Hero Technologies Inc (HENC)

[tchauncy]

I know it has been a while since I posted here, but don't let my silence lead you to believe I have lost any confidence in the exceptional potential, both near and long term in HENC. I just don't feel it does much good to try to second-guess the unknown. Plus, I admit, I have also been adding to my stock position over the past four to five months.

Yesterday I was discussing HENC with a long term investor who, as I, owned the stock going back to 2007. He reminded me that back in early 2009 when the price of oil was lower than the current price, HENC traded as high as .64 a share. At that time, average finding costs in the Western Flank of the Cooper was running a full $10 higher per barrel (in the low $30 level) than today. This current decrease due to modern 3D seismic programs paired with a lot of new well information. So at the current sub .30 price the stock is a relative "give-a-way".

Anyway, I am piping in here because I am now about 90% confident we will see the first of a series of wells spudded in the next three to five weeks. I am also hearing that the drilling contractor is likely to be the same contractor Beach, Drillsearch and Senex have used to drill several hundred successful wells in the Cooper over the last five years so it is not likely there will be a three week $3 million debacle drilling what should have been an 8 day well, like last time.

If anyone became concerned over the six month extension that HENC announced, don't worry about it. ALL of the operators in the north western part of the Cooper surrounding PEL 444 were given an automatic 6 month extension due to rare heavy rains this past rainy season.

The recent collapse of oil prices, while being quite problematical for a number of Junior oil producers in the Cooper who have strapped on a lot of debt based on $80+ oil, has turned out to be a big windfall for HENC and TGC. While rigs are being stacked in Cooper, just like the rest of the World, it is not because drilling in the field is uneconomical, it is because the local "majors" who are cash flush due to a long run at selling Cooper oil at a 10-15% premium to Brent, have slowed down their drilling efforts and diverting capital to buying up debt distress young companies. (Ironically, we could have been one of these distressed young companies had the first well drill two years ago been successful and a lot of debt strapped on for development

Why this is a windfall for us is two fold, not only a severe price drop in drilling costs due to excess rigs, but also the currency shift between the USD and the AUD. All this causing the dry hole costs even from a Premium Driller to frop from $1.8 million AU dollars to $1.3 million AU Dollars, As recently as a couple of years ago the AUD was trading at $1.10, now it is at .77. So the cost today to drill a well in USD has dropped to around $1 million. This later currency advantage is much more significant to HENC who uses USD than TGC who uses CND. CND has a .04 differential compared to .23 for the USD.