Cash rich Canadian oil explorer uses Argentinian production to fund UKCS exploration.

16th Dec '10 by AJ51

5 comments 4896 reads

I came across Antrim Energy Inc (LON:AEY) recently, and found it to be an interesting alternative to some of our other Aim stocks searching for oil in Argentinian territories :-)

The company is listed in Canada as TXE:AEN and on AIM LSE:AEY. They have probable reserves of over 37M barrels and have an interesting strategy of funding long term capital intensive north sea exploration with steady (mainly gas) production in Argentina.

They have just acquired a 50% interest in the Cerro Los Leones concession, Argentina which could offer an additional15M barrels net. In October they agreed a joint venture with Premier in the Fyne area North Sea and will farm out 25% of their Cara prospect North Sea in April 11 (medium to low risk).

Canadian analyst have a median target of CA$1.43 for the shares and they currently trade at CA$0.94

I find them particularly interesting due to their positive cash flow and the fact they have a US$ 24.4 M cash position on a market cap of US$ 127M. They could add some long term stability to my get rich quick oil gambling portfolio. (GROG1)

Obviously, I'm not an oil expert so I would appreciate any viewpoints on the value of this company based on probable reserves.

Regards,

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mariposa

16th Dec '10

causeway 2p reserves 14mbo start production of 7000bopd with in12- 18 months aey 35% costs carried to production

Fyne
Antrim’s Core Property - Central North Sea
17.5 Million barrels 2P* net (Antrim 75%, operator)
5 successful wells drilled into the field
Free flow test rates up to 4,000 bopd
Anticipated initial production rate of up to 19,000 bopd
Large concentrated land position with 100% ownership
Premier Agreement Highlights

Antrim signs agreement with Premier Oil on October 6th 2010 for Fyne Field.
The highlights of the deal are as follows
•Antrim Energy and Premier Oil signed an agreement on October 6th, 2010 to jointly explore development options for the Fyne Area located in the UK Central North Sea. Under the terms of the agreement, Premier will have the option to contribute US$50 million (carry) towards the predevelopment and development costs for the Fyne Field. As part of the agreement, Premier will immediately pay US$2.0 million (non-refundable) to Antrim. This agreement provides Premier the option to acquire 39.9% interest in the Fyne licence, which includes block 21/28a including the unappraised Dandy and Area 4 discoveries.
•Upon exercise of its option on Fyne, Premier will also earn a further option to participate up to 50% in a planned drilling program scheduled to start as early as the 2nd quarter 2011 in the Greater Fyne Area.
•With Antrim retaining 35.1%, Antrim's share of the development costs is expected to be covered by Premier's carry and existing treasury.
Facts:
• Antrim's Fyne Discovery contains 23.3 million barrels of 2P reserves (medium crude).
•Antrim owns 75% of the asset or 17.5 million barrels.
•Antrim will retain 35.1% of the asset 9post Premier Option) which eqautes to approx. 8.2 million barrels.
The Area:
•The Fyne Field is located in the Central North Sea adjacent to the Guillemot Complex. The Guillemot Fields have proven to be prolific producers with production to date of 84 million barrels.
Why is this a good deal for Antrim?
•Antrim is carred for at least the majority of development costs. Taken toegther with the previously announced Causeway farm-out, Antrim should be in a position to bring the Company's North Sea discoveries to production without incurring significant debt or dilution to shareholders.
•Antrim intends to further develop the reserve base in the Greater Fyne Area by drilling the Company's exploration targets in the surrounding licences. Farmouts and strategic partnerhsips will play a major role in the drilling campaign.

they seem to know what they are doing
I bought some the other week and will be buying some more soon this is one for the long term and I will be buying as much as I can bellow £1

AJ51

17th Dec '10

CALGARY, ALBERTA--(Marketwire - Dec. 17, 2010) -

Antrim Energy Inc. ("the Company") (TSX:AEN)(AIM:AEY) was informed on December 16, 2010 that Hedgehog Capital LLC and parties connected to them, has a beneficial interest of 34,672,700 shares in the Company representing 25.59% of the Company's issued share capital.

Will this cause the price to spike?
AJ

Doubt it. What will cause the price to spike is the start of production in the NS, farm outs and some drilling. I am looking forward for them to start drilling on the ccreage they got close to catcher and cladham. Below £1 looks a good punt...

They seem a cautious bunch. They remind me of Dana Petroleum Plc (LON:DNX) . I expect great things from them but it will not happen overnight.

Mariposa,
I was trying to crack a joke (spike-hedgehog)! Sorry about that.
I agree that they look well run and are good long term punt.
AJ

20th Dec '10

20th Dec 2010 Motley Fool provide company comment;

http://www.fool.co.uk/news/investing/company-comment/2010/12/20/the-venture-capital-approach-to-oil-gas.aspx

"Last Friday's Antrim's shares closed at 65.5p, valuing the company at £87 million. If we strip out the cash and ignore every other asset this values Antrim's North Sea reserves at about £2.60 a barrel. I consider this to be cheap"

Cash rich Canadian oil explorer uses Argentinian production to fund UKCS exploration.

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AJ51

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