CVN - Carnarvon Energy

[Riles]

Holding tight, nevertheless I really am mystified by the slaughter, now down 22% from the high and I see no reason except lemming behaviour.

A bit perplexing really. I guess you can't fight sentiment it was probably always going to sold off by a few and now the herd has followed them.
And this is from a good announcement - imagine if it was a duster...

Oh well, buy the dips. I'll appease myself by picking up more today at 51. I expect sideways action around low 50's for a few days.

 

[Rob 17]

CVN has been sold off considerably compared to its JV partner who has hardly flinched. For long term investors who put faith in this company from the beginning the sell off is a minor hiccup in my opinion.

I bought my last batch at .535 before it hit a high of .66. Still up and looking forward to the SP stabilising in the near future.

Seems like its finding support at .51 for now

13:06.44 100,000 .51
13:12.24 150,000 .51

DYOR

 

[cgf]

From memory i think it was on the interview with POE CEO Jeff Chisholm
The title of the video is "Commodities Report [11-02-07 11:30 AM ET]" :
http://www.bnn.ca/
I've just tried to have another look at it and it seems that you cannot access videos that are over a week old so maybe this one is unavailable now??

Anyways, looking at the market depth on this one is quite daunting. Alot of investors getting out . I am considering buying back in as CVN have solid fundamentals, the question is at what price will she find solid support... 48c?? 50c seems to be solid at the moment

Although there is still many years of exploration before we will know the full extent of the JVs potential Ted will no doubt clear up the current reserve announcement at this months AGM.

But indications within Jeff Chisholms interviews clearly indicate that this will be at least the second biggest oilfield in Thailand next to the Sirikit Oilfield. When you put it in perspective (not from a day traders point of view "on a well by well basis") thats not a statement that should be taken lightly. Obviously Na Sanun or Sirikit is no Ghawar oil field (in Saudi Arabia) but for CVN this IMO puts CVN in the position of being a well undervalued stock.

The Sirikit Oilfield covers an area of 1,039 square kilometers and started in December 1982. It produces crude oil, natural gas and liquefied petroleum gas. It has a daily production rate of 19,500 barrels of oil, 59.2 million cubic feet of natural gas and 280 tons of LPG. On the 30th December, 2003 approximately 150 million barrels of Crude from Sirikit Oil Field were produced under the operation of Thai Shell Exploration and Production Co., Ltd. before the oil field was handed over to PTTEP to carry on the operations. PTT Exploration and Production Public Co., Ltd (PTTEP) entered into a joint venture with Thai Shell with 25% share holding while Thai Shell held the remaining 75%. On January 12, 1983, PTTEP acquired all of Thai shell’s shares and assumed full operation of Sirikit Oilfield. The Sirikit Oilfield is estimated to continue supplying for about ten more years as there are at least 60 million barrels of oil and 245 billion cubic feet of natural gas yet to be recovered.

My problem is how to get enough spare cash. That to me is something thats much harder to solve than any question I have as to what CVN shares will be worth in one-two years time.

 

[INORE]

Thanks for that CGF. As allways I have the little voice inside my head telling me to sell however I have been caught out many times like this, selling a stock on market sentiment when the fundamentals of the company have not changed, i am a little dark that i dont have any funds to pick up some more possibly in high 40's which seems possible now. The only reason i can see for the SP change is the infrastructure problem they have of getting the oil out, I think this is the key and the sooner they solve it the sooner the SP will start climbing, because really the if the next hole flows 3000BOPD its meaningless (except for reserves) unless they can get it to market. So come on Ted, strike a deal with Thai govt to get some infrastructure pronto, or keep buying trucks. I actually remember now that a thread on hot copper mentioned someone knowing someone who was purchasing trucks in thai in the area but couldnt be certain if it was the JV....

However, the more i think about the experience of T Jacobson and POE the more i realise that he would have had the forsight to order more trucks 4-6 weeks ago when they new that supply would be restricted by transport issues....so hopefully we get some closure on this before the new year.

 

[wipz]

I put my last pay cheque into CVN, so I am running on nothing for the next fortnight - also thinking of selling up a few of my other shares to put in CVN while all the short term players jump ship. I am really bullish on CVN's future, POE know what they are doing and definately have big plans for the JV blocks.

The way I see it is that the short term punters are getting out largely due to the capacity restrictions and lower than expected flow rate from NS5. Even if NS6-D1A side track and L44H-D1 flow early next week CVN will not beable put these new well online, hence they believe that in the ST the price isnt going anywhere. She should trade sideways around the 50c mark and rise on anticipation around friday. Depending on how it pans out I may just pick up another parcel.

I am hoping they will address the issue at the annual meeting on Monday, if not I will raise the question. The question is how long will it take to get the infrastructure and transportation in place to increase capacity in the ST? How will they tackle the issue going forward (assuming the strike rate continues)?

Im trying to compare CVN at the moment with TAP oil, does anyone know how many net barrels per day TAP are producing and at what capex?

 

[MS+Tradesim]

re: Tap

Should answer some of your questions. Doesn't seem to address capex but I didn't look closely:

http://www.tapoil.com.au/admin/Upload/docs/ASX_315_Investor_Presentation_Update_-_Nov_2007.pdf

They're saying 1.5mboe per year = 4100boepd.

150m shares on issue. $100m in the bank, no debt. DYOR.

(I don't hold TAP but it looks good going forward)

 

[Rob 17]

Bit puzzled why CVN has been sold off. It has been rising steadily on results and oil is at record highs. 4pm could not have come quickly enough today.

If the Dow takes a hit tonight there could be more selling tomorrow IMO. I’m going to raid the money box and buy some more. Going to show some faith in the company.

There are some oil companies that are steady and don’t even produce any oil yet (ELK).

Hopefully after the AGM a clearer picture of CVN future's will be painted and we can all sleep well

DYOR

 

[cgf]

There are so many variables in why an investor sells and I believe you have to be extremely careful in the way you interpret their reasoning. I will give you an example: One such guy I know took out a personal line of credit for $50,000 to buy CVN at 0.45c and he was planning on a selling at the 0.70c - 0.80c range. Another had extended himself a little too much on his AGO holdings so he decided to buy $20,000 @ 0.50c using his gold card and panicked yesterday when the market fell and then sold CVN this morning. None of those decisions have anything to do with CVN.

Maybe I'm the lone soldier in this age of "new day traders" who buy and sell based on market trends. Back when I had significant amounts of JBM @ 2.00 (and was well overextended) I made a rule for myself in that I don't invest what I need for day to day living. I only invest what I can do without, that way I am never sacrificing my sanity on whether a SP is up or down on a certain day when I might be forced to sell.

The fundamentals for CVN's worth are "the size of the reserve less its costs", it is not if a well flows 100 or 3000bopd. To me its clear certain investors don't understand (or even look at the whole picture) and they will be the same ex shareholders who a few years down the track say boy I wish I held onto them I had plenty of them for only 0.60c.

In relativity to finding a viable oil field ..... storage and transport are very easy, cheap and quick issues to solve (I bet even CVN was not expecting 3000bopd suddenly in two wells). Now how much money can I get for my first born (I even throw in the wife) I think I know of a good buying opportunity in the morning.

 

[MS+Tradesim]

The fundamentals for CVN's worth are "the size of the reserve less its costs", it is not if a well flows 100 or 3000bopd.

This is not quite the whole picture. The reserves are meaningless if they can't be pumped and sold. They could have 500mb in the ground and it's essentially worthless till they get it out. Cash flow is the lifeblood of any business. I do, however, agree that CVN is a long-term hold.

 

[Rob 17]

Im looking forward to L44H - D1. It is approx 700m south of L44H.

L44H is the one that flowed 1265 bbld. Hopefully by than POE & CVN would have bought a few trucks....

DYOR

 

[cgf]

This is not quite the whole picture. The reserves are meaningless if they can't be pumped and sold. They could have 500mb in the ground and it's essentially worthless till they get it out. Cash flow is the lifeblood of any business. I do, however, agree that CVN is a long-term hold.

What I of course meant was "recoverable reserves" less all costs (inc company running costs) or otherwise known as "Profit".
You can turnover 10 billion but if your costs are 9.99 billion its pretty well useless for a shareholder to see value.

 

[doctorj]

What I of course meant was "recoverable reserves" less all costs (inc company running costs) or otherwise known as "Profit".
You can turnover 10 billion but if your costs are 9.99 billion its pretty well useless for a shareholder to see value.

I'm not sure I quite agree here. If you had two companies equal in every way (recoverable reserves, fixed and variable costs etc etc) except one pumped at 10,000bopd and the other pumped at 100bopd. Which would be more valuable?

 

[1234]

I think there is a fairly short sighted view of CVN from traders atmo.. Then again, the whole stockmarket has a shortsighted view atmo the way things are...

I label myself an investor - not a trader. I then do not worry about these little bumps and jumps. Solid reserves and good production ( read cashflow ) are what counts for me. Building that core foundation that will support the company through 'dusters' or market volatility.

imo once reserves are announced in Dec ( as per Thai gov't regulations ) we will see some more long term views placed on this stock. Next years cash flow statement should be very healthy also.

sp has now dropped to support levels shown before last announcement, imo due to the US, not CVN. Unfortunately, I might have to buy more tomorrow with the dow being down tonight... I really don't mind at all!! Smart buying, not impulse ( sheepish ) buying

My main purchase was ~16c and I have topped up along the way whenever I could see value. Right now, based on production Vs sp I see great value.

Two more good results combined with more storage - should be off again. Until then I expect sideways trading @ 50c.

Ask me two months ago to take sideways trading at 50c I would have jumped at it!!

I wonder what these two new wells will produce - due the day before the AGM??

 

[cgf]

I'm not sure I quite agree here. If you had two companies equal in every way (recoverable reserves, fixed and variable costs etc etc) except one pumped at 10,000bopd and the other pumped at 100bopd. Which would be more valuable?

I never said it wasn't if all things where equal.
Of course if everything is equal i.e. costs of operation then more speed (or bopd) is going to be better. But thats never the reality because so many variables come into play such as drilling difficult ground, transport costs, operational costs. As I mentioned the fundamentals of a company like CVN is "profit" to be made from the "recoverable reserve". Recoverable reserve of course encompasses everything from the drilling, transport to final sale.

In the ultimate scheme of things the bopd rating per hole means nothing if the well is dry in a years time. Sure it makes for "flashy" announcements that cause speculators to buy stock but in truth if the recoverable reserve is small then thats the death nail for valuation of the company.

 

[Rob 17]

Looks like the share price has stabilised. The nervous nelly's have sold out and learnt a hard lesson . Looking forward to some news at the AGM as to the direction they see the company going in the near future.

I still cant belive it was sold off so heavily after a positive result as it was rising steadily on good results.

dyor

 

[imaginator]

I read that they said the market condition now resembles the 1987 stock tumble. (time to sell?) I am going to sell most of my other stocks which are still in the money.

However I've been topping up CVN, making my average 0.54.

I am eager for the new reports to come out again.

Maybe this is a time to buy again?

 

[Riles]

Nice support coming in at the end of the week here.
Seems not everyone thinks the markets are going to self implode overnight and next week will be business as usual - which just happens to bring with it an AGM and results of 2 more wells...

Bought more at 46.5 and 47.5 for the rebound.

 

[kransky]

from POE this evening...

L44H-D1 (60% WI & Operator)

Deviated well L44H-D1 has reached a total measured depth ("MD") of 1,217 meters, 866 meters true vertical depth ("TVD"), at a subsurface location approximately 700 meters north (this was incorrectly stated as south in the November 19 press release) of the oil producing L44-H well location. The top of the main volcanic was penetrated at a depth of approximately 1,016 meters MD (755 meters TVD) with over 200 meters measured thickness (111 meters true thickness) of the target volcanic reservoir penetrated. The drill bit was still within the main target volcanic reservoir when the decision was made to terminate the well. L44H-D1 is the structurally highest volcanic reservoir penetration within the Na Sanun East field encountered to date. Total drilling fluid losses of 9,385 bbls at rates of 100 to 260 bbls/hr were observed while drilling through the main target. Wiper trips at 1,155 meters MD and 1,217 meters MD resulted in oil to surface.

Testing is anticipated to be completed within the next 2 weeks.

NS6-D1A Sidetrack (60% WI & Operator)

The Aztec #7 rig has been on standby, awaiting pump repairs, since setting casing just above target on deviated well NS6-D1A. These repairs are expected to be completed shortly with total depth anticipated to be reached within 5 days of the continuation of drilling.

WICHIAN BURI-1 "DEEP" (60% WI & Operator)

The Aztec #14 rig is expected to rig up and drill ahead within 8 days on the moderate risk, high impact WB-1 (Deep) exploration well, located 25 meters west of the original WB-1 well. WB-1 (Deep) will be targeting an approximately 220 meter thick volcanic at a depth of 1,503 meters. This interval was penetrated by the original WB-1 well in 1988, resulting in severe lost circulation with approximately 20,000 bbls of drilling fluid losses that were associated with very high mud gas readings while drilling through the potential volcanic reservoir. Subsequent sidewall cores taken over this interval indicated oil staining. This deeper volcanic zone was never properly evaluated by the earlier operator as the shallower, conventional F sandstone reservoir tested oil at 500 bopd.

Drilling is anticipated to take approximately 21-28 days to completion.

 

[JTLP]

So is this a good or bad thing?

I'm new to all this so please fill me in.

From what you've pasted and bolded it sounds bad

 

[Riles]

Sounds like they have just found a potentially huge reservoir - and it contains oil
Oooh I'm getting excited....calm down now, there's 2 weeks to wait for this one now!

And now they're into Wichian Buri already!
I'm happy to see them targeting the outer exploration areas now whilst there are still transport issues. Seems like a good time to start sending down a few probes to see what's out there.

Exciting times ahead!