After today's announcement that Lynden Energy Corp. obtained a $50 million Credit Facility, the stock traded up 26%. This follows several days of positive trading for Lynden. The stock price is now up 89% in just over two weeks! Clearly, the market likes the recent announcements by the company.
Today's uptick on almost 2.5 million shares follows up on several days of trading up. The recent deal with the large company, obtaining the Credit Facility and the excellent results from Spade 17-1 have increased the market visibility of Lynden.
Wednesday, July 13, 2011
Lynden Energy obtains Credit Facility
Lynden Energy Corp. announced today that it has obtained a revolving line of credit in the amount of up to $50 million. This should reduce fears of further dilution.
Additionally, Texas Capital Bank of Dallas would have completed their due diligence prior to offering the line of credit. They have validated Lynden's work to date by moving forward with the Credit Facility.
This is excellent news for Lynden!
Additionally, Texas Capital Bank of Dallas would have completed their due diligence prior to offering the line of credit. They have validated Lynden's work to date by moving forward with the Credit Facility.
This is excellent news for Lynden!
Monday, July 11, 2011
Lynden Energy up 18% today!
Lyden Energy Corp. traded up 18% today on above average volume.
With the recent release of encouraging results from Spade 17-1 and partnering with a large company to exercise the Mitchell Ranch, Lynden should be trading much higher. Maybe this is the beginning of Lynden finally attracting some market attention. We believe that Lynden has a lot of upside potential based upon its success in the Wolfberry and lease of the Mitchell Ranch.
With the recent release of encouraging results from Spade 17-1 and partnering with a large company to exercise the Mitchell Ranch, Lynden should be trading much higher. Maybe this is the beginning of Lynden finally attracting some market attention. We believe that Lynden has a lot of upside potential based upon its success in the Wolfberry and lease of the Mitchell Ranch.
Tuesday, July 5, 2011
Lynden converts Mitchell Ranch option into lease
Lynden Energy Corp. announced today that it has exercised its option on the Mitchell Ranch and converted it into a lease. They have also leased 35,000 acres to a large, independent eploration and production company.
This appears to be a very good deal for Lynden as they now own the lease for the Mitchell Ranch. They will also retain a 1.25% royalty interest. Also included is the return of the mineral rights above the base of the Strawn formation.
The most significant part of this deal is the sharing of technical information between the large company and Lynden. Because the large company is targeting the rights from the Strawn and below, they will be drilling through the Wolfcamp. Lynden and CrownQuest will be able to review the logs to gain further understanding of the Wolfcamp at the large company's expense. Also, a deal with a large company provides opportunities for a potential buyout in the future.
This appears to be a very good deal for Lynden as they now own the lease for the Mitchell Ranch. They will also retain a 1.25% royalty interest. Also included is the return of the mineral rights above the base of the Strawn formation.
The most significant part of this deal is the sharing of technical information between the large company and Lynden. Because the large company is targeting the rights from the Strawn and below, they will be drilling through the Wolfcamp. Lynden and CrownQuest will be able to review the logs to gain further understanding of the Wolfcamp at the large company's expense. Also, a deal with a large company provides opportunities for a potential buyout in the future.
Wednesday, June 22, 2011
Laredo to buy Broad Oak for $1 billion
Laredo Petroleum LLC announced today that it is buying Broad Oak Energy for $1 billion. Broad Oak holds about 65,000 acres in the Wolberry trend and produces about 5,000 bo/day. This transaction equates to over $15,000/acre.
Tuesday, June 14, 2011
Lynden posts updated Inverstor Presentation
Lynden Energy Corp. has posted a new Investor Presentation on their website. A couple highlights:
1. Wolfberry project now includes 5,985 net acres with 250 BOE/day and estimated production of 450 to 500 BOE/day by the end of 2011.
2. Lynden has 9 gross producing Wolfberry wells and 7 that have been spud or awaiting completion. They have a 43.75% working interest in all but one of those wells. They anticipate 23 gross producing wells and 5 spud by the end of 2011.
3. "Repeatable nature of Wolfberry allows for conservative use of debt financing." This would reduce the need to issue more stock preventing further dilution.
4. Developing "Land Rush" throughout the Eastern Shelf of the Permian Basin with the Mississippian as the primary driver. The Mississippian is being developed in Eastern Oklahoma on similar rock packages as exists at Mitchell Ranch by Chesapeake, Eagle Energy, Sandridge and Range Resources.
1. Wolfberry project now includes 5,985 net acres with 250 BOE/day and estimated production of 450 to 500 BOE/day by the end of 2011.
2. Lynden has 9 gross producing Wolfberry wells and 7 that have been spud or awaiting completion. They have a 43.75% working interest in all but one of those wells. They anticipate 23 gross producing wells and 5 spud by the end of 2011.
3. "Repeatable nature of Wolfberry allows for conservative use of debt financing." This would reduce the need to issue more stock preventing further dilution.
4. Developing "Land Rush" throughout the Eastern Shelf of the Permian Basin with the Mississippian as the primary driver. The Mississippian is being developed in Eastern Oklahoma on similar rock packages as exists at Mitchell Ranch by Chesapeake, Eagle Energy, Sandridge and Range Resources.
Wednesday, June 8, 2011
Lynden Energy Corp.
By our analysis based on the recent news release and articles by Canaccord Genuity and Keith Schaefer, Lynden Energy is significantly undervalued. The $0.50 current share price values the company at a $50 million market cap. The stock price should be trading much higher given the facts.
Here’s another way to look at Lynden’s assets: Canaccord Genuity’s Daily Letter assumes an average recovery of 190,000 barrels per well and 180 net drilling locations. This correlates well with 40 acre spacing and 6,000 net acres (150 net well locations). This equals 30 million barrels of oil ultimately recoverable. Using an industry standard potential transaction metric of $17/barrel if this oil were proven, Lynden’s Wolfberry could be worth over $500 million. If these are just probable/possible reserves, then they could be valued at $5/barrel. Even at $5/barrel, LVL’s 30 million barrels of oil are worth $150 million.
The Daily Letter further states that Lynden expects their Harrell 34 #1 well to ultimately recover 408,000 barrels of oil due to drilling down to the Mississippian limestone and production from the Atoka interval. Lynden and CrownQuest have shown to be innovative in their drilling approach by deepening their wells and are achieving some of the best results in the industry. Lynden’s association with CrownQuest gives them vast experience in the Wolfberry as CrownQuest has successfully drilled over 180 Wolfberry wells to date.
Recent Wolfberry land transactions have been reported to be anywhere from $20,000/acre to $40,000/acre. With $20,000/acre and 6,000 net acres, their land could be worth $120 million. This valuation provides another metric that validates Lynden’s potential.
Lynden’s Wolfberry land is in areas that are surrounded by proven Wolfberry wells. It appears that with the success they’ve had with their Wolfberry wells, their Wolfberry land is relatively low risk. This is evidenced by the Cawley reserve report released last year which stated that Lynden had 8.25 million barrels of proved plus probable reserves and this report covered only a portion of their Wolfberry lands.
Given the recent release of initial results from their Mitchell Ranch Spade 17 #1 well, there is now some valid evidence that this area could have productive Wolfcamp wells. With over 50,000 net acres in that area, even a valuation as low as $2,000/acre (the recent March University Land Sale netted an average of $2,400/acre demonstrating the confidence that Permian Basin oil and gas operators have in the basin) result in an additional value of $100 million for Lynden. With additional success at Mitchell Ranch, the stock price could be multiples of what it is currently trading at.
Given Lynden’s existing production in the low risk Wolfberry and the potential for the Mitchell Ranch lands to add SIGNIFICANT value, Lynden has a lot of value that is not currently recognized by the market. This is a great story and it’s only a matter of time before the market takes notice.
Here’s another way to look at Lynden’s assets: Canaccord Genuity’s Daily Letter assumes an average recovery of 190,000 barrels per well and 180 net drilling locations. This correlates well with 40 acre spacing and 6,000 net acres (150 net well locations). This equals 30 million barrels of oil ultimately recoverable. Using an industry standard potential transaction metric of $17/barrel if this oil were proven, Lynden’s Wolfberry could be worth over $500 million. If these are just probable/possible reserves, then they could be valued at $5/barrel. Even at $5/barrel, LVL’s 30 million barrels of oil are worth $150 million.
The Daily Letter further states that Lynden expects their Harrell 34 #1 well to ultimately recover 408,000 barrels of oil due to drilling down to the Mississippian limestone and production from the Atoka interval. Lynden and CrownQuest have shown to be innovative in their drilling approach by deepening their wells and are achieving some of the best results in the industry. Lynden’s association with CrownQuest gives them vast experience in the Wolfberry as CrownQuest has successfully drilled over 180 Wolfberry wells to date.
Recent Wolfberry land transactions have been reported to be anywhere from $20,000/acre to $40,000/acre. With $20,000/acre and 6,000 net acres, their land could be worth $120 million. This valuation provides another metric that validates Lynden’s potential.
Lynden’s Wolfberry land is in areas that are surrounded by proven Wolfberry wells. It appears that with the success they’ve had with their Wolfberry wells, their Wolfberry land is relatively low risk. This is evidenced by the Cawley reserve report released last year which stated that Lynden had 8.25 million barrels of proved plus probable reserves and this report covered only a portion of their Wolfberry lands.
Given the recent release of initial results from their Mitchell Ranch Spade 17 #1 well, there is now some valid evidence that this area could have productive Wolfcamp wells. With over 50,000 net acres in that area, even a valuation as low as $2,000/acre (the recent March University Land Sale netted an average of $2,400/acre demonstrating the confidence that Permian Basin oil and gas operators have in the basin) result in an additional value of $100 million for Lynden. With additional success at Mitchell Ranch, the stock price could be multiples of what it is currently trading at.
Given Lynden’s existing production in the low risk Wolfberry and the potential for the Mitchell Ranch lands to add SIGNIFICANT value, Lynden has a lot of value that is not currently recognized by the market. This is a great story and it’s only a matter of time before the market takes notice.
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