buyers, page-5

Just scanned the Hartleys website and this was written in October 2009.

The last two paragraphs are interesting as 6 months is now and we are a long way from $1.57.....and any pullback is an opportunity.

Not blaming Hartleys.....but as everyone has said....what has happenened?

RED FORK ENERGY LTD
Cashed Up for Pivotal 12 Months
Red Fork Energy Limited (Red Fork, RFE, Company) has recently held an
EGM to approve a previous issue of shares and also an additional placement for
$24m (at 120cps). This should result in a cash balance of ~$29m. The Company
plans to use the cash to accelerate development activity at its 100% owned
onshore USA projects.
East Oklahoma First Production by Year End
Red Fork has drilled and completed 6 wells to date at its 50,000 acre project
located in East Oklahoma (EOK). Sales infrastructure is largely completed and
the Company plans to drill 6 additional wells over the next few months. It is
anticipated that all 12 wells will be tied in and producing by the end of the year.
Recent testing has indicated flow potential of 300 thousand cubic feet of gas per
day per well from the Woodford Shale reservoir. The reserve potential of each
well has been independently estimated at 0.3 billion cubic feet of gas. The
Company estimates that the possible total recoverable reserve from EOK is up
to 200 billion cubic feet of gas. Given the low development and operating costs,
we estimate value per thousand cubic feet of gas at ~A$2, resulting in potential
value from EOK of A$400m or 240cps*.
*At this stage our valuation assumes only 200 wells are drilled at EOK, resulting
in recovery of 65 billion cubic feet of gas (compared with the 600 wells planned
the Company). This results in an unrisked valuation 81cps.
Transaction Could Double EOK Potential
Red Fork has recently completed a transaction that could see it more than
double its existing acreage position in the Woodford Shale. Under the
agreement, RFE is free carried for a 25% interest in 10 wells scheduled for
drilling by the end of CY09, as well as for an additional 60,000 acres at North
EOK. Red Fork is the operator and can increase its participation by contributing
to the cost of the project (we assume a final working interest of 50%).
Pawnee Prospect Delivers Oil at West Tulsa
Red Fork has made a significant oil discovery at its Pawnee prospect, located in
West Tulsa (RFE 100%). The Company has drilled 5 wells to date and
production is >100 barrels of oil per day. The wells have a high water cut;
however, are estimated to have production potential of 70-90 barrels of oil per
day each once water disposal and increased pumping capacity is in place.
We estimate the value of the ~2 million barrels of oil at West Tulsa at 29cps,
with up to 20 wells in total planned for the development of Pawnee over the next
12 months.
Strong Cash, Reserves Position, Production to Ramp Up
Red Fork has a strong 2P reserve position of 72.8 billion cubic feet of gas
equivalent and sufficient cash to develop and increase these reserves. The
Company should have an interest in 20 producing gas wells at EOK and North
EOK by the beginning of 2010, as well as increasing oil production from
Pawnee. The additional wells and production, particularly at EOK, are likely to
result in significant reserves upgrades and increased cashflow from early 2010.
The potential upside for Red Fork from EOK is huge, at 480cps; however, based
on the likely pace of development, our 6-month price target is 157cps. We
recommend RFE as a BUY and view the recent pullback as an opportunity.