CPC carpenter pacific resources limited

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  1. 251 Posts.
    Carpenter Pacific (CPC)

    Recommendation: Buy/Outperform

    Price/ Target: 0.33/0.60

    EVENT: Harris #1 flows 1.1mmcf of gas/day equivalent project now at 7mmcf/day

    Carpenter Pacific has recompleated a new reservoir, Travis Peak in Harris #1 which flowed 1.1mmcf of gas/day equivalent at 850lbs trough 17/64 inch choke.

    The result follows up the Childers#1 which flowed 1.4mmcf and 10 bbls of oil with a commingled flow rate is expected to be in excess of 2mmcf and 30 bbls of oil per day and Huntington #3 which flowed 240 bbls oil and 450mmcf of gas/day equivalent 1.9mmcf /d.

    The company is recompleting several well in Utah at Clear Creek and results are anticipated by month end. More Wells are planned in East Texas to follow up reservoirs perforated in Childers#1 and Huntington #3


    The well builds on the 600 mcf/day announced in February this year. Assuming a sustained flow rate of 1.1mmcf/d and a gas price of US$10 /mcf, the well could generate gross revenue of US$4m pa (A$5m). This implies CPC share could be around A$1.5 to 2 pa..

    Elsewhere at Jefferson McLeod, CPC expects to participate in up to 5-6 wells over 4Q05/1Q06. This will consist of two re-completions, the Davis-1 and Huntington-1 wells, and up to 3 new vertical wells. The Davis-1 and Huntington-1 wells are expected to be re-completed over the 4-5 weeks.

    The East Texas Project production is now 7mmcf/day equivalent. Assuming a sustained flow and a gas price of US$10 /mcf the project will produce cash flow $25.5m next calendar year .This equates to US$7.6m (A$9.6m) for CPC share.

    At the Clear Creek Project in Utah (CPC 70%), CPC is re-completing the Utah Fuel-13 and Ridgerunner-17 wells before of the onset of winter. The Clear Creek Project is an under-explored, project 10kms west of the Helper Project. Historical production in the Clear Creek field is 139 BCF from 18 wells. Each well adds between 2.5 to 20 BCF in reserves and had flow rates between 2 and 10 mmcf/day.

    CPC because is a low risk exposure to increasing reserves and production in the onshore USA. It will focus on low cost development, redevelop old reserves and find new reserves in existing producing areas. By December CPC will have more production, cashflow and reserve potential than any other ASX listed junior oil company.

    Recommendation STRONG BUY
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