big volumes and ticking up

AMU is experiencing some big volume buying - around 1.2 million so far today. This has seen the price move up to mid-70s today from last weeks mid-60s, and might be the forerunner of a significant jump in price.

Why the rise now?

My guess is the recent Byczynski #1 deep gas well in Lavaca County is enticing buyers back into the fold. That well intersected around 350' (!!) of gross gas bearing sands and looks like being completed as a very, very lucrative commercial producer.

Or maybe it is the likelihood of a FY2003-04 production of over 310,000 barrels of oil and around 400 mmcfg (up from FY2003-04 production of 256,000 and 149 mmcfg) - with commensurately higher profits to match.

Then again it might be the 13+ million barrels of 1P & 2P oil reserves AMU is already sitting on (worth a conservative US$145 million/A$185 million). Or maybe its the likelihood of substantial additions to those reserves that their recent drilling successes will surely bring.

It could also be the steady progress of their bio-diesel business which, based on Shaws valuation, is likely to be worth at least A$35 million to AMU in the near future.

Maybe it is just the appeal of a company which is going to participant in the drilling of at least 37 wells in 2005.

Twenty-eight of those will be on its Raccoon Bend prospect - with the first for 2005 about to spud any day now (and 3 of 4 drilled to date have been completed as producers). Eight deep gas wells are scheduled for Lavaca County - one of which is drilling now (2 successful wells drilled here last year are each expected to deliver A$750,000 in annual profits to AMU). And 1 deep gas well is due in Iberville Parish. Expect plenty of oil and gas to flow from that exciting program.

Or maybe it is all of the above.

Expect plenty more action and price appreciation with AMU in 2005.

(I hold so of course I am biased.)