DBLE:
Msg: 1154 of 1154 11/11/2006 8:56:57 AM Recs: 0 Sentiment: Not Disclosed
By: sumark Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 1153 by margin321
Re: A plug for DBLE
I am not bashing DPTR...Risk/reward for a possible 10-bagger looks enticing, although I agree there is still risk....CRB, in particular, will take a long time to bring home....Utah looks more enticing to me than CRB given the proven success at Covenant...Best place to drill for oil is where there is oil.
Nevertheless, I thought I would put in a plug for DBLE as a very good risk/reward that could very easily be a triple and still has the potential for a 10-bagger with minimal to no downside risk.
Company has been discussed on this board a couple of times, and there is a lively (thought not as lively as DPTR's) board here on Investor Village.
Suffice to say that the company's current stock price of $24 is covered by the company's current proven and probable reserves of 77 bcf (8.8mm shs outstdg).
Company has the following projects on its plate for 2007
1) Workover rig is on the S. Fillmore land...Results should be known in 14 days...Initial flow rate was 900m mcf/day and 60 barrels of oil....Company has staked 8other nearby locations for drilling upon successful completion on original well here in next two weeks....Company says a total of 50 net wells exists on almost 6000 acres....Assuming flow rate is 1mm mcf/day from the wells (the initial one is doing that when you add back the oil), the 8 wells could double the company's current production profile of 8.5mm mcf/day. S. Fillmore could be worth approx $20 of NAV to the company over the next 2 years.
2) Eastern Washakie Cow Creek---DBLE has established its Catalina Unit which is located in the fairway of this play...Partnered with WRES and APC....Check out the latest conf call from Thursday as well as WRES latest press release from their qtrly release....BLM is giving hints that the final EIS will be ready by end of this year....After 30 day public comment period, final EIS could be granted in Q1 2007, allowing for drilling to commence on July 1 after seasonal wildlife drilling restrictions lapse.
Newell Sutherland has put the reserves at 150 bcf of possible....However, this is no wildcat....The nearby acreage has been developed and is currently producing at Doty Mtn and Sun Dog.
DBLE has contracted two rigs to commence on July 1 (assuming approval)...Because these are shallow cbm wells of approx 2000 feet, the company hopes/plans to drill 36-48 wells during 2nd half of 2007.
Beyond the Catalina Unit, DBLE has other acreage in the Basin that could bring the potential number of wells to over 250....If each well produces 1 bcf....well, the math gets big very quickly.
Catalina should be worth at least 100 bcf of reserves (this is the prime fairway acreage)...Again, DBLE currently has 77 proven and probable in reserves....So, the Catalina ought to add approx $33/sh of value to DBLE
If the rest of the other 150 wells only produce 75 bcf of reserves, that is still approx $20-25/sh of NAV.
So, just those two projects, one of which is drilling NOW and the other one is awaiting environmental OK for drilling in 2007 could add $50-100 of value to DBLE over the next 24-36 months.
The wildcard for DBLE is its XMAS Meadows monster in Uinta Basin of Utah.
Well was spud on Sept 6th---Targetting a 100 day drill schedule for late December completion.
15,700 TD target....Just completed casing down to 6000 feet.
The CEO has said several times that this is the biggest elephant he has ever gone after....Over 20 years of bureacratic delay ended with the spudding in September....Multiple seismic shots have confirmed a large dome....Is it hydrocarbon or not will soon be known....If hydrocarbon, however, many geologists/engineers in the industry agree that the field could be a multi-TCF play....DBLE has a 30% stake after payout.
1 tcf equals 300 bcf to DBLE....At $3/mcf that is $900mm of value or more than $100/sh to DBLE.
So, similar to Joseph, we could know within 60 days whether there is a gusher at Xmas Meadows...If not, the stock might suffer some pullback...However, the current share price is well supported by current production profile...Still very little value for the other two plays listed above.
Beyond all this, the company has significant exposure at Pinedale via its minority stake on Questar properties, which continue to look good. Company also has a nice small play of a monster at Deep Madden (Conoco) as well as a very nice pipeline in its Cow Creek territory.
Also has 100,000+ acres of virgin wildcattish land in Nevada near Elko County....Finally, the company hopes to get after its Deep Cow Creek target within 6 months to go after another good prospect.
Add it all up, and the company provides limited downside and good to very good shot at being a triple with just its S. Fillmore and Cow Creek plays....Xmas Meadows gives it another shot at going up 3-6x if it hits.
All for your consideration.
To reiterate, I own both DPTR and DBLE
Email this page to a friend
|
