* working capital of $0.12 per share with no LT debt
* multiple light oil well drilling locations in Viewfield, SK
* carried interests with no drilling costs
* natural gas at Pembina – 10-12 additional locations identified
Doren, I would certainly appreciate receiving a copy of this file(excel)...thanks in advance.
P.S. no rush.
dquinton
Posted: Tue May 4 21:48:33 2010
I agree with the majority of your comments. Interestingly, I did a comparison on junior companies for compensation but my focus was on companies producing between 800 boe/d and 1,400 boe/d so I didn't go down into the smaller juniors. The following was my report after Q3/09. I'm not sure how to post an Excel file so it works properly on here but I'd be happy to send this to anyone who wants it.
Comparable Oil & Gas Executive Compensation
9 mth Date of Options
Company Production Report Position Salary Bonus Other Awards $ Total
Canadian Phoenix 960 Oct15/09 President* 55,000 23,750 67,022 145,772 *partial time period
CEO* 110,000 28,894 138,894 *partial time period
CFO 150,600 16,830 167,430
Directors 30,000 $1,000/mtg Yes 30,000 Chairs of each committee receive additional $2,500 quarterly plus extra $500 per meeting
Wrangler West Energy 1156 Apr9/09 Pres & CEO 126,000 18,600 144,600
CFO 126,000 18,600 144,600
Directors 0 0
oilerman
Posted: Tue May 4 19:32:25 2010
Yes, Drake's annuals were an interesting read...I will post my comments on it later.
I have find one thing that bothers me...that I have to get off my "chest"....and Drake is not the only junior energy company that has this problem but I will use them as an example.
While 2009 numbers are not out...I will assume 2008 numbers are similar...How can Drake justify paying at least 3 executives 120,000 a year? In 2008, the CEO is listed at 119,500, CFO at 120,000 (if annualized as started in Sept 2008), VP of Operations at 114,952...Hopefulyl when 2009 numbers come out they are not higher than this.
So you have these 3 salaries plus also a VP of exploration (noticed this guy just resignedrecently), a land manger, and a VP of Corporate Secretary.
In my view, a business model like this can not work in 3.50 to 4 dollar natural has environment. You need to be LEANER!
For example, take a company like Ripper Oil and Gas, the CEO is doing the CEO and CFO role...you think he wants too..I would guess that they are doing this as they are in survival mode to make it through this low NG period. At the very least...well I do not have the 2009 report yet...the Drake postions should be 80k a year tops...these guys should not expect 120K a year..this is not boom times... and if they do they should be doing dual roles.
But that does not bug me the most...this does...as it is actually very sad. DRAKE HAD THREE DIRECTORS who got 3,000 dollars in director fees in 2008. While that is very little money...I think it shows the "cost culture" at Drake.
Directors charging director fees is not industry standard for a company this SIZE...I read 5 junior management circulars nightly...name me any junior energy with Drake's market cap that does????
PS: The reserve report is on Sedar. Reserves are down..proved + probable to 660 MBOE. This is the scary part for Drake investors, only 22% of those reserves are oil. Whether on here or SH..I don't sense enough urgency or the fact how DIRE this situation is.....
dquinton
Posted: Tue May 4 11:52:50 2010
2009 was obviously a huge disappointment for Drake and its shareholders. The fourth quarter was paricularly disappointing with a significant increase in costs, a decrease in production and a drilling program which increased debt with only marginal results. At this time I am waiting to receive Q1 results later in May as production should be over 40% higher in Q1 compared to Q4 and costs should have been significantly reduced. The company also successfully drilled the Sousa 01-24 well during the first quarter which will have a very positive impact on future operations.
Current Pros:
- company is looking at merger, RTO, and re-organization opportunities. While this is no guarantee, with Drake owning its own infrastructure, several years of drilling prospects, and reserves of about 750 mboe which should be worth $13-$15 million, this could result in a much higher value than the current trading price. One never knows if and when a transaction could take place.
Current Cons:
- debt is very high and company is limited in its ability to drill due to capital constraint
- the market seems to have given up on the company at the current time
I am currently waiting on reserve numbers and Q1 report and will reserve judgement until that time. Our next QIS Update outlining the latest press releases should be out shortly.
Please complete your own due diligence.
Doren
Broke in Canada
Posted: Mon May 3 20:54:43 2010
Doren, what are your thoughts on the annual results?
Why was there insider selling before the release of these results?
dquinton
Posted: Fri Apr 16 15:35:15 2010
All board participants should be aware that Broke in Canada and Nachochip are the same individual. Broke I have warned you before about multiple aliases and your postings will continue to be removed. If you continue to post inappropriate postings I will release all of your aliases.
The latest QIS Update will be out shortly with reference to Drake's shareholder maximization process.
Bobwins
Posted: Tue Apr 13 19:36:33 2010
nachochip... no, not drunk. DPE.v is going to explore all means to increase value. Do they have the cash to do that? No. Could they do it after the mandatory PP to raise cash for the drill program that they need to produce more oil? Maybe. Stating the possibilities doesn't mean I'm drunk. A share buyback is a standard procedure for companies seeking to increase the stock price.
Just as I said, we'll have to see what, if anything, comes of this.
Bobwins
dquinton
Posted: Tue Apr 13 18:54:23 2010
Drake's production is currently about 55% natural gas and 45% oil. Yes the natural gas prices are certainly not helping. Will be interesting to see how the market responds to this news tomorrow morning as well as how this process will play out in the coming months.
nachochip
Posted: Tue Apr 13 18:25:51 2010
Not to be rude...but are you drunk? How could you suggest they do a share buy back? Look at there balancesheet..they are in alot of trouble with the debt load they are carrying in an environment where NG is 3.51 AECO price. There is no cash for a share buyback..
In my opinion...they have too either recaptilize or merge..I knew this months ago looking at the financials.
People on here are still forgetting that a significant percentage of drakes production is NATURAL GAS! How much cashflow will the NG side of the business provide...I think we all know the asnwer to this.
Even with some hedged...Drake needs to pull a miracle and massively cut operating costs on the NG production...make a spreadsheet...like I did a few months back and calculate interest costs, operating costs...versus cashflow...and incorprate REALISTIC decline rates.
People seem to always use unrealistic decline rates.
Bottom line is if NG prices continue as these levels...I expect alot of juniors that did not cash up in the fall will be putting out press releases stating they are up for sale!
Bobwins
Posted: Tue Apr 13 14:17:27 2010
Don't know what this means yet. If they are undervalued, probably means other energy companies wouldn't pay top dollar for Drake either. If they institute a buyback program, that potentially could be good for shareholders or just cash out to a bigger player. We'll see what happens. Hopefully they drill another well or two to prove up their oil well sites and that would definitely increase the value of Dpe.v to either shareholders/investors or other energy companies looking to swallow an energy minnow!
CALGARY, ALBERTA--(Marketwire - April 13, 2010) - Drake Energy Ltd. ("Drake" or the "Corporation") (TSX VENTURE:DPE - News) announces that, after a review of its current share price, production and cash flows, debt levels, and scarcity of equity investment capital, among other matters, its board of directors has initiated a process to identify and consider strategic alternatives with a view to enhancing shareholder value. Strategic alternatives may include, but are not limited to, sale of the corporation, recapitalization, merger or other business combination, a sale of a material portion of the Company's assets, farmin or farmout or acquisition, among other alternatives.
Drake continues to trade at a substantial discount to its net asset value despite having a major land position in its core area of Sousa in northern Alberta and ownership of the extensive gathering and processing infrastructure. The board of directors has determined that it is an appropriate time to assess strategic options.
The board of directors will consider various alternatives and may engage outside advisors if deemed necessary. Drake does not intend to disclose developments with respect to the strategic review process until the board of directors has approved a definitive transaction or strategic option, unless otherwise determined or required by law. There are no guarantees that the process will result in a transaction or, if a transaction is entered into, as to its terms or timing.
Neither the TSX Venture Exchange nor its Regulator Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.
Contact:
Neil Orr
Drake Energy Ltd.
President and CEO
norr@drake-energy.com
Bobwins
Posted: Tue Apr 13 6:58:25 2010
(Note from editor: Post from Broke removed)
Thanks Broke. I get very few replies to my posts. Always looking for opportunities to discuss things with other investors. I enjoy it. But, of course, sometimes it's not discussion. Simply name calling. numbskull ain't bad. How did you do in the last stock picking contest? They don't have archives and you aren't entered in the current one so I can't see your "brilliant" picks as opposed to my "numbskull" ones.
I have been a long term holder of Dpe.v so I discuss their PR's and the implications for the company. They are tiny(which I pointed out) and survived the bad times. Because they are so tiny, this little oil well(if its repeatable) will have a big impact on their production and cashflow. Haven't seen the numbers yet but looking forward to that plus seeing if they can drill and repeat.
Bobwins
Bobwins
Posted: Sun Mar 21 9:47:40 2010
This press release has good and bad.
The bad is that their new oil well has declined from 120bpd to 70bpd in March. That's normal for new wells and the company has maintained the total 250boepd reported when the well was first produced by other reworks and bringing behind the pipe production back online.
The good news is that there is a new presentation on the drake website.
http://www.drake-energy.com/
Go there and you will find a 2/10 presentation that lists an impressive list of drill prospects for the company. This is a tiny company with total 250boepd production. They have an inventory of wells that are mostly 100% owned and have potential production additions of 345bpd in 2010 and another 300bpd in 2011. Starting from 250boepd and representing 100% oil prospects, these will dramatically change the revs and cashflow for DPE.v.
Each new oil well producing 50-75bpd will add several cents cashflow to DPE.v. Considering the stock price is only .16, each new well will justify more than the current share price. Drilling success in 2010 should multiply the DPE.v stock price.
Bobwins
Posted: Fri Mar 19 22:04:32 2010
Press Release Source: Drake Energy Ltd. On Friday March 19, 2010, 4:05 pm EDT
CALGARY, ALBERTA--(Marketwire - March 19, 2010) - Drake Energy Ltd. (TSX VENTURE:DPE - News)
Production Update
Field production for the Company at the end of February exceeded 250 barrels of oil equivalent (boed) with additional production undergoing optimization throughout the Company. The acquisition of the remaining 25% working interest at Sousa and the successful drilling and optimization program this winter has enabled Drake to increase production from 130 boed at year end to the current levels.
Sousa 01-24 Update
The re-entered 01-24 horizontal well has continued with steady production and averaged over 70 barrels of oil a day for February (including setup and optimization down time). Initial March volumes have been consistently at this rate. Rate optimization and cost cutting efforts will continue on the well over the next few months.
Sousa 13-12 Optimization Update
The optimization of the 13-12 Sousa well has been completed but short-term pipeline shut-ins have curtailed production in February. Resumption of production from this well was begun in mid March.
Jenner Optimization Update
The optimization of the previously shut in Jenner well was unsuccessful in the lower zone. The upper zone re-entry is being considered for Q2.
Line of Credit Increase
The Company has successfully negotiated an increase in its credit facility from $3.8 Million to $4.0 Million. Increased production and cost controls have provided this increase in the level of the bank's confidence.
Direction in 2010
Despite a difficult year in the Alberta oil patch, the Company was able to return to its peak production levels from the prior year but with much stronger oil weighting, stronger cash flows going forward, 100% ownership of its core area and 12 more oil prospects to pursue in the coming year. The new corporate presentation on the website (www.drake-energy.com) has further details.
"The steps we have taken to re-activate our gas production, coupled with our favourable gas hedging program, our focus on oil development and our strong position to acquire undervalued assets have placed the Company in an excellent position for growth." said Drake president, Mr. Neil Orr.
Drake Energy Ltd. is active in oil and gas exploration and development in Alberta. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.
Bobwins
Posted: Wed Feb 10 8:18:18 2010
Wow! DPE.v hit a high of .27 this morning on 691K volume. I bought 50K shares at .11 last week after the winter operations PR so a quick double. My original shares are still in certificates. Need to get those deposited somewhere and at least have the possibility of selling some day. For once, my procrastination may payoff.
Bobwins
Posted: Wed Feb 10 6:51:25 2010
stock popped to .20 this morning and is currently at .18 on 209K volume. Market cap per flowing barrel is still only 14.4K per boe. That is extremely cheap for an oil heavy producer. Another couple of oil wells and that ratio should double or triple. Median for QIS third qtr was $33,976 and that included many depressed ngas producers. Most oil producers with greater than 50% oil were well above that median figure.
dquinton
Posted: Tue Feb 9 21:40:39 2010
Those are reasonable calculations. Based on current production, I am expecting annualized cash flow to be about $0.07 to $0.10 per share. Conservatively let's say $0.07 per share. Stock is still only trading at 2X even though it has gone up 50% in the past few weeks. In addition, I would expect the company's net asset value to now be near $1.00 so the company is trading at 14% of NAV. The well is still young but it is a huge success for Drake and will hopefully be a catalyst for more good things to come. Congratulations to management and those who were buying when everyone else was selling.
Bobwins
Posted: Tue Feb 9 20:48:52 2010
Doing some math on the new well....
Company cost of operations is about $21/boepd so at $71/boe for light sweet crude, the cashflow is $50/boepd.
120boepd X $50 X 91 days = $546,000 cashflow from this one well.
DPE.v had negative cashflow of 324K for Q3 so this one well should put them at a positive 222K for Q1. That's about .01 cashflow for the qtr.
Obviously the value of this well will be the follow on wells and their production and decline ratio.
Let's say the next oil well is a more normal 50boepd.
That kind of well would add $2500/day or $227.5K/qtr cashflow or .011/share.
So the next well that brings production up 50boepd will double qtrly cashflow to .02 total or .08/yr.
Better ngas prices will accelerate this improvement but it's likely that the oil initiative will drive cashflow results for Drake for the near future.
Getting production up to 350boepd with 250 from oil should lead to qtrly cashflow of .03/share or .12 for the year.
By then, I would anticipate a share price in the .30 to .40 range.
Bobwins
Posted: Tue Feb 9 11:19:49 2010
This is confirmation that their recompleted well is performing well. Drake wanted to make sure that their test results were accurate so produced the well for several weeks before releasing the results. This should result in gross revs of over 1million for Q1 compared to 280K for Q4 2009.
Drake Energy Ltd. Re-Completed Sousa Oil Well Producing Over 120 BBLD
CALGARY, ALBERTA, Feb 9, 2010 (Marketwire via COMTEX News Network) --
Drake Energy Ltd. (TSX VENTURE:DPE)
Sousa Oil Program
The Company's oil program at Sousa included the re-entry of a horizontal well at 01-24. The well is currently producing over 120 BBLD of light sweet crude oil. The well has been producing since the beginning of the month and has seen steadily increasing levels of production. The well has opened up multiple follow-up locations which are under consideration. The 01-24 well is expected to qualify for both the 5% royalty program and the transitional royalty rates.
"Our oil program at our core area of Sousa is off to a great start. We have recently acquired the remaining 25% working interest in the area and our oil well re-completion is producing at excellent rates. We own 100% of the infrastructure necessary to continue our growth and we have over 35 sections with numerous oil and gas locations. The Company is poised to continue our growth trend and gain value for our shareholders." said Drake president, Mr. Neil Orr.
Drake Energy Ltd. is active in oil and gas exploration and development in Alberta. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.
SOURCE: Drake Energy Ltd.
Drake Energy Ltd. Neil Orr President and CEO norr@drake-energy.com
Copyright (C) 2010 Marketwire. All rights reserved.
Bobwins
Posted: Thu Feb 4 9:48:13 2010
I talked with CEO Neil Orr yesterday. This is the type of transaction they are looking for. There will be more small energy companies in financial difficulty. The metrics in this deal are outstanding for DPE. They get most of their production out of Sousa, probably 175boepd out of their current 250boepd production rate. So they got 44boepd for $250,000 cash. In the good old days, companies were selling at $40,000 per flowing boe or $1,760,000 in Dpe's case.
Ideally they would use their shares to acquire more assets but the stock price has been depressed. So the goal is to generate results from the oil focused drill program and increase the share price so their "currency" is closer to fair value. DPE is selling well under NAV. It's small and has to develop a repeatable play so they can consistently increase production. The Sousa oil play should be a good start since they stated that there were follow up locations. Bobwins
CALGARY, ALBERTA--(Marketwire - Feb. 4, 2010) -
Acquisition
Drake Energy Ltd. ("Drake" or "the Company") (TSX VENTURE:DPE - News) has acquired the remaining 25% working interest in its Sousa property and 40% of the 13-06 Jenner well from a partner, a private oil and gas company which is currently in receivership. The assets were acquired for $250,000 cash and the offset of receivables due from the partner. The transaction was completed on January 27, 2010 and is effective July 1, 2009. This acquisition has a reserve value before tax of proved and probable reserves (NPV 10%) of approximately $3,508,000 based on the evaluation at April 1, 2009 by Fekete Associates Inc. The assets include those that recently underwent drilling and optimization as reported in Drake's February 2, 2010 release.
Sousa Gas Optimization
Drake's optimization program at Sousa included the work at the 11-12 and 13-12 wells, which have seen significant increases in gas production and significant new production of NGLs. Production from the two wells is expected to level out at 300 MCFD with additional NGLs for total production of 52 BOED.
Sousa Oil Program
The Company's oil program at Sousa included the optimization of a producing well at 09-02 and the re-entry of a horizontal well at 01-24. Both programs are nearly completed and currently on production. The approximate current field level production for 09-02 oil well has now stabilized at 20 BBLD. The 01-24 well is still being tested and details should follow next week. Both wells have follow up locations under consideration.
"Sousa is a key area for Drake. This acquisition gives us an effective 100% interest in the area and allows us to pursue our expansion program as quickly and effectively as we can. It adds significant value to our company and resolves a difficult situation with our partner who went into receivership." said Drake president, Mr. Neil Orr.
Drake Energy Ltd. is active in oil and gas exploration and development in Alberta. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.
Bobwins
Posted: Wed Feb 3 13:19:25 2010
oil revs should help a lot. Looks like oil will be about 1/2 production so if oil is 125bpd and ngas is 125boepd, you get total revs for a qtr of about $1 million per qtr. Compare that to Q3 when they had gross revs of $280K. Should give company a big boost when qtrly report comes out.
With strong oil prices being forecast and with a strategy to balance its oil and natural gas production, Drake Energy Ltd. ("Drake" or "the Company") has focused on its oil prospects for the 2009/2010 winter program. Oil wells were drilled and/or re-entered at Enchant, Sousa, and Jenner. In addition, gas optimization programs were implemented at Sousa, Jenner, and Retlaw.
Retlaw Gas Optimization
The gas optimization program at Retlaw resulted in a 50% increase in production at the 12-32 well to 300 Mcfd. The area now produces 31 (net) barrels of oil equivalent per day (BOED) for Drake.
Jenner Oil and Gas Optimization
The optimization program at Jenner resulted in the re-activation of the 13-06 gas well. The details will be released in the following weeks.
Sousa Gas Optimization
The optimization program at Sousa included the re-entry of a well at 12-21 and further optimization work at the 11-12 and 13-12 wells. Upon re-entry, the 12-21 well-bore was determined to be in very poor condition and the well was abandoned. The 11-12 and 13-12 wells appear to have positive increases in gas production and new production of NGLs but details will not be released until next week to allow for further testing and validation.
Sousa Oil Program
The oil program at Sousa included the optimization of a producing well at 09-02 and the re-entry of a horizontal well at 01-24. Both programs are nearly completed and are in the testing stages. Details should follow next week. Both wells have follow up locations under consideration.
Enchant Oil Program
At Enchant the Company did a re-completion of an existing well at 06-02 and drilled a well at 05-25. Both programs are in progress with results expected in February. Both wells have follow up locations under consideration.
Current Production
"In the last half of 2009, Drake shut in production due to low natural gas prices," said Drake president, Mr. Neil Orr. "Production for the third quarter averaged only 129 BOED and remained curtailed throughout the remainder of the year. With the re-activation of the shut-in wells and the success of our winter program, we have an approximate current field level production of 250 BOED representing almost a 100% increase from third quarter production levels. 2009 was an exceptionally difficult year for the industry and for the Company. Determined to break out of the malaise, we ran an aggressive winter program which has produced positive results. Our oil program appears to be on track to produce one of our best wells yet."
Drake Energy Ltd. is active in oil and gas exploration and development in Alberta. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
