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Trading BKP: Some Big New Oil Reserves Are Coming

Discussion in 'Shares' started by wdongli, 23rd Mar, 2011.

  1. wdongli

    wdongli Well-Known Member

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    "The U.S. oil industry, the world leader in technology in extracting oil, is leading an new oil boom from the reserviours that were overlooked because the oil wouldn’t flow from tight sands and shale rocks. For now the big rush is getting underway from the U.S. example of natural gas and oil recovery using horizontal drilling and formation fracturing into the shale rocks.

    So, how much oil is there in newly economic shale oil deposits around the world? It will take decades to find out. On the other hand, that’s not stopping energy companies and government agencies from offering some huge prospective resource guestimates of tens of billions of barrels of oil, all with almost no data to back it up."

    ...
    (All of the links to existing reports of Australias-Georgina-Basin-Aurthur-Creek-Shale are listed in http://www.invested.com.au/blogs/wdongli/bkp-pfc-acquires-all-texalta-555/)

    "The Arthur Creek shale formation in Australia has 15 historical wells, which may show the oil charged shale. Geologically it looks just like the Bakken as well, and PetroFrontier plans to drill it this year. The pre drilling report suggests the Arthur Creek could have 26.4 billion barrels of oil in its “best case”.

    [​IMG]
    Australia's Georgina Basin Where the Aurthur Creek Shale Formation is Found.

    All of this is based in speculation. So to speak. What isn’t speculated is the shale is there in these formations and there is oil within. And there are more shale is check and more shale to find."

    Some Big New Oil Reserves Are Coming | New Energy and Fuel
     
  2. wdongli

    wdongli Well-Known Member

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    Expected Monetary Value

    Serial in HC gave his calculation of EMV of BKP, which you may agree or not. However if you have not done any value calculation before for BKP, it is a good start point:

    ***
    Extrapolating BKP's share from today's Cormark research report, I get the following approximate figures:


    EMV = $90m
    EMV per share = $0.045
    Unrisked Value = $2,098m
    Unrisked Value per share = $1.00


    * EMV - Expected Monetary Value - a risk weighted value.
    * Unrisked Value - Refers to the value that could be potentially realised if success was achieved on prospect.
     
  3. wdongli

    wdongli Well-Known Member

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    BKP value calculation based on PFC report

    The followings are from jovial in HC. Don't see for accuracy but roughly what BKP could be:

    ***
    From Petrofrontier report page 16.
    Assume parity of $C and AUD.
    Current value of EP 127 + 128 = $5.30 per share (75%).
    Shares on issue 47.7m
    Total value $252.81m
    Baraka share value (25%) $84.26m
    Baraka shares on issue 1,764m
    Risked value 4.8 cents per share.

    Unrisked value of EP 127 + 128 = $132.14 per share (75%).
    Total value $6,303m
    Unrisked value $1.19 per share

    Includes 12% discount per annum.
    5% chance of success.

    Notes from report
    1. C.o.S. - Chance of Success - Includes all risk factors such as geological, political etc
    2. Value/Boe - Includes proximity to established infrastructure, development capex required & oil quality
    3. EMV - Expected Monetary Value - a risk weighted value. EMV= (Reward*C.o.S.) - [Capital at Risk*(1-C.o.S.)]
    4. Unrisked Value - Refers to the value that could be potentially realised if success was achieved on prospect.
     
  4. wdongli

    wdongli Well-Known Member

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    It is very important matter for a share to be researched and reported in the market.

    1. It shows the acceptance of some new themes by the market. FDL, PRR, AZZ, IAU, SSN, and so on had been analyzed by some market research houses before their price shot up.

    2. Any R/D means cost and then if the potential is not big enough, no one wants to waste money on it in the market. These potential and R/D results would give the market players to value their target more effectively and accurately. For example, before SSN moved up/down between 0.07, its cash value of $0.10 had been accepted by a lot of people around it.

    3. Usually the evaluation of the targets with the potential to shoot up, would be done by the bargain hunters who have the value senses and skills. They usually give the value with great risk discount.

    4. The value would take time to be accepted by the market. It usually takes 6 - 12 months and would be realized in stages, such as base formation, value appreciation with great suspects, drastic shooting up since events confirm the potential, and then the price shoots up in momentum.

    The key to take the advantage of the shooting up is the understanding what is the causes of the value re-rating. The causes must be consequence-significantly and company-making type. If you understand the cause deeply enough, you would get the gut and patience with great belief. Most of early selling of 10 baggers are caused by not-knowing the causes! I had held FMS for 2 years, PRR for more than 1 year, and so on since I believed they have the causes to shoot up.

    BKP has all of causes to shoot up in my view based on what we have. Only one thing could stop the shooting, that is, the similar geological structure as Bakken Basin just could not hold the oil, which would be a joke nature hide to Australia! If it happens, it is a problem of geological science not market decision. We have done what we should do to make a excellent decision. What could we do if nature makes joke to us? Accept the fact and go forward again for next great target.

    However if you have got it at $0.005, still hold it, and have joined its SPP, you should read all of its reports and make your mind. It is a different story to sell at $0.50 from that at $0.03, please note! Why? It is because the capital base would be great leveraged at $0.50. It would be much more than that if the oil is 26billins barrels there.

    It is not the dream! If its initial horizontal drilling and facci could get the oil, the market would draw a big cake in the sky first; more drilling success the bigger cake would turn to be; and then people would buy first and hope for a piece of cake later. Who are you? You are the leader of the herd. Could you get out at the peak in the cheer of herd? It is the last challenge and then we have time to think about. Now we do need to drink and dream if you don't want to read and post.
     
    Last edited by a moderator: 24th Mar, 2011