CVN - Carnarvon Energy

[jonnie]

CVN

CVN continues it's slide. Expect support around the .38 mark.Still at the moment for holders.

 

[jonnie]

CVN

As expected the fall continues today.and: to continue for a while yet. My opinion only.

 

[Sean K]

Re: CVN

As expected the fall continues today.and: to continue for a while yet. My opinion only.

How did you come to that opinion jonnie?

And, please don't start new threads when you know one already exists.

Cheers

 

[jonnie]

Just looking at the chart kennas. Relax no need to get upset. I did say it was my opinion only.New thred, old thread still the same point.

 

[Sean K]

Just looking at the chart kennas. Relax no need to get upset. I did say it was my opinion only.New thred, old thread still the same point.

jonnie, Just because you say 'in my opinion' does not mean you can just sprout off anything without some analysis or justification. Adding a few qualifying remarks adds much more value and contributes to the knowledge of everyone else here.

So, what about the chart? Why .38?

In regard to starting threads, if you go and start a new one everytime you want to say something there would be a million threads on the site. Then, if anyone else wants to look up something on CVN, which thread does he go to? Please do a search prior to starting any new threads and if you have a comment on a particular stock, put it in that stock thread. If you don't do it, the Mods end up doing it. Thanks for your assistance.

Now, what about the chart?

Looks like it's broken key support at .43 to me and finished disastrously with a big red candle.

 

[JTLP]

Jonnie + Kennas...

Just a note...the selling pressure is without a doubt JP Morgan...they acquired an odd 32 million shares and become substantial holders...only to cease their existence as sig. holders a few weeks ago. Buyer's will be avoiding this for a while as JP can just push the shares out without having to worry about ann's to the market.

It really does suck for CVN...by years end they will be producing 6000 BOPD...just stuck in a hard place. I unfortunately have an emotional attachment to this stock (dangerous I know) but i jsut see them ticking all the right boxes and pulling all the right moves. I never say it but if I had cash on hand (leaving the country soon so no dice) I would pick some up.

So I guess at least the attachment is for success reasons...not pie in the sky predictions.

Let's hope we can get a bit of a turnaround because this is looking ugly.

JTLP

 

[grace]

JTLP, I must admit to being a bit attached to it too.

Here is Bell Potters take on CVN.

Initiating Coverage - Carnarvon Petroleum Target: A$0.87

Current net oil production of 4,000bopd to rise 50% in the next 6 months.

Carnarvon Petroleum is a significant oil producer onshore Thailand, with excellent prospects to expand production from a growing reserve base. The operating environment is good, with low capital and operating costs, and a reasonable fiscal regime. Even with strong re-investment in further drilling, the company generates excess cash flow, particularly at current high oil prices around US$125 a barrel.

We value the company at $0.87 a share and forecast the company’s PE ratios at 6 - 4x for the next three years. Bell Potter initiates research coverage on CVN with a Buy recommendation.

CVN is generating very strong cash flow thanks to the low capex and opex environment onshore Thailand. At a cost of about US$1m per well, payback is less than a month. Asset quality improved dramatically 18 months ago, with the discovery of oil in fractured volcanic reservoirs, generating flow rates up to 4,000 barrels of oil per day (bopd) compared to 100-200 bopd from the sandstone reservoirs exploited in prior years.

Cash flow is re-invested into drilling more wells, which is expected to significantly lift production in the next six months, to 15,000bopd gross (6,000bopd net to CVN). The identified contingent resource potential is in excess of 200m barrels gross, or 90m barrels net, compared to current 2P reserves of only 11.4m barrels net to CVN. The joint venture has two rigs under contract and is negotiating for a third rig. The continuous drilling program should see 20-30 wells drilled per annum, with a number of low risk prospects within the large license areas.

CVN management is experienced, and focused on keeping overheads to a minimum. The operator of the joint venture is Pan Orient Energy, a Canadian company with good alignment of interests, as the Thai oil fields are both companies’ major asset.

Our base valuation of CVN is dominated by four producing oil fields north of Bangkok, comprising $0.62 of value. This DCF valuation is based on oil prices staying firm over the next three years and then declining to US$96 by 2012. Due to the fiscal regime in Thailand, the valuation is not particularly leveraged to oil prices. A more relevant sensitivity is to increased reserves, whereby a 10m barrel increase in net reserves would be worth about $0.20 a share. CVN holds 40% of licenses L44/43 and L33/43, covering the entire Phetchabun basin, with four oil fields and one gas discovery made to date in L44/43. Exploration drilling has just commenced in L33/43, with a three well program underway.

We initiate research coverage on CVN with a Buy recommendation. We are attracted to the established production base in a low cost environment, where surplus cash flow provides strong capability to expand production, and excellent growth potential in a focused area. Good, sensible management adds to the appeal of CVN.

 

[JTLP]

Thanks Grace...at least i'm not going crazy. Have you been a long time holder?

CVN looks to have had a little buying today...a sigh of relief I guess.

But it is probably to do with the upcoming drill results from 2 wells (most likely this week). I would hate to see what happens if they miss these ones (i think from memory 1 is an appraisal well too...!)

Bloody insto support was what I was crying out for...we get some...then they sell LOL!

Their JV (POE) must be looking at a T/O at these prices...hell even an insto must see value with these coverages and could be buying up!

Time will tell but my love for CVN will never falter LOL

 

[skunkmonkey]

I used to think my love for AED would never falter
Anyway - I bought more CVN today at 42 cents. Fingers crossed for a better end to the year.

 

[Rob 17]

CVN's share price is almost at the level it was when it was producing at very low levels.

If anything things have improved ten fold.

This doesnt make sence to me.

DYOR

 

[MS+Tradesim]

CVN's share price is almost at the level it was when it was producing at very low levels.

If anything things have improved ten fold.

This doesnt make sence to me.

DYOR

In a bull market we have irrational exuberance upward. In a bear market we have irrational exuberance downwards. Apart from a big holder exiting (which may be the case) I cannot see any rational reason for this fall - production is up, cash at bank keeps rising, no debt, prospects great. I guess that's what makes this downtrend irrational.

 

[skunkmonkey]

Whoops - I bought too soon... $0.385 at the close today. An opportunity to pick up a few more! What an unpleasant day for commodities all round.

 

[Garpal Gumnut]

CVN's share price is almost at the level it was when it was producing at very low levels.

If anything things have improved ten fold.

This doesnt make sence to me.

DYOR

sence ? a typo ??

CVN looks crook.

I was out at .65 , if it pokes anywhere below its next support/resistance at .35 I would be fearful it would tank.

gg

 

[JTLP]

GG i'm with you...chart looking very unhealthy.

I remain adamant that JP Morgan are flogging their stock off though...just too much sustained pressure. Oil may be down but I believe there is more to the story then that.

Do you still hold any CVN? You once called it your WPL in the making :

Still adamant about that view?

God we need some awesome flow rates...if not i'm with your target GG...and then it will be good night

 

[Rob 17]

sence ? a typo ??

CVN looks crook.

I was out at .65 , if it pokes anywhere below its next support/resistance at .35 I would be fearful it would tank.

gg

The last time CVN was .65 was around the 20th of june 2008. On the 2nd of July 2008 u posted u "were still bullish on it". ???????

I never take comments for more than they are worth but its just interesting.

DYOR

 

[jonojpsg]

Honestly, I can't see how you could follow the chart to the point where you say it would tank

If the company is producing 4000bopd and looking to add another 2000bopd by years end, then even if POO hits $80 say, the company would still be making what 6000x$20x365 = $44 million profit (assuming a cost of production of $60pb which would be high I would think?).

That gives them a PE of about 6 at current MC. Can't see that even with bear market pushing SP lower that the fundamentals will allow SP to go below 35, and if oil stabilises above $100 then that doubles their margin at least and makes them highly attractive IMO

 

[Aargh!]

Big turnover today. I hope the selling pressure has now gone and we can get back to where we were a few weeks ago. I hesitantly bought a sizeable chunk yesterday.

 

[Aargh!]

Ok so on further inspection it appears nearly 13 of the 17 million traded was a single cross trade...

12:02:24 PM 0.355 12,921,839 4,587,252.85 XTOS

At $0.355 its well below the $0.38 trades that surrounded it... Anyone care to fill me in?

 

[Real1ty]

Honestly, I can't see how you could follow the chart to the point where you say it would tank

If the company is producing 4000bopd and looking to add another 2000bopd by years end, then even if POO hits $80 say, the company would still be making what 6000x$20x365 = $44 million profit (assuming a cost of production of $60pb which would be high I would think?).

That gives them a PE of about 6 at current MC. Can't see that even with bear market pushing SP lower that the fundamentals will allow SP to go below 35, and if oil stabilises above $100 then that doubles their margin at least and makes them highly attractive IMO

You have to remember that CVN doesn't get spot price for it's Oil due to the quality and sells it at a discount.

I don't believe the current sell off is based on fundamentals at all but of course i have no facts to back this up with.

 

[jonnie]

Apparently CVN got a buy recco from a broker this am with a target of 87 cents. Cant remember which broker.