Wednesday, June 26, 2013

Antares Energy signs Letter of Intent

Antares Energy signed a Letter of Intent to sell 32,297 net acres of Permian Basin acreage for $300 million.  The acreage includes 15,500 from their Big Star project in southern Martin County, 12,100 from their Northern Star project also in southern Martin County and 4,697 from their Southern Star project in Howard and Martin Counties.  Included in the sale is approximately 2,500 boed.

Metrics for the sale are $9,300/acre and $120,000 per flowing barrel.

This is a good comp for Lynden Energy as there aren't many other small cap junior oil producers.  Lynden Energy has approximately 6,482 net Wolfberry acres in Martin, Howard, Midland and Glasscock counties and 34,150 net acres at their Mitchell Ranch project in Sterling and Mitchell counties.  Keep in mind that Lynden also sold 630 net acres in Martin County for $25 million ($40,000/acre) to Breitburn in December so at least some of their producing acreage is worth upwards of $40,000/acre.

Also, Keith Schaefer from the Oil and Gas Investments Bulletin had a nice article about Lynden in his recent bulletin.  He claims the area around Mitchell Ranch is getting drilled up "with some success" and Mitchell Ranch is "pretty darned near smack dab in the middle of the new Cline Shale play."  His potential valuation numbers are pretty much in line with what has been previously mentioned on this blog which means Lynden has the potential for a much higher stock price.

Five large block trades have occured since 6/19 equalling 5.25 million shares.  These trades have not been listed as insider trades by JVL Advisors so it's likely that another investor has been making these purchases.  It's good to see that another investor is enthused by Lynden's story.

Tuesday, June 18, 2013

Link to Torrey Hills Capital/ article

Here is the link to the Torrey Hills Capital/ article on Lynden Energy (click here). 

Highlights from the article:
- Pioneer Energy plans to "rapidly escalate their horizontal drilling program" in the Permian Basin.  Lynden Energy has "excellent exposure to this Permian region" with 6,500 net acres in the core Wolfberry Play area.

- Lynden sold 630 net acres to Breitburn Energy for $25 million ($40k/acre).

- Lynden is targeting 1,000 to 1,200 boed by June 30, 2013 and 1,500 boed by year end.  Note that this is only from vertical wells as Lynden has yet to drill a horizontal well.

- Using Breitburn sale, Lynden's remaining acreage is "around $193 million , $1.34/share."  Using $125k per flowing barrel equals $1.29/share.  With these "two back of the envelope calculations would yield share price appreciations of 91.5% and 84.3% yielding nearly a double from current share prices."

- Devon and Oxy have "set up camp on the perimeter (of Mitchell Ranch) and are showing success with a number of 800+ boed horizontal wells in close proximity."

- JVL Advisors owns 21.29% (prior to today's 2.5 million share purchase) of the outstanding shares.  "Based in Houston, John is a very experienced energy professional and institutional investor with an excellent track record.  If he sees this much upside in Lynden at this time, we think you should be taking a hard look at the Company here as well."

Pioneer's success could bode well for Lynden Energy

Pioneer has experienced a recent runup in their stock price likely due to their horizontal success in the Permian.  Pioneer's Mabee K #1H and DL Hutt C #1H wells are both very close to Lynden's West Martin acreage.  This should help attract interest in Lynden's land.

Babybulls has issued a post about Lynden.  The article is very bullish.  We will post a link to this soon.

A 2.5 million share block traded today.  It is possibly another purchase by JVL.  JVL is a well known  energy investor and obviously through his due diligence, he sees a lot of value in Lynden.  If this is indeed another purchase by JVL, then they are approaching a 25% ownership stake.

Monday, June 10, 2013

JVL acquires 1.6 millions shares of Lynden Energy!

JVL Advisors acquired an additional 1.6 million shares of Lynden Energy today (click here).  They now hold 20,716,000 shares.  Together with their 3,571,500 warrants, their ownership would represent 21.29%.  They have now taken their ownership above the 20% level with the purchase pursuant to the private issuer exemption.