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Trading BKP: Grab a Surfboard & get ready to ride the wave

Discussion in 'Shares' started by wdongli, 20th Jun, 2011.

  1. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    I am ready!

    Shale gas could be the next success-story for Australia Oil & Gas. Increasing news flow on this exciting potential means early investors could be well rewarded.

    The best immediate leverage for stocks under our coverage is in Beach Energy and AWE while Santos retains the greatest exposure to acreage, plus it has production infrastructure.

    It’s very early days in Australia... and highly speculative, but we document a rising level of activity from over 25 local and foreign operators, consider the risks involved and put forward an investment strategy.

    ***
    …following extraordinary success in the US. It took less than a decade for shale gas to completely re-shape US domestic gas industry dynamics. The
    search for shale gas has now gone global, including into Europe, China and Australia.

    Shale gas potential is enormous. In Australia, industry estimates are for as much as 400 Tcf of recoverable gas in total. The focus of the local industry over 2011 and 2012 will be to understand whether any of this gas can
    technically be produced.

    Cooper and Perth basins are best understood and there is existing production infrastructure and pipelines. Other prospective basins are the Canning, Georgina and Beetaloo, but less is known about rock quality, and
    production and transport infrastructure is absent.

    Surfing is risky. Around A$500mn in 2011 is needed and as with any exploration, there will be set-backs. The size of the prize is potentially very large, but unlocking the resource is likely to be an evolutionary process and
    as with any exploration there are likely to be setbacks.

    Collective industry results will be more important than singular outcomes at this time...

    http://www.barakaenergy.com.au/pdfs...ey_Oz_Energy_Shale_Gas_Research_June_2011.pdf

    ***
    But I do hope BKP gets the shale oil since I am early bird for it! And I am 100% sure if it has the shale oil, it would be a beautiful white swan from the ugly ducks. Its glossy new appearance, if could be painted by the shale oil, could shoot its price much higher than anyone's expectation!

    Is it gambling? It depends on how well you know its tenement, the risk, the potential reward, and your affordability and your age or your personal profile. At my average buying price I know I am a value bargainer!

    By the way I do feel sorry for ORO and DMN due to their unlucks in REE exploration. Some would be lucky and then do you want to buy in the ruins and wait for the lucks? I like to wait for!
     
    Last edited by a moderator: 20th Jun, 2011
  2. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
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    Location:
    Perth
    Drilling started....

    [​IMG]

    [​IMG]

    Baraka Energy & Resources

    It is pleased to see the photos on drilling site.

    "Whilst the first and second wells being drilled by PetroFrontier are targeting the huge potential of the Arthur Creek Shale on EP103 and EP127 analogous to the highly successful Bakken Oil Shale discovery in Canada/USA, there are potential discoveries of conventional oil and gas above each targeted zones of the Shale, which may be intersected prior to the Horizontal drilling taking place on each well."

    There are three important reports:

    1. Geoscience Australia: Report on Potential of Georgina Basin - March 2011
    http://www.barakaenergy.com.au/pdfs..._Potential_of_Georgina_Basin_-_March_2011.pdf

    2. Ryder Scott Report
    http://www.barakaenergy.com.au/pdfs/2011-05-17-005330Ryder_Scott_Report.pdf

    3. Isis Report

    http://www.barakaenergy.com.au/pdfs/2011-04-26-011157Isis_Report.pdf

    I have 1,800,000 BKP shares in which 1,200,000 at $0.005 and 600,000 at $0.017. All of these three reports show strong geological probability that Georgina Basin could be the hot spot for next shale oil/gas beds.

    I would hold until the first well is drilled. It is high risk and high reward exploration. I would like to take the risks for the potential shale oil. This basin is much bigger than Bakken basin. If the shale oil and gas are economical one, it would make BKP!

    In my view it is a risk I should hold without matter what the consequence would be!

    1. If BKP and Australia are lucky, I am lucky

    2. If not, I would like to accept the loss from this betting!

    I bet on BKP as I bet on FDL, PRR, AZZ, and SSN!

    Two things are sure: if no shale gas or oil you could be trapped and if it has the gas and oil, it would shoot up and never come back to $0.02 in one or two years!

    ***
    Warning: not all of dirty-cheap fishes could be 10 baggers before they turn to be. A lot of them could be falling knifes.

    No one could tell which will be 10 baggers and falling knifes. All of dirty-cheap fishes have the fundamental reasons in the past to make them to be dirty!

    Be careful to deal with them and you need 10 baggers, which needs the gut to hold!

    ***
    Never bet on anything with so strong back up teams for a company I have some shares:

    1. petrofrontier,
    2. soros hedge fund,
    3. heritage oil,
    4. ryder scott,
    5. Aust Government Geoscience Dept

    They could not give me 100% sure winning odds but 75% seems reasonable as my winning odds!

    Don't forget

    "This zone commences at a depth of approximately 770 meters vertical depth on EP 127. Baraka also retains an undivided 75% working interest in approximately 75kms² around the Elkedra-7 well on EP 127, where previous drilling has indicated oil shows."

    If the shale gas/oil is economical one in EP127, the market would turn to be crazy! It is really pleasure to have a seat in a grand party place and wait for the music starts!

    Could be there a euphoric music soon? I could not predict the future but I have to find this kind of places to wait for! If the music could be started, it would give me a lot of time to enjoy the music until the party become too crowded and I have to give the seat to some warriors at reasonable price!

    Based on the experiences with FDL, PRR, AZZ, IAU, and SSN, it should take at least a year to get the best time for the music!
     
    Last edited by a moderator: 18th Aug, 2011
  3. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Questions and risks!

    http://www.petrofrontier.com/en/pfc-2011-06-15-arthurcreekarticle.pdf

    1. Are there oil?

    "The question is whether the Arthur Creek interbedded shale zones will yield
    oil at Bakkenesque rates through horizontal wells fracked in stages—a proven drilling-and-completion technology in the Bakken to be tried for the first time in Australia.

    Predicting hydrocarbon producing rates and reserves before drilling is problematic at best."

    2. Proof of concept at moment

    "The executed field development plan will be the proof of concept in
    determining whether Arthur Creek belongs in the same company as the Bakken, Niobrara, Eagle Ford and other emerging oil shale plays."

    "Very few wells have been drilled in the entire Georgina basin. Within the four exploration permits, only 29 exploration wells have been drilled—all from 1962 to 1991. All but two were drilled off structure with no closures. All were drilled
    with slimhole mining rigs and a few were government stratigraphic test
    wells."

    3. One of the few remaining virtually unexplored basin

    “The Georgina basin represents one of the few remaining virtually unexplored onshore sedimentary basins with prospective hydrocarbons”

    "Complex geology, including significant basement faulting within the area, and a lack of well control made the Ryder Scott technical analysis challenging. The Monte Carlo study generated ranges for each reservoir parameter. That
    included low, best and high cases for porosity, gross intervals, net-togross
    ratios for rock volumes, oil saturations and oil recovery factors.

    4. Unrisked prospective and its meaning


    Ryder Scott estimated about 26 billion barrels of unrisked prospective resources as a best (P50) case."

    "The independent study states that the Lower Arthur Creek organic rich hot shale is a potentially very large unconventional shale oil play … with world class TOC values averaging more than 5 percent in the shale intervals."

    "The term “unrisked” means that Ryder Scott did not incorporate geologic risk
    (play risk) in the hydrocarbon volume estimates. The resource plays evaluated in the Ryder Scott report are high risk.

    No commercial hydrocarbons have been discovered on the four exploration permits. There is no certainty that any portion of the undiscovered resources will be discovered. If discovered, the play may not be economically viable or technically feasible to produce the resources.

    Worth to drill but the risk is there!

    If cannot sleep in the night with BKP shares, just sell! But if could sleep well its cheapness and the potential reward, just hold some. It is the last unexplored Basin in this world.

    Would you like to take the risk and could you afford the risks? No one could give you the answers! If you decide to do anything you should count the risks first!

    Don't curse anyone if the risks turn to be real, which would mean the losses rather than risks then! Be sure it is your selection!
     
  4. wdongli

    wdongli Well-Known Member

    Joined:
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    Location:
    Perth
    What's really matter to me?

    What're really matter to me now?

    10 baggers or avoid capital losses?

    I just only have 6 months cash reserve. What if the market takes longer to be in bearish mood?

    My portfolio as a whole is at the lowest part of the bottom after XAO was in selling mood between May - beginning of August. I need to hold them and look for cheaper options for lower cost. If I don't sell BKP I could not hold others without worrying.

    Struggled to balance the promising and risks. Just this morning I decided to sell 1,000,000 BKP to get more cash reserve, which I desperately need.

    ***
    I tend to think positive factors more than the negative one and usually I am over optimism, which resulted $400,000 paper profit loss, $100,000 capital losses in my geared funds, and all of paper profit losses since last October.

    This selling has negative effects if BKP has economic shale oil. Yes 2 of 10 dirty-cheap fishes would be falling knife; 6 of 10 would be so so; 2 of 10 would be 5 - 10 baggers if I could get them at the lowest price in their bottom channel. But GFC has changed the bottom channel for all of dirty-cheap fishes and I am not confident about the formation of the new bottom channel.

    Actually I have miscalculate the bottom channel since last October. I need to be more conservative to keep the capital safe and leave room if some new chances appear in the market. I need to get the fact to see the new bottom channel rather than just guesswork.

    ***
    Capital safety and cash reserve are more important to me after I have made a series of mistakes. Now my 800,000 BKP could get their free running in the market. The locked profit could be used to compensate my mistakes in IMI.

    If BKP has shale oil 800,000 are big enough to promote the profit of my portfolio and I could buy back if it has the oil on the table when the price is reasonable.

    The most important thing to me after this selling is I get the capability to stay in the ruins and start to service the warriors. I could just scan the market to find fishes with big enough margin of safety and continue my mind updating!

    ***
    It is much harder to change behavior and overcome our own biases.

    Very painful to decide to sell but after the selling I feel much better and confident for my portfolio!

    If the market keeps its recovery, I would put my bottom line goal first, that is to get my labor value realized first. If not or the market worse enough, I could buy or hold my portfolio until it could recover!

    I have got AKK and CTO last week. I do feel they are very promising. Hope I could recover some paper profit in the bearish market. If so I could have the qualification to run under the rising Sun.
     
    Last edited by a moderator: 18th Aug, 2011
  5. wdongli

    wdongli Well-Known Member

    Joined:
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    Perth
    Cash reserve and where could I get more?

    I was in paradox.

    1. The market became worse and much worse than in a normal August. If no sunny days in August, it has quite high odds to have bad days in the coming Sept and Oct.

    2. I need better cash reserve to be sure I never sell on the fire in the coming bad days.

    ***
    So where should I get the cash? Sell the worst performers in worst time? Sell the sure winners in recovery which has been sold on fire in this bearish market? No it is crazy!

    How about my love, BKP, which I have held it for two years?

    BKP is high risky and high consequent chips on the table. It is drilling, which put it at stake in weeks! It could be in great success or in great failure. Nothing now could decide the consequences but the lucks!

    If it could go as I hope, it could make it, but if it could not, it would hurt me greatly, which I could not afford in this market situation.

    Yes could I sustain or afford the risks?

    ***
    The more important thing is it has been recovered more than 50% in days. The market still has great hope and wish for it.

    1. I should never sell anything when no one wants to buy!
    2. I should never buy anything when everyone wants something!

    No one wants to buy anything else except BKP in my portfolio if I didn't want to sell in deep discount!

    Do I buy more for any other fishes in my portfolio for margin of safety? I turned each of them up down and right and left. Anyone else are dirty-cheap after the market sold on fire. If I have cash reserve in hand I would buy more of them.

    ***
    How about BKP? It has made a lot of paper profit for me. It could make more and much more for me if the drilling get the oil. But it has the risk to lose all! It is too much I could afford.

    What if it shoots up since the oil? 800,000 BKP shares still could get excellent profit for my portfolio. I usually is very greedy but I am greedy when the profit has been locked and I could afford.

    What my direct goal is now? Cash reserve and get my labor value for this financial year! Before I complete this bottom line goal, I should not target to get 1000% gain! It is greedy and could let me make more mistakes in future!

    ***
    What did I get to sell BKP for my portfolio?

    What if market crash another 10%? No worries! What if XAO recovers and challenges 5000 again? No problems if I could get more and more cash in the way for XAO to 5000 or 6000.

    I should not tie my portfolio's future to BKP only! Anything could crash but my portfolio should not! Anything could shoot up which should add more cash to my portfolio!

    Yes, I am not a warrior to fight until my last drop of blood! I have to put everything into my concerns about the service business to the warriors!
     
    Last edited by a moderator: 18th Aug, 2011
  6. wdongli

    wdongli Well-Known Member

    Joined:
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    1,292
    Location:
    Perth
    BKP: PFC sold asset to focus on Aussie shale oil

    BKP's partner, PetroFrontier Corp. (TSX-V: PFC) announced the closing of the sale of its non-core Canadian petroleum and natural gas properties to an arm's length private company (the "Disposition").

    Pursuant to the Disposition, PetroFrontier sold its producing properties located at Wordsworth and Queensdale in Southeast Saskatchewan, as well as exploration properties at Carlyle, Saskatchewan and Joarcam, Alberta (collectively, the "Assets"), for a cash purchase price of approximately $6.8 million.

    The Disposition represents the sale of all of PetroFrontier's Canadian petroleum and natural gas properties acquired pursuant to its plan of arrangement with Texalta Petroleum Ltd. that closed on May 31, 2011. The Disposition will allow PetroFrontier to focus its resources on its core, high impact, prospective light oil exploration program in the Northern Territories, Australia.

    ***

    1. PFC seems quite confident for its shale asset in Australia
    2. PFC consolidates to focus on in Australia
    3. It is a company maker if it could get the shale oil
    4. It would be hit terribly if no shale oil
    5. It is lovely part and terrible part too for exploration.
    6. If you put all into it you could be sent to the hell
    7. If you put affordable capital into it, it could give you a 10 baggers or more!
    8. What do you want? It is a question for all of the traders, investors, and speculators of BKP. What's your answer!

    The drilling has being gone for a month. PFC decided no announcement before they finish the drilling. The traders of BKP shares feel gut-crunching since no news at all!

    I feel it has 70/30 odds to get the shale oil and have been ready for both of scenarios. In the market and life we do need some lucks. I would hold my 800,000 until we are told if PFC could find the shale oil.

    If it has the shale oil, the damage to my portfolio due to a series of my mistakes would be covered by the profit from BKP. If it has not the shale oil, I am ready to pay the cost! Fears and greed both are very powerful to destroy the capital. We have to take the calculated risks for our business profit.

    When we deal with the future, we can not be absolutely right for what we want or don't want. We need roughly right for what we expect from our portfolio. How could we are surprised by unprecedented profit but not shocked by unprecedented losses? Open the doors only for profit or 10 baggers? It is impossible! It is a war place.

    Could we tell the desperate needs of warriors at the time they need your help? It is impossible we are told always but it is the existing mood of the warriors. Theoretically and practically we could get roughly right if we know enough.

    If we know human nature and the psychological feature of warriors, we could be roughly right for their excitement, thrilling, euphoria, anxious, desperate, panic, capitulated, despondent, and depressed! How do sell the over-happy time and buy the over-panic time with enough margin of safety and cash reserve?
     
    Last edited by a moderator: 11th Sep, 2011
  7. wdongli

    wdongli Well-Known Member

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    Perth
    Fear volatility continues?

    Europe is the dominant story that continues to be behind the volatility; there is not a clear path to recovery there that has led to making the market nervous. Do you fear volatility continues?

    On Friday, DOW’s nerves were further frayed as worries intensified about Greece’s debt crisis after the European Central Bank said its top economist Juergen Stark had resigned from its executive board.

    All make the negative sentiment stronger and more fearful. It seems not take much in the way of good news to push the market higher, and even modestly positive events can have an impact even on one could predict what will rally happen.

    Prudence and cautions are necessary and margin of safety must be available always with your portfolio. However there are huge gap between fear and prudence. Fear burns the money and opportunities on fire. Prudence help business to find the chances with affordable capital!

    All of people else in the market could be dizzy in the market rollers-coasters but you should not. Turning the unaffordable risks to be affordable is good. Lowering the cost is the way to make business profitable. But crying in the ruins and predicting the sky falling down is the conduct of cowards!

    There are some great bargains in the market. Could you find them? Not sure but I am trying to get them into my hand!