Resaca Share Discussion Threads

[half man half codpiece] 11/6/2009 11:05

$72 oil now.

[half man half codpiece] 11/6/2009 10:40

No one is more disappointed than myself about the performance of our stock.
While I believe the culprit of such a drop in value lies beyond our control that feels too much like an excuse. We are all determined to emerge from the
circumstances of today a far better and larger enterprise than the one which
went in to it.

JP Bryan
Chairman

[half man half codpiece] 11/6/2009 10:39

some buying this morning for a change

[half man half codpiece] 11/6/2009 09:41

getting ready to gap up soon

[half man half codpiece] 11/6/2009 09:41

Outlook
Since our last communication barely three months ago, a near lifetime of
financial turmoil has battered global credit markets. U.S. politicians and their appointed surrogates have managed to turn this long overdue and quite severe correction into a crisis with a dysfunctional and erratic response that demeans the ability of the free market to provide a proper solution to many of the problems. At the same time, our government is moving to socialize America with a spending program that is neither stimulating nor temporary. This is offered in homogeneous fashion to the American people and our world partners as their solution for the crisis.

To the oil and gas industry, they have something more
specific in mind-a tax plan that will severely injure the entire industry. So,
how do we respond? Certainly money is going to be devalued at some point by this vapid spending frenzy, so holding substantial long life oil reserves has to be of considerable value. So, we need to be in a position to take advantage of when markets improve, which they surely will. We have at least three initiatives to see this happens:

1. Reduce costs, even if it means shutting in production from wells with marginal economics at these prices
2. Increase water injection as quickly as possible in fields that have the best chance for immediate response
3. Grow our reserve base by way of merger and acquisition

How have things developed so far:
1. We have reduced cost by approximately $235,000 per month and are shutting in numerous wells at our Kermit, Kayser and Iatan fields
2. Water injection at Cooper Jal, our largest field, is 15,000 barrels per day, but needs to be 18,000, which is the point when the oil production will begin to show improvement. I should tell you that we are three months behind where we should be in this endeavor.

The reasons for the delay were unforeseen mechanical problems in the wells we selected for our source water. These issues are nearly solved and we should be injecting 18,000 barrels per day in 30-45 days. At our Jordan Unit, we have realized there is a great advantage to unitize the field with two other offset operators. We will have a meeting in early April to try and lay the ground work for such an outcome. If successful, this will both reduce cost and increase production.

In the area of acquisition, we believe there are unique opportunities for
benefitting shareholders by a significant acquisition or merger. These endeavors are not without special challenges, but we have greatly increased the level of commitment to the endeavor. Just so you know, our objective is to double the reserve base.

No one is more disappointed than myself about the performance of our stock.
While I believe the culprit of such a drop in value lies beyond our control that feels too much like an excuse. We are all determined to emerge from the
circumstances of today a far better and larger enterprise than the one which
went in to it.

JP Bryan
Chairman

[half man half codpiece] 11/6/2009 09:37

JP Bryan, Chairman of Resaca, commented:
"We are pleased with the results of our capital program to date and we are also pleased to have reached the 15,000 barrels of water injection per day level at Cooper Jal, our largest property. Our stable production and hedge position Contribute to positive operating cash flows, even in the current low commodity price environment. With a solid reserve base, operating cash flows, and available borrowing capacity, we are in a strong position to grow our business.
We believe the global economic conditions and the pricing environment currently facing our industry will present attractive opportunities and we are well positioned to take advantage of these opportunities."

[half man half codpiece] 11/6/2009 09:29

great chart

[half man half codpiece] 11/6/2009 09:28

Resaca's exploitation plan, which was initiated in 2006, is to reactivate many of the shut-in wells, optimize and reactivate the existing waterflood programs and conduct a significant infill drilling program. The directors believe that the properties represent excellent opportunities for the development of low risk oil reserves. In addition to the company's initial exploitation program, the directors believe the primary properties are excellent candidates for CO2 tertiary flooding. The use of CO2 for this type of enhanced recovery has revitalized many older proven oil producing fields in the Permian Basin. Several major companies are operating CO2 floods in the region and many of Resaca's properties were identified in a US Department of Energy Study of CO2 flooding techniques as being amenable to CO2 enhanced oil recovery. To this end, in 2007, the company engaged Williamson Petroleum Consultants of Midland, Texas, to perform a feasibility study on some of the properties for CO2 flooding. The study concluded that material amounts of incremental reserves could be accessed through CO2 flooding. Resaca plans to initiate a CO2 flood program for certain of the properties. If the program is successful, the directors believe that the CO2 flood could lead to additional recoveries of 7 to 16% of the original oil in place, based on the published Permian Basin oil recovery rate projections and the study performed by Williamson Petroleum Consultants.

In addition to efforts with the company's primary properties, Resaca intends to create long-term shareholder value by acquiring and exploiting a portfolio of high potential, but low to moderate risk, oil and gas projects offering substantial upside from aggressive exploitation techniques. With domestic oil and natural gas prices near historic highs and increasing demand for fuel and electricity generation, the directors of Resaca believe that the onshore US offers significant opportunities to build long term value and cash flows for the Company. In addition to the US, the company intends to evaluate, acquire and exploit low to moderate risk oil and gas projects in other jurisdictions, including South America and Central Canada. The company will focus on development and exploitation projects in areas with existing production infrastructure and both proven and probable oil and gas reserves as opposed to higher risk exploration of unproved properties. The company intends to focus on properties that are long lived and have significant levels of original oil in place. The company will actively pursue properties which can be enhanced through a variety of exploitation techniques, including waterflood optimization, CO2 flooding, infill drilling, deepening and re-completions into undeveloped reservoirs and pay sections.

[half man half codpiece] 11/6/2009 09:27

Assets and StrategyThe Resaca properties are located in the Permian Basin of the United States, in West Texas and Southeast New Mexico. The Permian Basin, one of the largest and most prolific oil and natural gas producing basins in the United States, extends over 100,000 square miles of West Texas and Southeast New Mexico and has produced over 24 billion barrels of oil since its discovery in 1921. The area is characterized by oil and natural gas fields with long production histories and multiple producing formations. Resaca's producing properties in the Permian Basin are mature fields with established decline curves. Resaca's primary properties currently produce from the Yates, Seven Rivers, Queen, Grayburg, San Andres, Clearfork and Tansil formations and include 171 producing wells, 59 injection wells and 25 shut-in wells. The majority of Resaca's wells are shallow – less than 4,000 feet deep - and produce from multiple producing horizons. In January of 2008, Haas Petroleum Engineering Services valued Resaca's reserves. Utilizing NYMEX commodity price assumptions of $95.98 for oil and $7.48 for natural gas and discounting at 10%, Haas valued Resaca's "2P" reserves at $423 million

[half man half codpiece] 11/6/2009 09:27

www.resacaexploitation.com/page/assets-strategy

[half man half codpiece] 11/6/2009 09:26

www.resacaexploitation.com

[half man half codpiece] 11/6/2009 09:21

strong interest now

[half man half codpiece] 11/6/2009 09:18

27p to buy. Someones buying early today.

[half man half codpiece] 11/6/2009 09:17

Evel Knievel will be expecting a big pay day on his big investment here.

[half man half codpiece] 11/6/2009 09:16

$70 oil now. Should see 50p soon here just for starters.

[targatarga] 10/6/2009 13:46

yes - but not as we know it...

[oltend] 09/6/2009 21:18

Is there anyone out there?

[half man half codpiece] 23/5/2009 08:47

Author: GHH Number: 58996 of 59202
Subject: Re: Resaca yet to bounce Date: 14/5/09 15:56
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Recommendations: 10
I posted re Resaca last week. The gist:


Listed 17th July 2008, raising £42m at 130p. Can buy today at circa 22p.



From above Seymour Pierce Note:

It has not changed our asset value estimate which remains at 120 pence per share assuming an oil price of $55 this year and a flat $65 per barrel thereafter.

However, applying valuation metrics derived from industry M&A activity would value Resaca at anywhere between 150 and 200 pence per share.


Market cap is £21m and net borrowings of £14m, hence EV £35m.

Resaca has independently assessed proved reserves of 17.3 million barrels and proved plus probable reserves of 31.6 million barrels, in oil equivalent terms. In January of 2008, Haas Petroleum Engineering Services valued Resaca's reserves. Utilizing NYMEX commodity price assumptions of $95.98 for oil and $7.48 for natural gas and discounting at 10%, Haas valued Resaca's "2P" reserves at $423 million.


The concern was

Resaca refinancing its current senior credit facility but had headroom of $32.0 million available at YE. Not sure whether re-financing to increase facility for acquisitions or breached covenants because of falling commodity prices . Will find out.


Since then I have clarified that RSOX under no financial pressure to re-negotiate Senior Debt - they are only doing so in order to achieve better terms since they used the bulk of the £40m to reduce the Senior Debt Facility. They still have circa $30m headroom.

They said at recent Presentation that in merger talks. It appears that they intend to build Resaca into a significant oil company and then sell, presumanly when market picks up.


Bad news is shares illiquid but if RSOX packaging itself for a takeover we have an exit.

There has been a large US seller holding share price down but possibly nearly cleared - this is what I'm being told but......

I'm also told recent Presentation (on web site www.resacaexploitation.com) was bullish and well received.

Resaca effectively run by the guys behind Torch. Looks decent track record with plenty of corporate exits.



Directors close to retirement - 12% shareholder/Chairman 69.


Business model low risk, very large discount to reserves, plenty of financial headroom and cash positive (800 bopd with 65% hedged at $62) and a probable exit strategy via multi bagging takeout if Seymour Pierce NAV's even half correct.


Regards

[chrissey] 20/5/2009 17:57

exactly, why would anyone want to shift stock they think is worth several times more unless they are playing games to create demand to get rid of them?
this really is not what one looks for in an impartial view from a broker.

[mdchand] 17/5/2009 11:14

First oil play up is Resaca (RSOX). I am told that one should take Seymour Pierce's valuation which is between six and nine times the current buying price of 25p very seriously. Apparently, the management are looking for an exit. Attractively, there is no stamp duty on buying this stock and Resaca has no financing worries. A case of buying it and sitting back. There is stock around.'

[lqs] 15/5/2009 18:16

What did Simon Cawkwell say about this stock.

[howdlep] 15/5/2009 15:28

HMHC - Evil Knievil aka Simon Cawkwell