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Strategies & Market Trends : The Ego Forum -- Ignore unavailable to you. Want to Upgrade?

To: hubris33 who wrote (11530)	11/27/2012 3:02:59 PM
From: JimisJim	Read Replies (1) \| Respond to of 12175

I sold most of my CEN... holding 1/4 of my core, no traders (for now)... I'll be completely out at 25... it's been a good ride, but I've achieved my endgame goal... may trade it a bit if it resumes range bound habit while waiting for new production updates... would only consider longer term hold if they began paying decent divvy on their cash-printing machine.

To: hubris33 who wrote (11530)	11/27/2012 6:44:46 PM
From: JimisJim	2 Recommendations Respond to of 12175

Coastal Energy Rebuffs Pertamina Approach As It Prepares To Step Up Drilling Rate Offshore Thailand Shares in Coastal Energy, which is listed on AIM and the TSX, continue to hover near 52-week highs even after Indonesian state oil company Pertamina distanced itself from takeover talks. M&A speculation is rife throughout the industry so even though Pertamina wasn't prepared to pay at a level that satisfied the Coastal Board, investors clearly feel other companies, hungry for the kind of production and cash flows now being thrown off by Houston-based Coastal, will be running a slide rule over its assets. Coastal would have made a good buy for Pertamina, which is keen to aggressively grow its upstream operations. Former OPEC member Indonesia, despite being a major oil producer in its own right, became a net importer in 2004 and, at current oil prices, that really hurts. Coastal, with its growing production and the promise of much more to come from its acreage in the Gulf of Thailand and offshore Malaysia, would have added some material weight to the Pertamina portfolio. Now market watchers are touting London-listed SOCO International, with its cash-generating production offshore Vietnam, as a candidate for the Indonesians. For its part, Coastal has been playing its cards close. In response to media reports on the Pertamina approach, it said it was continuously evaluating Strategic alternatives including a potential sale of the company. Coastal, however, clearly felt it was worth a lot more than the US$2.5 billion that analysts suggested was on the table from Pertamina. Its 2P reserves base of 149 million barrels, up 45 per cent since the end of 2011, caries an after-tax 2P PV10 of US$2.497 billion – and that doesn't take into account the significant upside of the forward work programme. The company reckons it has the opportunity to derisk around 130 million barrels by June 2013 and it has identified more than 30 prospects that add up to 450 million barrels of offshore prospective resources. In Q3, the company was pumping almost 22,000 barrels of oil equivalent per day, the bulk of which comes from its producing oilfields in the Gulf of Thailand (it also has production of around 2,000 boepd from an onshore gas field). This generated EBITDAX of US$114.6 million for Q3 2012, up 157 per cent on the prior year period. For the full year, production is expected to come in at 25,000 bpd. This looks set to rise as the company continues to enjoy an impressive strike rate on its acreage. In late September, for example, the company brought online the A-10 well on the Songkhla A field at a rate of 4,000 bpd. This well found a record amount of net pay for the basin and very favourable reservoir characteristics in the Lower Oligocene interval. This was followed by the A-13 well in the previously untested northeast fault block, encountering 67 feet of net pay in the Lower Oligocene. This now suggests drilling higher up structure, the proposed Songkhla A-19 well, could find additional pay thickness. Coastal recently signed a contract to hire an Atwood Oceanics jack-up on a day rate of US$145,000 for the coming year to step up the pace of development and exploration drilling. While this indicates the level of capex committed to working the asset base, Coastal has a strong balance sheet. In addition to the cash from the production, it has also doubled its lending base to US$200 million. Even companies with strong balance sheets aren't immune to pressures to sell, however: these are difficult times for the industry as higher oil prices don't always mean a bottomline bonanza as margins are squeezed by higher costs (of rigs, materials, personnel, everything) and more aggressive tax takes from host governments, particularly in the countries where Coastal operates. Coastal, however, is obviously not prepared to sell shareholders short, particularly ahead of a drilling campaign that could materially add to production and reserves. Pertamina will have to look elsewhere for cheap reserves. oilbarrel.com >>>posted by rgm<<<