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.
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.
ADI Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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