The Dean’s Math on $AEXP
January 3rd, 2010 at 11:45 am Posted by The Dean
The Dean promised to deliver BIG this year and what better way to Explore Profits in 2010 with $AEXP, an oil and gas company looking to Turn Shale Gas into Green.
In mid-November, $AEXP teamed up with Mainland Resources, Inc. and combined mineral resources to now total 13,225 acres. Besides increasing their lease area by more than 160%, The Dean believes this collaboration could be HUGE for $AEXP because Mainland Resources, Inc. has a 2-year $40 million line of credit with Guggenheim Energy Opportunities, LLC.
The Dean believes this funding be utilized for exploration efforts in 2010 and that’s where the most exciting part comes into play. $AEXP plans to explore their 13,225 acres worth of land in the Haynesville Shale area, a region suggested to be the 4th largest natural gas field in the world.
In fact, the Haynesville Shale region has been compared to the Barnett Shale Play, estimated to contain 29 trillion to 39 trillion cubic feet of natural gas. If this is an accurate comparison, The Dean isn’t the only one who thinks that $AEXP‘s sitting on “one of the biggest U.S. natural gas finds in history.”
So how valuable is the BIGGEST natural gas find in history? Fear not students, The Dean has done his homework on the Haynesville Shale region, conversion rates and natural gas futures to bring you The Dean’s Math on $AEXP.
1 cubic foot = 1,020 Btu
So, on the low-end of this estimate, (29 trillion cubic feet of natural gas) X (1,020 Btu per cubic foot) = 29,580,000,000,000,000 Btu
Since market prices for natural gas are measured in MMBtu, we must divide this by 1,000,000
(29,580,000,000,000,000) / (1,000,000) = 29,580,000,000 MMBtu
As of Thursday, futures prices for natural gas were 1MMBtu = $5.57. So, based on this information, the Haynesville Shale region is estimated to contain more than $165 billion worth of natural gas [(29,580,000,000 MMBtu) X ($5.57 per MMBtu) = $164,760,600,000].
Certainly, the Haynesville Shale region is large. But, even if $AEXP discovered .5% (or 1/200th) of the natural gas in this region, $AEXP would be looking at more than $800 million in green potential.
