Solana Res Share Discussion Threads

[thegreatgeraldo] 13/3/2008 20:19

Good day over in cannuck land ;-#)))

[norman the doorman] 13/3/2008 00:31

i prefer option 3 sg31. i see gtre hit 4 bucks tonight. i would like some more...

:)

i also like option 4...

i feel that the MM's wouldn't sell with the P-1 news out in the UK and no TSX trading. perhaps tommorrow they will play ball after the rise, who knows.

why is no-one buying this stock here ?

this is now my largest holding.

[captainfatcat] 12/3/2008 22:42

norman try leaving a limit order open

[sg31] 12/3/2008 22:29

That you have got the wrong broker?
That nobody in the UK is interested in SORL..........Yet?
That we know something the rest of the PIs dont?
That we are about to make some serious returns?


Take your pick from the above Norm,They are all true.Good luck.

[norman the doorman] 12/3/2008 17:32

tried to get some more early today. mm's not playing ball. no market in the shares. what does that tell you ?

[ramesham] 25/2/2008 22:47

keep getting fat captain.

[captainfatcat] 25/2/2008 17:48

100% up now on the remainder of my holding 8-)

[thegreatgeraldo] 25/2/2008 14:13

Notice SORL's partner in Costayaco (TSX:GTE) have announced the Costayaco-2 results, but have also added some info on Costayaco-3....


" Costayaco-3, the third well in the Costayaco Field, reached TD at 8,620 feet on February 20, and is currently logging "

[vavoom2] 25/2/2008 11:16

------------------

[captainfatcat] 25/2/2008 07:09

Solana Resources Limited ("Solana" or the "Company") - Costayaco-2 Successful
Test Results

Primavera-1 Spud

CALGARY, and LONDON, UK, Feb. 25 /CNW/ - (TSX-V: SOR; AIM: SORL) is
pleased to announce the Costayaco-2 step out exploration well has been
successfully tested at a combined maximum flow rate in excess of 6,600 barrels
of oil per day (BOPD) from 119 feet of perforations.
Solana holds a 50% working interest in the Costayaco Field that was
discovered in 2007 and which is located in the Chaza Block, Putumayo Basin,
Colombia. Gran Tierra Energy Inc., the operator, holding the remaining 50%
interest.
The Costayaco-2 well is being completed for production. Produced oil is
currently planned to be transported through a planned six inch flow line to
the Costayaco-1 truck loading facility. At this point it will be mixed with
crude oil from Costayaco-1 and trucked to Uchupayaco where it will enter the
existing pipeline network. The Costayaco-1 discovery well is continuing to
produce approximately 3,500 BOPD (gross) from the Caballos and Villeta T
reservoirs. Costayaco production is currently limited by trucking capability
and in the near future it will be constrained by existing infrastructure
limitations. The joint venture is investigating ways to remove these
production constraints.

Costayaco-2 Testing Program

Costayaco-2 reached a total measured depth of 8,600 feet on January 2,
2008. A two formation, five zone cased hole drill stem test (DST) program,
designed to evaluate only the primary reservoirs in the field, commenced on
February 2, 2008.
Five DST's were completed over the Lower, Middle and Upper Caballos
Formation, and in the Villeta T Formation. The Villeta U Formation and the
Rumiyaco Kg Formation, which indicated pay zones from log interpretation and
which were successfully tested in the Costayaco-1 discovery well, were not
tested to avoid additional formation damage and to preserve reservoir
integrity. These zones are expected to be completed later in the field life
when the primary reservoirs are depleted.
DST-1 (8,494 - 8,498 interval; 4 feet of perforations) tested the Lower
Caballos. No flow was obtained. Additional perforations were added in DST-1A
(8,490 - 8,498 interval; 8 feet of perforations) and a maximum rate of 26 BOPD
with a steadily decreasing water cut was obtained by swabbing. The oil gravity
fluctuated between 25 degrees and 15 degrees API. Due to the short duration of
the test (28 hours in a 48 hour period) a stabilized flow rate was not
achieved. Analysis of the pressure data indicates very high formation damage.
DST-2 (8,330 - 8,342 interval; 12 feet of perforations) tested the Upper
Caballos. Swabbing for a short period of time (20 hours in a 48 hour period)
produced 29 degrees API oil at a maximum rate of 25 BOPD with a decreasing
water cut (8% at the termination of the test).
DST-3 (8,330 - 8474 gross interval; 88 feet of perforations) tested the
Upper and the Middle Caballos combined. Initial swabbing (1.5 hours) was
followed by natural flow at a maximum rate of 2,376 BOPD of 31 degrees API
oil. Only traces of water were noted.
DST-4 (8,200 - 8,236 gross interval; 31 feet of perforations) tested the
Villeta T Formation. Initial swabbing (49 minutes) was followed by natural
flow at a maximum rate of 4,209 BOPD of 30 degrees API oil. Only traces of
water were noted.

Primavera-1 Well

Solana is also pleased to announce that drilling operations commenced
February 20, 2008 on the Primavera-1 well located in the Guachiria Block,
Llanos Basin, Colombia. Primavera-1 is planned to take 21 days to drill, with
completion and testing operations to follow. Upon completion of drilling
operations at Primavera-1, the drilling rig is currently planned to move 12 km
to Palmitas-2, located on the Guachiria Sur Block, Llanos Basin, Colombia.
Solana is the operator and holds a 70% working interest in both the
Guachiria and Guachiria Sur Blocks with Lewis Energy Colombia holding the
other 30% interest.
Mr. Glenn Van Doorne, Chief Operating Officer of Solana, a Petroleum
Geologist, is the qualified person who has reviewed the technical information
contained in this news release.

Forward Looking Statements

Certain information regarding the Company, including management's
assessment of future plans and operations, may constitute forward-looking
statements under applicable securities law and necessarily involve risks
associated with oil and gas exploration, production, marketing and
transportation such as loss of market, volatility of prices, currency
fluctuations, imprecision of reserve estimates, mechanical problems, equipment
limitations, environmental risks, competition from other producers and ability
to access sufficient capital from internal and external sources; as a
consequence, actual results may differ materially from those anticipated.

Solana Resources Limited

Solana (www.solanaresources.com) is an international resource company
engaged in the acquisition, exploration, development and production of oil and
natural gas. The Company's properties are located in Colombia, South America
and are held through its wholly owned subsidiary, Solana Petroleum Exploration
(Colombia) Limited. The Company is headquartered in Calgary, Alberta, Canada.

NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE



/For further information: Solana Resources Limited, Scott Price,
jsp(at)solanaresources.com, [phone]; Ricardo Montes,
rmontes(at)solanacolombia.com, [phone]; Nabarro Wells & Co. Limited
(Nominated Adviser), Robert Lo, RobertLo(at)nabarro-wells.co.uk; Marc Cramsie,
MarcCramsie(at)nabarro-wells.co.uk; [phone]; Tristone Capital Limited
(UK Broker), Nick Morgan, nmorgan(at)tristonecapital.com, [phone];
Pelham Public Relations, Charles Vivian, charles.vivian(at)pelhampr.com, +44
207 743 6672; Philip Dennis, philip.dennis(at)pelhampr.com, [phone]/
(SORL)

[sg31] 21/2/2008 22:55

Think they heard you over on the TSX and decided that they couldn't let us run out of chart space.I think you had better redraw the chart on a different scale before we get the C2 & C3 reports.Can i suggest a scale of 0 to £10 that might last for a few months.:-)

[norman the doorman] 21/2/2008 08:23

looks like we may just be about to pop off the top of those charts soon !

[norman the doorman] 12/2/2008 22:57

With RE: to test rates.

8000 barrels would be good fortune! Over the long term, that rumour should add a couple of dollars to the share price, and perhaps increase the chances of success for Costayaco -3. Solana was trading at $2.20 on Dec.11, when Costayaco -2 was spud, and has added $.60 / share on speculation of Costayaco -2 success.

With Solana trading at $2.80 this equates to specualtion that Costayaco -2 will add production of 1,600 bopd gross (800 bopd net to Solana).

Value of Costayaco-2 from production in bopd.

$70 net price x 800 bopd x 360 days / 126 million shares FD = $.16 net revenue x 4 times multiper = $.60 share .

$70 net price x 2000 bopd x 360 days / 126 million shares = $.40 net revenue x 4 times multilper = $1.60 share

$70 net price x 3000 bopd x 360 days / 126 million shares FD = $.60 net revenue x 4 times multipler = $2.50 share.


Nicked off architect again off the Investors village site.

Dont forget though that production rates are often only 40% of the test rates.

Im fairly positive the results will be good but the longer the wait the more nervous I get.

The real deal will be the size of the prize with C-3 and the detail in the 3D seismic they have shot.

[ramesham] 12/2/2008 22:23

Thanks norman, £1 would be brill.

[norman the doorman] 11/2/2008 11:26

i think GTRE said more likely towards the end of feb. then we will also get indications of oil shows from C-3 with testing of C-3 to be finished around the end of March. We also have the P-1 well spudded I believe. should be a stonking month. im hoping for a £1 on the share price by mid march.

[ramesham] 11/2/2008 11:03

news expected any time mid FEB?

[sg31] 24/1/2008 22:15

Flying on the TSX up 30c,roughly £1.45

[captainfatcat] 24/1/2008 16:49

Nice recovery indeed

[soulsauce] 22/1/2008 17:10

Nice recovery!!

[tuckswood8] 21/1/2008 15:37

I also took out some profit today (the 1770 sale). Didn't expect to see such a large fall though.

[norman the doorman] 17/1/2008 11:11

Sold 10% of my holding as well, wanted some cash for PET. Noticed SORL has done 244% YTD and is the 8th highest % riser on the LSE. Still only 274 posts though.



Stolen off the Investors village site by ARCHITECT.


GTRE 'netbacks" speadsheet includes operating costs, so it's net revenue (price/net revenue) if the operting costs were not deducted a multiple of 3.5x, might be more appropriate. Since operating costs are deducted, a multiple of 4x seems reasonable as general guidance, for a "back of the envelope" valuation.

Solana spends $4 million a year in operating overhead, $4 million in G&A and averaging 3500 - 4000 bopd they should be profitable. At say 5000 bopd, Solana might turn an annual profit of .50 / share then a price/earning (PE) mulitiple of 10x would yield a $5 share price.

Dahlman Rose recent report uses a 7.9x price-to-2009 net cash flow multiple, which is derived from the E&P peer group average. Dahlman Rose projects their $4 price target (GTRE). The Dahlman Rose report estimates $0.51/share in 2009 cash flow. 7.9 x .51 equals $4. I'll assume Solana's operating overhead and G&A will increase 125% from $8 in 2007 - $18 million in 2009. $18 million added to $67 million (.51 x 133 FD shares) = $85 million in net revenue. Assume operating margins improve significantly about 70% - 80%, as production increases.

Working backwards from Dahlman Roses report, $85 million net revenue / 360 days / $60 "netbacks" requires production of 4000 bopd 2009 to support their price target of $4. I used $60 netbacks, assuming operating costs will increase 125% from $4 barrel in 2007 to $10 barrel in 2009 (due to increased rilling and infrastructure investment in the Putumayo basin) and oil prices will average $90 / barrel thru 2009E.

$10 / barrel in production costs x 1,000 bopd x 360 days supports a field operations budget of $3.6 million.
$10 / barrel in production costs x 10,000 bopd x 360 days suports a field operations budget of $36 million.

Costayaco -1 generates net revenue of $80 million /year ( $40 million net to Solana) compare that to Solana's net revenue in Q3 2007 of $3.1 million. Solana could continue to grow revenues expondentailly, with a succesful 2008/2009 drilling program.

I use a 6.5 x multiplier for "price/net cash" flow ratio - 4 x multiplier for "price/net revenue", and 3.5 x multiplier for "price/gross revenue". Either way it yields approximately $1 / share for 1000 bopd, discount the $1 8% to service the debt and increase the discounted percentage if Solana draws on debt for field operations and doesn't discover oil.

Petrominerales PMG is good one to look at- Q2 2007 PMG reported 2850 bopd production with $6 in production cost and + .13 / share in profit with the average price of oil WTI $58 / barrel, Q3 2007 they reported 4500 bopd with $7 in production costs and +.11 / share profit with an average price of oil WTI $68 / barrel. Petrominerales' PMG operating margins were better than Solana's and Gran Tierra's on 2800 bopd, as PMG reported a +.13 profit on 2850 bopd, and SOR and GTRE are "breaking even" on 2800 bopd. When Solana's Q4 2007 financials are reported, compare to PMG's Q2 2007 report, to see if Solana is " on-the- path to profitibility. I believe PMG and PBG share some G&A and or personnel expenses, in any case, PMG was "lean and mean" to turn a .13 quarterly profit on 2850 bopd.

Given the current share price, there are four conclusions:
1) the market hasn't priced in much, if any, forward production growth above 3000 bopd thru 2009, or
2) the market expects Solana's production costs will increase above $10 / barrel, ie. Solana and Gran Tierra will incur significant capital investment cost in the Putumayo - building pipelines, flowlines and increasing the capacity of the processing facility, and then not discover a significant amount of new oil. The same analogy could be applied to the Llanos basin.
3) the investment for field operations plus capex cost for costayaco 2-7 are significantly more than $72 million / year ($36 million net to SOR)
4) The markets are wrong on this one, or expecting the price of oil (WTI) will drop to $60. I believe Tristione uses $57 as the average price of oil (WTI) thru 2009E.


Take your pick from the above options. I prefer No.1. :)

( although a short crude hedge may be sensible. )

[sg31] 15/1/2008 22:05

well done,profits are always good,I will hold mine,think there is much more to come from sorl

[captainfatcat] 15/1/2008 17:11

Took some profits today