CVN - Carnarvon Energy

[Out Too Soon]

Anyone on these forums topping up CVN at these levels?

My train of thought is that with oil having taking a massive hit, stocks having taken a massive hit, but CVN continuing to grow and reach targets (aiming for 6000bopd by end of 2008), for the long term investor wading into the market now, the returns could be fruitful...

Thoughts?

Yes I've been topping up, but I'm still in the bottom 20 share holders not the top 20. Doesn't help that I've been jumping in & out with the volatility I suppose.

 

[Rob 17]

Pan Orient, Thailand: NSE-A4 on Production at 830 bopd

NSE-A4 appraisal well (60-per-cent working interest and operator)

The NSE-A4 appraisal well was completed and put on production at a rate of approximately 830 bopd (0.05% water cut) after a number of difficulties related to the severity of the fracturing of the main volcanic reservoir which resulted in the loss of over 64,000 barrels of drilling fluid while attempting to complete the well on three side tracks. In the final completion, the production liner was unable to be set through the reservoir section after encountering an obstruction above the reservoir interval. A drill bit was attached to the end of the production tubing and drilled through to the top of the main reservoir. This production rate is noteworthy given that oil is being produced through production tubing with a drill bit still attached to the end of the tubing.

NSE-D1 appraisal well (60-per-cent working interest and operator)

After the installation of a larger diameter tubing pump, NSE-D1 is currently producing at an increased stabilised rate of approximately 1,063 bopd with an average water cut of approximately 0.28%. The NSE-D1 appraisal well, located approximately 455 meters north of the NSE-B drill pad, was originally announced on November 7, 2008, as producing 710 bopd prior to the installation of the larger pump.

NSE-D2 appraisal well (60-per-cent working interest and operator)

The NSE-D2 appraisal well encountered the top of the main volcanic reservoir at a depth of depth of 754 meters true vertical depth (TVD) approximately 330 meters north of the NSE-D1 location. Approximately 34 meters of highly fractured volcanic reservoir was drilled, with mud losses of approximately 1,200 barrels. The well has been put on test, flowing mainly gas with some oil, indicating close proximity to an interpreted oil water contact. Rig 14 is currently moving back onto this location to drill a side track approximately 10 to 15 meters structurally lower into the oil leg, at which time testing is expected to resume.

NSE-D3 appraisal well (60-per-cent working interest and operator)

The NSE-D3 appraisal well was drilled into the main volcanic reservoir at a depth of approximately 823 meters TVD and a sub surface location approximately 315 meters north west of the NSE-D1 location. A highly fractured volcanic reservoir section was encountered that resulted in over 6,000 barrels of drilling fluid losses. An 8 meter highly fractured oil stained core was cut through the main reservoir objective. A slotted liner is currently being set through the volcanic reservoir section and testing is anticipated to commence shortly.

NSE-C1 appraisal well (60-per-cent working interest and operator)

The NSE-C1 appraisal well encountered the top of the main volcanic objective at a depth of 775 meters TVD at location 1,248 meters east of the NSE-B drill pad in area targeting possible reserves as defined in the year end 2007 NI 51-101 compliant reserves report. Lost circulation was encountered within the main volcanic target with drilling fluid losses of approximately 1,900 barrels. Testing to determine the hydrocarbon potential of the volcanic reservoir at this location is anticipated to commence shortly.

 

[magnale]

As I'm not a geologist, I would appreciate your views on the recent Company information! Is it reasonably good news? Thanks

 

[MS+Tradesim]

The news is very good. Unfortunately, CVN seems to be stuck between the twin falls of oil price and overall market sentiment. Considering their very low production costs (around $6-7/bbl) even at current oil price levels they are still raking in money. Yet their bottom line has been discounted heavily based on what...? Overall fear? Extended recession with reduced demand for oil? Yet Thailand is a large net importer of oil so CVN will still have no problem selling their production. With their track record and sound bottom line one would expect a far healthier share price. I think it needs a catalyst but I don't know what that's going to be.

 

[magnale]

Thank you! I really appreciate your comments. I guess we just have to think of it as a long term buy

 

[Miner]

CVN published this story which with my limited knowledge on oil and gas, I thought is a great story.

Market however did not react at all .

Could the oil experts please comment if the story could be told as good for CVN shareholders or it was the residual effect of RED I had last night ?

Disclaimer : I now hold a very small parcel of CVN

 

[MS+Tradesim]

Could the oil experts please comment if the story could be told as good for CVN shareholders or it was the residual effect of RED I had last night ?

I don't currently hold but have been in and out many times. I love the CVN story but there are no shares I'm prepared to hold in this environment except for one.

I'm not an oil expert but I've followed many different oilers for years so I have a reasonable idea. CVN's story is just one good thing after another since they started hitting the fractured volcanics in Thailand. Everything is in place for it to be a sp success. They are already a success as a company though. No debt. Growing production, growing reserves. Cash at bank just keeps building. Extremely low cost producer. Plenty of exploration upside. I can only reiterate what I said previously - it's been hit by the fall in oil plus overall share market fear. IMO, it will take off again when the overall market recovers but for it to take off sooner there will need to be a catalyst. Perhaps a new major discovery or large increase to reserves when they're calculated in December (released early next year) or a new major shareholder accumulating. I think the only significant fundamental downside risk is the price of oil, but it is buffered strongly against that due to very low cost production. It really is in an enviable position.

 

[rub92me]

CVN published this story which with my limited knowledge on oil and gas, I thought is a great story.

Market however did not react at all .

Could the oil experts please comment if the story could be told as good for CVN shareholders or it was the residual effect of RED I had last night ?

Disclaimer : I now hold a very small parcel of CVN

Could be that the trouble in Thailand has increased the perception of sovereign risk perhaps? People are very skittish in the current market.

 

[Miner]

I don't currently hold but have been in and out many times. I love the CVN story but there are no shares I'm prepared to hold in this environment except for one.

I'm not an oil expert but I've followed many different oilers for years so I have a reasonable idea. CVN's story is just one good thing after another since they started hitting the fractured volcanics in Thailand. Everything is in place for it to be a sp success. They are already a success as a company though. No debt. Growing production, growing reserves. Cash at bank just keeps building. Extremely low cost producer. Plenty of exploration upside. I can only reiterate what I said previously - it's been hit by the fall in oil plus overall share market fear. IMO, it will take off again when the overall market recovers but for it to take off sooner there will need to be a catalyst. Perhaps a new major discovery or large increase to reserves when they're calculated in December (released early next year) or a new major shareholder accumulating. I think the only significant fundamental downside risk is the price of oil, but it is buffered strongly against that due to very low cost production. It really is in an enviable position.

Could be that the trouble in Thailand has increased the perception of sovereign risk perhaps? People are very skittish in the current market.

Thanks MS+Tradesim and rub92me for prompt responses.

That really makes some sense.

How can I honestly extend the message to be within ASF rule when short is sweet and beautiful to express my thanks

 

[JTLP]

Mwah!

BEAUTIFUL!

CVN are so cheeky. I am guessing the JV could easily make up the 15,000 total to make the end of year target...just proving up more reserves...fantastic news.

I thought the AGM was a really good read. CVN has a long term plan that even has the words *dividend* thrown in the mix...good thing for long term holders i guess.

There basic plan is to expand, buy out distressed assets and remain as a partner and not operator to oil ventures. They are building a quality bank account at the moment ($41m from last reports but that was awhile ago) as well as on the look out for new S.E Asia opportunities. Hoepfully getting some major institutional holders on board to shore up the shares on issue (might be tough now though)

The sovereign risk does pose a bit of a problem...i guess that's why they want to expand.

I just can't sell this sweetheart...I know you shouldn't fall in love but sheesh...they've done all the right things

 

[seasprite]

Hartleys Broker report increases valuation by $0.10 to $1.10 refer

http://www.carnarvonpetroleum.com 01 DEC 08.

 

[Out Too Soon]

Hartleys Broker report increases valuation by $0.10 to $1.10 refer

http://www.carnarvonpetroleum.com 01 DEC 08.

Patience is a virtue, especially when holding a stock like this in a market like this.
If our dollar wasn't so wretched at the moment Thailand would be a great place for a holiday, I'm serious, I know Thailand well & as long as you avoid Bangkok & airport you'll be there in the holiday season & service will be even better & cheaper than usual because so many tourists are scared off.

 

[Miner]

Patience is a virtue, especially when holding a stock like this in a market like this.
If our dollar wasn't so wretched at the moment Thailand would be a great place for a holiday, I'm serious, I know Thailand well & as long as you avoid Bangkok & airport you'll be there in the holiday season & service will be even better & cheaper than usual because so many tourists are scared off.

Great comment but where is CVN here ?

Unless you are inferring to make a huge profit from CVN and then to spend them in THailand for a full massage

 

[doogie_goes_off]

It would appear that everyone s still in love with CVN. Even after 2 days of downward pressure on oil prices to well below $50, there are still no signs of the big drops that have hit other junoir oilers - elk, oel, inp etc. I'm guessing time is up for CVN to drift down to 20c ish OR is it going to outperform and be the miracle stock?

 

[seasprite]

It would appear that everyone s still in love with CVN. Even after 2 days of downward pressure on oil prices to well below $50, there are still no signs of the big drops that have hit other junoir oilers - elk, oel, inp etc. I'm guessing time is up for CVN to drift down to 20c ish OR is it going to outperform and be the miracle stock?

Looks like the "Weekly Informer" Euroz Securities is in love with CVN as well. Refer http://www.carnarvonpetroleum.com/ 4 Dec 08 announcement.

 

[magnale]

Yes, I 'm sure you would agree that this company will eventually do so well . When the market becomes stable, I'll increase my holdings

 

[1234]

Looks like the "Weekly Informer" Euroz Securities is in love with CVN as well. Refer http://www.carnarvonpetroleum.com/ 4 Dec 08 announcement.

So how does one broking house value a stock at 0.55c upside and another the same stock at $1.10?


using up characters....................

 

[J.B.Nimble]

So how does one broking house value a stock at 0.55c upside and another the same stock at $1.10?


using up characters....................

Many differences in their assumptions - price of oil for one ($65/barrel vs $79.9), exchange rate for another (0.7 vs 0.73), probably production rate, etc etc. Hartley's put value at 1.1 but (12month) price target at 0.83. All there in the fine print - best to build your own model rather than be caught out by someone else's assumptions...

 

[Miner]

So how does one broking house value a stock at 0.55c upside and another the same stock at $1.10?


using up characters....................

I think you have answered it 1234. The brokers make various ideological and hear say assumptions. THat is why for the same scrip (look into FN Arena or Compare Shares) five brokers would say BUY, three say HOLD and two say SELL.

There is no science in their assumptions. Many are also pumped by the company themselves probably asking them to write good stories in exchange of giving them some hot tips to build up their (and favoured clients) portfolio.

Many a times it is the brokers' false pride stop them to change their recommendation from BUY or HOLD whatever they said. THe result comes they reduce the price target to be safe , do not change their valuation and retain original recommendation.

Many differences in their assumptions - price of oil for one ($65/barrel vs $79.9), exchange rate for another (0.7 vs 0.73), probably production rate, etc etc. Hartley's put value at 1.1 but (12month) price target at 0.83. All there in the fine print - best to build your own model rather than be caught out by someone else's assumptions...

Dear JB NImble

IMO what you said 100% correct.

But with all fairness how many investors even they have some savings or investment have the time or capability to develop their own models. In that case no newsletter would have survived.

Normal Joe or Mary will tend to get sucked into believing the stories or models by different analysts and burn themselves as well profit themselves.

Real sustainable winners are those as you indicated, make their own models.

So bottom line CVN price will still be driven by confused stories from brokers but in all honesty with its good strength even some of the assumptions are wrong.

I have been following it for about a year now and though not developed my own model but waiting to jump into it when market stabilises.

 

[seasprite]

So how does one broking house value a stock at 0.55c upside and another the same stock at $1.10?


using up characters....................

I try to stay away from ASF during the weekend however there is not too much to do today except drink cold beer in the sun so here I am doing both.

In a previous post on a ROC thread I have said that I personally tend to take the 2/3rds approach towards Hartleys broker reports which in this case will give a value of $0.73 from $1.10 . Euroz securities gives a value of $0.55 with upside. No matter how you look at it these valuations , they are more than twice the current share price. Which should in theory give you some comfort .

I am not sure if the difference in valuation overshadowed your thoughts but what impressed me was the fact that CVN was the 1 and only stock recommended in the resource sector while the rest were industrial stocks.

"Weekly Informer" readers will seriously be looking at CVN, which in the past I imagine they would have probably overlooked , and that is sure to add meaning if the arena has been opened up to a new viewer (potential investor).