CUE-> Pantheon of small oil stocks

CUE energy- NEW Shrewd crude pick....
This time I want to be alot more professional about my pick and I willnot be raging bull all the time, I hope to have a balanced view of this pick that will return 100% minimum over a one year play...

before I start talking about the company I want to take the time to discuss
1....what type of investment this is,
2....talk about some of the risks,
3....and tell you where im positioned in CUE...

1.... This is the type of investment suited to a person with an investment term of around one year plus a few months if need be... this is not a short term investment where multi baggers will be made in weeks/ months, but the upside is big over a period and upside is present in the short term and medium term.... this is not the type of investment with a long term view... it is the type of investment following a few key projects into production including Maari-(NZ offshore), Oyong oil, and Oyong and wortel gas tie into Oyong oil facilitys late next year if you are prepared to hold through... I will discuss these projects at a later stage...(it is a pure spec oiler nearing production) and fits all the criteria I have of spec oilers nearing production...
so investment term is 1 year plus possibly a few months...

2....CUE energy is favourable in terms of risk return...
The biggest risk CUE has is market risk... if markets are stable this will return well... if markets volatile, then this maynot be the best pick suited for your risk profile...
It is up the the individual to understand market risk, and dont blame me if markets turn this share soft... blame me in alittle over one year if this stock turns soft and markets are up...

it is similar to other stocks I have held with low downside and big up... downside risks are alittle higher than my previous picks... and are due to project delays and Exploration/ projects being in Indonesia/ and Sampang PSC which is risky in itself... Oyong is a project that has been delayed multiple times similar to that of Pike, Santos is running the project and Production is expected late this quarter...
Jeruk has been unsuccessful in exploiting its large potential and currently holds little value for the company, but does hold oil reserves around 50million barrels..
This type of investment is not based on luck through exploration success... it is about investing in projects that will re-rate similar to what Tui has done to NZO as projects sure up and become more certain as they come closer to coming online... Maari production is massive for the growth of this company... but is abit more risk as Oil needs to be heated up for extraction to occur rather than natural flow rates, Production will need to be stopped at times to heat the oil up...

The todds are one of the richest and familys in NZ, they currently own 25% of CUE...
management is capable, but sometimes doesnot disclose like some would hope...
current disclosure is about par within this industry


3....At the moment I am not currently in CUE, I am not in because I will have to sell a position of another holding, and I will sell NZOOD once Tui production comes online and hector gets closer...
I think SP could be strong soon and I dont want others to miss out because im not in and because of that not pushing CUE... I look to return more in nzood in the short term before transferring into CUE for a 1 plus a bit play, and make 100% minimum... CUE has been strong lately and On friday sp was stable in a falling market... SP has risen off 12-13cent lows this year and its still an undervalued play...

As I have said before, SP cannot be determined in weeks months or even a year or two....
One thing I can say is that the path of the Share price looks up and up to me...
upside is bigger than 100%, 100% is a bench mark
[8D]
.^sc

CUE is currently trading at 22cents...
Markets are expected to open down on monday, so this may give you some time to DYOR and see what happens to market volatility over a few days...
[8D]
.^sc

Shrewd,

Following our discussions via PM on SS, I have been doing a bit more research on CUE, reading your posts on SS also.

As I advised you then I have been in CUE (small holding) for about 2 months now and am more than happy with the gains so far. Bought in @ 18c so up 22% now. I haven't added to my position yet, too busy topping up on something that I said I wouldn't top up on...... NWE!! Been good buying there of late.

Now back to CUE;

Oyong will come on eventually, whilst this has been far from a stellar project, fundamentally it will be good for the company. Oyong will not add greatly to the share price until production, it may even cause negativity if their is more bad news to be announced or gets out and about. As we all know these projects always experience delay. With pretty meagre flows and CUE only having a 15% interest, I don't believe Oyong will be a great driver of the share price. I do however believe it will give it some solid depth.

Maari will be delayed, as is always with these projects, it is not a matter of if and when, but for how long. But, once production starts and those 35000 bbopd start flowing on to the Raroa, share price will rise most definitely. The interesting thing will be how much CUE gets re-rated as Maari production nears.

I haven't had a chance to get on the Raroa yet and have a look around as I promised. Off to Pakistan for a few days this week, once I get back I will definitely get on board. Will try then to get an accurate gauge of status / progress / completions.

Also to note that we should soon start getting announcements out regarding the Kimu seismic survey. If all looks good with the survey and interpretations are for the +ve, I'm of the opinion this should also be a small driver to SP.

Another thing that I don't think people are completely aware of, is the connection between OMV and CUE. OMV is a massive Austrian oil company. They have just been awarded exploration permits to the GSB in conjunction with Todd Energy. Todd Energy is the by far the largest holder in CUE with approx 25% of CUE, being held through to different entities. If all goes well with the Maari JV and OMV make a significant discovery in the GSB, hopefully CUE will be farmed in as a JVP. Obviously all this is speculation on my part, but if all said "planets were to line up", then we could have a ripper here.

I think it was you who said "CUE will limp into 2008", I wholly agree with this, but come production of Oyong, Maari and some exciting news from some of their other interests, they will be able to throw their crutches away and start running.

Exciting times ahead.

Cheers,
Roo

pyong is the problem IMO

i was in cue a few years ago, pyong is their indonesian oil thing eh, maybe it was jerek, flow rates were not as good as had thought etc, alot of technical difficulties

i brought at 25 and sold at 24.5

that was about 2 months be4 the todds came along

todds are good with the energy sector so with them holding 25% = big thumbs up

hey Mattyroo,
first of all....
you are a great asset to have at this thread...you have insight from a different angle that I just cannot provide... So thankyou for posting....

mattyroo-"Oyong will not add greatly to the share price until production, it may even cause negativity if their is more bad news to be announced or gets out and about."

this is the exact reason why I did not push the stock earlier, but SP has come up and Oyong has gotton closer... CUE had the exact same problem that NZO had over the last few years.... CUE just like NOZ had multiple Projects all a few years from production and development was soldiering along... and SP was flat or dropping...
now that production is coming close, then SP is starting to re-rate...
and Oyong is substantial revenues to CUE if it can get 1500 barrels per day as a recent announcement suggests...expected flow rates (8k to 10k per day at 15%)....

So yes I have miss interpreted The way that CUE would re-rate because I thought Oyong would get delayed further this year (and it did) and because of all the negativity around Oyong that the Market would wait for production to re-rate this one...

The thing about CUE is that on a forward looking basis, Oyong could dissapear, Jeruk could dissapear and Maari could Drive the CUE ship all the way... some of CUEs other permits look amazing in principle... and I will no doubt go over some of them...
which will be explored sooner when Oyong comes online...

mattyroo-"Maari will be delayed, as is always with these projects, it is not a matter of if and when, but for how long. But, once production starts and those 35000 bbopd start flowing on to the Raroa, share price will rise most definitely. The interesting thing will be how much CUE gets re-rated as Maari production nears."

well because CUE willnot be a spec oiler when Maari production comes around... SP will rise up much sooner IMO...
But none the Less I do feel that attaching a 100% return to this company is absolutely appropriate and watching the shrewd rumble with CUE is not a problem...

I will detail CUE more indepth soon...
[8D]
.^sc

The thing about Cue is ... Solid management.
Encouraged me to increase my investment and average down.
21-22c probably is still good buying.

Won't Maari be much more difficult to get into production then Tui, so could expect further delays?

I'm a holder, dreaming of a JV in the GSB too hehe.

Quote:

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quote:Originally posted by Tok3n

Won't Maari be much more difficult to get into production then Tui, so could expect further delays?

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Why do you say that? Is there a technical reason or otherwise? As I type this I am looking out the window at the Raroa FPSO for Maari field, so hopefully I can answer any technical related questions.

Cheers,
Roo

Need to dig up the old link which compared Tui vs Maari, but hasn't Maari production date been pushed out?

On the upside alot of the JV's in Maari like HZN have said that there's a potential for a reserve upgrade there.

Anyone following HZN too? thats how I found CUE because of the JV in Maari.

Quote:

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quote:Tok3n
1....Need to dig up the old link which compared Tui vs Maari, but hasn't Maari production date been pushed out?

2....On the upside alot of the JV's in Maari like HZN have said that there's a potential for a reserve upgrade there.

3....Anyone following HZN too? thats how I found CUE because of the JV in Maari.

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Hey tok3n,
1... yes Maari's production date has been pushed out.... maari 1stP had been put back 3 months and then another 3 months, now making it 6 months behind on previous estimates....
If you are comparing Tui vs Maari then TUI has been pushed further aswell and has been held up by AT least ONE year on what earliest announcements had told us
....
delays in the oil industry such as 1st production, exploration wells which came through late, Joint venture/partnership agreements take longer than expected, organising a drilling rig takes longer, undervaluation of the company takes longer to re-rate, this is what the oil industry is all about... and sometimes there are no delays, YOU cannot rule them out...
so yes Maari is 6 months late and is expected to be in production in the 3rd quarter of 2008.... so about one year from now is first production, at that stage the company will already no longer be speculative because it will have positive cashflow through OIL production at Oyong, (and CUE already has minor revenues from SE GOBE...shhhh:D.....
....)...
2... upside at maari huh?, do you care to share alittle bit more information on that....[8D]......S C Is more focusing on what we currently have, and CUE's take is 2.5 million barrels compared to HZNs 5 million barrel take if you want to compare tok3n...CUE gets more barrels of oil for its market cap because CUE is much less than half the market value of HZN, (not comparative analysis taking into account seperate projects)...

3....Yes I follow HZN, And saying that opens up a new chapter with First Australian Resources who also holds a major asset with HZN...
Yes HZN is another play on Maari, but CUE IS the ONLY Company offering near term expected production which is major for this company... HZN first production is Maari next year, HZN have drilling program in CHina sea late this year... short term first production, then short term HZN drills, then hold for for Maari is all the same...
I believe CUE will return more from here over the next 2 years than compared to HZN.... cue is 22 and HZN is 36.5.... track them both... CUE will return far more in percentage terms compared to HZN over the next two years, I WILL reference this example down the line...

Mattyroo yes I do have questions about the technical side, I will show you something first before I start asking questions..
:)
.^sc