Resaca Share Discussion Threads

[gandalf1971] 06/1/2013 12:30

Hpcg, interesting response.

The Eor has yielded better results.

They've only got 20m shares in issue. I'd say they do have options going forward, but it all really depends on the amount they raise from the sale.

760boepd with a 1.5m mcap smacks if something and its the finances which are all up the swanny.

I hold Slme which operate in the province, they are also buyers but that is nothing more than a note of interest.

I'm waiting for the next announcement, half a billion barrels is worth something with an independent report

[hpcg] 06/1/2013 11:51

Nope, this is a dead duck IMO. Ignore the random and inexplicable hedging operation and depletion and interest and they still can't make any cash once recovery enhancement expenses are accounted for. They have had just one not terrible year since listing.
Looking into the immediate future Henry Hub prices still awful, Cushing still full to overflowing and the EOR techniques don't materially work and certainly don't pay for themselves. I imagine there is not much demand for the properties which would probably benefit most from 20-30 years of natural oil movement.

[gandalf1971] 06/1/2013 10:36

p.s 1.5m market cap

[gandalf1971] 06/1/2013 10:34

HPCG- Good point with the office lease, maybe they thought they would be blue chip in 2 months, same with the exec board really.

regarding the sale, I've tried contacting the company on a few occasions but have a limited response with regard to the sale process, all I do know is that we will get an announcement in the next 2 weeks.

TBH, if you look back at the feb presentations then you will note :-

At the Company's Langlie Jal Unit, which was acquired in August 2011, gross production has increased approximately 40% to 138 barrel of oil equivalents per day primarily through returning idle wells to production and the optimization of water injection. While Langlie Jal is at an earlier stage in its waterflood development process, Management continues to believe this property is analogous to the Cooper Jal Unit, thus further validating our thesis on the potential value of the Langlie Jal Unit.

On 31st October 2012 they released a 25% increase in reserves, they also note above that Langlie could be cooper jal.

I'll allow you to chew on this comment and then if you can help with the valuation then happy days

The Company's third party reserve consultants have estimated a combined 500 million barrels of original oil in place for the Cooper Jal and Langlie Jal Units

So half a billion barrells in the USA

[hpcg] 06/1/2013 00:42

How on earth do they do water flood in West Texas given it's dry as a bone?
Why don't they move their office somewhere cheaper? They are opposite the 4 Seasons in the centre of town. I can't think there are any network effects which make it worth while. No point if they have years to run on their lease of course. I would have thought losing a VP with the company in the balance was not bad news - though the fact he joined in the summer of last year is a bit of a red flag IMO.
Their relationship with Torch is difficult to fathom.

...So... what do you expect the asset sale to realise?

[gandalf1971] 05/1/2013 14:46

Combine the news with being grievously oversold. It's a good combination


Resaca Exploitation (LON:RSOX) announced this morning that the sale of the Company's Cooper Jal Unit and Langlie Jal Unit will occur in early 2013. The AIM listed Company also announced that Will Gray II, Executive Vice President and Head of Capital Markets and Business Development, has resigned his position with Resaca to pursue other interests.

Resaca Exploitation are currently trading at 11.00 pence a share, down 18.52% on opening.

[gandalf1971] 05/1/2013 07:18

Rig zone article, this company have producing assets, a very interesting with with a 1.5m market cap it could be interesting if they sort out their indebtedness

[gandalf1971] 05/1/2013 00:30

Reserves upgrade

[gandalf1971] 05/1/2013 00:21

Old oil barrel

STOP PRESS:
Oando Energy's 'Transformational' Deal With ConocoPhillips T_
February 29, 2012
Resaca Exploitation's Update Gives Good News On Reserves, Production And Value
Resaca Exploitation, the AIM junior focused on developing known reserves in the Permian Basin in Texas and New Mexico in the US, continues to make progress in recovering from the disappointments of an aborted merger eighteen months ago which could have doubled its size.
Resaca, as its name suggests, is not a high risk exploration company but one which has assets which offer low risk, mature, long life production with considerable secondary and possibly tertiary recovery potential through water flooding and C02 injection. The name of the game is increasing the number of wells, since none of them produce block busting amounts by themselves. The putative merger with Cano Petroleum could have greatly increased output. But it was not to be and Resaca has been trying to rebuild its profile.
The latest update, released recently, says this is going well with reserves up and production better. There is also some good news in various metrics about value.
As of December 31 2011, Resaca's proved and probable (2P) reserves were 28.1 million barrels (mmbbls) of oil and 15.4 billion cubic (bcf) of gas, for a total of 30.6 million barrels of oil equivalent (mmboe). This  represents a 0.7 mmboe increase in Resaca's 2P reserves since June 30 2011 after realisation of 0.1 mmboe of production during the six months ended December 31 2011. The company's proved reserves represented 52 per cent of the 2P reserves as of December 31 2011.
Additionally, Resaca's possible reserves were 6.5 mmbls of oil and 3.3 bcf of natural gas as of December 31 2011 for total proved, probable and possible (3P) reserves of 34.6 mmbbls of oil and  18.7 bcf of natural gas (37.6 mmboe). Resaca's 3P reserves increased 1.8 mmboe since December 31 2011. All reserves are calculated on a net revenue interest basis (working interest volumes less royalties).
Resaca's proved developed producing (PDP) reserves as of December 31 2011 were 3.3. mmbbls of oil and 2.6 bcf of natural gas for a total of  3.7mmboe, This represents a 0.5 mmboe increase in PDP reserves since June 30 2011 after the realisation of 0.1 mmboe of production. This meant a 16 per cent increase in PDP reserves, after consideration of fiscal year production.
Resaca has some 300 producing wells, virtually all of them water flooded or secondary producing wells. For the month of February 2012 to date Resaca's daily production has averaged 750 boe per day.
There was an acquisition and a farm out during the second half of 2011. Commenting on the reserves and production update and the Bone Springs farm out, J.P. Bryan, Chaiman and CEO of Resaca, said: "We are pleased with the continued success at Cooper Jal (its main producing field) San Andreas and Edwards Grayburg and the acquisition of Langle Jal Unit and initial production increases we have seen at this property in a short period of time. These achievements have contributed to growth in both our 2P reserves and our PDP reserves over the last 18 months.
The company is therefore doing what it always said it was going to do – to become a low cost (wells cost  around US$600,000 a pop) low risk producer growing by accretion.
Perhaps the progress made in the last 18 months, however is best seen in some of the financials. EBITDA as at June 30 2011 was US$10 million based on the 750 boe production. This compared with US$4.78 million a year earlier in June 2010. Prices were strong during the period. In terms of reserves Resaca now says it has a net asset value of US$25 per share. A year earlier it was half that figure. Yet its shares are currently standing at US$0.70. At this level the company is heavily undervalued and the progress made has yet to be recognised.

[gandalf1971] 05/1/2013 00:00

I've taken a speculative punt in this company with some profit from another venture.

They are due to release an update in the next week to update shareholder on the sale of 2 licences that will bring the books back into order.

It's speculative as it needs to happen but with 21m shares in issue I say if they do make some right moves it's got 100% in it.

On 4/1/13 it's below the mid price to buy

Assets and Strategy

The 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 179 producing wells and, 58 injection wells. The majority of Resaca's wells are shallow – less than 4,000 feet deep - and produce from multiple producing horizons.  As of June 30, 2010 Haas Petroleum Engineering Services valued Resaca's 2P primary and secondary reserves at $292.3 million utilizing NYMEX commodity prices assumptions of $75.76 per barrel of oil and $4.10 per MMBTU of natural gas and discounting at 10%.  In addition, Haas valued Resaca's possible primary and secondary reserves at $79.0 million utilizing the same assumptions.

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 the company engaged Williamson Petroleum Consultants of Midland, Texas, to perform a feasibility study on some of it's 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.  As of June 30, 2010, Williamson Petroleum Consultants valued Resaca's probable CO2 recovery reserves at $73.4 million and Resaca's possible CO2 recovery reserves at $7.3 million utilizing NYMEX commodity price assumptions of $75.76 per barrel of oil and $4.10 per MMBTU of natural gas and discounting at 10%.

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.

[targatarga] 08/10/2012 12:11

euclid- ageed. As an investor i was more than patient. They wanted cano but couldn't even sort themselves out.

[euclid5] 08/10/2012 12:05

the Company's net indebtedness was approximately $57 million.

I assume they are in debt by this amt & need to raise sufficient funds to repay / fund this debt

only £3m market cap seems very tiny compared to it's NPV value

[targatarga] 08/10/2012 11:53

Now their selling the family silver[no other choice]. If there is a buyer i wonder how long it will actually take. The interest charge must be bleeding them drier than their wells! imho

[targatarga] 03/10/2012 11:43

Large holders will struggle to get a good price. Sold the last of mine earlier.. gla

[euclid5] 14/9/2012 09:11

shame because RSOX has a very high npv value

[targatarga] 14/9/2012 09:08

euclid5 - yep. They were always trying to up production by tweaking old wells etc. Problem with these american co's is their managements ego's. Leed petroleum rolled on and on and only survived by heavily diluting old existing holders. Now renamed ldp. imho

[euclid5] 14/9/2012 09:02

but I recall they have to spend multi $millions on developing their wells to extract the oil out - & that is the main problem here - the development costs

[targatarga] 13/9/2012 08:37

Without looking back at old rns's they stated their in the ground nett asset value was £12 a share[SIC].

[pugugly] 13/9/2012 08:31

Bye bye:> As a top list faller just dropped by to see if any possible value left - I cannot see any.

[targatarga] 13/9/2012 07:37

The boys at chase obviously got this wrong. Looking at production it would probably be cheaper to leave the gas in the ground and just sell some assets. I wonder how much the failed cano merger eventually cost! imho

[yngwie] 13/7/2012 16:56

Looks like Chase Nominees Limited
topping up.

yngwie.

[mypension] 24/3/2012 19:00

Any views on this share? I notice quite a bit of state building from the RNSs. Sp movement looks strange dues to move from being quaoted in USD to GBP