AED Oil (AED) Ridiculously Undervalued??

[tricha]

They have come out with a response to the ASX.

Quite a clever reply. All is not lost..this could be quite a steal.

Had it under edit and did not see your post, yes absolutely a steal at todays prices if u had nerves of oil.

Tanks for the tip in RPM , its starting to fly.:D

[scorp57]

in the short term could still be a lot of volatility, but i will back this company more.

i still have faith, and wont let the negative sentiment scare me off. the ann. seems ok to me, and i look forward to the road to recovery.

I'm IN.

i would love to see this company in full flight. would be a great oiler i beleive.

[bermuda]

in the short term could still be a lot of volatility, but i will back this company more.

i still have faith, and wont let the negative sentiment scare me off. the ann. seems ok to me, and i look forward to the road to recovery.

I'm IN.

i would love to see this company in full flight. would be a great oiler i beleive.


I feel the same. Dont own any but this stock is a huge buy.

[mattyroo]

I've been away from the market for the last 3 months pretty much, been doing a lot of travel and living the good life! So I haven't paid a lot of attention to AED and NWE except for grabbing a pocketful of NWE between 15 and 16.5 cents.

It is really interesting what has happened to AED, and to a lesser extent NWE! I did fore tell that there were these problems coming with the reservoir, it is widely known in the industry about the lack of permeability of these sands. I did warn people both here and over at sharescene and I'm pleased to see that some listened here...... Whereas over at sharescene, people seemed to be blinded by a certain zealot. The other thing that I knew of was the crap outfit running the show, they were an absolute circus in Singapore, truly comical. The problems that they were having were huge and the fact that they took on leasing of the FPSO at the stage they did was truly mind boggling, there was real potential that the whole bridge and quarters would have to be cut off to remove the engine, this was months after they had taken over. I think they were just truly naive, and this has also come out again in the way the production has panned out.....

I'm really interested to delve into AED now and understand what the hell is wrong. If it is as bad as I suspect there will be no going back to the highs of before. I think a takeover is an outside bet at the moment, any company looking at them will want to see either a clear plan to solve the recoverability issues or at least have their own plan. And if others did believe that the oil is easily extractable, I'm sure they would have been onto the field well before AED!! The oil is worth SFA if it cannot be extracted, no matter how much is there!

In my opinion, I think this stock will flounder for the next 2 years, whilst they try to improve flows, by drilling more holes and bringing the second FPSO online. I haven't heard much about the "rumours" that they are having trouble paying their contractor, but that will not surprise me, in fact at a guess I would say they are! How the hell are they going to pay MODEC if they have further recoverability issues when the second FPSO comes online?????

All very interesting

Cheers!

[tricha]

I've been away from the market for the last 3 months pretty much, been doing a lot of travel and living the good life! So I haven't paid a lot of attention to AED and NWE except for grabbing a pocketful of NWE between 15 and 16.5 cents.

It is really interesting what has happened to AED, and to a lesser extent NWE! I did fore tell that there were these problems coming with the reservoir, it is widely known in the industry about the lack of permeability of these sands. I did warn people both here and over at sharescene and I'm pleased to see that some listened here...... Whereas over at sharescene, people seemed to be blinded by a certain zealot. The other thing that I knew of was the crap outfit running the show, they were an absolute circus in Singapore, truly comical. The problems that they were having were huge and the fact that they took on leasing of the FPSO at the stage they did was truly mind boggling, there was real potential that the whole bridge and quarters would have to be cut off to remove the engine, this was months after they had taken over. I think they were just truly naive, and this has also come out again in the way the production has panned out.....

I'm really interested to delve into AED now and understand what the hell is wrong. If it is as bad as I suspect there will be no going back to the highs of before. I think a takeover is an outside bet at the moment, any company looking at them will want to see either a clear plan to solve the recoverability issues or at least have their own plan. And if others did believe that the oil is easily extractable, I'm sure they would have been onto the field well before AED!! The oil is worth SFA if it cannot be extracted, no matter how much is there!

In my opinion, I think this stock will flounder for the next 2 years, whilst they try to improve flows, by drilling more holes and bringing the second FPSO online. I haven't heard much about the "rumours" that they are having trouble paying their contractor, but that will not surprise me, in fact at a guess I would say they are! How the hell are they going to pay MODEC if they have further recoverability issues when the second FPSO comes online?????

All very interesting

Cheers!

Good points Mattyroo - just imagine the carnage if oil was $45 a barrel :confused:

Lets hope they can keep producing for NWE sake.

[Taijon]

Back on 24 Jan when the SP was around $2.50 I posted:

" I've never held AED but it seems to me at a SP around $2 it could be worth getting in. A year ago the SP was more than $11.

Mattyroo and others, any thoughts? Can the current problems be rectifed within a reasonable time trame and cost?"

Shrewd Crude gave a great response which he said was "off the top of his head". He covered a whole range of issues and potential outcomes. Thanks a lot - the thought and effort you put into responding is much appreciated.

Now Mattyroo has responded. He is right on the spot, had inciteful comments and sounded caution way back before the FPSO even left Singapore. Unfortunately for AED shareholders much of what he was warning about has come to fruition. His latest posting is, as always, a gem and anyone thinking of getting into this share would do well to read this thread over several times before jumping.

The SP right now is $1.42.

Sharetrader has some excellent posters and any novice like me can learn heaps. Of course you have to learn who is ramping and who is really knowledgeable. However in SC and Mattyroo we have two of the very best. Thanks a lot. I'm definitely not a buyer at any price until AED's future is much more clear.

[Crypto Crude]

thanks taijon...
yeah it did just come straight off the top...
Mattyroo said that a takeover is an outside bet, and that it is...
A good deal/farmin for AED is Absolutely on the cards and will come through as a bare minimum outcome...
I reckon SP will explode at some stage and on this announcement... AED alluded to a deal in late March so wait abit longer perhaps...
Yeah I also thought that AED was a buy around $2 but how all has changed... I had kept away from posting on AED/NWE topics in early first 1st production stage until recently as to see what would happen with low flow rates and ongoing issues so as to not risk getting myself in deep on the thread...it was a fun ride all the way up huh....
AED down 20% today...
im still sitting and waiting...
not really sure what to do about that one or NWE in the short term, NWE - which has 'shorter term big target North Sea pre discovered drilling'...
:cool:
.^sc

[scorp57]

yes but only a good day if you bought yesterday at $1.03 and u didnt already have existing holdings...

needs to go a lot further up for the rest of us to be happy.

[COLIN]

I don't really follow this company, but what is one to make of today's steady rise? Up 42% so far, and still climbing? And on a day when there is so much red ink around. I'm fascinated.

[lakeys]

some one big taking a position? ...........$25 million turnover and half way through the day

and very little NWE movement!

[shasta]

some one big taking a position? ...........$25 million turnover and half way through the day

and very little NWE movement!

That you loading up Lakeys? :D

[deano]

why have the ASX not issued a speeding ticket to AED with such massive price movement?

[macduffy]

why have the ASX not issued a speeding ticket to AED with such massive price movement?


Probably for the same reason that they watched it fall from great heights without showing much concern.

Whatever that is.

:)

[deano]

Probably for the same reason that they watched it fall from great heights without showing much concern.

Whatever that is.

:)

announcement re price query is now out...

[tricha]

Hmm, lets look at another scenaro.

They flounder along at 6000 barrels a day = $4,200,000 turnover for the week.

Thats going to pay their debt and when paid, boggy on with more drilling.

So what's the rush, if the oil is still there :confused:

I'm sure they will learn by their mistakes, don't we all ?

[tricha]

Mean while Northwest just stick their hand out.

Sweet :D

[macduffy]

Sounds ok provided 6000 bopd is sustainable without further drilling.
Do we know this?

:confused:

[Corporate]

So what are the details of the agreement/contract with NWE?

[macduffy]

So what are the details of the agreement/contract with NWE?


NWE receive an "Overriding Royalty" payment of 1.25% of revenues from the Puffin field. Relates back to the sale of the licence to AED. Actually the ORR extends to areas beyond Puffin but I don't have the details handy.

A great deal for NWE so long as AED ( or someone else ) can produce the stuff!

;)

[JBmurc]

In my lastest issue of OGW

-We think AED is dangerous close to insolvency.An article in the sydney morning herald friday said Norwegian oil services company was owned $41.5million and a payment from AED was said to be overdue.

-Hope for you guys holding its not the case

[tricha]

In my lastest issue of OGW

-We think AED is dangerous close to insolvency.An article in the sydney morning herald friday said Norwegian oil services company was owned $41.5million and a payment from AED was said to be overdue.

-Hope for you guys holding its not the case

AED have had two chances to spill the beans with the ASX, implications would be pretty severe now if they are withholding I would think :confused:.


http://research.iress.com.au/ids/idsimage.asp?uid=A09B517AF4E07E47AD56FB86822A6A705 9290000279354ABF548E340F1AB0000F4120000&i=0&dt=20080215&id=00812545

[mattyroo]

Hmm, lets look at another scenaro.

They flounder along at 6000 barrels a day = $4,200,000 turnover for the week.

Thats going to pay their debt and when paid, boggy on with more drilling.

So what's the rush, if the oil is still there :confused:

I'm sure they will learn by their mistakes, don't we all ?

Article in yesterdays SMH says they are only producing 1000bbopd without gas lift, and 6 -7000bbopd when gas lift is online. Article does not say it, but gas lift is one of things they are having serious problems with.

At FPSO leasing costs of $160,000/day, it's not qute as cut and dried as it looks for AED... If they have a week without gas lift, they are significantly behind the 8 ball, without covering operating overheads.

[Crypto Crude]

DJ INTERVIEW: AED Oil Still Cashflow Positive - Chairman15/02/2008
By Alex Wilson
Of DOW JONES NEWSWIRES

MELBOURNE (Dow Jones)--Timor Sea oil producer AED Oil Ltd. (AED.AU) said late Thursday the company remains cashflow positive despite its production problems and still has a number of parties seriously looking at taking an interest in its project.

Lower than expected production from the company's Puffin project and concerns about overdue debts saw AED Oil shares crash to a low of A$1.01 this week, from a high of more than A$11 in October last year, as the market worries about a cashflow crunch.

AED founder and Chairman David Dix told Dow Jones Newswires the company is facing difficulties, with production well below what was expected, but that it is working hard to get its project back on track.

"We obviously have significant production problems compared to where we thought we were and we have got a whole lot of liabilities," he said.

"But we are still producing profitably, we are still cashflow positive in relation to our ongoing operations. Taking all that into account you have still got a fair amount of oil in a region that is 100% owned by a company, and the optionality of that is enormous."

AED has appointed Macquarie to carry out a strategic review and interested parties are carrying out due diligence on Puffin as the company looks for a partner to take a stake and provide a much needed cash injection.

Analysts say the outcome of this farm in process looms as a key event for AED, and the arrival of a white knight could help the company start to rebuild market confidence.

Dix said there had been 17 parties involved in the process, 11 are still active and a handful appear to have potential, with more interest from offshore parties than local players.

Investor confidence in AED hit a new low this week when Norwegian drilling services company ARG Group ASA (AGO.ASA) said AED owes it A$41.5 million, which is now overdue, for work done on the Puffin project.
:cool:
.^sc

[Crypto Crude]

mattyroo,
read The 3rd paragraph from the bottom of the last post...this is exactly what Ive been saying...
It will cost $130m for a development well, AED have to get this right and after the fallout in SW, The company needs some sort of free ride on a few drills, over the next year and commitment for some cash...
Ive already said a a couple of hundred million dollars is required......

Dix said there had been 17 parties involved in the process, 11 are still active and a handful appear to have potential, with more interest from offshore parties than local players.

sounds like good news... major deal announcement is not likely until late March.... This is why I waited off and missed last run... I was trying to be greedy and not in real panic mode to buy...
....
As long as NE puffin remains in production then AED will survive because of the looming farm in deal...
The drilling services company owed 40 something million have blown this whole thing out of proportion, And news of this new deal on the cards for AED has potential to add baggers to returns...
...
mattyroo, how do you feel about drilling a well mid year with a JV partner, and hopefully some major expertise to sort the current production issues out...?
:cool:
.^sc

[shasta]

mattyroo,
read The 3rd paragraph from the bottom of the last post...this is exactly what Ive been saying...
It will cost $130m for a development well, AED have to get this right and after the fallout in SW, The company needs some sort of free ride on a few drills, over the next year and commitment for some cash...
Ive already said a a couple of hundred million dollars is required......


sounds like good news... major deal announcement is not likely until late March.... This is why I waited off and missed last run... I was trying to be greedy and not in real panic mode to buy...
....
As long as NE puffin remains in production then AED will survive because of the looming farm in deal...
The drilling services company owed 40 something million have blown this whole thing out of proportion, And news of this new deal on the cards for AED has potential to add baggers to returns...
...
mattyroo, how do you feel about drilling a well mid year with a JV partner, and hopefully some major expertise to sort the current production issues out...?
:cool:
.^sc

SC

Wouldnt the smart play be to load up on NWE & watch it re-rate when AED gets it act together, in the knowledge NWE has it's own drill programme (ie, Cobra) coming up?

[Crypto Crude]

shasta,
Yes I like NWE, but im writing about AED...
YES norwest does have other projects and Cobra is likely to spud this coming week...
CObra is going to take along time to complete and the 'AED deal' will be known before final results from Cobra... Im not in panic mode on any stocks in the market at the moment... While Cobra churns along, then theres the ann of a Deal from AED... also, the anticipation of a deal will see the Stock rise... Dix's comments sound very positive....
and market has reacted accordingly...
:cool:
.^sc

[mattyroo]

Shasta, Shrewdy,

I wouldn't be surprised to see AED get smashed back to 1 buck again, i think there will be some serious volatility in this stock with the traders, especially if there are delays in announcing a farmin partner, which I honestly expect there might be..... I seriously think that a farmin partner is going to take a lot of wooing, and they are going to want to be very confident of a successful outcome, which may be a way off proving yet.

I think if AED get knocked back to 1 buck again they could prove to be a good trading opportunity as they have late last week. But I probably aren't the only person thinking like this.... Also they have more potential for a sharp 100%+ gain than NWE do in the near future, the way it has been behaving.

Still looking at grabbing some more NWE too...

[Mick100]

notice the spike in volume the other day
this indicates a change in trend
you won't see AED at $1.00 again
It will be volatile but the trend will be up from here on, IMO

https://ost.asbbank.co.nz/3D8BB8800A7B4D80C30FFD2B9C90BC54/Research/GetChart.ashx?url=http://asbc.iguana2.com/asb/hist/ASX/AED/6m/1/line/30/60/linear/vol

[Crypto Crude]

Im not sure if this means anything, The sell side started to fill in pre open and then just before open bell, trading halt was issued...
I wait for announcement in suspense...
could this be a deal?
:cool:
.^sc

[seaosh]

Im not sure if this means anything, The sell side started to fill in pre open and then just before open bell, trading halt was issued...
I wait for announcement in suspense...
could this be a deal?
:cool:
.^sc

Seems likely.

Hope so for NWE's sake anyway. Seems like NWE needs a big shot of something to get going.

[Crypto Crude]

AED announcement out and the message is clear.....
My previous large expectations of a farm in deal could be meet and this will be huge for both AED and NWE...
....
suspension still in place while a deal is worked through.....
Great news for NWE....
:cool:
.^sc

[Huang Chung]

Will be interesting to see how much AED have had to give up......

Screwed over or not? Probably.

Anyhow, not that this matters to NWE shareholders.

[Mick100]

Will be interesting to see how much AED have had to give up......

Screwed over or not? Probably.

Anyhow, not that this matters to NWE shareholders.

the announcment says that the incoming partner will be a majority shareholder so AED are giving up the lions share of their assets.

[mattyroo]

Mitsui????

[macduffy]

AED clearly had a problem with Puffin that they couldn't solve on their own.
Better to end up with a smaller share of a valuable, producing asset than with 100% of something they couldn't exploit and which might have sent them broke.

Disc: Small NWE holding.

[shasta]

Mitsui????

Would AWE with there Tui cash be interested?

[Serpie]

If Matty guesses Mitsui - then my money's on Mitsui.
Looking forward to your take on whoever the successful bidder is Matty.

[shasta]

If Matty guesses Mitsui - then my money's on Mitsui.
Looking forward to your take on whoever the successful bidder is Matty.

I thought as much too, but AWE came to mind :cool:

[scorp57]

hey a debt free producing oil company in todays market environment??? i would much rather that than where AED has been for the last few months,,,

people were pricing in that they were going into receivership... with that hopefully out of the picture, they can start turning into a proper producing company and start exploitingtheir assets...

i am all for the deal whatever it may be, just hoping that they dont have to give up a 90% workin interest or somethin along those lines...

[Huang Chung]

hey a debt free producing oil company in todays market environment??? i would much rather that than where AED has been for the last few months,,,

people were pricing in that they were going into receivership... with that hopefully out of the picture, they can start turning into a proper producing company and start exploitingtheir assets...

i am all for the deal whatever it may be, just hoping that they dont have to give up a 90% workin interest or somethin along those lines...

Hold shares in MFS, so accutely aware of what being boxed into a corner can mean in terms of the deal you can strike.....:(

[Huang Chung]

So the girl who was asked to the dance was...Sinopec!

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00820934

[scorp57]

keeping a 40% interest and hopefully receiving around $400 million aswell up front.

sounds good to me. what does everyone else think?

actually if SINOPEC can get things running how they should eventually (50,000bopd) that gives aed 20,000 bopd. alot better than where they are at now...

or am i misinterpreting that? what does everyone think?

[tsb]

no - just went up 26%

[Viking]

So the girl who was asked to the dance was...Sinopec!

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00820934

Looks like the girl nodded~ and just need to stretch out the hand and walk to the dance floor~ although I think she sips quite a bit of my beer... :P

Nevertheless, I still welcome the announcement:

AED Oil is pleased to confirm that Sinopec International Petroleum Exploration and Production Corporation (“SIPC”), a wholly owned subsidiary of China Petrochemical Corporation (“Sinopec Group”), and AED executed formal binding documentation late Friday 28 March 2008 to give effect to the transaction outlined in its announcement of 7 March 2008. The execution of this agreement concludes the Strategic Review process initiated in January 2008. The Strategic Review has achieved its objectives, namely (i) significant reduction in debt levels; (ii) independent technical review of existing production (refer ASX release on 22 February 2008); and (iii) financial capability and asset ownership structure which will facilitate the exploration, development and production from the Puffin and Talbot oil fields expeditiously.
Under the agreement, SIPC will acquire from AED a 60% joint venture interest in the assets held under AC/P22, AC/L6 and AC/RL1 (which include the Puffin and Talbot fields) (the “Assets”) for US$561 million (equivalent to approximately A$617 million at current exchange rates). The transaction therefore values 100% of the Assets in excess of A$1 billion.
SIPC will pay AED an upfront cash payment of US$561m for the 60% joint venture interest once certain conditions (discussed further below) have been satisfied. Part of the cash received will be used to repay all of AED’s bank debt (leaving only existing convertible bonds in place) and settle trade creditors which will result in AED having a significant cash balance of approximately A$350 million after completion. The available funding will be used to expedite and fund the significant future development of the Assets in conjunction with SIPC.
SIPC and AED will develop the Assets through an unincorporated joint venture in which SIPC will participate as to 60% and will be the operator, and AED will participate as to 40%. Under the terms of the unincorporated joint venture each party will contribute to capital and operating expenditure in proportion to their JV interest. Net revenue from crude oil sales will also be shared in proportion to each party’s JV interest.
Page 2 of 2
Completion of the transaction is subject to a number of typical conditions including FIRB approval, People’s Republic of China Government approval, registration of the acquisition by the NT Government and certain third party consents. AED and SIPC will work towards the satisfaction of those conditions as soon as possible and have agreed that the effective date of the transaction, for economic purposes, is 31 March 2008.

[tricha]

keeping a 40% interest and hopefully receiving around $400 million aswell up front.

sounds good to me. what does everyone else think?

actually if SINOPEC can get things running how they should eventually (50,000bopd) that gives aed 20,000 bopd. alot better than where they are at now...

or am i misinterpreting that? what does everyone think?

Excellent stuff Sinopec, u r a worthy benefactor.
As always, little old Norwest will put their hand out gratefully ;) at no cost and take the reward, a share of 50,000 bopd would be :p

Poor AED shareholders better have deep pockets.:mad:

[shasta]

Excellent stuff Sinopec, u r a worthy benefactor.
As always, little old Norwest will put their hand out gratefully ;) at no cost and take the reward, a share of 50,000 bopd would be :p

Poor AED shareholders better have deep pockets.:mad:

AED quarterly out...

Cashed up, & paying a 20c special divvie (fully franked)

Should underpin the share price over the short term...

http://www.stocknessmonster.com/news-item?S=AED&E=ASX&N=302447

Another O&G company i'm looking at ;)

[Lizard]

From $1 to $10 to 10c and administration... another amazing sharemarket story!

[drillfix]

Pheeww Liz, Close calls when trading this one previously, would have not like to have been in a trade when something like this goes down.

[Huang Chung]

Just pulled my AED file.

First purchase was in January 2006, at 95c.

Highest price I paid was $7.80 in September 2007.

Highest price I recieved was $9.54 in October 2007 :cool:.

Now, it's an ex-parrot, or more appropriately, an ex-puffin.... :(.

RIP AED......

[Corporate]

very sad state of affairs! I wonder if MEO will be picking over the shell

[airedale]

Any ideas on how this will affect NWE, if at all.

[drillfix]

Just pulled my AED file.

First purchase was in January 2006, at 95c.

Highest price I paid was $7.80 in September 2007.

Highest price I recieved was $9.54 in October 2007 :cool:.

Now, it's an ex-parrot, or more appropriately, an ex-puffin.... :(.

RIP AED......

Geebers HC,

That is a bit of a roller coaster you have been on ehh, so hope you effects have not hurt you badly in any way~!

[soulman]

Drill, just by the tone of HC post, the man himself last exit was at the top so that a BIG WIN.

If HC suffered any major loss, he wouldn't have said RIP. Just wonder about the 1st placement completed at 7.5 cents. That's a lazy $2 mil plus down the drain, eh....

[drillfix]

Drill, just by the tone of HC post, the man himself last exit was at the top so that a BIG WIN.


If thats the case then HC, how about a Pizza or Thai food dude, your shout :P

[Huang Chung]

If thats the case then HC, how about a Pizza or Thai food dude, your shout :P

You're about 4 years too late Drilly.

Anyhow, what I made on AED, I lost on GFC, lol.

[drillfix]

You're about 3 years too late Drilly.

Anyhow, what I made on AED, I lost on GFC, lol.


Ahh well HC, easy come and easy go I guess.

[Crypto Crude]

RIP AED,
what a sick high and now low.....

yet again we are thrust with the risky nature of this business...
got to be prepared to sell when the info changes...
Think I just got lucky with this NWE, MEO, and all the others...

sick sick sick...
:cool:
.^sc