SGC 0.00% 3.0¢ sacgasco limited

That's actually not true. The Dempsey well is ready to go on...

  1. 345 Posts.
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    That's actually not true. The Dempsey well is ready to go on line all they are waiting for is approval from the pipeline operator to turn on the valve. With well shut in for so long initial flow rates should be above what was previously reported ie. more than 1.2 mmcf a day.

    There is a lot of activity going on to increases production from the 27 wells the company owns across its various leases (see March quarterly for lease details). Sacgasco just doesn't believe it is necessary or desirable, given the competition in the basin for acreage, to report every actual field activity as it happens. We will learn in the next quarterly just what this workover and field improvement activity has meant for the bottom line.

    The company considers that with just a bit more production it will have all up costs of US$2.00 an mcf so given the company is a low cost producer a significant increase in gas production from Dempsey and/or Alvares will be highly profitable.

    A larger player with fewer monetary constraints might come in and say lets frac Dempsey now and see what we have got in the deeper zones. But Sacgasco wants to keep the number of shares at a minimun and build up cash flow first so it can pay for the fracking of Demspey at a later date with its own money and not hit shareholders again or go into debt..

    The Alvares operation is waiting on final approval from DOGA to commence and payment of cash calls from partners . Remember SGC is free carried thru the well bore integrity test. You have to give GJ a lot of credit for the farm in deals he has done.

    There is a sheet load of gas in the Sacramento Basin and Sacgasco and its partners have a good shot at claiming some of it via the wells it bought in recent years and Dempsey and Alvares. GJ has also done well in acquiring leases in an environment where landowners are seldom willing to sell acreage particularly that held by production. Red Emperor found that out recently as I recall.

    Yes, its frustrating to see the share price make new 12 monthly lows every day but at this time of the year there is nothing the company can or should do about it. Let those who want out get out for tax reasons do so. Good riddance!

    Its curious to me how the market reacts to companies. 88 Energy has what 5.5 billion shares on issue no commercial anything just a lot of blue sky and a willingness to tout a multi billion barrel OIP which may or may not be true. More likely not true IMO.

    Sacgasco and its parters are possibly sitting on multi Tcf of pipeline quality gas but you won't get GJ making the same sort of claims Dave Wall and his brokers are prepared to make about the HZR zone at Icewine. And the funny thing is the HRZ at Icewine won't free flow hydrocarbons it has had to be fracked.

    Unlike 88E, Sacgasco is actually producing and selling gas, has in place a program of workovers to produce more from its 27 wells, is leasing more acreage and has Dempsey deeps and Alvares as upside. Yet the company has less than 300 million shares on issue giving it a market cap of less than A$8 million compared to the $150 million or so of 88E. Go figure!

    If in six months time we haven't seen a significant improvement in production, cash flow and the share price then we will have good reason to compalin.
 
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