Im probably not the only one sitting here wondering why on earth we find ourselves sitting at levels of 6.3cents after HUGE successes at H1 and J1 which MORE than make up for a non event at Moeller 1. Its clear to me people don't understand this stock and there is a lack of clear and truthful information on this forum.
I think its in everyones best interest that we put the FACTS and REAL numbers out in the open for all to make a fair judgement on.
Folks like BigGambler (see Amateur Punter) are misinforming everyone on the forum and its simply a damn waste of our time reading your bullocks. As many on the forum have worked out, you know as much about the oil and gas business as Wayne Swan knows about the economy, bugger all! So please kindly stop posting incorrect figures and pessimism in an attempt to suppress the share price so you can load up cheaply! Why else are you bothering with your propaganda???
SO HERE ARE THE FACTS AND THE TRUTHS ABOUT BUR:-
-Moeller 1 didnt come in as expected, but they haven't given up hope yet and there is still a chance they will come through with the goods in the upper 20ft untested section. Worst case its a duster we move on as we have other wells which more than cover Moeller 1 and to say that the future of the company is now seriously in jeopardy over the failure of one well is very short sighted!
-Heintschel 1 flowed at 1.2-1.5mcfd from a 4ft section out of a TOTAL GAS PAY ZONE of 225ft! That flow rate was UNFRACTURED so we can expect to see a significant improvement if not at least a tripling in flow rates. They only tested one 50th of the gas pay zone so this could prove more substantial that Moeller.
-Joann1 has flowed (again without fracturing) gas to surface at 2.1mcfd from one of four gas pay zones and we can expect to see the flow rate improve dramatically on fracturing
-The game has changed, Moeller one is no longer the golden goose but Heintschel & Joanna 1 are and both of these have flowed gas (without fracturing) significantly de-risking the stock!
Lets do some rough calculations @ a gas price of $4MMbtu (check Henrys Hub pricing if you want) & this site is useful for energy conversions http://www.natgas.info/html/natgasunitscalculator.html
Cash flow from J1 based on todays flow rates (unfractued & the remaining 221ft untested) works out as follows:-
-2.1MMcfd (million cubic feet of gas a day flow rate) = 2100MMbtu (British thermal units) -BUR share of around 38% less royalties etc (so assume 30%) -2100*.3 (30 percent) =630MMBtu (BUR Share of flow rate per day) -630MMbtu (flow rate per day) X $4MMbtu (gas price) = $2520 USD/day -$2520 usd/day X 365days = $919,800 usd/year revenues
The above does not include any Condensate and as we are only working this out off 4ft out of 225ft of the gas pay zone I have not factored in any production rate declines as this is a very very conservative figure as it stands and we should expect to see a much higher flow rate upon fracturing and testing of the remaining pay zone.
Cash flow from H1 based on todays flow rates (un-fractued & the remaining 221ft untested) works out as follows:-
-1.4mcfd (million cubic feet of gas a day flow rate) = 1400MMbtu (British thermal units) -BUR share of around 38% less royalties etc (so assume 30%) -1400* .30 = 420MMbtu (BUR share of flow rate per day) -420MMbtu X $4 (gas price) = $1680 usd/day from H1 gas flow -$1680 X 365days (a year) = $613,200 usd/year revenues
Again this does not include any condensate and this 1.4mcfd flow rate is based on ONLY one of FOUR gas pay zones.
Total revenues from these two wells conservatively:-
= 1,533,000 USD/year based on CURRENT UN-FRACTURED flow rates
-In Australian dollar terms that works out to be 1.76 million AUD This figure is extremely conservative and we can expect to see at least a tripling in the flow rates & therefore the revenues.
BUR has 3,940,000 in cash at the bank as per the latest quarterly and they are burning through around 900,000usd a quarter, so they have enough cash to see them through the drilling campaign as they stand now, especially so as they will now have additional revenue from Joann 1 and Heintschel 1 so calls of bankruptcy are unfounded.
The repayment of the convertible notes is not due until december and there are many more wells to be drilled before the year is out. Im positive they will be able to more than cover the repayments of the notes as they will be producing a nice revenue stream for their currently producing wells and future drilling successes.
We have recently acquired a 1,000sq miles of additional 3d seismic data so its very fair to say they are extremely confident with the area we are drilling in. If that was not the case why on earth would they bother purchasing a 1,000sq mile 3d seismic survey? The board and management are very experienced highly skilled operators and i'm confident we will see a significant return on our cash.
BUR have a massive drilling inventory of more than 70 wells from their initial 112 sq mile seismic survey so now that they have another 1,000square miles they seem to have a potentially huge drilling inventory. Their drilling success rate has been pretty impeccable (bar Moeller) so we can expect that the revenues from the existing wells will fund further exploration so a capital raising or debt funding should not be required.
I would suggest you all re-read the April investor presentation which gives you a good overview of the stock and the potential that lies within it. Those with knowledge and patience will be handsomely rewarded.
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