RLE- REAL Energy --Cooper basin-- Nat Gas
-Market cap- 19mill
-cash 6mill end of march
SP- 8.5c
Significant gas resources: Independently Estimated Total Mean Gas in
place amount to 13.76 TCF and maiden 3C gas resource of 672BCF.
May17-Research report target price 16c
http://www.realenergy.com.au/images/...eal_Energy.pdf
Real Energy (ASX: RLE) is a simple, straight-forward shot at gaining exposure to a potentially large onshore gas resource in Australia.
We’ve been tracking RLE, and its chances of hydrocarbon success over the past few years.
In our last update, ‘RLE to Frac in Coming Days as M&A Activity Hots Up’, published around this time last year, RLE was gearing up to begin an extensive fracking program.
Since then, RLE has confirmed a significant gas discovery in the Cooper Basin and is continuing to progress exploration and development activities at Windorah.
The pieces are coming together as RLE works towards commercialising its project.
In late January, RLE recommenced operations at the Tamarama-1 well and has successfully brought the well on with intermittent free-flowing operations.
Tamarama-1 is proving up the Basin Centred Gas concept and is a key step in RLE’s efforts to commercialise the Windorah Gas Project.
RLE is now witnessing a stronger and faster build-up of pressure and more gas flowing to surface from Tamarama-1. It intends to continue to flow the well to enable it to collect and determine reservoir performance data as it works towards commercialisation.
Its non-binding MoU with the $7.5 billion capped Australian mining giant Santos to supply raw gas from Windorah to be processed into sales gas and then be supplied to the east Australian gas market is a big step forward for the company.
Santos and its joint venture partners have gas processing facilities at Moomba in South Australia and RLE and Santos, as Operator of the Moomba gas plant, have agreed indicative terms for gas progressing and transportation services.
The terms of the agreement form the basis for a subsequent formal binding agreement which could inevitably support the economic development of the Windorah Gas Project.
RLE has also agreed in principle to swap geological data for its wells for geological data for a nearby well drilled by Santos.
The MOU with Santos could give RLE a clear pathway to commercialisation without the need to build an expensive gas plant and other associated infrastructure.
hit a high of 10.5c before idot selling pressure pushed it back to pre ann lows
Real Energy secures gas sales for Windorah
July 17, 20174:19pm
Newsbites Finance
Real Energy (ASX: RLE) has secured sale of gas from its Windorah Gas Project in the Cooper Basin, Queensland, with a 15% surge in its share price in the first half hour of trading.
The company has signed a non-binding memorandum of understanding with Weston Energy Pty Ltd.
Weston Energy is a gas retailer created by Weston Aluminium Pty Ltd, an established privately owned manufacturing company. The group is cognisant of the importance of having access to a competitively priced gas supply, and the agreement with RLE aims to secure energy supply, a crucial factor in continuing to operate at optimum efficiencies.
The MOU represents a significant step towards signing a binding gas sales agreement between the two parties, covering the purchasing by Weston Energy of 3 petajoules of gas per year for a period of five years.
Management noted that a future binding gas sales agreement would be subject to a number of conditions, including the client finalising gas transportation arrangements.
Weston Energy will make a prepayment of $6 million, which will give RLE additional financial flexibility to execute future field development activities.
This agreement also allows RLE to convert its 2C and 3C resources into reserves, upgrading the valuation attributed to its assets. An independent petroleum engineering group has assessed the 3C gas resources of the project at 672 billion cubic feet of gas.
Institutional investor Credit Suisse sees the company as representing good value having recently emerged as a substantial shareholder with a stake of circa 5%.
Analysts also have a positive view of the company with Hunter Capital Advisors initiating coverage of the stock in May with a buy recommendation and a valuation of 38 cents per share attributed to its 3C resource, which it expects will increase to circa 52 cents per share as resources are converted to reserves.
With RLE having 100% ownership of three large permits in Queensland, initially focusing on the Toolachee and Patchawarra formations, well known throughout the basin for holding and producing gas, it is positioned to take advantage of increasing demand from East Coast users.
As RLE has already completed substantial seismic interpretation in conjunction with existing petroleum well data it has positioned itself to take advantage of this acreage with strong news flow expected over the next 12 months.
This should also be complemented by further developments regarding commercialisation of the Windorah Gas Project with managing director Scott Brown looking forward to providing further updates on additional gas sales agreements.
While Weston Energy is the foundation customer for the Windorah Gas Project, RLE has already forged important relationships in terms of progressing this initiative, including the signing of an MOU with Santos for Windorah's gas processing.
finfeed.com: Trevor Hoey