ADI 0.75% $2.63 apn industria reit

feedback from eme from brokers´ meeting

  1. 271 Posts.
    From ADVFN in UK earlier today:-

    "For those of you interested, I met up with TK and FB yesterday afternoon for over an hour. Both of them are very down to earth and very patient to explain what they are trying to do.

    some misconceptions on BBs:
    - this is not a 44 well project, its a 140 well project.
    - 2,500 barrels per day were never expected from Kow. ADI and the rest of the JVs in Australia have been spoken to about this.
    - They are very happy with the flow rates as no Frac yet. If they decide to frac then the rates may well shoot up. at the moment, they are happy for it to flow naturally and that's the cheapest and most profitable option.
    - PIs should not worry when initial flow rates fall.. this is normal and expected.

    Other news:
    - eagle: When the sale by VPE is completed, they will discuss with Adelaide. It is currently in their plans to drill again in Q4 2009.
    - Glantal: New Seismic being planned. They have been offered up to 90 new projects over the life of the company and several Glantal like prospects.
    - Marguerita is generating good cashflow.

    With regards to needing further funding, it is not necessary at present as they have enough funds to continue with the exploration program as it stands and there is good cashflow in the business. However, what happens if a good project comes about!!

    Some interesting points:
    We all mention the 18% vs 6 and 7.5% wells. I believe they only have 7 more 18% to drill. The NPV of the project does not change if they drill these as 18% or 6% wells (they have a choice). As PIs, we see 18% and get excited but on a 140 well program the difference in value is insignificant.

    This is not a 10 year play but a 30 year play. All wells expected to be completed by 2015. Remember they have a lot of time to frac and increase production over that time as they see fit.

    In 2 years, the annual cashflow alone will be the size of the current market cap.

    They expect to drill approximately 36 wells next year.

    See posts last night about flow rates and misinterpretation by BB. We have got it completely wrong about flow rates..

    Hope some of this helps and makes sense"
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