Member Info for Vernony

Well a t/o at these prices is a possibility

Just looking at some of the responses to my 'What worries me' . I hear what you guys say but I still have a nagging doubt, as to the longevity . As the CEO says in his video, the Delaware basin is quite small . It has been drilled with straight bores for a long time, of course they are fraccing now, but so is everybody else. Acerage is a surface measurement, I am speaking about sub surface, and they do seem to be sucking it out of the same pool, but within their acrages, only - naturally. The actual acerages owned by Caza are quite small in oil company terms. Don't get me wrong, I have faith in this share, but I have mentally downgraded it from bonanza to plodder, which seems to be the stock market view too !

Acrage is irrelevant . Its how close the various licenses are. Many of them must be sharing the same pool deep down. Thats fine while it lasts, but it will deplete the pool that much faster

Is so many companies drilling the same play, it seems to share the asset and lead to a much faster decline in BPD

Oh they are just creating fictional problems to sell newspapers. We are electrically connected to France, its just a matter of throwing a switch if the UK demand exceeds capacity, but true we ought really to be independent in any situation. Buying energy abroad subjects you to the politics of the country you are buying it from

Undoubtedly they are affecting the oil price. But, I think when the dust settles it will boil down to whether you are trying to sell deep sea oil, or landbased oil. Landbased being the cheapest to produce. CAZA is on land, its in the USA which wants, if anything, to buy its oil at home. I think the market is just acting generally at the moment, sooner, or later, they will start to analyise which fields are likely to close, due to the slump, and which will probably stay open. In the not too distant future they will wise up to the fact that CAZA , has oil, its in the USA, and its already pumping the stuff. IMHO CAZA has a great future, but there is a storm to be weathered in the oil markets

My opinion, for what it is worth, we are seeing a general down on oil prices which is affecting every oil lie.Yet CAZA have good prospects, it depends - in the long run, how cheaply they can get a barrel of oil to the surface . Its got to be cheaper than oil shipped in from Saudi Arabia which probably adds quite a mark up on the actuall well head price

I don't think that oil is ever going to recover much at all. Shale is now having its effect upon oil prices and it can only get worse . CAZA however, is onshore even if the oil price is lower, then so too are their overheads v/v deep sea oil. Onshore will continue to make a slimmed down profit, deep sea oil is debatable

Hi Tide, It is possible that that Saudi is deliberately selling into a glut in order to force expensive to recover oil, such as deep sea projects , out of the market. What we do know, however, is that any unrest in the Middle East has, hitherto, sparked a dramatic rise in the price of oil.....It has not happened this time. But, logic suggests that unless they run at a loss then Saudi could not undercut the home grown oil and gas production, in its sales to the USA. There is talk of China vacuuming up oil capacity, but they too are desparately looking for Shale oil and gas in their own territory . Some say they are sitting upon the largest Shale beds in the world, it has to be proven yet, if their Shale is of the right quality ! Anyway, here are a couple of cut and pastes from Bloomburg . Makes interesting reading; The U.S., the world’s largest oil consumer, still imported an average of 7.5 million barrels a day of crude in April, according to the Department of Energy’s statistical arm. The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said. From this I deduct , may be wrongly, that oil, in the not too distant future, is set to decline somewhat, It will remain important, but it now has competitors, and competition is always good for the consumers as far as prices are concerned

America overtook Saudi Arabia as a producer of oil and gas in July. America now stands as the second largest producer of these commodities, after Russia, and it is catching Russia up fast

I think it is a plus point that they have sold their production for the next fy. They will not have done so at a loss.Not many companies, in the world, that can say that our production for all of next year has already been sold !

The decline in the oil price is almost certainly due to an oil glut, as opposed to a decline in manufacturing, which is slowly recovering after the recession. In general unrest in the Middle East normally shoves up the price of crude, not this time however. The reason for this is shale and green energy. The USA, hitherto, the largest importer of oil has, due to shale, moved to being the largest producer of gas and oil. This has a knock on effect upon the world price for oil. There may be temporary rises in the oil price due to OPEC reducing output to jack up the price, but this would be artificial and only encourage further shale development as well as oil producers, not in OPEC, expanding to take up the short-fall. At around $70 to $75 dollars per barrel, some of the deep sea and hostile waters may prove too expensive and they may shut down, or be mothballed. CAZA is well placed here because its sources are on land, which is cheaper to drill and cheaper to transport from the well head. The heady days of $147 per barrel for Brent crude are long past and, short of Middle East total war, oil is very unlikely to recover to anwhere near that and, as more shale comes on tap, so OPEC revenues and their ability to rig the market will cease

The decline in the oil price is almost certainly due to an oil glut, as opposed to a decline in manufacturing, which is slowly recovering after the recession. In general unrest in the Middle East normaly shoves up the price of crude, not this time however. The reason for this is shale and green energy. The USA, hitherto, the largest importer of oil has, due to shale, moved to being the largest producer of gas and oil. This has a knock on effect upon the world price for oil. There may be temporary rises in the oil price due to OPEC reducing output to jack up the price, but this would be artificial and only encourage further shale development as well as oil producers, not in OPEC, expanding to take up the short-fall. At around $70 to $75 dollars per barrel, some of the deep sea and hostile waters may prove too expensive and they may shut down, or be mothballed. CAZA is well placed here because its sources are on land, which is cheaper to drill and cheaper to transport from the well head. The heady days of $147 per barrel for Brent crude are long past and, short of Middle East total war, oil is very unlikely to recover to anwhere near that and, as more shale comes on tap, so OPEC revenues and their ability to rig the market will cease

Its acedemic really. If you have been paid for your capacity before hand, then you don't have it to sell to anybody else. I imagine that they will have a pretty complex contract and there are so many variables how it could be worded. But, unless there are compensatory clauses in the contract, then it is unlikely to be affected by scarcity . Its as long as a piece of string really, unless you can get a look at the contract

I thought I understood that they have already sold their generating capacity for 2014-2015. If that is the case they probably will not benefit at all from power station outages or fires in this fy

Good post. You get the feeling with this share that the corporate investors are scratching their heads and mulling over their whisky and wondering what to do about CAZA. If your predictions ( and I see no reason why not) work out then it may be a new ball game in three weeks times

I think they can grow edible fungi on it, very small but I think it figures in vegitarian products

Well as you pointed out, they have sold their capacity in advance. Obviously a company is not going to enter a contract where they lose if they are not called upon to produce power. So the contract will have a notional value 365/24. Many of those days they will not be producing at all, but still getting paid for it as if they were. So, they have nothing more to sell, unless they can bring new facilities on line

Thanks for that, but was it the combined 'settled' or anticipated 'settled' production of all of Caza's recent wells and how much is their share of that ? If you then multiply that up by 365X $90 . Even less over heads, it is a tidy sum per annum, and we have not even done the sums for gas yet . So any bright sparks what do we think their overall gross income will be, based upon current expectations ?

Alk, and Igas et al will not find a stable price until after the current bids are in. i.e 28th October, although they may pre-empt that and start a speculative rise on the Friday 24th and Monday 27th.( I don't know the terms of the Alk contract, but if they have sold their electricity production prior to winter setting in, then it would not matter if it is a good, or a bad winter ) Incidentally two nuclear power stations are down for essential repairs at the moment, that's a scenario made for ALK.