CUE - CUE Energy

[JeSSica WaBBit]

Hey Oldblue,

good to hear from you, its been a quiet last few months but can't help but get the feeling we could soon be motoring along again.

Can you believe it, i hesitated for just one day convincing myself that i can pick them up at a cheaper price and MEO has to come and spoil the party. Should have followed the gut instinct and bought them yesterday at 22 cents, silly Wabbit...............i shall have to stalk Etrade/ASX for a little longer.

Seems like Zeus could be shaping up to be a cracker or at least potential cracker?

By the end of the year we should be looking very good especially with 2009 set to bring home the bacon with the gas.

Hey Blue, how much money must Cue be raking in with oil above $140.00 a barrel?

The directors will have to buy a truck later this year once Maari is pumping just to transport the loot to the bank.

I look forward to the next financial report, more out of curiosity than anything, how much money has Cue made over the last few months?

JW

 

[oldblue]

Hi JW

Yes, good money indeed!
I suppose we shouldn't get too far ahead of ourselves but back in February the company was looking at an increase in operating revenue to around AUD7 per month in the first half of 2009, provided Maari came on stream and oil prices remained around Feb 2008 levels.
Oyong alone was expected to deliver an average of approx AUD3 per month from stabilized production of 8-8.5 kbbl per day of which CUE's share was 1-1.1 kbbl per day.
Now I havn't looked back at the PoO in Feb but I think from memory it was still sub USD100 bbl? Exchange rate has gone against AUD of course but not by enough to negate most of the increase. So the revenue for the 6 months to 30 June 2008 should be ?????
Too hard for me but a lot more than the AUD12.5m for the December 2007 half !

 

[Shrewd Crude]

WHERE ARE CUE HOLDERS AT?

These are my own thoughts...
Maui-4 was drilling in 1970,(manaia)...
when they re-drill Manaia 600-800 meters North East it will hit the ultimate payzone...
must be drilled updip as Moki was only just hit on the outside flank, what we are after is the tip of the Anticline structure......
Im telling you, Ultimate recoverable reserves are going to increase with ultimate maximum upside of 100%... 100 million recoverable...But more likely fair game 50% increase....I explain this all...

The Main Maari Structure is anticline and Holds three Zones of Interest...
Moki, M2A formation, and Kapuni formation (mangahewa)...
Only The Moki Formation will be produced at first which Holds P50 recoverable oil volumes of 45-50Million... Only the Moki Formation makes up current field development reserves... with 140 Million barrels in place in that formation...
Banking requirements usually require P90, and P90 is 34million barrels in Moki formation (90% probability of being produced).....
1P ->34million barrels... 2P ->50million barrels.... 3P -> ?...
recoverable oil will increase as Oil prices have increased, making P90 higher...... In the main field the upside to 50million barrels recoverable comes from the M2A formation... This zone is above the Moki Formation, further appraisal will take place during development drilling of the main zone... Upside is interpretted to be 12 million barrels recoverable in the M2A formation.... Infact Maari-2 well, intrepreted a 25 meter oil bearing sand column in the M2A formation, with mobile oil of 17m....

small summary of wells drilled to date...
1970- Maui-4 (manaia prospect) 40 meter Live Oil column, flowed 575 BOPD, drilled in wrong location... I will come back to this shortly...
1983- Moki-1... 40 meter live Oil column, flowing 660 BOPD over upper 10m interval..
1985- Moki-2a drilled on structure edge, which resulted in small column of 6meters...
1998- Maari-1 hit 54 meter vertical oil column, drilled to total depth through Kapuni...Was then plugged back and side tracked through Moki formation (maari-1a), Horizontal drilling length of 654 meters with 563 Oil bearing, This flow tested at 4350 BOPD...
1000 meter horizontal section is thought to flow initially at 5000 BOPD...
2003- Maari-2 (1.2 KM south of Maari-1).... Appraisal well... added 45million barrels (P50) to total barrels in place in the Moki Formation, hit 3 sand layers in M2A......

The Kapuni formation (mangahewa) has a 30meter oil column with an overlying gas cap... reports that I have read suggest this is uneconomical to extract... this was said when Oil prices were only $70US per barrel...?
The kapuni formation is much deeper... -> moki 1200M.... Kapuni -> just over 2100M....further testing will be required...


Manaia Prospect
10 KM South West Of the Main Field... WILL hit ultimate big time if drilled 600-800 meters NE....Manaia Is not being developed yet, and is going to be appraised at some stage During the 5 development wells, and 3 water injection wells...
Oh, The Water Injection wells are used to help maintain pressure to get higher flow rates, and to push the oil towards the producing well... this results in higher recoverable reserves...

OK manaia,
Is a very exciting prospect because the well that was drilled in 1970 (shell I think drilled it), was drilled off center, off crest and flowed at 575 BOPD only...

Horizon said-AVO and inversion work also suggests that reservior quality and/or hydrocarbon saturation may improve updip from Maui-4

two structures are being targeted, Mangahewa formation (kapuni), which hit the 40m plus oil column (no gas cap).... and the Moki formation which was drilled in a less optimal location...

Heres my example to explain it...
Oil rises naturally to the surface (fact)... and In an anticline structure Oil fills up high points... Imagine like an upside down ice cream cone where oil pushes to the tip of the cone...
The Maui-4 well was not drilled near the tip, it was drilled closer to the top of the cone.. (on the edge of the structure)...
Im sure of it that the top of the cone will be hit this time... Oil is there in place, its same stucture as Maari main field...

If you do your own research you will find exactly what I am saying is true...

Recoverable resource of 25million barrels average, with up to over 100 million barrels potential in place...
very similar to the Main field apart from M2a Sands are not present in Manaia...
Currently we have a 50million barrel oil development with water injectors...
The crude quality has a high Wax content and has a small premium to the Brent Crude benchmark...
Using downhole electric heating and FPSO tank heating...(added risk)

First production in september... Each development well will be connected to production after they hit the oil ....
Upside recoverable could be up to 100% more Oil in total...

100 million barrels of oil at a shot, but this will take further work, and all the dots will have to be connected.....
The Manaia prospect reserves, main field M2a, and Kapuni target has not yet been included in the main field development reserves and represent big upside...
Right now we can bank on 50M recoverable... I hope we can bank on 50 million more recoverable... its a wait and see, (with no downside risk, as downside risk is hedged against forward looking production)....
...
OCT well ZEUS, free carried and one of the most highly anticipated offshore wells in Auzzie waters of this year...
CUE will get its re-rate just like NZO, and it will be bigger in percentage terms than NZO's... SP could very likely head lower (before it starts to run)...
Manaia is low risk increase to current reserves... This will perform...
....
On current forward revenues, CUE is worth 50cents... CUE has ultimate exploration drilling with ZEUS highly anticipated well of the Year....
I am giving this stock the ramp that it deserves...
I filled my position today at 21cents...
Have been in and out of it over the last five years, but am here to stay now, with Multiple developments coming onstream over the next few years including, Maari, Oyong Gas, Wortel
sure fire 100% returns in the next year to be made...
...Why no posting in the last week on the CUE thread?
I cant possibly be the only one excited about big forward looking revenues with exploration/ appraisal (manaia), development and existing production...
I hope to get some feed back...
thankyou if you have read this far...

.^sc

 

[Shrewd Crude]

CUE IS ON CUE...

Over the next few months this stock is going to blow out...
Im hoping to see DOW down another hundie tonight to reduce our risks of a bigger fall...
very exciting to be in the oil industry...
CUE is positioned with a good spread between all the Oil stages...
Low downside risk with this stock...
what a hummer this is going to be... Maari has been 30 years in the making...Manaia 40 years in the making...
later

.^sc

 

[oldblue]

This morning's NZ "Dominion Post", in reporting that the Momoho well is being abandoned ( NZOG/Genesis/Origin )

"The drilling rig will be released next week and will move on to the Todd Energy and OMV Maari field."

No mention of CUE's interest but we know it's there! Looks to be on schedule for first oil in September.

 

[oldblue]

A nice bounce in the CUE shareprice today - one and a half cents or about 7% - against the run of play!

 

[Shrewd Crude]

Old Blue,
this has only just begun....
Im so excited about this, Ive thought about putting my whole portfolio on CUE and that is saying something from me...
We will be sharing great performance from this stock...
theres little downside on a fallout from Cobra as Ensoc handover will push SP up as market catches onto development drilling and first production in September...
yeahhh harrrghh...
catch you around...

.^sc

 

[oldblue]

A bit later than expected but Origin have announced today that they expect to release the rig from Momoho next week. It will then move on to Maari!
First oil now expected around the end of October, according to yesterday's drilling report.

 

[JeSSica WaBBit]

Hey Oldblue and team,

been a while since i was last in, just sitting and waiting...............SP looks to have plenty of support above 20 cents.

Cobra 1 seems like its got some potential. This has been a strange one but i feel more confident by the day that it is going to yeild a positive result. I can't imagine they would put in so much time and effort otherwise.

Looking forward to October, that should be a very intersting month for us.


JW

 

[treefrog]

Hey Oldblue and team,

been a while since i was last in, just sitting and waiting...............SP looks to have plenty of support above 20 cents.

:

Market Depth
BUY
Number Quantity Price
1 25,000 0.210
4 185,000 0.205
4 105,600 0.200
1 102,564 0.195
4 169,350 0.190
2 30,000 0.185
4 70,000 0.180
1 10,000 0.175
1 50,000 0.170
1 75,000 0.165
SELL
Price Quantity Number
0.215 232,954 2
0.220 118,000 4
0.225 160,613 2
0.230 210,500 3
0.235 106,134 5
0.240 71,450 3
0.245 60,750 1
0.250 37,913 3
0.260 90,000 2
0.270 50,000 1
Last traded time
11:03:37

23 buyers for 822,514 units 35 sellers for 1,538,384 units

frogs aren't as confident as rabbits on this - oil headed south and some predictions as low as $80 on this down leg won't help the little oilers: value is there on the likes of CUE and MOS though - more a question of the extent and timing of the sector downleg

 

[Shrewd Crude]

Hey tree frog...
CUE will still perform even if two things happen (which are likely)...
DOW 9000.... and Oil US 95 per barrel.... CUE will still perfrom...
Maari reserves are most likely to increase 50-75%... but could ultimately increase 100%... which will net CUE 5 million barrels... add in the existing 2p Oil, 2P gas... PNG assets...
current revenues.. (4 million per month approx)...
first maari production in Oct...
http://www.sharetrader.co.nz/showthread.php?t=5040&page=17
this link will help....

.^sc

 

[JeSSica WaBBit]

Hey Treefrog,

its been a while.................looking forward to seeing how your prediction goes.

I dont think you can pluck out the market depth for buy and sell and add them togeether to give a true reflection of the support or lack there of it for a share. You need to consider those traders who are waiting on the sidelines and who will either buy in or sell out once their price is triggered.

I base my statement that there is plenty of support above 20 cents on the fact that each time it pushes toward that figure it rebounds.

Oil has risen such a tremendous amount over the last year a correction was ineivtible, i'd say healthy.

Nothing to worry about with Cue while oil is above $75.00 a barrel, even at $55.00 a barrel we are easily profitable. At any price above $100.00 a barrel it is money for jam.

Cue is setting up for its best 12 months. I will confidently go on the record to claim that the share price will be above current levels this time next year. Hell, i am so confident, if you are game we can put a slab of beer on it right now!!!!

If you truely think Cue will be below the current price this time next year let me know and the bet is on.

You should carefully look at the up coming drilling and production program before you make this bet because i think after you read through it you may have a different opinion.

Remember i bought my shares for 12.5 cents and if you go back through my posts you will see my plan was to hold the bulk until at least the end of 2008. I still believe this plan will provide me with a very hasome profit, i may even hold to mid 2009, need to wait and see how things go.

JW

 

[treefrog]

Hey tree frog...
CUE will still perform even if two things happen (which are likely)...
DOW 9000.... and Oil US 95 per barrel.... CUE will still perfrom...
Maari reserves are most likely to increase 50-75%... but could ultimately increase 100%... which will net CUE 5 million barrels... add in the existing 2p Oil, 2P gas... PNG assets...
current revenues.. (4 million per month approx)...
first maari production in Oct...
http://www.sharetrader.co.nz/showthread.php?t=5040&page=17
this link will help....

.^sc

hi sc,
I am not currently in CUE (awaiting market indecission atm) after a profitable run down.
I check both fundamentals and technicals before trading (long or short).
Have picked up a few guidelines along the way though:
1. nothing is a sure bet - just have to look at CUE's own sp over the last few years to confirm that (attached)
2. never trade when emotive
3. always fill out both sides of the assessment sheet before totalling the points
wrt the 'con side of the ledger atm
the market is very nervous and even very good ann's aren't doing much for the smalls
technically CUE is back to support of a very volatile uptrend line - the last downleg of 76% is not normally healthy but, there is good support at 18c if current doesn't hold.

 

[Shrewd Crude]

Hey tree frog...
thanks...
I have looked in depth at CUE and been in and out for around 5 years...
CUE have spend the best part of a decade to get to this point, and the best part of 3 decades to get to the point of first maari production after first discovery in 1983...
I have studied the positives and negatives...

The only negatives I can find---> market risk...
-> oil prices expected to fall...(but trend up over the medium term)
There is a bit of soverign risk in INDO, and abit of risk with maari as Oil needs to be heated up...
The soverign risks are heavily diversified as CUE has a great asset base across Australisia NZ, PNG, Indo...
CUE is well diversified between production, development (more weighting to development stage), exploration, and appraisal... CUE really has it all, with the asset base, great management team...
CUE also has the greatest list of savvy Joint Venture partners, that I can see for a small oiler on the market..
going off current market info CUE will be 50cents down the line, we just got to be patient in the mean time...
you are right though, nothing is a sure bet...
This is as close to a sure bet without actually being one that I can see on the entire market (bar market risk)....
thanks...
.....
Please post negatives if you have them...
I would be very interested to see them....

.^sc

 

[treefrog]

Hey tree frog...
thanks...
I have looked in depth at CUE and been in and out for around 5 years...
CUE have spend the best part of a decade to get to this point, and the best part of 3 decades to get to the point of first maari production after first discovery in 1983...
I have studied the positives and negatives...

The only negatives I can find---> market risk...
-> oil prices expected to fall...(but trend up over the medium term)
There is a bit of soverign risk in INDO, and abit of risk with maari as Oil needs to be heated up...
The soverign risks are heavily diversified as CUE has a great asset base across Australisia NZ, PNG, Indo...
CUE is well diversified between production, development (more weighting to development stage), exploration, and appraisal... CUE really has it all, with the asset base, great management team...
CUE also has the greatest list of savvy Joint Venture partners, that I can see for a small oiler on the market..
going off current market info CUE will be 50cents down the line, we just got to be patient in the mean time...
you are right though, nothing is a sure bet...
This is as close to a sure bet without actually being one that I can see on the entire market (bar market risk)....
thanks...
.....
Please post negatives if you have them...
I would be very interested to see them....

.^sc

SC - your handle on this share's fundamentals and prospective health into the future appears sound.
I did not mean to infer I had other negatives in that specific bucket but more the technicals and the general market sentiment atm which makes it hard for immediate headway without some exceptional and sustained good news. The positives you summarise are already factored in by the market but probably not appreciated by many small bit players.
trading volume for the recent slide is very low indicating the few that are trading are bailing but most are just holding.
today: Volume 198,269;Trades 9; Value $42,628

cheers

 

[Shrewd Crude]

tree frog-The positives you summarise are already factored in by the market

They cant possibly be, because CUEs future revenue stream is worth multiples on the current SP...
Manaia is a very good bet to increase reserves....
Im just concerned about the markets in general... and I know how easily things could be taken away...
CUE has held up well in the past...
Bar big market corrections-> this stock can really only go one way...
even with Oil sub $100
bye for now...

.^sc

 

[treefrog]

Bar big market corrections-> this stock can really only go one way...
even with Oil sub $100

arh!! see, there is a significant qualification.
Of course the market has already factored in the known positives - it may not, in the view of optimistic CUE holders have got it right but the market is never wrong as it is always judge jury and executioner when it comes to what we get for our shares - there is no market appeals court!
Back in mid Aprtil 'til mid May we had CUE rocketing north on pretty much the same positives as you still highlight.
But the market has decided that all that gain should be given back, mostly I suspect on the negatives in the significant slippage of first oil from Marri and the turn in crude prices.
Lets assume that first oil from Maari slips further; the world oil price also keeps dropping and just one other of the CUE expected positives (there are many at risk) also comes up just a little short of expectations.
Do you the CUE's price would hold, rise or fall??
Personally I would then not be so keen to buy at that support level of 18c I pointed out above.
cheerz

 

[Shrewd Crude]

tree frog-
1)arh!! see, there is a significant qualification.
Of course the market has already factored in the known positives -

2) it may not, in the view of optimistic CUE holders have got it right but the market is never wrong as it is always judge jury and executioner when it comes to what we get for our shares - there is no market appeals court!

3)Back in mid Aprtil 'til mid May we had CUE rocketing north on pretty much the same positives as you still highlight.

4)But the market has decided that all that gain should be given back, mostly I suspect on the negatives in the significant slippage of first oil from Marri and the turn in crude prices.

5)Lets assume that first oil from Maari slips further; the world oil price also keeps dropping and just one other of the CUE expected positives (there are many at risk) also comes up just a little short of expectations.
Do you the CUE's price would hold, rise or fall??

6)Personally I would then not be so keen to buy at that support level of 18c I pointed out above.

Hey tree frog, I love debating and to me it looks like you really dont understand CUE very well, or at least the process of re-rating from development through to production....
Let me answer some of your queries..

1)No the market has not factored in the known positives...
CUE is heavily in Development stage which has cash thirsty capital expenditure requirements through multiple developing projects... infact NZO is the perfect company to model CUE off as they are so similar in so many ways (but CUE is around 1 year behind)... When CUE moves further into production stage then it will re-rate accordingly, infact its looking that good (on all aspects of the company profile-exploration, Manaia appraisal looks sure thing tie in, development, and current production ) that the stock will start to re-rate before 1st maari production...
The Deal of CUE's NWS (MEO farmin) is worth 10's of millions of dollars to CUE in terms of free carried costs and Seismics costs carried by MEO... SP did not run at all...(Beach free carry also)...

2) in the short term of course the market can be wrong... that is why CUE is so undervalued... it is my job to find Oilers which are undervalued at that time... this is how I make my money...
If the market was never wrong (in the short term), then the return on any investment would be Just the expected return....
in the short term few reasons could dampen the SP including a Large seller (which over time gets pushed aside by the herd)...
In the short term market sentiment can reduce buying behaviour (which wont happen for long as this stock will perform in any market)...

3)Back in April the SP ran, and pulled back... The fact that it ran gives every indication that the strong fundamentals of this company are there, they wont go away...they will just simmer away and then kabaam...

4)As you know Crude prices fell a whopping 5 bucks over the weekend..
CUE opened up half a cent, and remains flat for the day...
As I said, this company will still perform with DOW at 9k and Barrels at $90

5)Maari first production is very very unlikely to slip much further as handover on Ensoc is imminent, FPSO is in place, just waiting to drill the development wells and put them into production... the only real delay could come from weather delay, of technical problems... Both cant be ruled out....
The delay in that would not hold the project back for 6 months or anything...

6)CUE is very unlikely to ever hit 18cents ever again, perhaps its only shot of doing that is if we get a DOW falling over 1000 points in one day (within the next month)...
therefore, it wont be CUE specific..
it will be market specific and all stocks will fall...
therefore holding CUE is a good bet...

I heard Peter Strachan said Zeus could add 80cents to CUEs SP...
This could be one dollar by years end, with low downside risk..
OCT ZEUS, Spikey Beach and first maari production...
30 cents looking very very likely by November..
I have over half my portfolio on CUE...
best aussie oiler I can see on the entire market...

As for the next while, its all about the re-rate from development stage into production stage... The high profile, large revenues on a forward looking basis will take care of the SP, and add in a few wells for free...
that is the payoff... the market has a delayed reaction...
thanks...

.^sc

 

[Shrewd Crude]

I also picked CUE in the monthly Share picking competition...
Im sitting 18th out of seventy something entrants...
Hummm....

.^sc

 

[treefrog]

nothing new there SC.
CUE is holding at 21c on very low volumes and there is not much indication of where it wants to go atm. Possibly it is holding there as the result of some orchestrated ramping (no names = no pack drill).
But I wonder if we can glean a little if we glance at CUE's partner in Maari ie HZN - MC $260m (c.f. Cue of $135m) they hold a 10% interest (CUE 5%).
The companies appear quite similar in many respects and we might therefore expect them to track proportional share prices. Indeed they have been until the last two weeks when HZN has pretty much "tanked" from its 39c level to 31c
The 5 month (likely) delay in Maari appears to be starting to seriously affect cashflows as HZN has found it necessary to chase extra finance.
So what do HZN holders know that they continue to bail? Probably tossing in the probability that after waiting, and waiting, more delays may run well into next year with technical dificulties (heating) causing low production rates, and further cash flow negatives. Or maybe something entirely different.
.........and my point??
1. CUE is no sure thing
2. nice ramp SC - tad long winded though