Buying for a rerating soon
had to buy more at current prices too many postives in the pipeline for STX with the strong managerment to back it up.
-IMHO I'm positive that STX will have more success at Rayburn(more drills 2-3 successive 10mmcfd finds)maybe even mut finds at each
which without doing any numbers STX would be rerated towards $1sp when the market falls back into favour with STX(remember the 45c highs it reached last muti drill success)
then don't forget the other 4+drills this year plus,Kingston coal,Florenc,coal veiw side track,Bear river Performations(increase flows),complete FEED study on the Rivoli Gas.
-Overall upwards of 10 more drills by mid 2008 for STX
JBMURC-now holds 194k STX
looks good but wish they'd give us some flow-rates
Australian Stock Exchange Ltd
via electronic lodgement
BOARD APPROVES US$15 MILLION GULF COAST DEVELOPMENT PROGRAM AND A$10 MILLION ENTITLEMENT ISSUE
Following the successful drilling results from the Duncan 1 well on the Rayburn Gas Discovery, onshore Gulf Coast, Texas the Board of Strike Oil Limited has approved a US$15 million (net to Strike) expanded drilling and development program.
The drilling program, scheduled to commence in October 2007 and planned over a 12 month period, includes six new primarily development wells targeting the gas pay zones penetrated in the Duncan 1 well on the Rayburn discovery. A few of the wells are expected to be combined development and exploration wells with offset exploration targets on the large Rayburn Prospect (500 Bcf) and other wells may include further exploration drilling from the Canyon (20 Bcf), Rodeo (240 Bcf) and Flint (40 Bcf) prospects.
Revenues from a successful development drilling program are expected to increase Strike Oil’s current income stream from US$8.6 million in 2006/2007 to more than US$20 million in the 2008/2009 year and place the Company in a cash flow positive position.
In addition to the approved drilling and development program and following finalisation of key agreements for surface facilities, transport and gas sales and the installation of facilities the initial testing of the Duncan 1 well is planned to commence in early September. The development drilling of the shallower Wilcox pay interval in the Duncan 1 well is planned for October 2007. The rapid installation of production facilities will enable initial test gas and subsequent production to be sold immediately.
The Company expects to fund its US$15 million share of the proposed drilling and development program from its existing cash flow from the Mesquite Project, new revenue from Rayburn development, a possible small debt facility and a A$10 million entitlement issue, details of which will be announced in the next week
Maybe not Xmas, but a Happy New Year
Sounds as if we'll hear about the flow rates and the new well will reach target depth just after Xmas.
STX Cashflows ever increasing
US gas At $12.22 mmbtu STX massive Rayburn discovery and other operations will be bringing in some large cashflows for STX am confindent that STX will be announcing cashflows over 150k per day in the next couple months add in a discovery at the Florence project
I think we'll see Hartley valuation of STX go alot higher as they only took $9.50 av Gas price if you took the lastest price as the new average(US gas is going only oneway) STX production IMHO 12mmcfpd before years end est.= $1.22 min
Natural Gas Rises Amid Competition for Storage, Industrial Use
By Reg Curren
June 3 (Bloomberg) -- Natural gas rose to the highest since December 2005 amid increased demand as distributors secure supplies for storage in competition with industrial users.
On an energy equivalency basis, oil used to heat buildings and run power plants traded at a premium to gas in New York of about 27 percent. Gas inventories totaled 1.701 trillion cubic feet in the week ended May 23, about 321 billion, or 16 percent, below a year earlier, the U.S. Energy Department said May 29.
Consumers who can burn either fuel oil or natural gas have switched and they're not moving back to petroleum products, said Stephen Schork, president of Schork Group Inc. of Villanova, Pennsylvania. ``Natural gas is still a relatively cheap fuel.''
Natural gas for July delivery rose 25.2 cents, or 2.1 percent, to settle at $12.221 per million British thermal units at 3:05 p.m. on the New York Mercantile Exchange. Futures have climbed 63 percent this year.
Gas for delivery through March 2009 traded at a premium to July. When gas for future delivery costs more than near-month contracts, it's a situation technically known as contango, which encourages companies to increase stockpiles now for use later. Gas for January 2009 delivery traded close to 90 cents per million Btu above July.
Crude oil for July delivery fell $3.45, or 2.7 percent, to settle at $124.31 a barrel in New York. Futures reached a record $135.09 a barrel on May 22. Futures are 91 percent higher than a year ago.
``I have a utility client who didn't burn any fuel oil this past winter, they're still burning natural gas,'' said Schork.
About 10 percent of manufacturing plants and power generators have the ability to switch between gas and oil to take advantage of price swings, according to the U.S. National Petroleum Council.
Inventories
``We had a very large drawdown in stockpiles this winter and we need to replenish that,'' said Schork. ``April to June is when we see our largest injections and we are trailing a year ago.''
The Energy Department is scheduled to release its weekly report on gas inventories June 5 at 10:35 a.m. in Washington.
Technical traders and investment fund money may also be buying natural gas as crude oil loses favor, said Martin King, an analyst at FirstEnergy Capital Corp. in Calgary.
Since reaching a record on May 22, crude has fallen nearly 5 percent and gas has gained more than 4 percent.
``Gas had been ignored to some degree,'' said King. ``If you're gunned up on the hurricane season and you think it could be an extended, hot summer, then why not get in there. Gas is getting some respect.''
There was concern ``that you would see a pullback in industrial demand and this just hasn't happened,'' said King. ``Demand has been well supported by exports, the chemical guys are producing like crazy and there has been no slowdown in steel. They're all big users of gas.''
Chemicals and Steel
The American Chemistry Council said in its 2008 outlook that exports, fueled by a lower U.S. dollar, will increase industry volumes by 2.1 percent. Shipments may rise to $654 billion this year from a record $639 billion in 2007.
``We're still seeing strong exports,'' Kevin Swift, chief economist at the Arlington, Virginia-based council, said today.
The chemical industry accounts for about 6 percent of total U.S. energy consumption. Gas and gas liquids represent 55 percent of the energy feedstock for the industry, according to the associations Web site.
Colorado State University meteorologists, whose forecasts are followed by insurers and energy markets, today stuck to their April prediction of eight Atlantic hurricanes this season.
latest news---------------------
-No wonder thers been no news on Florence of late
-Overall I trust the managerment so this move will be postive for shareholders as STX focus more on the Gulf.
-Bring on the-- flint discovery
GULF COAST EXPANSION AND ROCKY MOUNTAIN SALE
Strike Oil is pleased to announce a focussing of resources and expansion of
its interest in the Gulf Coast Texas.
• Gulf Coast, increased interest in exploration drilling
• Rocky Mountains sale of interests
• Redirection of funds to Gulf Coast activities
GULF COAST TEXAS
Strike Oil has successfully negotiated an increase of its overall interest from
25% to 30% in the Eaglewood Area Participation Agreement (“the
Agreement”) in onshore Gulf Coast, Texas.
The Agreement controls the relationship that Strike Oil has with Cypress E&P
Corporation in the currently successful exploration program in the Gulf Coast.
In addition to the increase in its overall interest under the Agreement, Strike
Oil has increased its interest from 25% to 35% in the Flint Prospect, a 50
billion cubic feet (bcf) of gas potential prospect, which is a specific exploration
prospect within the Eaglewood Agreement.
The additional interests acquired will cost Strike Oil approximately US$0.9
million in prior expenditure primarily associated with data purchases and
leasing on numerous prospects.
Strike Oil’s existing 26.25% and 22.8% interests respectively in the Mesquite
and Rayburn Projects will not change as a result of the increase in its
interests under the Agreement
The increase in its overall interest under the Agreement provides Strike Oil
with the opportunity to participate in up to 30% of a large portfolio of existing
prospects and future prospects generated in the Gulf Coast in which there
are up to five priority prospects that are planned for drilling in the next 18
months, primarily Wilcox Formation Prospects, with a combined potential to
the order of 400 bcf of gas.
Strike Oil Limited
ABN 59 078 012 745
2
The proposed drilling programme for the future prospects is in addition to the
ongoing appraisal and development drilling at the Rayburn Project, which has
the potential for multiple hundreds of bcf of gas.
The success rate in the Wilcox Formation in the current program is two
commercial successes out of three exploration wells drilled, which has
resulted in the Mesquite and Rayburn Project discoveries which are currently
producing at a combined gross rate of 27 million cubic feet of gas and 700
barrels of condensate per day. Strike Oil’s revenue to its Working Interest
from these projects is around $3 million per month.
The current production rate and revenues are expected to increase
significantly over the next few months as more wells are brought into
production at Rayburn.
ROCKY MOUNTAINS
Strike Oil has entered into a Purchase and Sale Agreement with a privately
held US company, Pine Ridge Oil & Gas, LLC to sell its Rocky Mountains
interests that it held in Joint Venture with Comet Ridge Limited. (Refer to the
attached ASX release by Comet Ridge Limited for further information).
Strike Oil will upon settlement (at the end of June 2008) receive a purchase
price in the sum of US$2 million cash plus approximately US$0.5 million in
cost reimbursement for the sale of its interests.
In addition to the purchase price and cost reimbursement of approximately
US$2.5million, Strike Oil will achieve internal cost savings to the order of
US$2 million over the next 3 to 6 months from its budget for the Rocky
Mountains drilling program.
The cash payments and cost savings, the order of US$4.5 million, will enable
Strike Oil to redirect additional funds to its expanded Gulf Coast program.
Strike Oil’s Managing Director, Simon Ashton, commenting on the above
transactions stated that:-
“The combination of the increased interest in the Gulf Coast activities and
sale of the Rocky Mountains interests enhances Strike Oil’s focus on its
activities in the successful Gulf Coast exploration and development program
and therefore allows the company to grow at an even greater rate than
previously expected.