Intersuisse brkerage house has recently come out and said that if Sugarloaf 1 lives up to its anticipated potential the share price could increase to as much as $5.40
ADi is 98c and starting to run, this company has a history of the share price moving up before major news.
Testing of sugarloaf 1 is starting now, expect an announcement this week.
New taiton is nearing completion and results are expected anytime now, this is a bonus worth at least 30c a share extra to share price.
Expect an announcemet in the next 2 weeks.
Here's another positive report which considers prices in excess of $5.00.
http://www.adelphienergy.com.au/files/brokerreports/Hartleys%20Research%20Report%20-%20Dec%202006.pdf
------------------
Hartleys Limited ABN 33 104 195 057 (AFSL 230052)
Adelphi Energy Limited (“ADI”, “Company”) has participated in the
Sugarloaf-1 well (ADI 20%) which intersected hydrocarbons in the
primary and secondary targets. Pre-drill estimates placed a mean
recoverable reserve of 800bcf on the primary target, which if proved
would be a significant result for the Company. Production testing is
expected to commence in mid-late January. The secondary target also
remains in play which will be tested at a later date. In the meantime,
drilling has commenced at New Taiton, Texas (ADI 25%) to test a
number of lower risk gas targets. First results are expected by mid-late
January. With drilling underway at New Taiton, production testing at
Sugarloaf and potential for further wells at Sugarloaf, news flow is
expected to remain active. We rate Adelphi Energy Limited as a
Speculative Buy.
Investment Highlights
• Sugarloaf-1 Hits 27m of Potential Reservoir in the Primary
Target - Interpretation of wire-line logs over the primary Hosston
target indicates that an aggregate of 90ft (27.4m) of potential
reservoir is gas saturated and may be capable of commercial
production after fracture stimulation. We are encouraged by these
results and await production testing to determine the commercial
significance. Based on our unrisked analysis if the target is proved to
be 800bcf and commercially productive then this could potentially be
worth >$4.50 per share to ADI (based on a pre-drill mean potential
reserves estimate of 800bcf of gas).
• Production Testing Expected to Commence Shortly – The
forward programme will utilise a smaller work-over rig to fracture
stimulate and production test the primary zone. This is likely to
commence in mid-late January (subject to rig availability) with results
likely in early-February. The total cost of these operations is
estimated to be US$2m. If the production testing is successful, then
the close proximity of gas pipelines bodes well for rapid
commercialisation. It is likely that the primary zone will be kept on
production if commercial flows are achieved. In this instance, the
secondary target would need to be tested by another well.
• Secondary Target Remains in Play – If testing of the primary target
is unsuccessful, then the secondary target will be tested in the
existing well. Wireline logs confirmed a 92ft (28m) zone of potential
gas pay corresponding with the zone of gas shows obtained during
drilling in the secondary target. We understand that this horizon is
productive elsewhere in the region and we believe it has an excellent
chance of commercial production. If the target is proved to be
12mmb of oil and 27bcf of gas then this could potentially be worth
>$0.50 per share to ADI, although results to date suggest that this
estimate may be conservative.
• New Taiton Spuds on 1 December - The New Taiton Prospect is a
low risk opportunity located on a well established trend. The
prospect has mean potential reserves of 40bcf of gas and upside
potential of 85bcf in the three stacked intervals. Based on our
unrisked analysis, a 40bcf discovery could be worth ~30cps to ADI.
The well is expected to reach total depth in late January with first
results expected in mid to late January.
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