CVN - Canarvon Petroleum Ltd Issue Date 29/06/2009
Recommendation Spec Buy
First Recommended 29-Jun-2009
Current Price 0.855
Target Price 1.8
Stop Loss 0.39
Earnings
Market Capital $585m
Price Depth Strong
A rebound in oil prices and increasing production out of Thailand have driven a strong re rating in Carnarvon over recent months. Current 2P oil reserves of 16.7m barrels and production levels are factored into the share price, however management are focused on growth. Canarvon is aiming to increase production by up to 45% to between 4800-6000 barrels of oil per day (bpod) during the coming quarter with an active exploration schedule is also planned across its various Thailand projects for the remainder of 2009. Although the stock is lacking value characteristics based on current production, we suspect a further re rating is possible should L33/43 also emerge as a production center. A drilling program of 10-15 wells over the next quarter is targeting to lift its share of field production to 4800-6000bopd. Depending on the oil price, this could yield annual revenues nearing $150m. With the company capitalised at $585m these goals already appear to be factored into the share price. One or two well exploration wells are due to be drilled in 2009, and we suspect that success could drive a further re rating in anticipation of production beyond current targets.
This report was produced by PPS Investments Pty Ltd (ACN 097 446 369), which holds an Australian Financial Services Licence (Licence no. 246670). PPS Investments Pty Ltd believes that the information and material contained in this report has been obtained from reliable sources. However, no representation is made about the accuracy or completeness of this information and it should not be relied upon as a substitute for the exercise of independent judgment. Except to the extent required by law, PPS Investments Pty Ltd does not accept any liability for any loss arising from any use of the material contained in this report.
Man, some bold predictions being made on this one, is it just me or does it not seem a bit overcooked to anyone else?!
If you look at a 2 year chart its sufferred some pretty mean pullbacks, .75 to .35, .80 to .25. And that was in a much friendlier economic enviroment with oil at twice the price.
Sure theres been more discoverys but still seems a bit of a stretch to say its gonna just keep on skyrocketing up.
Thats just my opinion tho & i'm often wrong so maybe just keep on buying it up!
Looks like i can stand by my post on this one so far.
I notice its gone all quiet on here now its started going down, even the posts have followed the same pattern as the last rise & pullback. On the way up theres 5-10 posts a day saying "next stop $1-$1.30" etc... pause at the top & they change to "due for a slight pullback before carrying on up on its merry way" then it keeps going down & it all goes quiet.
My prediction is that it still could get hammered down a bit yet, like i said in my last post tho thats just my opinion & i often get it wrong & it may turn out that now is the perfect time to buy before it shoots up!
The recent weakness is due to declining production and revenues in recent report.
We need some good news and / or an improvement in the figures.
Wave 2's or B's normally retrace between 50-61.8% of the prior advance. In strong trends the retrace can be shallower.
If you look at the time taken to complete your wave 1, wave 2 is quite short in comparison, symmetry always adds confidence to a count.
Here's how I think it could play out (had to post a weekly chart as with a daily I couldn't look further enough to the right)
Looking at the chart if we get that 3 wave decline looks like we might have a large cup and handle pattern. Very bullish.
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