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
Got from a HC poster-dollar@51 /...... really backs up my position RLE will break 50c
Mr Scott Brown emailed this response to our email yesterday and We thank him for taking the time and courtesy to reply.
Good Luck All
We feel it is the best interest of the Company to raise capital at this time. This will allow us to accelerate our program and give us circa $9M to fund the drilling of 2 wells. Gas projects are very capital intensive to bring into production. Our company has used comparatively little capital to get where we are with a contingent resource of 672 Bcf. We are very efficient in how we run the business. We see a great opportunity over the next three years with the gas market and we need to move now. While we may have some short term pain the Company will get re rated particular if we can get into production, which we are very confident about. Also, we will be able to move our contingent resources into reserves, which would move the dial big time.
The board was not willing to sign up to a drilling program until we had the funds in the bank. This placement gave us enough funds to commit to this program. We could do what a number of other listed companies in the sector - that is sit on their projects and not do any field work (ie Blue Energy) but our view is to have a go. We are not a lifestyle company. We see 2 wells as probably the minimum for the program.
In recent times we have thought about the best way to advance our existing project. After considering many options include a full takeover for the Company, we believe the current raise is the best way forward in that it gives us certainty, is the least dilutive and gets us to our medium term objective of production.
I should also mention that I am the biggest single shareholder in the Company. I have lots of incentive to see a higher share price. While directors can not participate in a placement, I have recently asked the board for approval to buy shares on the market. I intend to top up if the price comes down to 9 cents.
Kind Regards
Scott brown
from low 7's to 9.3c enjoying the run of late bring on the drilling HUGE UPSIDE
REAL ENERGY TO COMMENCE HIGH IMPACT
COOPER BASIN DRILLING IN EARLY APRIL
Drilling contract with Ensign International executed
Contract signed for two firm appraisal wells Tamarama- 2 & Tamarama- 3 in ATP927P
Preparation for field operations underway
Fully funded for the drilling of 2 wells
Pilot production to be established if wells are successful
Real well placed to unlock significant value from its prospective Cooper Basin acreage
Sydney, 16th March 2018: Cooper Basin focused oil & gas exploration company Real Energy Corporation
Limited (ASX: RLE) (“Real Energy”) advises that it has signed a contract with Ensign International for drilling
services at its 100%-owned ATP927P exploration permit in the Windorah project, Cooper Basin, in early April
2018.
A contract has been signed for Rig 964 to drill the two pilot development wells, Tamarama - 2 & Tamarama
- 3. If the wells are successful, Real Energy will look to establish pilot production out of the wells and look to
connect flow lines so that sales gas can then be supplied to Australia’s East Coast gas market.
Wellsite and access roads construction for the drilling of the two wells will commence within the next few
days. Real Energy is implementing the Research and Development it has gathered from the drilling, testing
and fracture stimulation from Tamarama-1, and this knowledge is being used to work up a drilling program
for a deviated well design suitable for multi-stage fracs for both wells.
These wells represent a major catalyst to potentially convert Real Energy’s contingent resources into
reserves, and ultimately into production. The other aim is to start proving up the delivery of basin centred
gas play within ATP927 which has a prospective resource estimated by De Golyer & Mac Naugton to be 13.7
Trillion Cubic Feet of gas initially in place.
RLE must be a takeover target sub 50c IMHO
https://www.theage.com.au/business/t...01-p4ziy5.html
“The latest EY report found that 73 per cent of oil and gas executives expect to complete more deals in the next 12 months compared with 37 per cent just six months ago. It isn’t surprising, therefore, that 74 per cent expect their M&A pipeline to increase in the next year,” EY global oil and gas transaction leader Andy Brogan said.
Lets just say I'm going be moving more funds into RLE & BUL over the next month ..
Third, we will back investment in baseload generation to retain supply and encourage competition. We will force divestments if necessary. Opening up our abundant natural resources – gas, coal, water and the sun – will ensure Australians receive the cheapest and most reliable electricity.
Angus Taylor is the federal Minister for Energy AUS
https://www.angustaylor.com.au/media...ving-customers
https://www.smh.com.au/business/mark...03-p507hn.html
Could well set your 2019 off the right way if flow rates and reserves hit targets
Post from another forum from a guy that had contacted RLE mgmt on delays>>>>etc
I contacted RLE. The line that got me suss was "Real Energy will continue to evolve its extraction techniques". To me, that was code for 'the wells aren't performing as expected and cap raise. I put this to RLE and the answer was a definite "we meant what we meant". So there's nothing up with the current wells, they were just confirming that this play will evolve and they should be able to improve results over time.
Why the change of due date for flow rate results? Onsite RLE reps advised the board of the progress in recovering frac fluids from T2 & T3. T2 is all but recovered (~90%) whereas T2 is >50% so far. The shut in, pressure build and flow test will take ~2 weeks to complete. There was a risk this 2 week timeframe would put RLE too close to Xmas. So RLE made the call to delay the testing until the new year. Fair enough i say, i would rather be with my family on Xmas day than on a rig in Windorah.
I expect both wells will be shut in before Xmas.
Why 2 weeks for flow testing? 2 weeks will provide enough data for consultants to predict well decline and estimate reserves! RLE expect a 'long' well life based on productivity data from nearby Santos wells. Flow rates are important but each well needs enough ultimate recovery for payback. RLE seemed very confident of this.
What does "both wells are performing better than T1" mean? T1 has 'slugs' of formation water that inhibit continuous flow. T2 & T3 whilst recovering frac fluids are performing with far greater consistency. 'Slugs' of frac fluid (only) appear but are nothing like T1. The flow rates from T1 when not affected by water are solid, so i expect that T2 & T3 without these issues should flow consistently and at a higher rate.
Interestingly, RLE mentioned that re-conditioning T1 was a future option to improve the well. That to me further shows that the gas is good and its a well completion issue that has hindered T1.
Testing of liquid recovered from T2 & T3 has been completed and did not indicate the presence of water issues like T1. RLE did indicate they would continue to conduct testing to confirm the results thus far. This is very good news.
Hopefully we get a few more flare videos and 'business as usual' updates before Xmas. I assume there will be an ann confirming shut in of the wells?
Reserves are expected Q1
HIgh Risk High return ....has been hit from sell-off
Yes 3mmcfd+ would have been better but is very positive all the same
Commenting on the successful flow test, Real Energy’s Managing Director Scott Brown said: “This is a good
result for Tamarama 2, which we believe will be a future gas producer. Importantly we are a step closer to
commercialising a very large gas field and supports the drilling of future development wells. ”
“We are now on track to convert our large Contingent Resources of 2C & 3C into reserves and then start to
deliver sustainable production from what is potentially a very large gas project in the heart of a proven
Australian energy province, the Cooper Basin.
“The current gas crisis on the East Coast of Australia, where last week the Sydney gas price hit AUD$12 per
Gj, is something we predicted when we founded Real Energy. We positioned the Company to take
advantage of today’s gas situation, something that is hurting Australian industry. We have 100% ownership
of a field with an estimated 13.7 Tcf total mean gas in place, and our goal will be to convert a large amount
of this into gas reserves. Whilst we are on the verge of commercialising a very large gas field we are still at
the very early stages of unlocking the project’s true value which we anticipate is significant.”