Canadian Resource Play Economics - Where AusTex Fits In

Mar.12.13 | About: AusTex Oil (ATXDY)

GMP Securities recently put together a fascinating spreadsheet of Canadian oil play economics, displaying the economics of each oil play for each public company, listing 121 total plays.

The top 11 plays are the following:

Company Play Types Well Cost Well NPV Well NPV/Well Cost Payout (MOS)
Strategic Steen River $1,800 $5,022 279% 6
Paramount Musreau Mtny $8,000 $18,527 232% 5
Twin Butte SK Low Viscosity $615 $1,346 219% 14
RMP Ante Ck Mtny $3,800 $8,165 215% 5
Trilogy Montney Oil $4,000 $8,059 201% 1
Marquee Lloydminster Hvy Oil $605 $1,068 176% 10
Crew CR Princess Vt $800 $1,347 168% 6
Tourmaline Deep Basin Hz $5,500 $9,203 167% 7
Tamarack Sk Heavy Oil $700 $1,146 164% 11
Renegade SE Sk Mississippian $1,200 $1,955 163% 22
DeeThree AB Bakken (HZ) $3,450 $5,562 161% 7
Click to enlarge

This list is a "who's who" of emerging and mid-cap oil producers in Canada, including premier companies like Paramount (OTCPK:PRMRF), Tourmaline (OTCPK:TRMLF) and Trilogy (OTCPK:TETZF), and rapidly growing companies like DeeThree (DTHRF.PK), RMP (OTCPK:OEXFF) and Strategic (OTCPK:SOGFF).

One other interesting data point - on "average" the 121 plays are quite exceptional:

Average Typical Play $3,766 $3,220 86% 22
Click to enlarge

This chart and analysis is helpful in forecasting the impact to Austex Oil (OTCQX:ATXDY) of up-listing to the TSX-V. Austex's vertical Mississippian wells cost $700k and generate NPVs of $1.2 million, and pay out in less than a year. Austex's economics would be in the top 10 of these 121 Canadian plays.

This is relevant because the other small, rapidly companies in the top 11 - Deethree, RMP and Strategic, have outperformed, particularly RMP and Strategic.

Austex Versus DTX, RMP and DTXClick to enlarge

As Austex up-lists to the TSX stock exchange, perhaps it will "catch up" with some of this outperformance, as its wells are comparable to wells drilled by these other high performing, Canadian traded small-cap oil companies, and they are growing at a similar rapid rate.

Disclosure: I am long OTCQX:ATXDY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Permission was granted by GMP to use this analysis in presentations