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Josh Young

 
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  • Seeking Alpha Top Idea Explained In Non Technical Language - AusTex Oil [View article]
    Bankstocks,

    A) please don't "demand" I reply to your comments on here immediately. You have my phone number and email address, and I have a full time job managing money for clients.

    B) the presentation Joe cited is full of discrepancies and seems to be based on early 2013 numbers. For example, it cites a March 2013 reserve report, when there has been a more recent reserve report cited here (http://bit.ly/1mLObsy) and in the PWC report.

    C) analysts at GMP and RBS Morgan are forecasting numbers in line with my numbers. If you don't want to believe me, thats fine, but for a small cap stock GMP and RBS are incentivized to be conservative in their equity research - it is just not worth it to be overly aggressive relative to reputational risk.
    Jan 23 01:23 PM | 1 Like Like |Link to Comment
  • Seeking Alpha Top Idea Explained In Non Technical Language - AusTex Oil [View article]
    Bankstocks, they could spend $50 mm this year - $20 mm from the preferred, ~$10 mm from cash flow and $20 mm from bank debt they may bring on mid year. And with the stock well above the conversion price of the convertible debt and trading with significant volume, they may be able to spend all of that on drilling.

    They already have a lot of the necessary infrastructure in place to get there.

    Thanks for your intense interest in this stock.
    Jan 23 01:20 PM | Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    Joe, there are a number of discrepancies in this most recent presentation, which was released subsequent to my top idea article. For example, it uses out of date reserve numbers. The PWC report and a previous update (http://bit.ly/1mLObsy) cited a more recent reserve report. I won't speculate as to why they used outdated numbers, but considering the discrepancies, I wouldn't rely on it.

    GMP and RBS Morgan both have much higher projections than 1600 boepd for exit 2014.

    I'm looking for public releases of 2014 guidance. While I'm looking, using bankstock's cost back-in, which was a little high because a lot of infrastructure is already built out, if they spent $25 million to get to over 1,000 boepd and are spending their $20 million cash, ~$10-15 million from cash flow, and $10-20 million from bank debt added mid year, that should be $40-50 million this year, which gets them to ~3,000 boepd. This is subject to timing of capex, and assumes new wells are equivalent to old wells (the wells generally seem to be getting better as they get more familiar with the play). My guess is the 1,600 boepd exit was a pre- october 2013 equity raise number. With the incremental $17.5 million, there should be incremental 1,000-1,500 boepd exit production.
    Jan 23 01:15 PM | Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    Their presentation says that they are CURRENTLY at 1,600 gross BOEPD. That is different from saying that their year end goal is 1600. Net they were at ~1,000 boepd at the end of December and have said numerous times they are targetting 2,500-3,000 boepd for the end of 2014, and sell side analysts are projecting that they reach that number.
    Jan 22 08:56 PM | Likes Like |Link to Comment
  • Seeking Alpha Top Idea Explained In Non Technical Language - AusTex Oil [View article]
    Young Capital Partners is "my" firm. I fully disclose my ownership of Austex Oil. I think readers should be skeptical of authors who do not own the stocks they write positively about.
    Jan 22 08:52 PM | 2 Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    Someone asked, so I'll go through your math here. It is totally incorrect.

    $90 * the 5.5 million barrels of oil gets you to ~$500 million in gross revenue from their oil reserves. Plus an additional 12.1 bcf of gas reserves at $4 per mcf gets you to ~$50 million in gross revenue from gas reserves.

    Thats $550 million in undiscounted gross revenue, or $200 million in discounted net revenue (cash flow) according to that report. Which is not the most recent report, another had come out more recently with a $250 million 1P figure.

    $250 million is ~2.5x the current enterprise value of Austex. Most rapidly growing E&P companies trade at a 2-4x premium to their proved reserve values...
    Jan 22 05:35 PM | Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    Bankstocks - you can't have it both ways. Either the stock is cheap, and the deal is "unfair", or it is not cheap and the deal is fair. Your comments above suggest that you both think the stock is not cheap AND think the deal is not fair, which is logically inconsistent.

    Also, to be clear, I do not and will not have "control" over the company.

    And I'd suggest consult a securities lawyer before making proxy recommendations in a public forum.
    Jan 22 01:09 PM | Likes Like |Link to Comment
  • Sell Shell And Oil Majors, Buy High Growth Undervalued Juniors [View article]
    It was listed in the company's filings on their website and at the ASX (viewable both on Austex's website and on the ASX's website).

    Ptolemy / Freestyle have been buying and filing for months. Generally it makes sense to review public filings before a) identifying an "information void" and b) selling.

    Regardless, PWC has a recent fairness opinion out there saying they think the stock is worth $0.20-27 (versus a current ~$0.185), and they were paid to come out with a low number. Not too late to do the relevant due diligence and make an informed decision.

    Here are some helpful links:
    ASX Announcements page:
    http://bit.ly/1hdbhF0

    Recent announcement of insider buying:
    http://bit.ly/1aIrmkr

    Less recent announcement of insider buying (more than a month ago):
    http://bit.ly/1aIrkJe

    Massive acquisition of stock buy well informed private equity veteran with a great track record:
    http://bit.ly/1aIrmkv

    Operational update (in December):
    http://bit.ly/1aIrkJh

    There are something like 100 announcements in the past 12 months. Yes, perhaps they should update their corporate presentation. But there was more than enough information out there between regular quarterly filings, monthly operational updates, and announcements of massive share purchases.
    Jan 22 03:52 AM | Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    Kevin, excellent question. Can you please link to the specific presentations you are referring to.

    I'll note that the reserve value has ticked up consistently and has been independently reviewed (most recently prior to the new control shareholder buying an additional ~20% of the company). And that production is continuing to grow rapidly.

    The thesis is basically production is shooting up and reserves keep going up (and have been doing so despite lower EURs per well), and E&P companies typically trade based on both. If AOK traded in line with peers like SYRG, it would be at a multiple of its current price.

    So no, I don't think investors should demand a big discount to proved pv-10, any more so than with any of Austex's rapidly growing comps.
    Jan 21 09:03 PM | Likes Like |Link to Comment
  • Sell Shell And Oil Majors, Buy High Growth Undervalued Juniors [View article]
    I'd suggest taking a look at Gastar (GST). I did something similar with Gastar, it had fallen off of people's radars and was stupid cheap. I bought a lot of the stock, shared my analysis publicly and wrote numerous articles. It is now widely held and was up ~650% last year.

    Austex could be the Gastar of 2014. You're missing some key components of the investment thesis, and likely sold your shares to the insider (not me) who nows own over 30% of the company and has made his clients and co-investors BILLIONS of dollars over his career.

    The biggest 2 reasons people haven't bought Austex is 1) they hadn't heard of it and 2) because for 2 years the stock just didn't go up. Proved reserves are up, production is up, and now the stock is just starting to go up.

    You and bankstocks are focused on the wrong points: G&A and poor historical investor relations. Both seem to be in the process of being fixed by an aligned, control shareholder with an excellent track record.
    Jan 21 08:52 PM | Likes Like |Link to Comment
  • Sell Shell And Oil Majors, Buy High Growth Undervalued Juniors [View article]
    The "safe" part of your portfolio that is invested in companies that are spending more than 100% of their cash flow but still shrinking? That doesn't sounds particularly safe to me. I prefer to buy stocks at a substantial discount to intrinsic value, for an actual margin of safety.
    Jan 21 12:51 PM | Likes Like |Link to Comment
  • Sell Shell And Oil Majors, Buy High Growth Undervalued Juniors [View article]
    Last small cap stock I spoke about last year in a similar manner versus the larger "safer" companies mentioned here. 1 year stock chart. http://yhoo.it/1eOj5dV Enough said...
    Jan 20 06:56 PM | Likes Like |Link to Comment
  • Five Of The Fastest Growing E&P Companies [View article]
    Shouldn't matter, US dollar denominated oil assets, so the price for ATXDY should be independent of the price of the aussie dollar
    Jan 20 03:56 PM | 1 Like Like |Link to Comment
  • Sell Shell And Oil Majors, Buy High Growth Undervalued Juniors [View article]
    Thank you for the comment; some of what you said is mathematically incorrect, and some I disagree with.

    Mathematically incorrect: "more likely to go down by more than it can go up" - If ATXDY traded at its 2P value, it would trade for ~$20 per share. This is more than 2x its current share price. It thus CANNOT go down more than it can go up, because it can only go down by 100% but can go up more than 100%

    And now, qualitatively: There is nothing special about larger market cap stocks that prevents them from going down more than smaller cap stocks. See Enron, formerly one of the largest cap energy stocks. Shell is outspending cash flow to shrink. This is fundamentally a bad situation. Austex is outspending by a similar proportion and tripling their production.

    I agree they are very different - one is outspending and shrinking, the other it outspending and rapidly growing. I prefer the one that is rapidly growing. And I think in a market downturn, the one that is rapidly growing might do better than the one that is shrinking too.
    Jan 20 03:45 PM | Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    J, I appreciate the question but this is a hard answer to give publicly. I think proved reserve value is a reasonable expectation, subject to a number of different factors.
    Jan 20 01:08 PM | Likes Like |Link to Comment
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