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Santarus, Inc. (SNTS) Message Board

massivad 3 posts  |  Last Activity: Aug 15, 2014 1:10 PM Member since: Jan 16, 2008
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  • massivad massivad Aug 15, 2014 1:10 PM Flag

    Were you not impressed they had increased production some 35% in just the last six weeks? Thom said there were additional workovers and recompletions that are planned/underway and that there was room to run on production. My guess is the quarter will end closer to 2,800 vs. 2,400 boepd based on current run rate and continued focus on increasing production from legacy wells. Don't forget, there is room to increase the production from Rocky 3 which is currently producing 450 bpd. Given the original flow rates, I don't see why they can't produce this well at north of 600 bpd. The current production rate was a pleasant surprise and is not being reflected in the stock price IMO.

    Despite your suggestion that the NAV argument has been discredited, reserves are what they are and given the substantial discount the stock trades at relative to reserves (est. $7.50/share) there is plenty of running room without becoming over-valued relative to this important metric. For me the biggest disappointment was that management did not commit to drilling a horizontal well in Q4 given the huge success at Rocky 3 and low risk of disappointment. They need to get 2 or three wells permitted ASAP and schedule a rig for November regardless of the outcome for Goldeneye. They need to stay focused on blocking and tackling and drilling. Delays in their drilling program is not good for creating value!

    The need to be at Enercom to get their story better disseminated and hob nob with potential investors/partners. This is the most important conference of the year.

  • massivad massivad Aug 15, 2014 10:45 AM Flag

    Did I hear correctly? 2,662 boepd currently being produced? WOW! Stock should be trading north of $3.00 based on resultant cash flow from this level of production.

  • massivad massivad Aug 15, 2014 3:58 AM Flag

    The important thing to focus on is the sequential Q over Q results and they were good. Oil revs. increased 42.88% and Gas revs. increased 39.72% for a combined total O & G revenue increase of 42.61%. Gas revs. were affected by a 15.60% drop in avg. price from $5.90 in Q1'14 to $4.98 in Q2'14.

    Oil production for Q2'14 was 134,769 Bbls, an increase of 40,522 Bbls over Q1'14 resulting in a 43.0% Q/Q improvement. Gas production for Q2'14 was 253,025 Mcf, an increase of 100,164 Mcf over Q1'14 resulting in a 65.53% improvement. Total production for Q2'14 was 176,940 Boe, an increase of 57,216 Boe over Q1'14 resulting in a 47.79% improvement. The Company exited the qtr. with avg. daily production of 1,944 Boepd up from 1,330 Boepd at the end of Q1, a 46.17% increase. My target was 2,100 Boepd. Run times avg'd. 77% during Q2 (80% during June) versus 75% in 2013.

    Apparently, the extensive recompletion and workover program took longer than anticipated and the recently completed Rocky 3 well along with other wells that produce back to Breton Sound Block 32 facilities were not brought back up to 100% after installation of new 6" flow line. I hope to hear that production has improved some 10-15% over the last 6 wks. My exit rate for the end of Q3'14 is 2,400 Boepd. I look forward to knowing what other improvements/workovers are scheduled for the remainder of Q3 to continue building momentum.

    It appears they have finally gotten their arms around the field personnel and infrastructure issues and Q3'14 should mark the beginning of the turn-around with better results expected during the 2nd half of '14 based on completion of their production optimization initiatives, resumption of drilling in Q'4 (Rocky 2, Charlie), and a better handle on overhead (labor.) Important catalysts include the projected drilling schedule, progress regarding Goldeneye partner, venture partner for Gulf of Mexico property, continued ramp in production and strengthening of natural gas prices into year-end.

    Sentiment: Buy

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