FDM 0.00% 1.1¢ freedom oil and gas ltd

another rbs research update, page-32

  1. 630 Posts.
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    Trader8888

    I have noted your passionate belief in AUT as an investment - fair enough - but your negative comparisons with MAD are over the top.

    MAD is a pure light crude producer with current production running $10 above WTI pricing.

    AUT is a mixed play with the current reserves split around 30% oil, 45% NGLs and 25% gas on an energy basis but not actual prices for the products.

    Thus one must take a view on the prices going forward for each of the products produced.

    The price of natural gas is about 25% of that for oil for equivalent energy so you can take out around 13 million barrels of reserves from the quoted 72 million barrels.

    This leaves the key market for AUT - that for NGLs. You may wish to ponder over the following report which shows NGLs going into surplus in the next few years as operations such as AUT keep pumping increasing amounts of this product into markets.

    Maybe a pure oil play does have some advantages.

    http://www.turnermason.com/assets/The-Great-NGL-Surge.pdf



 
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