Posts from the ‘Oil Stocks’ Category

Mar 4

Adding to Pan Orient

I increased my position in Pan Orient on Friday.

The more I look at the story here the more I like it. The following comment from Raymond James was posted on the Investors Village board:

…after speaking with management we believe the recent discovery could have significant resource upside potential (see page 2 for details), and lead to a step-change in the company’s current production profile. The discovery represents an important milestone for Pan Orient as it moves towards its goal of increasing production from more stable sandstone reservoirs (as opposed to the prolific but highly volatile volcanic reservoirs which until recently underpinned the company’s production base).

The one short term negative for the stock is that it is expected that there will be a 10MMbbl writedown of reserves from their legacy volcanics field in Thailand when the reserve report comes out. The reserve report will come out some time in the next month or two.

Chen Lin was interviewed earlier this week and he had some comments about POE as well:

Pan Orient has a slightly different thesis than Mart Resources because there is some exploration/discovery risk. It is drilling wells, potentially very big wells, but I don’t know if the wells will be successful. With Mart, there is much more certainty. However, though there is risk for Pan Orient, it is a very experienced oil exploration company, and it’s been in Thailand for five years, drilling and fine tuning its technology.

I shared with my subscribers a report that estimates each of the three Pan Orient wells in Indonesia is worth about $3 of net asset value (NAV)/share if successful in the first half of 2012 and $2 for each of the other three wells in the second half of 2012. In addition, Pan Orient also has an oil sands property in Canada that it wants to sell. The company has $1/share cash on the balance sheet and cash flow over $1/share right now, and this is in addition to the oil sands property that it has for sale. Thailand is ramping up production and Indonesia has the big wildcat wells at work. So in terms of risk-reward, it’s an ideal situation. I wouldn’t be surprised to see the stock be a ten-bagger by the end of this year. The company could be a $1 billion (B) company. It was a $2 stock when I recommended it in my newsletter. Right now it’s $3 and change. With some success in drilling in Indonesia, I’m looking for a ten-bagger. Seldom do you have those in one year, so I have pretty high hopes on the stock

I think that Chen Lin can be a little over-enthusiastic at times; I mean we are still a number of good events away from being a 10 bagger. Nevertheless, the possibility certainly is there and the possibility of a 50% return, which is nothing to sneeze at, is, in my opinion, extremely high.

Mar 3

3 Comments

Trying to understand Equal Energy’s position in the Mississippian Lime

I’ve spent a few hours this week trying to get a better idea of just how pervasive the Mississippian lime and chat formations are in Oklahoma, and to a lessor extent in Kansas. My investigation was precipitated by some comments by Equal at the Enercom conference a couple of weeks ago. I will talk more about those comments at the end of the post, but first I want to go through what I have learned about the Mississippian.

I found investigating the Mississippian to be a tough slog; the information is sparse, some of the companies are private, and most of the others are large multi-play companies like Chesapeake and Range, and so they don’t divulge the well by well granularity that I am looking for.

Nevertheless I think I’ve developed a decent picture of the extents of the play and the well results so far. What I will try to do below is step through the companies with acreage in the Mississippian and where that acreage lies, trying at the same time to put together a picture of the field and how prospective Equal’s land might be in relation to others.

I’ve limited this discussion to the economics of the Mississippian play. I looked at expanding to geology and how it might change across the extents but I just haven’t been able to find enough information to develop a coherent analysis. For now we will have to look at where the wells are being drilled and how successful are the results and draw conclusions from that.

Sandridge: King of the Mississippian

Any discussion about the Mississippian has to start with Sandridge. They are the largest land holder, the largest producer, and I’m pretty sure they were the first mover in terms of trying out the hz multifracs on the formation.

Sandridge provides a good map of where they have been drilling horizontal Mississippian wells so far. I have highlighted where Equal’s land sits in yellow.

You can see from the little red and blue dots that most of the activity in the Mississippian has been centered around Northern Oklahoma. Equal’s land is right on trend, if only slightly south.

Sandridge (the red dots) has been drilling most of their wells to the north of Equal, but still in the same counties, Alfalfa and Grant. Sandridge provided a close-up of Grant, Alfalfa and Garfield counties in a later slide. Again I have tried to deliniate Equal’s land with respect to Sandridge. Based on the graph, and Equal’s own presentation that maps out their land holdings, it is clear that Sandridge surrounds Equal with their land package.

Valuing the Mississippian

During the Investor/Analyst Day on February 27th, Sandridge stepped through the valuation of the Mississippian. Sandridge puts a value of $4,236 per acre on their Mississippian land.

The acreage value is implied from the joint ventures that Sandridge has completed with Repsol, Antinum, etc. The resource NAV is more subjective; it is an estimate of the eventual NAV of the land once it has been fully developed and is producing oil.

Sandridge has been showing improved success as they drill more wells. This is exactly what I would expect. It happened in the Bakken, it has happened in Equal’s own area in the Lochend, it has happened at Swan Hills with the Beaverhill Lake. As operators experiment and figure out what works and what doesn’t results improve. Below is an illustration of how the Sandridge 30 day average has improved over time, taken from their Credit Suisse presentation.

Sandridge put the following economics on the Mississippian in their Analyst Day Presentation.

I thought it would be an interesting exercise to see how these economics compared to other players in the Mississippian. Below I have compiled a comparison of all the players with public data available regarding their Mississippian productivity estimates.

In the case of Range Resource, the company doesn’t provide a NPV estimate but did provide an ROI during one of their conference calls, so I have included that.

These estimates bring up the question of where some of these other companies are operating with respect to Equal. Osage Exploration has a decent map of the Oklahoma acreage that can help deliniate that. Its a bit cluttered but it helps to point out where some of the other companies have been drilling. Again the area where Equal Energy owns acreage is highlighted in yellow.

Range Resources and Nemaha Ridge

If you look at the upper right of the graph you will see a purple arrow labeled Nemaha Ridge that is pointing to a yellow line going north to south. Range Resources has built up a land position along this ridge, east of Equal’s land.

Range Resources had some interesting comments about the Mississippian on their Q3 and Q4 conference call (taken from SeekingAlpha). First, here is what Range says about their acreage around Nemaha Ridge:

We are on the ridge. So you have that whole area that’s been defined and there’s different mats out there. So there’s — you can go west of the ridge, on the ridge or east of the ridge. It’s interesting — and I saw somebody put a map out to just look at historical vertical wells out there. If you look at where the best historical, vertical oil wells are, that’s where range’s acreage is. Somebody asked me offline, why do your wells — it’s early on and granted, can we hold it up? And as we drill, we will continue to see those results, but why are your wells look so good for the — why you’re getting the 485,000 barrels for 2,000 foot lateral, while other people are drilling 4,000 foot laterals and their reserves are in the same range? And if you look at the historical vertical wells or where the best wells are, that’s where are our acreage is in and around. So it’s necessarily east of the ridge or west of the ridge. It can be on the ridge or there’s — just like in all of these plays, where your acreage is really matter.

Next, here is what Range said about recoveries along Nemaha Ridge:

Particularly if you look at the oil plays, specifically like the Mississippian, we put out recovery factors of 4% to 9% of the oil in place. Do I expect ultimately it’ll be that? No, I would say it probably will be higher.

They also had the following to say about EUR:

I think in any of these places it’s really important on where you are. There’s always a core area and non-core areas. There’s better areas and poor areas. I would say looking at the results of our Mississippian wells even though it’s early, there’s only 8 wells, but the average results of 485,000 barrels per well… [up on nemaha ridge] you have a chat component to your production… The chat — when you get off structure, you tend to lose chat or you don’t have nearly as much. The porosity in the chat is 30% to 40%. The porosity in the carbonate is 3% to 5%.

When asked by one of the analysts during the Q4 conference call about the variability of results being seen in some areas of the play, Range had this to say:

I think in any of these places it’s really important on where you are. There’s always a core area and non-core areas. There’s better areas and poor areas. I would say looking at the results of our Mississippian wells even though it’s early, there’s only 8 wells, but the average results of 485,000 barrels per well is really great. It’s outstanding. So I feel comfortable that we’re in a good position. And we think really what drives that is the fact that where our acreage is located.

Chesapeake: Alfalfa and Woods Counties

Chesapeake owns a large parcel of land in the Mississippian. The company is not as forthcoming as Sandridge and the smaller players about where the acreage is or what their results have been. I don’t think this has any nefarious intent; they are simply a big company involved in many plays and they don’t have the space in their presentations to deliniate each play in detail.

According to their comments on the Q4 conference call, most of their drilling has been centered around Alfalfa and Woods county, which would mean just to the west of Equal. This agrees with the Osage map above, which highlights an area in blue around Alfalfa county as being primarily CHK and SD.

Chesapeake has participated in about 70 wells in the Mississippian so far. Of interest, in their fourth quarter conference call the company said that the Mississippian would be seeing 22 rigs this year, second only to the Eagleford.

We do expect our operated rig count will stay relatively level for the year at an average of approximately 161 rigs for the year. This is including 33 rigs in the Eagle Ford Shale; 22 in the Miss Lime play; 20 in the Cleveland and Tonkawa plays; 14 in the Utica Shale play; 13 in the Granite Wash plays; and 10 in the Permian Basin.

Devon and Osage Exploration: To the southeast

Devon Energy (DVN) has 210,000 net acres of exposure to the Mississippian oil play in Oklahoma and Kansas. Devon bought land to the south east of where Equal owns land. Devon and Osage own land in very similar location.

Apparently, Devon Energy drilled twelve to fifteen vertical wells in the Mississippian oil play in 2011. Because they are a big company involved in multiple plays (much like Chesapeake) finding individual well data is difficult, even more difficult then Chesapeake. However the company did report during its Q4 conference call that it had drilled its first succesful horizontal well (again from SeekingAlpha):

We drilled our first vertical well in the second quarter of last year to gather data and have since drilled our first horizontal Mississippian producer, yielding very encouraging results. The Matthews 1H was brought online in the fourth quarter and achieved a 24-hour sustained IP rate of 960 barrels of oil equivalent per day, of which greater than 80% was oil. Through the first 30 days of production, the well averaged 590 barrels of oil equivalent a day.

Devon doesn’t describe where its land is. In one of the companies presentations they point to land holdings in SE Oklahoma but mainly with the intent on drilling gassy Woodford shale wells. There is no other mention by Devon of any Oklahoma acreage. Luckily, Osage Exploration again provides an excellent map of where both they and Devon have a significant land base.

An extremely interesting point with respect to this map is that Equals Hunton lands are right in the middle of Logan and Lincoln counties, which are just to the south of the red and green blocks in the Osage map above.

Osage drilled one well at the end of December in Logan county and spudded another in mid-January. There are no results yet, which would normally be somewhat discouraging, except that the stock price of Osage has gone rather ballistic over the last two months (up from 45 cents to 70 cents). That and the the anecdotal Devon well leaves me wondering if Equal has more Mississippian acreage than they at first suspect?

Red Fork Energy: A Detailed Well Result

Red Fork energy is an Australian company that has been mentioned a number of times on the InvestorsHub Junior Energy Board. According to a recent news release, they control 60,000 acres centered around the Nemaha Ridge (Payne, Kay and Pawnee counties) but extending as far west as Grant and Noble counties. According to their presentation (which is from March 2011 btw) they expected to drill 11 wells in 2011. I think that number ended up being more like two. nevertheless, I stepped through the company news releases (here) to see how that drilling went. They provided a rather detailed account of the company’s first well, releasing updates on almost a two-three week basis.

The company’s first well, in Pawnee county, was estimated by Schlumberger to contain OOIP of 58.4mmbo per section. At a 5% recovery this would give 290,000bbl of oil per section, and presumably at 4 wells per section a little over 70,000bbl per well. The company said they expected 3-5 Mcf of associated gas per barrel so that would put an overall hydrocarbon EUR of around 500,000boe per section or 125,000boe per well assuming 4 wells per section. So pretty so-so numbers.

They fracked the well with 12 stages and provided information on the following 24 hour flow test:

The well produce 240 barrels of 28 degree API gravity oil, 240 Mcf of 1,300BTU gas, and 1,600 barrels of water by pumping via ESP and intermittant flow through the casing.

Don’t get too scared off by the water number. I have read numbers as high as 3,000bbl/d of water from some wells. It sounds like a lot, and is a lot, but it is being managed by Sandridge and others and isn’t indicative of any sort of watering out.

They follows that up with a news release on December 22nd and another on January 20th clarified that the well was producing at 300boe/d with about 80% of that being 38 degree API oil.

A second offsetting well (called Abunda 1-21H) is just finishing drilling in Pawnee. The company is also in the process of drilling two wells in Noble County (McMurtry 1-22H and Blair 1-24H).

Equal Downplays the Mississippian

If you take in all the information from above and try to sort out some conclusions from it, I think its reasonable to say that the Mississippian is slowly being derisked, and it looks like its a productive and economic play. Yet Equal seems to be really downplaying the potential. If you listen to the presentation that Don Klapko gave at the recent Enercom conference it really focused on the negatives, in particular the risk of a 50 boe/d duster.

The slide in question is slide 12 from the presentation:

The essence of the slide is that Equal has gone through all the public data and determined that the economics are just not up to par with the other plays the company has, at least when considered against the risks.

At the conference Don Klapko had the following to say about the Mississippian:

Our vision here is to liberate the value. What we’ve done is taken all the public available data and mashed it together. We are seeing is aout $3.5M capital expenditure, about 300,000 boe that kicks out at 25% rate of return… now I bet you guys are hearing a 75% rate of return on the mississippian play, well some wells will do that but you can also invest $3.5M and get a 50 boe/d well.

Now clearly part of the reason he is playing down the Mississippian is because of the need to justify the farmout. Why would you farm it out if it was the the highest ROR? So that makes sense. The point is that the EUR estimates from other company’s are quite different than what Equal is estimating.

So I don’t know what to say. I’m not sure where Equal’s public data is coming from and maybe they have access to more data than I have access to. I can only go by what I have access to and the fairly rigorous analysis of what I have available to me does not paint the picture of a marginal play. Its still early of course, but so far the results look pretty good, and appear to be improving as the engineers get a better handle on unlocking the play.

Below is a snapshot from another Sandridge presentation, providing estimates of 30 day production rates for the latest wells drilled in the Mississippian.

While there is indeed the odd 50 boe/d duster, there are far more 1,000boe/d + boomers. Particularly of late. 5 of the last 12 wells have seen 30 day IP’s of over 800 boe/d.

There are differences between regions, so that is a risk. Perhaps Equal knows, or suspects, that the land they own is lower quality. But at the conference Equal called the actitivy around their area a “hot-bed” which doesn’t sound like they are on any fringe. I can only speculate on the quality based on what is being drilled around them, and if you look at where Sandridge is drilling, it appears to be very near the heart of the play.

Nevertheless I do understand how quickly geology can change from section to section. Structures can end suddenly, or thin out quickly.

Either Sandridge, Chesapeake, and Range (as well as the juniors) are hugely overestimating the resource or Equal is hugely underestimating it. There’s no other way to take it. The 3 former companies have all publically stated EUR’s that are 30-40% higher than Equal’s estimate.

Anyways it’s all conjecture until these wells produce a little longer and we get to see the real declines. The bottomline, based on the information I have access to, is that the land itself should be worth at least $4,000 per acre. That is based on other transactions. The entire land base, 15,200 acres (I still can’t figure out if they lost the other 4,000 acres to lease expiration or what happened to it), should be worth $60M at this price. A 50/50 JV should bring $30M to the company.

Unfortunately I suspect they are getting less than that. At the Enercom conference Klapko said “this land tends to fetch huge dollars, up to $3,000 per acre”. So I suspect that Equal is getting closer to this number, which would put a 50/50 JV at $22.5M net to Equal.

I suspect that this might be the reason they talked down the Mississippian at the conference. Its too bad; I think they could do better.

A last word on Oklahoma Oil and Gas Information.

There is a wealth of information on oil and gas wells available at the website of the Oklahoma Corporation Commission. They have a GIS database of well information, including monthly production volumes, for wells in Oklahoma. Unfortunately finding existing Mississippian wells is nearly impossible. Even when I got to the North of Alfalfa county, where there should be lots of wells drilled by Sandridge, I can’t find any of them. If any one can point to me why this is (are these wells confidential or on some similar status?) or what I am doing wrong to not be able to see the wells, I would appreciate it.

Feb 28

3 Comments

Buying into Pan Orient

I decided to take a position in Pan Orient energy yesterday after the company released the following results from their L53-DST3 (L53-D EAST) Exploration well off the coast of Thailand.

Pan Orient is pleased to announce that the L53-DST3 appraisal well is currently on a 90 day production test flowing 38 API degree oil at a rate of 1,200 barrels per day through 8.8 meters of perforations between 1,142.7 meters to 1,163.2 meters true vertical depth (“TVD”), within an interpreted gross hydrocarbon bearing interval extending from 1,119 meters to 1,187 meters TVD with approximately 20 meters TVT of net oil pay.

This is the second successful well for Pan Orient in what they are calling the L-53-D prospect. The first well, which was drilled in early January, had equally good results.

Pan Orient is pleased to announce that the L53-D2 exploration well is currently on 90 day production test flowing 27 API degree oil at a rate of 1,015 barrels per day through 17.8 meters of perforations between 1110.8 meters to 1154.7 meters measured depth (860 to 890 meters true vertical depth), within one of six conventional sandstone reservoir intervals interpreted as oil bearing based on oil shows while drilling and open hole log and pressure data analysis.

It’s worth pointing out that these two wells are producing from different sets of sands. The first well produced from an interval 860m to 890 true vertical depth (TVD), whereas the second well produced from an interval 1,119m to 1,187m TVD. In the news release for the original L53-D2 discovery well Pan Orient described 6 potential producing zones:

the L53-D2 exploration well, drilled into the L53-D East exploration prospect, encountered approximately 65 meters of interpreted net oil pay averaging 20% porosity within five to six separate conventional sandstone reservoirs between the depths of 550 to 940 meters. This interpretation is based on numerous pressure data points indicating oil pressure gradients, oil shows while drilling and independent third party open hole well log analysis

Its too early to say whether all 6 zones will be as profilic as the first two appear to be. If they are though, this could turn into a major discovery for the little company.

About the little company

Pan Orient is pretty small, so it doesn’t take a huge discovery to have a big impact on the company. According to the January presentation on the company’s website, there are currently 56.7M shares outstanding, with a little over 60M fully diluted. As of the same presentation company has $58M of working capital, so there doesn’t appear to be any immediate financing concerns.

How much oil is there?

I’m somewhat confused about the prospective reserves in the L53-D prospect. The reason is that it is not completely clear whether the OOIP estimates being provided by various sources are for the L53-D block or for the entire L53 concession, and likewise it is not clear whether the OOIP estimates provided by the company were for one zone or for all 6.

From the company’s presentation, which was put out before either of the two discovery wells were drilled:

The company was assigning somewhere between 4.2MMbbls and 12.3MMbbls of oil ot the L53-D prospect.

A recent report from Paradigm (posted on the investorsvillage board, which is a great source of information on the company) suggested the following resource for the entire block:

The L53 fault structure is targeting 30–50 mmboe of potential recoverable reserves in three faulted compartments. Management believes each compartment has the potential to add 3,500 bbl/d

Where my confusion lies is that there is some suggestion that the resource estimates for the L53-D block only refer to a single set of sands, and that with 6 sands being intercepted there is actually a much bigger resource at stake.

This point was articulated clearly by an Investorsvillage poster algrovenew, who wrote the following:

I don’t think most people have fully grasped the significance of this discovery. The aerial extent might be limited, although still significant. However, what is really significant is the layering of the production zones. Take whatever aerial extent you want (2 to 6 sq. km, depending on whether the other fault blocks are saturated or not) and then multiply by 3 or 4 or 5 times.

The point that the pre-drill estimate may have been far too low was echoed in another post by sculpin, who I believe was posting a piece of a Paradigm note:

The L53-D2 discovery well and the L53-DST3 appraisal well have evaluated the first of three fault compartments of the L53-D East Structure. Results to date have been better than pre-drill estimates and could result in a substantial increase in reserves. The mid-case pre-drill resource estimate of the L53-D East structure is 7.4 million barrels (Figure 1).

What’s the discovery worth to the company?

As of the last reserve report POE had 32MMbbl of proven and probable reserves of which 7.4MMbbl is proved. Of note is that most of these reserves come from “volanics” which are reservoirs in offshore Thailand that have proven themselves prone to watering out and under-producing estimates. These new discoveries are more traditional sandstone reservoirs, which should be be deemed less risky by the market than the volcanics. Even the mid-point of the original prospective resource estimate (7.4MMbbl) would be a significant addition to reserves.

Macquarie placed the following valuation of the original prospect (my bold):

Pan Orient’s most recent P50 resource estimate for the L53-D East prospect is 7.4mbbl. The terms of the L53 concession are similar to Pan Orient’s core assets at L33/44, where Proven reserves are worth ~US$23.00/bbl (PV10AT, ~US$90.00/bbl crude pricing). On an unrisked basis, we estimate the L53-D discovery would be worth C$2.97/sh. Pan Orient indicates that it has at least two other fault compartments to test in the vicinity of this discovery, which would be additive to our unrisked valuation.

Pan Orient is not expensive

Even before the discovery Pan Orient was not trading at a high multiple. The company produced a little over $13M of cash flow in both the second quarter and the third quarter off of production of about 2,000 bbl/d. That puts the company at a trailing cash flow multiple of 5x, and at a trailing EV/boe of $90K. Of course with the two new wells the company will presumably be able to nearly double production, and as per the last news release they have plans to drill a number of development wells in the area starting in May, which should increase production further.

Buying a stock up 25%

I hated to buy the stock at $4.20 yesterday, up 25% for the day. I really had to plug my nose to do it. And it may turn out that I got carried away in the short run; I always find it difficult to can tell if a short term blow off top is upon a stock, and with further drilling delayed until May it may very well be that the stock settles back down into the 3’s before moving higher.

I am fairly confident however that the stock will eventually move higher. Even taking only what is current known, the stock should be able to trade at least a couple dollars higher as they drill more wells and bring production up to 6,000-7,000 bbl/d. If a few of these other zones prove productive, well then the potential is even greater.

Feb 20

1 Comment

Week 33: Admitting the possibility of a bull market

Portfolio Performance

Portfolio Composition:

Weekly Trades:

Posts this week:

Can’t Stay Away: Arcan Resources and Second Wave Petroleum

PHH, Newcastle Investments and Mortgage Servicing Rights

Shadow Inventory and how an improving US Economy begets an Improving Housing Market begets and Improving US economy begets….

PHH and one way to bet on a turn in the US economy

Jumping on the Bandwagon

As I wrote about earlier, I am coming around to the view that the US economy will perform reasonably well over the next few quarters.

Now let us not confuse the short term with the long term here. I don’t for a moment think that the longer term issues in the US have been solved. The situations in Europe, in Japan, and in the US are very similar. There are massive storm clouds on the horizon, and those coming storms are causing the winds to pick up and the boats of the economy to waver in the seas. But the storms themselves have not yet reached us, and so while we may have bouts of turbulence brought on by rising winds, or even, as in the case of Europe in November, sudden gusts that threaten to capsize the rigs, the actual storms are still a little ways off in the distance, far enough that we can pretend at times that they are not there.

Now appears to be one of those times.

The LTRO seeming to have stabilized the banks of Europe in the near term.

TED Spread:

Italian 10 year:

Spanish 5 Year:

The economies of the European periphery, while entering what has to be an inevitable and deep recesion, are still far enough away from the consequences of these (maybe 2-3 more quarters) that we can ignore that more bailouts or a mass exodus from the euro is close at hand.

Finally, there can be no doubt that the numbers in the US are picking up some steam of late. How long will this continue? Perhaps not too long, but who is to say.

More specifically, the housing sector has been beaten to such a pulp in the past few years, and the stocks involved have taken such a beating, that even a stabilization at these low levels (both prices and activity) may lead to a substantial uptick in the share prices.

Always on the look-out for a bull market

So while I don’t really believe it can last over the long term, that doesn’t mean I can’t take advantage of it. In the absence of the arrival of a true storm (like what happened in 2008), there is always some bull market somewhere. You just have to find it.

Where am I looking?

US Regional and Community Bank stocks
Mortgage Servicing companies
Oil stocks with large resources that can take advantage of Hz-multifrac technology to exploit those fields

I still don’t know what to think of gold. There is a bull market out there, but only for select stocks (see Atna and Argonaut Gold for a couple of examples).

Buying into Newcastle and buying more into PHH

As I wrote earlier, I believe that the mortgage servicing business provides a unique opportunity right now, and while I have started a position in Newcastle Investments in response to that, I expect to increase that position substantially over the coming weeks. I have also turned PHH Corporation into one of my largest positions.

I’ve already talked about both of these investments ad nauseum in the last couple posts so I am not going to reiterate those theses here. What I will say is that I am becoming more and more cozy with the mortgage market bottoming idea and I would expect that you will see more of my capital make its way over to this market in the coming weeks. I am already looking for an opportunity to exit OceanaGold and reduce my position in Aurizon Gold. The proceeds are likely to either go into PHH or NCT, or into another mortgage leveraged corporation that I find.