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  • U.S. Energy: This Oil Stock Is Too Cheap To Ignore, With Significant Buda Exposure [View article]
    It takes years to permit a mine in the U.S. The mine is worth a lot when fully permitted and worth nothing if it fails to be permitted. That said, Mt Emmons is a world class molybdenum deposit. Here is an article detailing the potential value of the mine:

    http://seekingalpha.co...
    Oct 2, 2014. 08:00 AM | Likes Like |Link to Comment
  • U.S. Energy: This Oil Stock Is Too Cheap To Ignore, With Significant Buda Exposure [View article]
    Right now I am estimating revenue for 2015 above $60 million, assuming current prices for oil and natural gas. I will let others guess a price target.
    Oct 1, 2014. 08:38 PM | Likes Like |Link to Comment
  • U.S. Energy: This Oil Stock Is Too Cheap To Ignore, With Significant Buda Exposure [View article]
    Sorry folks, just discovered a typo.

    USEG's working interest in the Bruce Weaver 2H well is 7.5% and not 75%.
    Oct 1, 2014. 08:36 PM | Likes Like |Link to Comment
  • U.S. Energy: This Oil Stock Is Too Cheap To Ignore, With Significant Buda Exposure [View article]
    Here is some additional information on the Buda, which is right below the Eagle Ford, for those interested:

    http://seekingalpha.co...
    Oct 1, 2014. 06:43 PM | Likes Like |Link to Comment
  • Contango Oil And Gas: Take A Good Hard Look At This Misunderstood, Undervalued SMID E&P Company [View article]
    Terrance acreage is to the south and east and very near the Dan Hughes Buda wells.

    On a different note a new and very positive article appeared on USEG:

    http://seekingalpha.co...
    Oct 1, 2014. 06:40 PM | Likes Like |Link to Comment
  • U.S. Energy: This Oil Stock Is Too Cheap To Ignore, With Significant Buda Exposure [View article]
    Very nice article and thanks for the shout-out. Here are some additional points to add:

    1. Balance Sheet: With more receivables than payables, current working capital is currently a positive $5.4 million. Rare for a small-cap oil stock. Also, USEG has sold Bakken leases in the last three years for a profit of $35 million over cost. Most investors don't know GAAP accounting allows them to reduce the book value of their U.S. oil assets by $35 million rather than taking a Capital Gain through the income statement. USEG actually has invested $35 million more in its oil assets than reflected on the balance sheet.

    2. Recent Buda well results: Contango, the main operator of USEG's Buda assets released a new operations update today. USEG has not yet released this information.

    Contango Oil & Gas Company (NYSE MKT: MCF) today announced 30-day average IPs for the following wells that began producing in July 2014:

    Beeler 20H Buda USEG 30% working interest 30 day IP 835 Boepd (65% oil)
    Bruce Weaver 2H USEG 75% working interest 30 day IP 1,047 Boepd (57% oil)

    3. Contango was at the Johnson and Rice Energy conference today. They announced they will run a fulltime rig in the Buda in 2015. They also announced they plan to start drilling new Eagle Ford wells on acreage with USEG starting in early 2015. This will accelerate growth in production and reserves starting in 2015.

    4. Just my humble opinion with all sorts of disclaimers: Analyst estimates for 2014 and 2015 are too low based on the recent Buda well results this summer.
    Oct 1, 2014. 06:36 PM | Likes Like |Link to Comment
  • Marathon Oil Is 'Scooping' Up Value For Investors [View article]
    Anyone looking for spectacular IRRs should take a look at the naturally fractured Buda play in South Texas beneath the Eagle Ford. IRRs for the project as a whole is well over 100%. Multiple wells have reached payout in less than 60 days.

    http://seekingalpha.co...
    Sep 30, 2014. 09:21 AM | Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    Contango has said it is not that easy to see the natural fractures on 3D Seismic. You can see the hydrocarbons.
    Sep 26, 2014. 03:38 PM | Likes Like |Link to Comment
  • Contango Oil And Gas: Take A Good Hard Look At This Misunderstood, Undervalued SMID E&P Company [View article]
    "Given that the Buda is still somewhat of a "statistical play," delineation is key (how well it is tied into fracture network) and Contango is waiting on few more wells to further prove this formation."

    It is true Contango has called it a "statistical play." However, it is clearly a resource play. A statistical play is where it is not certain whether or not hydrocarbons will be present when the target zone is reached. A resource play is when it is fairly certain hydrocarbons will be encountered, although results may vary widely.

    There are other operators in the area that have drilled successful Buda wells on the northern side, eastern side, and southern side of Contango's leases. Conango has drilled the Beeler 9H well on the western side of its leases. In all, there have been over 30 Buda wells drilled in the general vicinity of Contango's Booth-Tortuga area. Every single well encountered hydrocarbons and has been brought into production. And every single well is still producing. Over 20 of the wells have achieved payout in less than 6 months, and several of those in less than 60 days. Contango has also stated the Buda project as a whole has an IRR well over 100% so far.

    By the way, nice article and thank you for bringing attention to these two companies.
    Sep 24, 2014. 10:25 AM | 5 Likes Like |Link to Comment
  • Contango And U.S. Energy Are In Austin Chalk Sweet Spot [View article]
    The reserves would certainly be worth more per BOE if Contango were to up the number of rigs drilling in the area.

    I see they are presenting at the Johnson and Rice Energy Conference next week. Hopefully we will get clear update as to what their plans are.
    Sep 23, 2014. 02:15 PM | 1 Like Like |Link to Comment
  • Contango And U.S. Energy Are In Austin Chalk Sweet Spot [View article]
    It depends on the extent of natural fractures and oil in place. Without more info it is not possible to evaluate. The key in both the Austin Chalk and the Buda is to find a sweet spot.
    Sep 22, 2014. 05:41 PM | Likes Like |Link to Comment
  • U.S. Energy Is The Way To Play The Buda Oil Discovery [View article]
    The recent results are outstanding. To follow the production profile of the Buda wells I recommend going to the Investor Village message board for USEG. They have a group of people that post regularly and keep everything up to date.

    The last four wells Contango drilled on the lease have been home runs. The Beeler 17H started producing in June and by the end of July it had already reached payout. They plan to start drilling longer 9,000 foot laterals from here on out. Many of their earlier wells had laterals that were less than 4,000 feet.

    USEG is a steal at current prices. The market hasn't figured out how rapidly production is rising for them from the recent success in the Buda.
    Sep 19, 2014. 03:39 PM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    Let me illustrate the $500 million estimate. The Dan Hughes Heitz 302 3H well has been producing for two full years:

    Estimated Gross Revenue: $35.00 million

    Less 25% Royalty 8.75
    Less 4.6% Production Tax 1.61
    Less 5% Operating & Transportation 1.75
    Less Est. $4 million Drilling Cost 4.00

    PV-10 for Production to date: $18.89 million

    PV-10 Estimate for future Production 6.00

    Total PV-10 for Heitz 302 3H well $24.89 million.

    It would take 20 very good wells like this well to have a PV-10 value of $500 million. The gross acreage position on the Booth-Tortuga lease is over 14,000 acres. With 320 acre well spacing the lease contains over 40 drilling locations. So far Contango and USEG have hit 8 good wells and 5 so-so wells. They also have the drilling costs down to $2.6 million.
    Sep 18, 2014. 10:20 AM | 2 Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    The $500 million is just for the Buda formation for the whole lease. The most recent well results indicate it could wind up much higher than that. USEG has a 30% working interest and their share would be worth $150 million.

    That doesn't count the Austin Chalk or the Eagle Ford. The Austin Chalk has the potential to be as productive as the Buda. There are already older Austin Chalk wells on the lease that are still producing.

    It also doesn't count the K.M. Ranch lease or the new Dimmit operator they are working with. It is not presently known if either of those leases are in a sweet spot.

    USEG also has Bakken leases and producing wells yielding over 600 boepd.
    Sep 18, 2014. 08:57 AM | 2 Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    The EUR for the Jessica well could be over 500K BOE.
    Sep 12, 2014. 09:43 AM | Likes Like |Link to Comment
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