Coastal Eng Share Discussion Threads

[melf] 01/4/2013 17:08

And some more mouth watering stuff from Belt:http://www.investorvillage.com/smbd.asp?mb=11837&mn=20961&pt=msg&mid=12672566Particularly the last paragraph........Have a look at the growth upside valuation for NAV for fields that they are going to drill into by the end of the year - giving no account for G5/50 or Malaysia - just the Songhkla basin - $72.59. Add Malaysia and G5/50 and that # is closer to $80.

[melf] 01/4/2013 16:33

CS rise target price to c$34

[melf] 31/3/2013 18:41

A nice post over on IV:



Coastal is back in play

I haven't posted on here in a long while because my position hasn't warranted it. That changed this week. Being in the brokerage business for many years I've seen it all but this week was one of the most blatantly obvious tree shakes against Mr. Retailer that I have seen in some time. My condolences to those who got tossed but me and my boys were loading up. Not the first time we have seen Coastal take a beating before good news - and good news it was. The implications are not understood yet but I have been waiting for years to see if they can unlock that deeper eocene and this release was the one I have been waiting for. Anything under $20 is a gift from here. They will be at 30,000+ bopd before you know it and will close off the year at 200MB+. Still lots of low hanging fruit with BBN exploration/development (115MB in possible recoverable) and the terrace (140MB possible recoverable) and some fabulous new prospects to be drilled in the very near future. In the last 6 months a lot more than Pertamina have been circling Coastal like ravens trying to scoop it up on the cheap. I thank this management company for not giving it away. The eocene just changed the game and those ravens will be swarming now. This well was not drilled to be fracked. Wait until they implement a proper program to really unlock this flood of mud. Go and look at the presentations and analyst reports to better understand the ultimate size of the eocene - it is the elephant that has just stomped into the room.

Thanks to belt et al for keeping Joe Retailer informed. We need it as this one remains a favourite of the institutions to play with and shake that big oak tree.

To quote Credit Suisse with their $33 Target Price in their flash from Thursday -

"Take advantage of this weakness and fill your boots."

I did and will buy more under $20 if allowed. I now wait for the end game. $30+

[dukedosh] 29/3/2013 12:37

GOT approx costs for:
Conventional drill = $1-2m
6 stage frac = $12m
3 stage frac = $6m

Still low capex compared to (most) elsewhere in the world.

Cost will be 100% offset against tax, SRB, etc..

TGG, reckon you're right. The CG anal-lyst chap will be bathing in Dom Pom this Easter, having made a killing from ripping the retail weak and margin.

[loglorry1] 29/3/2013 08:26

Mark interesting comment on the cost/duration of a fracked well. I've been wondering how much it adds to the cappex and in fact how long before they have to redo these wells with more fracking due to fast decline rates.

I have no idea of the answer but I can't see each well costing more than $2-3m to frack. So at 500bpd steady production (after fracking) with say netbacks of $40/bbl (fracking costs tax deductible so not sure how that will effect the netbacks) its going to take 6 months to cover the extra fracking costs to access the Eocene. One hopes that costs can be much lower but in any case assuming the wells continue to produce at high rates the extra cost looks commercial.

I should stress this is all finger in the air stuff and if anyone has more accurate numbers I'd love to hear them.

Log

[thegreatgeraldo] 29/3/2013 01:16

Interesting comment from FE,

"Overall this suggests that 4.5 mbbl/d production is be
hind pipe but is due to come back on stream over the
next 2-3 weeks, with an additional 1.5 mbbl/d from an
additional horizontal well about to be drilled. Exclud
ing decline, this could take overall offshore production
by end of April to 29 mbbl/d (31.5 mboe/d including
gas)."

when compared with their more detached (perhaps) view on 2013 production which settles on an average production for 2013 of a touch under 29k bopd & for Q2 an average of 25,250bopd (offshore)

[thegreatgeraldo] 29/3/2013 00:46

As far as brokers' notes go, the First Energy guys are the brokers to listen to IMO.

..If anyone knows, FE should, given they're the company broker ;-#)) Unlike that outfit Chris Brown works for..... bet he'll have a good easter!

[dukedosh] 28/3/2013 23:49

Belt still in the saddle this holiday weekend, this news must indeed be good:

"Well...amongst the scrambling, I'd say the wait was worth it. Of course, Canaccord and the boys were well above board as they drove the stock down big a few days before news to take out stops and create margin calls & overall terror.

First Energy Header: Commercial Flow Rate at Fracked Wells - Potentially - Game Changing - new TP $31.50 - see full report below.

In addition to the interesting tidbits on the Eocene and such:

The Company may also move earlier to Bua Ban terrace, which could potentially be larger than Bua Ban North. Our unrisked value for Bua Ban terrace is C$10.87/£7.24 per share (138 mmbbl prospective resources).

Of course the terrace will likely fail for as they keep moving north the miocene just gets worse and worse :)

Enjoy your Easter. Good Friday. Good Weekend.

He is risen...so has CEN."




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

As far as brokers' notes go, the First Energy guys are the brokers to listen to IMO. They seem to have a good handle on this company.

Header updated with the new broker TPs:

Brokers' Comments & 12 month price targets:

Credit Suisse: C$33.00 - 26.03.13
First Energy: C$31.50 (2100p) - 28.03.13
Dundee: C$28.00 - 26.03.13
Jennings: C$26.50 - 13.01.13
Paradigm Capital: $26.00 - 25.09.12
Macquarie: C$25.50 - 18.10.12
CIBC: C$24.50 - 22.01.13
Cannacord: C$24.00 - 27.11.12
Goldman: 1542p -
Investec: 1406p - 11.09.12

[marben100] 28/3/2013 21:52

Before we all get carried away, it's worth noting that a 6-stage frac is a very different kettle of fish from the simple, shallow, wells previously drilled in the Miocene.

These wells will take considerably longer to drill and CAPEX will be higher - a good reason for not reporting every single well.

Patience will be required before the true value of the Eocene becomes apparent in production and cashflow.

[gswredland] 28/3/2013 20:46

Thanks guys

[dcomd99] 28/3/2013 20:42

ryandj2222,

It might be £5 per trade, but it's also soon to be 1.5% on currency charges. So a round trip to buy/sell Coastal in Canada is 3%.

All brokers seem to ramping up their currency charges.

[ryandj2222] 28/3/2013 19:58

I've just signed up with iWeb.... £25 setup fee and then I think no ongoing charges for an ISA, or a dealing account, and £5 per trade for UK and international trades. I like their regular investment service as well, covers a broad range of shares.

[gswredland] 28/3/2013 19:22

Great stuff!

Off topic - sorry guys. I have my share portfolio wit Jarvis Investment but have exceeded 85k (government protection limit). I probably trade about 8-10 times month. Anyone recommended online share dealing service that is reliable and cheap please?

[nermil] 28/3/2013 16:14

Thrilled. I've held here a few years now I think give or take. I bit the bullet yesterday and loaded up on £14k more despite what has been going on. A very untypical risky move for me. What a relief!!!

[rivaldo] 28/3/2013 15:48

From Macquarie - $25.50 valuation and CEO in a position to beat forecasts:



"Action and recommendation

 We would describe Coastal's year-end results and operations update as "mixed". Following a healthy correction earlier this week, Coastal has ended its market silence and more or less shown that there are no major concerns
with respect to its reserve base. Although we would have preferred to see the company get the year off on a stronger foot production-wise, it appears that 2Q13 could actually beat out estimates, and put the company on track to meet its aggressive guidance. With forecast free cash flow of ~US$200m this year, on forecast production per share growth of 45%, we believe Coastal remains one of the few compelling International E&P investments in our coverage. We expect the market to remain focused on monthly production data, as the company continues its push for 30,000 bbl/d."

And Canaccord with a $24 target:



"Valuation
We estimate a 2013E NAV of C$24.30/share. Given the company's production and reserve base, we believe the current share price of about C$19.00 is well supported. At current prices, Coastal is trading at 5.6x our 2013E EV/DACF estimate and provides a 26% return to target."

[ryandj2222] 28/3/2013 14:54

I'm filling up. As people say a lot "this is gonna fly", "wouldn't wanna be out of this over the long weekend" etc etc.

[rivaldo] 28/3/2013 14:45

First Energy flash note from Belt - it's all about the fracking :o))

"First Energy Flash....

Market Reaction: Positive. The production is behind our expectations given a one month delay and lower IP rate at the horizontal wells. We believe this is already priced in the shares. Importantly the guidance of 33 mboe/d average production for 2013 is unchanged. What is very material in our view is the fact that the fracking activities have yielded positive results, potentially opening a complete new leg to reserves growth. The recently completed activities were targeting 21 mmbbl prospective resources, which are now partially derisked (£1.06/C$1.70 unrisked NAV).

Coastal reported EBITDAX of US$494.9 mm (FCC: US$480 mm) over the period with average production of 21,912 boe/d (FCC: 21,998 boe/d).

Operating cashflow was US$381.5 mm (FCC: US$331.1 mm) with net debt at the end of the period of US$31.2 mm (FCC: US$133 mm). This is mostly due to higher than expected operating cashflow.

Overall current production stands at 25.5 mboe/d, which is below our expectations (28 mboe/d) including 23 mbbl/d offshore. We estimate an additional 3.5-4.5 mbbl/d behind pipe production.

The Company's 2P reserves at the end of 2012 stood at 144.3 mmboe compared to 149.3 mmboe as of March 31, 2012.

The Bua Ban South 1 & 3 fracked wells had an IP rate of 1,200 bbl/d and 1,450 bbl/d. The first well has stabilized at 450 bbl/d while the second has not experienced a drop in production yet.

The Company has discovered 40 ft of net pay at the Eocene interval with 12% average porosity at the Songkhla A-15 well and 27 ft of total net pay with porosity of 14-18% at Songhkla A-16. The A-16 well has been fracked and will begin testing soon and the A-15 well is scheduled to be fracked once the fracking equipment returns to the field in the third quarter. "

[tommy51] 28/3/2013 14:38

Great stuff, nice to be back with such positive news .
I liked "The Bua Ban South A-03 well was completed with a six stage frac in the Eocene and initially produced at a rate of 1,450 bopd and has produced approximately at that level for two weeks. " Fracking and IP rates can always be a bit variable and it is clearly early days yet but to say that after 2 weeks it is roughly at the same level is very encouraging. They will undoubtedly have learned a lot from these fracks on how best to manage the well to keep water down , number of frack stages etc. Exciting times ahead.......I just hope we dont have to wait 3 months for the next full update.

[thegreatgeraldo] 28/3/2013 14:34

A name to watch out for in the future - Christopher Brown, who works for Canaccord & came out with his inspired call on production earlier in the week.

[thegreatgeraldo] 28/3/2013 14:00

Re belt's post, as I think I've mentioned before, the Miocene discovery at BB North was a nice bonus, originally they were after the Oligocene/Eocene.

[naeclue] 28/3/2013 13:49

Incidentally, I think this puts to bed the idea that Coastal is a leaky ship for news.

This is a great update, no idea what has been going on with the share price these last few weeks.

[ryandj2222] 28/3/2013 13:43

Can't resist a few more shares at these prices. Onwards!!

[blue86] 28/3/2013 13:22

Hopefully the lack of news, and future quarterly reporting has put off permanently a load of fxxking annoying retail speculators. Scourge of the E&P sector. Be gone