DEJ info - a VERY long post:
July 13, 2011: Noverra Research initiat'd with intrinsic value (tgt) of $1.25: for 2011
-Directors/Insiders owning approx 20% (not including the +/- 10% owned by Brownstone)
-price target of $1.25 is ONLY based on Woodrush and Gibson Gulch - ZERO value has been place on the 100K+ additional acres (like South Rangely,
- $51M+ tax loss carry forward
July 29, 2011:
currently are in the public comment phase for Dejour's Master Development Plan at Gibson Gulch
Dejour has a 72% working interest in this 2,200 acre project which is ideally situated for exploitation of the prolific Williams Fork Formation and in the future the underlying Mancos shale. The Williams Companies, Inc. and Bill Barrett Corporation (BBG) are developing and producing on adjacent acreage to the east, west and north of the Company’s acreage.
BBG = Mkt Cap of $2.3B,& Wells Fargo currently gives it overweight
Zacks: $1 tgt: In the case of Dejour, the majority of proven reserves are undeveloped ($83 million of the $108 million). However, these PUDs are within or adjacent to a known producing gas field. In addition, Williams Companies is extending a pipeline from its Grand Valley gathering system to the Kokopelli Field, where Dejour’s PUDs are located. This both reduces most of the uncertainties related to the PUDs and also provides an efficient method to transport Dejour’s natural gas into a large-scale, high-volume distribution system.
We expect a positive valuation increment in the marketplace as PUDs become PDs. When the uncertainties associated with PUDs abate, the discount to NAV that pertains to the PUDs at Gibson Gulch will be reduced or be entirely eliminated. As the PUDs become producing wells in the first quarter of 2012, the marketplace may not only eliminate the discount to NAV of those 8 wells, but also reduce or eliminate the discount related to a portion or all of the other 212 PUDs located at Gibson Gulch.
As the certainty of the value of the PUDs increases, we expect the valuation of Dejour’s stock to approach Net Asset Value (NAV). Dejour’s NAV is estimated to be $125 million ($1.03 per share).
Dejour Energy Inc. Secures Prime + 1% Bank Facility 4-Aug-11 08:09 am
Binding Term Sheet for CAD$7.0 Million with Canadian Chartered Bank 08/04/11
Canadian chartered bank for an initial CAD $7.0 million revolving credit facility at a bank rate of prime + 1%.
Currently, that is 4% per annum.
This loan will be utilized to retire the Company’s existing mezzanine facility of $4.3 million with its Alberta-based lender as well as provide low cost working capital to expand the Company’s reserve base.
(This was a bridge loan that they had been utilizing that was at a rate of 12%)
"We are very pleased that Dejour now has the confidence of the Canadian banking industry. With sustained production currently being evidenced at the Company's 75% owned and operated Woodrush oil/gas facility, Dejour can now begin to effectively lever these assets as a compliment to increasing cash flows for the development of its other key properties at a low borrowing cost", states Dejour CEO Robert L Hodgkinson.
From Message board: Not only has DEJ management re-financed the entire amount, but has done so in a manner that saves approx 8% per year (about $320K/year in interest) as well has this secured to ONLY Woodrush. Also to put other fears at rest, they have secured an additional $3M to use to start to cover costs associated with starting up Gibson Gulch - WITHOUT DILUTION!!!! Woodrush was alone the collateral.
The prior financing arrangement pretty much tied management's hands as their entire holdings were used as collateral and they required the express consent of the financier's for any potential JV, sale, or other action to be taken in respect to the acres.
Another respectable poster posted: From 12% to 4% saves the company 344,000 a year. Money that can go to improving the bottom line in production or more exploration which if improved should make the company profitable. The big moves in S. Rangley and Gibson Gulch will require big financing. Big Canadian Banks are entering resource financing in the U.S. and South America if the deal is solid, so I think this says a lot for the image Dejour is developing. Plain and simple ,the assets are being noticed.
And another poster regarding drilling potential:
DEJ GG details 9-Aug-11 09:41 pm Timepassest C
I found a news article from postindependent.com that adds some details to gibson gulch...need I say drill baby drill...
goodies:
Dejour Energy (USA) Corp. wants to drill up to 68 new wells from four new well pads about three miles south of New Castle, in and around the Garfield Creek State Wildlife Area.
Most of mineral rights involved are federally owned and located beneath the state-owned wildlife area, according to David Boyd, public affairs specialist for the U.S. Bureau of Land Management.
Boyd said the federal rights under the state-owned land mostly carry “no surface occupancy” (or NSO) stipulations, meaning the drillers cannot disturb the surface without a special surface-use agreement with the Colorado Division of Parks and Wildlife.
One lease, which inadvertently did not carry the NSO stipulation when it was issued, currently is the subject of a legal dispute, Boyd said.
In addition to negotiating surface-use agreements for all the leases involved, Dejour must negotiate a detailed wildlife mitigation agreement with the state. The mitigation agreement is meant to prevent harm to the herds of deer and elk that use the area for winter range.
If Dejour obtains the two types of agreements for the leases, Boyd said, the BLM will agree to lift the NSO stipulations.
Dejour's plans include construction of one mile of new access roads in the area, along with 1.25 miles of natural gas and water pipelines, according to the BLM. Dejour's pipelines would connect to an existing gathering line owned by Williams Production RMT, which also is drilling in the area.
Earnings 12-Aug-11 08:11 am
Looks pretty good
Gross Revenue 1,816,000
Net loss (189,000)
Net loss per share (0.002)
Operating netback 997,000
EBITDA 591,000
Adjusted EBITDA 6,000
Dejour Reports 15% Rise in Sequential Quarterly Revenue
Woodrush Waterflood Response Triples Oil Production between May and June. Additional Oil Production Increases Projected for Q3 and Q4
Q2 2011 Key Achievements
During the quarter, the Company achieved the following major objectives and also made significant progress on key strategic initiatives:
• Increased gross revenue by 15% from Q1 2011
• Generated a positive Adjusted EBITDA for the quarter
• Increased oil production by 37 %, Q2 over Q1, as the Halfway pool began to show good response to the water injection. Oil production averaged more than 400 BOPD in June, up from 131 BOPD in May.
• Received a mid-year updated reserve evaluation report on its Woodrush oil pool valuing the PV-10 proved reserves at $25 million, with proved and probable reserves valued at $42 million net to Dejour’s 75% W.I. The reserve evaluation bears an effective date of June 30, 2011 and was conducted by an independent firm, AJM Petroleum Consultants (“AJM”) of Calgary, Alberta, a qualified reserve evaluator.
• Extended an existing bridge loan credit facility to October 31, 2011. Subsequent to June 30, 2011, the Company signed a Commitment Letter with a Canadian bank for a $7 million revolving operating demand loan to refinance the bridge loan and to provide funds for general corporate purposes. The operating loan is at an interest rate of Prime + 1% (total 4% p.a. currently).
• Completed the drilling of a test well at South Rangely. The test well was drilled to a depth of 3863' and encountered approximately 90 feet of hydrocarbon bearing siltstone in the Lower Mancos “C" sands. After a thorough review of the well data the well will be completed, fractured and flow tested in Q3 to determine the commercial potential of the Lower Mancos “C” Sand in this area.
I was concerned when I saw that gas sales were very low this past qtr but here was the reason:
Revenue
In Q2 2011, the Company recorded $1,816,000 in gross oil and natural gas sales before royalty, as compared to $1,584,000 in Q1 2011 and $2,676,000 in Q2 2010.
In 2011 Q2 gas sales were suspended for approximately seven weeks, due to major maintenance at the MacMahon gas processing plant where the company delivers production for processing prior to delivering to the gas sales pipeline. Gas production resumed during the third week of July 2011.
It would have been a lot better if not for the issue at MacMahon Processing plant.
For all intents and purposes, they have pretty much broke even this past quarter and are on track for a profit with the next report.
From VERY respected poster:
Q3 = Profitability
Considering the increase in Woodrush production alone from Q1 to Q2 and the fact that production really only started to increase in June (last month of Q2) it is very conservative to estimate a profit being reported in Q3 (report around Nov 15).
Production has increased at Woodrush to over 400 bopd (not including gas, only oil) as of June.
Carry this amount only forward (again not including gas sales and considering that it is only 75% NET to DEJ), it is safe to estimate production of 300 bopd NET to DEJ for Q3.
Let's be conservative again and project they only get $80/barrel all through Q3.
300 barrels/day x 90 days x $80 = gross revs of $2.1M (again NOT including gas).
Again, this is ONLY from Woodrush. Nothing from Gibson Gulch, Rangely or the 100K+ additional acres.
Can't see how we are NOT going to see huge increases in share price going forward no matter what happens with the general market.
And another respectable poster:
Keep an eye on BBG, DEJ's neighbor. Any kind of JV to accelerate drilling would be huge for the stock. That's the model. Downside seems limited.
Another post for some perspective of another related small O&G company:
SSN was trading at 0.30 for years and did a stock offering at 0.60 (diluted the shareholders). And then the stock jumped to $3!!!!!
DEJ is trading at 0.30 for years and fixed a sublime financing without dilution and has to make its jump to $3.
Zax comments on the master plan... 29-Jul-11 04:23 pm
Steven Ralston, CFA
Dejour (DEJ - Analyst Report) filed a Master Development Plan with the Bureau of Land Management (BLM) for up to 68 wells from four new well pads on its Gibson Gulch properties in Colorado.
The acreage is in close proximity to the producing properties (some within one mile) in the Kokopelli Field owned by Bill Barrett Corporation (BBG:NYSE). Interestingly, Bill Barrett filed its second Master Development Plan (Gibson Gulch II) on July 10th for sites immediately adjacent to Dejour’s proposed well sites.
The similarity and close propinquity of the Master Development Plans bodes well for a timely approval process for both projects.
Thereafter, Dejour should be able to secure permits and complete the financing for the project. In the July 11th press release, the company announced that it was actively involved in discussions to secure debt financing for Gibson Gulch project. Dejour has received multiple offers to finance the debt.
Dejour’s management plans to drill 16 natural gas wells per year into the Williams Fork structure starting in the fourth quarter of 2011. Initially, we expect two-to-three wells to be drilled in 2011 so that the group can be economically fracked together. Dejour plans to take advantage of the new extension of the Williams pipeline from its Grand Valley gathering system to the Kokopelli Field. This new Kokopelli Field gathering system, based on the same nodal model, will provide an efficient method to transport Dejour’s natural gas into a large-scale, high-volume distribution system. Dejour’s production from Gibson Gulch is expected to commence in the first quarter of 2012.
Message board remark:
After financing these initial wells with non-equity funding, management expects that the remaining wells of the 60-plus planned in the drilling program will become self-funding in 2014.
Well, they did a good financing and from now on they are generating cash!
