CVN 17.5% 16.5¢ carnarvon energy limited

CVN - Must Read

  1. :-(
    33 Posts.
    This off Stockhouse...makes for very interesting reading...

    QUOTE ----

    All right Rubble, u asked for some figures .......and why not ...... I have picked up my fill and hanginging on TIGHTLY from here as the facts emerge ....... anyway run outa money to buy more. I havent seen a cert like this since i did the numbers on DRE after Thunderbox was announced ...... it had come up from 10c to about 18 - 20 and I couldnt get set fast enough ...... well they hit 2 bucks this year and sitting at 1.50 now! But of course i sold too soon !!!! So dont want to do this with CVN cos I can see the same sort of returns staring me in the face.
    This is what I THINK I have found out from research and guestimate .....and have read QC's spiel on it too so can compare the numbers.

    FACTS as reported by CVN

    *** current production odf around 150 bopd COVERS oilfields FIXED COSTS, so any NEW production will nly cost the OPERATING COST portion plus royalties plus any other bits and pieces;

    *** looking at what they just announced , reckon their royalties would only be a couple of bucks / bbl and opertaing costs stuff all ........ lets GENEROUSLY call it USD 5 /bbl ALL UP

    *** now their crude aint West Texas Sweet so lets discount selling price by another couple of bucks to allow for that

    *** so ALL UP NET BACK per NEW BARREL of oil produced from BASE of 150 bopd which is stated as covering FIXED COSTS is something like

    USD 29 less 5 less 2 = USD 22/bbl divide by 0.55 exchange = 40 OZZIE BUCKS a barrel NET BACK !!!!!!!!!!!

    Thats a REAL FIGURE for mine and way over QC's 25 which he bases his assessment on ...... and anyway, what would the old codger know !!!

    I have a HIGH DEGREE OF CONFIDENCE that total operating costs inclusive of royalties et al would still provide a net back based current oil prices of AUD 40 / bbl for NEW OIL production increase!!!!

    Now CVN themselves are being very conservative in their targets cos NO WAY would they be upgrading 5 wells to produce ANYTHING LESS than 300 bopd EACH ......... and they DID report 350 bopd initial flow from the original wells before the soil clogged up their lessor diameter pipes .....and now they are fraccing and using wider diameter ans slanting Asian style ........ i wouldnt be surprised if we saw 500 bopd from each ....... but lets take a MID ROAD here ...... so yes, I'll agree withthe old codger QC and accept a LIKELY 1500 bopd new production.

    +++++++ that means GROSS PROFIT would in such a case end up being:

    1500 bopd x 40% (CVN share) x AUD 40/bbl netback x 300 working d/y =
    AUD 7.2 million pa for CVN or 4.2 cps based NEW EXPANDED share cap ............and rising to DOUBLE THAT on increasing production to a meagre 3000 bopd over next 12 months from INTERNAL CASHFLOW !!!!!

    And I believe I noted some mention of tax breaks cos of previous expenditur on the field making first 2-3 years gross profit = NET AFTER (NIL TAX) PROFIT

    Now I certainly can live with that 4.2 cps net earnings beginning in 2 months and rising to 8.4 cps net earnings 12 months later WITHOUT FURTHER IOUTSIDE FUNDING NECESSARY !!!!!! SHOVE THAT DOWN YOUR THROAT GREAT PRETENDER ARQ !!!!!!

    And I say MEAGRE 3000 bopd production ...... cos recoverable reserves found to date (which no doubt will be increased by multiples once they start looking again after production is established) would say support a 10 year production rate at around 20,000 + bopd ....... which is what SHELL is churning out next door from a similar resource!

    Now may as well give it all to yas in one hit ...... lets look at SHELL next door and why they are so palsy with CVN letting them use their boys and equipment ???? That thought crossed anyones minds???? NAHHHH ......not even Rubbles I betcha!

    Take a trip down memeory lane and remember in 1999 what WPL paid for OFFSHORE legendre field minority reserves to SHELL to get them out of the way when oil price was around 20 bucks not the current 30 bucks ......... they paid USD 6.50 / bbl in situ for the 80 mmbo or so .....and correct me please cos this is from memory cos I was looking at that dog SUR to develop nearby SAGE at the time ......oh yes and CVN also had a share which they later disposed to preserve funds for the real McCoy in Thailand we now know .......and this was for an OFFSHORE field for Christ sakes!

    So lets apply this same figure for CVN's shallow, cheap to produce ONSHORE reserves ie

    30 mmbo recoverable (current) x 40%(CVN share) x USD 6.50 / bbl divided by ER 0.55 = AUD 142 million bucks "inground VALUE" by MOST CONSERVATIVE ESTIMATES ......... thats around 85 cps share price for CVN's current expanded capital...... HDR SHOVE THAT DOWN YOUR THROAT!!!!!

    Now before anyone would pay anything for inground reserves, u gotta work out why they may want to in the first place. OK, by my reckoning, SHELL next door.....who we now produces around 25,000 bopd of the same gunk and PIPES it down to the hungry local refinery about 200 kn away we know this gunk can FLOW OK !!! getting very palsy with its minnow neighbours and may want to OPTIMISE production / pipe use / market share etc etc etc ........ lots of reasons why to take out an emerging competitor !!! And they would need to do it sooner than later whilst the surface has only been scratched !!!!

    So recap guys ....and i thnk you for having the patience to listen to my ramblings .......

    ++++ from a PER point of view 12 months out (which is what analysts use) ......projected net earnings 8.4 cps x 6 (I always use PER 6 when assessing emerging projects ..... not like 300 those IDIOT yanks use and suck us into tha yahoos at 100 bucks a share +...... well sucks you guys in, not me .....I was out of the techs in MARCH 2000 buying into emerging gold and oilcos! ........makes 50 cps .... with HEAPS OF UPSIDE as production increase to a more realistic and CONSERVATIVE and self-funded 10,000 bopd for this size field.

    And from a INGROUND CONSERVATIVE VALUE based USD 20 / bbl oil price and what WPL paid for OFFSHORE reserves of a similar field size ........ 84 cps !!!!!

    SSOOOOOOOOO ...... my price target for Y 2003 for CVN is somewhere in 50 - 84 cps range based on my calculated and considered conservative guestimate ....... on which I have placed recent bet with my mate on ...... and he gave me ODDS the sucker!

    And why am I telling you guys now !!!! ......... Cos I have done my own homework and am satisfied with the risk / reward based above guestimates and assumptions to be buying it up at one -tenth its considered (my) value one year out ........ just like I did my homework with DRE and posted my findings in similar fashion and bagged a 10-bagger for me and my mates!!!!! Oh ..... and cos I am NOW SET at current prices ......... thank u God!

    So come on CVN ..... all you got to do is FLOW that Texas Tea and u dont need too much of it at once. Show me that the frac of the SMALL BORE holes can result in say 200 bopd per well and i'll be diving in for my second tier risk/reward buying at 7-9c! Cos the rest will follow NATURALLY.

    Hope I have given u guys something to work on in my attempt to create LEGENDARY status in here ..... I only spend such effort on potential ten-baggers over 12 months ....... and I want ALL you survivors and ex cannon-fodder to join me in my planned celebrations this time next year. And there aint too many depression busters left like DRE and this one ...... and DRE is too expensive for mine now DID its duty. Now for CVN !!!!!!

    I think I will keep quiet now til you do your own sums and the frac results end next week ..... then I can come back and point out the emerging possibilities for next phase of impending glory. Nope, my name aint Quentin ...... Olympian in vision and attitude ....... and i mean what I say ...... front line always to take the bullets fired! Cos glory and profit are there for the taking. Oh HERMES, GOD of gamblers and calculated risk takers ..... hear these ramblings and guide the drill bits to their target of BLACK GOLD !!!!!!

    Oh forgot to remind you .... this is a speculative game for real Olympians! And there aint too many left in this MEGABEAR market which is only JUST beginning to dig ..... well after current suckers rally ends anyway!

    Peace on earth and good will to all men and good loving to all women!

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