Disappointing recent news from Aurelian Oil & Gas regarding its first two Siekierki horizontal wells doesn't spell the end of the group's tight gas project there, and doesn't detract from the potential of the conventional assets in its portfolio.
Following a mechanical problem with the first horizontal well at Siekierki, flow testing of the second horizontal well suggested a recovery range of between 4bn and 8bn cubic feet of gas. That's significantly below expectations, given that the Siekierki reservoir is estimated to hold 1.6 trillion cubic feet of gas. Aurelian will now appraise the data and conduct a crucial pressure build-up test to enable it to update its outlook and plans for Siekierki by the year-end. Meanwhile, the Krzesinki conventional gas well is drilling south-west of Siekierki. Results are expected this month and could prove-up a conventional source and increase the size of Siekierki.
Aurelian's second core focus is exploration in the Carpathians area of Poland, Slovakia and Romania. The first of three planned wells in Bieszczady, Poland, encountered significant oil and gas shows and the company plans to drill at Cierne in Slovakia in early 2012.
Macquarie expects a full-year loss per share of 1.4¢.
| AURELIAN OIL & GAS (AUL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 17p | MARKET VALUE: | £84m | |
| TOUCH: | 16.75-17p | 12-MONTH HIGH: | 93p | LOW: 16p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 35¢ | NET CASH: | €95m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | nil | -2.55 | -0.80 | nil |
| 2011 | nil | -2.46 | -0.50 | nil |
| % change | - | - | - | - |
£1=€1.16 | ||||
