releases...the "AVERAGE 2013' ending rate is going to be 4300boepd...as there was an additional 50 boepd sold at the auction in December. Guidance for "AVERAGE 2014" is 4900 to 5100 boepd. So take your pick but the lower end of guidance equates to 13% production increase and the higher end equates to an 18% production increase....and this is with a much improved "pristine" balance sheet. Also despite some thumbs down given to "pocilujko" for pointing out that all BOE's aren't of equal value...it is a fact....very similar to a pound of feathers does not equal a pound of gold ( they may weigh the same...but go sell them ). The mix % matters greatly and AXAS has steadily chased a richer oil mix...which means the 13%-18% growth in production could and most likely will equate to an even higher % growth in revenue for that same BOE. Now for anyone who thinks AXAS lost production or is standing still...WRONG..WRONG..WRONG..they SOLD that production. It was not lost...it paid off debt which will enhance bottom line revenues and it will add acreage in the core. Come on folks....use your noggin's and your calculators and get the basic numbers right on what happened on Wycross and Production Guidance. JMHO GLTA
This was their 2014 expectation in the QR3 report:
" Reflecting these adjustments, Abraxas expects 2014 production to average 4,400-4,500 boepd and is maintaining its previously announced targeted exit rate of 5,300 boepd. Abraxas is also maintaining its previously announced $85 million capital budget.
Abraxas anticipates providing the company’s 2014 production and capital spending budget in early December."
I like AXAS much, much more than HK. I just don't trust the numbers HK puts out..I only own it because of the underlying asset value...I consider Floyd Wilson as not having fiduciary priority to shareholders. However there are tons of folks who believe in the stock...and it can pop just on that. So I put AXAS in a "real" growth holding and HK is just held for a "hype" pop. HK has "value upside" but I have great reservation as to Floyd's ability to ever bring it to fruition. AXAS has some real upside in both Duvernay and it's natgas assets...and if Bob is tired of the natgas direction...those natgas assets...( listed near the end of recent presentation ) could bring additional $$$ in a present market that's climbing rapidly. On risk versus reward....AXAS wins hands down. JMHO GLTA
I prefer AXAS to HK as it is more poised to grow in 2014 given the balance sheet and potential production levels. I've grown my position in AXAS and decreased HK in the past month, this is my 2 cents as I own both.
Sentiment: Strong Buy
It's just that the guidance for 2014 seems light. 5000 avg boepd? Since the exit rate is 4300 , the guidance is only 700 boepd more? If Blue Eyes is a good one (and we already know it's commercial) we are right there.
What's light about 700/4300 = +16% increase ? Keep in mind that all existing production falls steadily and newer wells fall steeply ..see Type curves to see actual decline rates. IP's on everything drilled falls and it keeps falling. So a 13% to 18% gain in average production does equate to a lot of good wells. To start the year @ 4300 and end at an average of 4900 to 5100...where's the exit rate production have to be to get that average ?...( THE TEST IS OPEN TO EVERYONE )...
Bob Watson has already said he doesn't like to speculate over future well performance, with that said he's playing it safe and probably knows that the 2014 exit rate will far exceed 5000 boepd. Better to be conservative and blow market's expectations away than to over promise and come in short. Think we all know this is how it works in the stock market.
Sentiment: Strong Buy