpt from their latest 10k about their properties.
Investments in Mineral Properties
During the three months ended March 31, 2012, the Company made one investment totaling $158,400. During the year ended December 31, 2011, the Company made six investments totaling $1,374,730. Prior to 2011, the Company made seventeen investments totaling $2,505,103. Several of those investments produced “dry holes” and were therefore fully impaired. During the three months ended March 31, 2012, impairment expense relating to these “dry holes” was $0. During the year ended December 31, 2011, 2010, and 2009, impairment expense related to these “dry holes” was $80,000, 765.229, and 765,229, respectively. In addition, during the three months ended March 31, 2012, an investment was impaired by $256,737 to bring the total capitalized costs in line with its market value. During the year ended December 31, 2011, an investment was impaired by $93,879 to bring the total capitalized costs in line with its market value for total impairment expense for 2011 of $173,879. As of March 31, 2012, the Company has investments, value at cost of $1,938,228; $1,314,848 in proved wells and $623,380 in unproved wells. As of December 31, 2011, the Company has investments, valued at cost, of $2,101,564; $1,365,714 in proved wells and $735,850 in unproved wells. Capitalized costs of proved properties are amortized and expensed using the straight-line method over the estimated useful life of each well. Unproved properties are excluded from amortization. Amortization expense for the three months ended March 31, 2012 and year ended December 31, 2011 was $36,342 and $119,415, respectively. A summary of investments follows:
S&W Oil & Gas, LLC - Poston Prospect
On May 4, 2009, the Company entered into a binding Letter of Intent (“LOI”) with S&W Oil & Gas, LLC (“S&W”) to participate in the drilling for oil in the Poston Prospect #1 Lutters in Southwest Trego County, Kansas (the “Poston Prospect”). Pursuant to the LOI, the Company paid S&W $64,500 in exchange for a 25% working interest in the 81.5% net revenue interest in the Poston Prospect. During the year ended December 31, 2009, an additional $44,624 was paid for completion of the oil well and for the purchase of necessary equipment. During the year ended December 31, 2010, the Company paid an additional $106,167 for drilling and completion costs of a second well on this property. Amortization expense was $22,568 and 16,572 on this prospect for the years ended December 31, 2011 and 2010, respectively. During the year ended December 31, 2011, an impairment charge of $93,879 was taken on this property to bring the net book value in-line with its market value. During the three months ended March 31, 2012, 75% of the property was sold for $65,000, which matched its book value.
S&W Oil & Gas, LLC – Rooney Prospect
On June 19, 2009, the Company entered into a binding LOI with S&W to participate in the drilling for oil and natural gas in the Rooney Prospect located in southwestern Ford County, Kansas. Pursuant to the LOI, the Company paid S&W a total of $113,333 for land acquisition and leasing costs, $216,697 for the 3D seismic shoot costs, and $392,231 for completion of the oil well and the purchase of necessary equipment in exchange for a 50% working interest in the 81.5 net revenue interest of the project. During the year ended December 31, 2010, this prospect was determined to be a “dry hole” and an impairment charge of $642,260 was taken on this property to bring the total capitalized costs in-line with its market value. The property was sold for $80,000 on October 15, 2010.
Shelor 23-3 Prospect
During the year ended December 31, 2009, the Company entered into an agreement with S&W to participate in the drilling for oil. Pursuant to the agreement, the Company paid S&W $116,900 for a 50% working interest in the project. During the year ended December 31, 2010, the well was determined to be a “dry hole” and the full $116,900 was written off to impairment expense.
Oklahoma prospects
During the year ended December 31, 2010, the Company entered into an agreement with Bay Petroleum to purchased working interests in several properties in Oklahoma and advanced funds for lease purchases. During the year ended December 31, 2010, the Company paid Bay Petroleum $697,600 in exchange for 25% to 50% working interest in the net revenue of several properties in the project. $1,374,730 of additional properties were purchased during the year ending December 31, 2011. During the year ended December 31, 2011, one well was determined to be a “dry hole” and its full $80,000 cost was written off to impairment expense. During the three months ended March 331, 2012, the Company purchased additional property for $158,400. As of March 31, 2012 and December 31, 2011, amortization expense was $129,449 and $96,847, respectively, relating to these wells. As of December 31, 2010, these prospects are unproved wells and were not being amortized.
Oh for sure lol. We all just want some action here, right???!?
Yes completely agree on the right track.
Thanks still doing my DD here.
Oh I was just replying to what the former poster said:
Awareness is also about to start!! It's still hidden
$0.10 x 35M shares = $3.5M market cap.
$0.20 x 35M shares = $7M market cap.
^^ is that possible
$0.____ x 35M shares = $___M market cap ????
Williams Co.
Williams Co.
Ticker: WMB
Price Target: $37
Location: Tulsa, OK
Specialty: Infrastructure
Comments: "WMB is a principal beneficiary of long-term demand in natural gas and liquids infrastructure and gas processing."
Source: Morgan Stanley
Read more: http://www.businessinsider.com/morgan-stanleys-natural-gas-playbook-2012-7?op=1#ixzz217bbXiEt
Kinder Morgan, Inc.
Ticker: KMI
Price Target: $42
Location: Houston, TX
Specialty: Transportation and storage
Comments: "A blue-chip midstream infrastructure behemoth. Scale, diversity of assets and stability of cash flows will increasingly reposition KMI as a core portfolio holding, with its C-corp structure broadening out the potential institutional investor base.
Source: Morgan Stanley
Read more: http://www.businessinsider.com/morgan-stanleys-natural-gas-playbook-2012-7?op=1#ixzz217bSeaMy
Spectra Energy
Spectra Energy
Ticker: SE
Price Target: $34
Location: Houston, TX
Specialty: Developer
Comments: "Stable fee-based revenues (~80% of portfolio) that have little exposure to commodity prices. Strategically positioned assets, solid track record of above average ROIC, prudent financial management."
Source: Morgan Stanley
Read more: http://www.businessinsider.com/morgan-stanleys-natural-gas-playbook-2012-7?op=1#ixzz217bJN0bh
NiSource, Inc.
Ticker: NI
Price Target: $26
Location: Merillville, IN
Specialty: Service and distribution
Comments: "Numerous midstream opportunities surrounding its existing pipeline systems in the Marcellus provide exceptional longterm value, but also come with it increased capex and possibly heated competition."
Source: Morgan Stanley
Read more: http://www.businessinsider.com/morgan-stanleys-natural-gas-playbook-2012-7?op=1#ixzz217b7SRSo
Why I like, hold and will not let go of DVN.
Duke Energy is a electric utility company, whose business model is defensive by nature. Defensive businesses in the power generation industry, being less cyclical, exhibit two distinct advantages for investors:
They are highly profitable on a marginal basis: Once capex is funded the marginal cost per unit decreases as sales increase adding to the company's profitability.
Demand is usually pretty stable which translates into a comparatively stable cash flow stream.
Risk-conscious investors, who feel uncertain about the future economic development and fear disruptions from the financial sector or Europe should consider a Duke Energy investment for the following reasons:
1. Stable cash flow streams can efficiently mitigate equity market uncertainty. High cash flows translate further into high dividends, that are relatively secure as demand for utility is inelastic. This is a very favorable business driver. Investors profit with a superior 4.63% dividend yield accordingly.
2. EPS growth this year stood at 28% which is way above average. Annual EPS growth in the past 5 years stood at over 7% indicating a solid underlying growth trend. In addition, in the last 4 quarters, Duke has consistently announced higher EPS beating consensus estimates.
3. The company is cheap: Given the low business risk, stable cash flow stream, good profitability with a net profit margin of 10.3% and high dividend, an earnings multiple of 12.8 is very low.
4. The stock price correction over a possible CEO change should be seen as contrarian investment opportunity to pick up Duke on the cheap.
5. The high estimate of 2013 EPS stands at $4.82 which is consistent with my own estimate based on historical growth rates. Applying a multiple of 16 yields an intrinsic value estimate of $77.12 representing about 17% upside potential.
5. Technically, Duke just sits on top of its lower bound trend canal. Chartists may find this an interesting Buy opportunity as well: Can Duke hold its level around $66, the company has immediate upside potential to its upper bound trend canal of $70.50.
Looking attractive here around $10. Interesting excerpt I pulled from back in April.
This company reported earnings last week after providing an update the week prior. Results were generally disappointing sending the stock down though its unclear why investors weren't prepared for weak results. Not only had the company missed earnings most of 2011, but Baker Hughes provided plenty of warnings.
The company still reported solid profits of nearly $20M and only slightly down from Q411. The disappointing part is that revenue actually rose 5% sequentially so the biggest culprit was rising costs.
Profit margins were hurt by rising labor costs and several non-recurring items though management expects lower pricing going forward to eat away any benefits from the reduction of one time expenses.
Basic saw similar issues with the Pressure Pumping product line and hence has substantially lowered capital spending for 2012. The new program calls for spending $175M to $200M from the announced plan of $250M.
Unlike Baker Hughes, the stock hasn't plunged to new lows. It hit double bottom from late September 2011 providing some support for a bottoming process.
S&P: Oil-sector credit looks strong for 2012-2013
By Angel Gonzalez
Standard & Poor's said Friday that low natural-gas prices are unlikely to affect the credit of the oil sector in general, as companies have kept relatively low debt levels compared with other sectors, and, in many cases, high oil prices offset lost natural-gas revenue.
In a news release, the credit-ratings company said companies with proven reserves of oil and related liquids, as well as oil-field-services companies, are poised for "strong operating performance" despite the depressed natural-gas market. The situation is likely to continue for the remainder of 2012 and 2013, the agency said.
Until recently, natural-gas prices were trading at decade-low levels below $2 per million British thermal units, a long way down from their peak above $13/mmBtu in July 2008. The decline was a result of both decreased demand amid the economic crisis and an unexpected glut of supply unleashed by oil companies tapping shale formations across North America.
"High oil prices and relatively low debt leverage for the sector should help these producers maintain their credit quality," said Standard & Poor's credit analyst Thomas Watters in a statement.
But S&P added that some companies have defaulted in the past year, as their natural-gas-focused portfolios wouldn't enable them to keep up with their obligations.
S&P: Oil-sector credit looks strong for 2012-2013
By Angel Gonzalez
Standard & Poor's said Friday that low natural-gas prices are unlikely to affect the credit of the oil sector in general, as companies have kept relatively low debt levels compared with other sectors, and, in many cases, high oil prices offset lost natural-gas revenue.
In a news release, the credit-ratings company said companies with proven reserves of oil and related liquids, as well as oil-field-services companies, are poised for "strong operating performance" despite the depressed natural-gas market. The situation is likely to continue for the remainder of 2012 and 2013, the agency said.
Until recently, natural-gas prices were trading at decade-low levels below $2 per million British thermal units, a long way down from their peak above $13/mmBtu in July 2008. The decline was a result of both decreased demand amid the economic crisis and an unexpected glut of supply unleashed by oil companies tapping shale formations across North America.
"High oil prices and relatively low debt leverage for the sector should help these producers maintain their credit quality," said Standard & Poor's credit analyst Thomas Watters in a statement.
But S&P added that some companies have defaulted in the past year, as their natural-gas-focused portfolios wouldn't enable them to keep up with their obligations.
In a news release, the credit-ratings company said companies with proven reserves of oil and related liquids, as well as oil-field-services companies, are poised for "strong operating performance" despite the depressed natural-gas market. The situation is likely to continue for the remainder of 2012 and 2013, the agency said.
http://www.marketwatch.com/story/sp-oil-sector-credit-looks-strong-for-2012-2013-2012-06-22
LOL I want one of those hats, I can switch between that and my cowboy hat!
I think if I recall they have several convertible debts they are servicing. Could be access to new capital but don't have the DD in front of me at the moment.
The right amount of accumulation seems to have balanced the supply /demand scale in our favor. Where is the next resistance?
Interesting link NCS. I think the delays are getting ironed out, could be time to rage.
Long and strong here on KOG. Been in and out of this one since 2010 and even more bullish now.
Nice entry. I am looking for March highs then would say my goodbyes :)
Very good, do you have any idea how their debt converts are impacting the float at this time? I was still doing DD on that part of it. May factor in how much stock is available at each level.
Got you this makes more sense. Many operators will do the work and drill or rework the wells in exchange for 20-40% of the project. The ol' OPM (others people money) strategy which works well for many a operator.
I would love to see that list if you re-DD it together :)
Interesting to see how he uses his cash flows. Growing internally off production is very attractive and it is even more importantly, financeable which leads to better and more production.
This of course has to be supported by a strong management team, but if management has a distinct MO from the past then the future can be projected.