FX Energy
Re: FX Energy
a lot of buying--a lot--is happening today. suspect there may be some good news about to come out of poland. hard to keep the insiders at bay.
Re: FX Energy
well they are still pouring money into kutno 2---good news for now 
FX Energy Updates Status of Polish Operations
Press Release: FX Energy, Inc.
RELATED QUOTES.
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SALT LAKE CITY, Aug. 20, 2012 /PRNewswire/ -- FX Energy, Inc. (FXEN) today reported that a liner has been set through the Zechstein section of the Kutno-2 well and cemented to a depth of 6,209.5 meters. Currently the well is waiting on cement to set up prior to drilling out the cement inside the 7" liner and running a cement bond log. When those operations are completed, the drilling mud system will be changed to a lighter mud prior to beginning coring. Coring is expected to begin later this week or early the following week. PGNiG will earn a 50% interest in the Kutno concession in connection with its participation in the Kutno-2 well.
Komorze-3 well
A production test at the Komorze-3 well, which finished drilling earlier this month, is proceeding as planned and results are expected in approximately two weeks. The Komorze-3 well is located in the Fences concession and is 51% owned and operated by PGNiG. FX Energy owns a 49% interest.
Frankowo-1 well
The Frankowo-1 well is drilling ahead at a depth of 314.0 meters. Frankowo-1 is located on concession block 246, which is 100% owned and operated by FX Energy.
FX Energy Updates Status of Polish Operations
Press Release: FX Energy, Inc.
RELATED QUOTES.
..........
SALT LAKE CITY, Aug. 20, 2012 /PRNewswire/ -- FX Energy, Inc. (FXEN) today reported that a liner has been set through the Zechstein section of the Kutno-2 well and cemented to a depth of 6,209.5 meters. Currently the well is waiting on cement to set up prior to drilling out the cement inside the 7" liner and running a cement bond log. When those operations are completed, the drilling mud system will be changed to a lighter mud prior to beginning coring. Coring is expected to begin later this week or early the following week. PGNiG will earn a 50% interest in the Kutno concession in connection with its participation in the Kutno-2 well.
Komorze-3 well
A production test at the Komorze-3 well, which finished drilling earlier this month, is proceeding as planned and results are expected in approximately two weeks. The Komorze-3 well is located in the Fences concession and is 51% owned and operated by PGNiG. FX Energy owns a 49% interest.
Frankowo-1 well
The Frankowo-1 well is drilling ahead at a depth of 314.0 meters. Frankowo-1 is located on concession block 246, which is 100% owned and operated by FX Energy.
Re: FX Energy
well i thought it was good news, but mkt disagrees---- 
what am i missing
what am i missing
Re: FX Energy
FX Energy has incredible near-term exploration upside. There are numerous Big Time catalysts just ahead. Below is one investor's analysis.
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Kutno-2: I expect coring will commence next week. There are many unknowns such as how many meters before reaching the Rot. How dense or difficult it will be drilling through the remaining rock. This is unchartered territory so expect the unexpected.
Should they not initially encounter gas do not lose heart. I fully expect drilling to continue right through the entire structure and into the carboniferous zone - Devonian oil maybe? Besides, this is such a large structure there may exist dry gas pockets throughout the formation. There is much to learn and rest assured they will not immediately plug and abandon if no initial gas shows. Lots of data to be collected that's for sure.
Resent posts have alluded to the news flow concerning Komorce. IMO, the Pols have a pretty good idea of what they've got and as many have alluded to, they haven't experienced much success with their shale plays. This PR is a way to toot their horn and divert attention away from their lack of success elsewhere. We should know more in a month or so but in the meantime I'm encouraged regarding the porosity (22-23%) and size of discovery - 18bcf net to FX which equates to an additional $1.20 in P50 reserves or $6.65 which strongly underlies my recent fair value estimate of $7. (P50 estimate excludes cash/liquid assets ($5.45 + $1.20).
So if that is the most likely near-term reserve value what is the fair price that FX should be trading at? We could attempt a discounted cash flow analysis or simply refer to the NAV from the risk table in the presentation (pg. 32) of their web-site. If we eliminate Kutno and Plawce East from the calculation since they skew the entire portfolio we end up with ~ $59 of unrisked value per share. Before we go on consider these estimates are based on very conservative assumptions especially with K & Pe factored out of the equation. Question - How do we factor this into the current stock price? Let's assume a 50% success rate - now we have $29.50 and let's further discount this 80%. We are left with around $6.00.
Another consideration is the potential near-term reserve adds from existing/planned drilling over the next 6-9 months.
Avoiding the desert (Kutno) let's focus on the following:
1. Frankowo in Block 246 - 50Bcf potential/100% net to FX or potential add of $3.35 to reserves - $6.65 + $3.35 = $10.00
2. Mieczewo in the Fences near KSK - 30Bcf potential/49% net to FX or potential add of $1.00 - Now at $11.00
3. Plawce tight gas play in Fences (frac) - 123Bcf potential/49% net to FX or potential add of $4.00 - NOW at $15.00
4. Tuchola in the Edge - 110Bcf potential/100% net to FX or potential add of $7.00 (rounded) - WOW! $22.00
5. Lisewo 2 in the Fences - not sure what to expect here but could add a few cents but not significant. Stay with $22,00
6. Lisewo SE in the Fences - 350Bcf/49% net to FX or potential add of $11.00 (rounded) - For a WOPPING $33.00.
Fellow Longs, that's a possible addition of $21.00 (rounded) to reserves in less than a year with half that to be determined in less than six months. On a side note, FX in its conservative vein only assigns 90Bcf to the five satellites + Mieczewo or 45BCF net to them. With satellite #1 - Kormorce anticipate to add 18Bcf & Mieczewo 15Bcf that only leaves 12BCF risked for the other four satellite wells. IMO this will be adjusted up before year-end.
What I'm expecting time wise: Frankowo now drilling - results in October; Lisewo-2 begins drilling early October - results late December; Plawce begins fracing in October - results in October; Tuchola begins drilling late October - results January '13; Mieczewo begins drilling November - results late January '13.
Now, back to stock price / fair value calculation. If we assume a 30% success rate then conservatively, FX should be able to add some $7.00 to reserves which I fully expect would be a minimum since Mieczewo, Plawce, Lisewo 2 and Lisewo SE all show 50% or better odds.
Given these most attractive reserve additions in the near-term I see no reason why FX cannot trade between $14 and $15 NOW! I am convinced after performing this discounted NAV analysis that there is absolutely NO premium being factored into the stock today (curently trading atr $7.88 down $.04) for KUTNO. Therefore, I am adjusting my previous fair value for FX upwards to $9.50 (up from $7.00) discounting the expected near-term reserve additions a further 40%. Absolutely no premium for Kutno success below the $9.50 level IMO.
My worst case senario assumes a potential sell-off on negative Kutno news to the $6.50-$7.00 area and I firmly believe that that area would not be warranted leaving us a short-term buying opportunity. Given the potentially long drawn out period waiting for Kutno results, I see no justifiable reason for a large pullback in the stock price. The reward/risk is skewed to the upside some 4:1 to the mid-teens and an eye popping 14:1 to the potential 9 month $33 NAV reserve target - if all goes as planned and 100% successful. You can dice it or slice it anyway your want but, I believe the odds point overwhelming in favor of owing/buying FX Energy now.
Comments/corrections welcome!
By the way, if this doesn't get you a little giddy (EXCITED) then nothing will.
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Kutno-2: I expect coring will commence next week. There are many unknowns such as how many meters before reaching the Rot. How dense or difficult it will be drilling through the remaining rock. This is unchartered territory so expect the unexpected.
Should they not initially encounter gas do not lose heart. I fully expect drilling to continue right through the entire structure and into the carboniferous zone - Devonian oil maybe? Besides, this is such a large structure there may exist dry gas pockets throughout the formation. There is much to learn and rest assured they will not immediately plug and abandon if no initial gas shows. Lots of data to be collected that's for sure.
Resent posts have alluded to the news flow concerning Komorce. IMO, the Pols have a pretty good idea of what they've got and as many have alluded to, they haven't experienced much success with their shale plays. This PR is a way to toot their horn and divert attention away from their lack of success elsewhere. We should know more in a month or so but in the meantime I'm encouraged regarding the porosity (22-23%) and size of discovery - 18bcf net to FX which equates to an additional $1.20 in P50 reserves or $6.65 which strongly underlies my recent fair value estimate of $7. (P50 estimate excludes cash/liquid assets ($5.45 + $1.20).
So if that is the most likely near-term reserve value what is the fair price that FX should be trading at? We could attempt a discounted cash flow analysis or simply refer to the NAV from the risk table in the presentation (pg. 32) of their web-site. If we eliminate Kutno and Plawce East from the calculation since they skew the entire portfolio we end up with ~ $59 of unrisked value per share. Before we go on consider these estimates are based on very conservative assumptions especially with K & Pe factored out of the equation. Question - How do we factor this into the current stock price? Let's assume a 50% success rate - now we have $29.50 and let's further discount this 80%. We are left with around $6.00.
Another consideration is the potential near-term reserve adds from existing/planned drilling over the next 6-9 months.
Avoiding the desert (Kutno) let's focus on the following:
1. Frankowo in Block 246 - 50Bcf potential/100% net to FX or potential add of $3.35 to reserves - $6.65 + $3.35 = $10.00
2. Mieczewo in the Fences near KSK - 30Bcf potential/49% net to FX or potential add of $1.00 - Now at $11.00
3. Plawce tight gas play in Fences (frac) - 123Bcf potential/49% net to FX or potential add of $4.00 - NOW at $15.00
4. Tuchola in the Edge - 110Bcf potential/100% net to FX or potential add of $7.00 (rounded) - WOW! $22.00
5. Lisewo 2 in the Fences - not sure what to expect here but could add a few cents but not significant. Stay with $22,00
6. Lisewo SE in the Fences - 350Bcf/49% net to FX or potential add of $11.00 (rounded) - For a WOPPING $33.00.
Fellow Longs, that's a possible addition of $21.00 (rounded) to reserves in less than a year with half that to be determined in less than six months. On a side note, FX in its conservative vein only assigns 90Bcf to the five satellites + Mieczewo or 45BCF net to them. With satellite #1 - Kormorce anticipate to add 18Bcf & Mieczewo 15Bcf that only leaves 12BCF risked for the other four satellite wells. IMO this will be adjusted up before year-end.
What I'm expecting time wise: Frankowo now drilling - results in October; Lisewo-2 begins drilling early October - results late December; Plawce begins fracing in October - results in October; Tuchola begins drilling late October - results January '13; Mieczewo begins drilling November - results late January '13.
Now, back to stock price / fair value calculation. If we assume a 30% success rate then conservatively, FX should be able to add some $7.00 to reserves which I fully expect would be a minimum since Mieczewo, Plawce, Lisewo 2 and Lisewo SE all show 50% or better odds.
Given these most attractive reserve additions in the near-term I see no reason why FX cannot trade between $14 and $15 NOW! I am convinced after performing this discounted NAV analysis that there is absolutely NO premium being factored into the stock today (curently trading atr $7.88 down $.04) for KUTNO. Therefore, I am adjusting my previous fair value for FX upwards to $9.50 (up from $7.00) discounting the expected near-term reserve additions a further 40%. Absolutely no premium for Kutno success below the $9.50 level IMO.
My worst case senario assumes a potential sell-off on negative Kutno news to the $6.50-$7.00 area and I firmly believe that that area would not be warranted leaving us a short-term buying opportunity. Given the potentially long drawn out period waiting for Kutno results, I see no justifiable reason for a large pullback in the stock price. The reward/risk is skewed to the upside some 4:1 to the mid-teens and an eye popping 14:1 to the potential 9 month $33 NAV reserve target - if all goes as planned and 100% successful. You can dice it or slice it anyway your want but, I believe the odds point overwhelming in favor of owing/buying FX Energy now.
Comments/corrections welcome!
By the way, if this doesn't get you a little giddy (EXCITED) then nothing will.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group