Shrewd Crude report
Cue Energy company profile...


-Company status: Spec oiler nearing production, on the brink of first major production...
-Market value of CUE $145M Aus....
-Todd Energy hold 25% of CUE.... The Todds are one of the richest families in NZ.. if not the...
-Cue have a large/diverse range of large capped JV partners such as Santos, Oil Search, Coogee Resources (unlisted), OMV, recent Beach Farmin which announced drill in T/38p in 2nd half of 2008 which is postive for a nearer term drill... potential of 33-57 million barrels with Cue taking 10%...
-singapore petroleum which has recently bought 6.5% of Cue and they are in early stages of negotiating tighter Company relations...
-These Large oilers are great partners, CUE will feed off these companys through faster tracked development, greater expertise from those companys etc... I rate Cues JV partners, and I have not seen a company like this that has such connections...
-Performance since I picked it here: I picked CUE at the top of the market at 22cents, and its still around those levels now...
-cash position, $9.1m on hand as at quarter ended 30 June... expected cashflow expenditure for the quarter starting July is $9.04m....
Large quarterly expenditure is through developments of Oyong and Maari, and some exploration activity to build the company in the future as large revenues will be poured back into growth....Loan facilities of $23.529m... and zero has been used on the loans...no capital raisings are necessary...

PRODUCTION...
quarterly revenue from SE Gobe of $1.9m aus per quarter...
Production is on a small scale ->still a spec... on the brink of large cash revenues from Oyong oil project...

DEVELOPMENT...
Cue is rather similar to the company situation New Zealand oil and Gas was in where they had multiple developing projects that have been sucking up cash, and are on the brink of a re-rating as this will be a new company after 1st oyong production which is expected to start next month...

OYONG OIL- 1st production set for September. Production barge sailing to field. Singapore petroleum purchasing CUE shares (oyong JV partner) gives me great confidence...5-8k BOPD with 15% CUe stake... mid recoverable reserves are 6million barrels of oil... 900k barrels to CUE....

OYONG GAS- 97BCF mid range recoverable reserves... 1st production late 2008... 60mfc/d.... 81k approx to CUE per day...
-> approx 130m revenues to cue in total...

MAARI- P50, 50million barrels -> 2.5 million barrels to CUE... area upside 10-20m barrels.... expected 35000 BOPD... so 1750 to CUE...
major revenues to CUE... does have risk in that oil has to be heated up before it can be extracted..large project and major company driver....

WORTEL GAS TIE IN....90BCF mid case, has been discovered... will be tied into Oyong facilities....

other discoverys,
Jeruk, may or maynot be a developing project... 50million barrels recoverable interpretted...

EXPLORATION....
CUE has a major diversified portfolio of great acerage with mammoth potential... including AC/RL7 (timor sea), murray deep, Kimu, Barikewa and many other permits....
one of Cues JV partners is Oil Search, which has a strategic relationship with Exxon....they are looking to extract gas in Indonesia and and ship it back to The US.. where 4 major refineries are in planning stage to be built, This gas would help supply these refineries, and CUE will be in on this aswell with their permits.... reserves in indonesia are massive and CUE will be there to extract them as a minor player along with Exxon, Oil Search, MOS...
speculation....CUE could have a minor role in Great south basin, in the Future with Todd connections, and OMV as mattyroo has said...
....
company positives and negatives....
Positives...
undervalued 100% on a forward looking basis,imminent production, diversified development projects, company at every stage in oil process... (exploration,discovery,development, production)...
production still on smaller scale now, but will be major driver for the company over the next year and abit as Oyong oil, oyong gas, wortel gas, Maari come online as producers....Singapore petroleum recently taking a stake in the company (6.5%).... left field announcement potential....

negatives,
soverign risk, market risk, (some of the regions where CUE are in can be rather instable...).... two directors leaving since may...

CUE is the company you want to invest in if You want the low down big up, (bar market risk).... alot would have to happen for this one to turn a loss, and that willnot be the case.... 4 seperate developments provide massive reveunes, and no doubt that SP will boom as these developments de-risk themselves further... CUE is one of my favourite stocks and Ive been watching it for 5 years now... I bought in a week or two back, but have sold all my shares now, so Im just watching at this stage... sold because of market risk...
If markets are stable, then this is the pick for sure... it is up to you to determine your risk profile and what this company holds within the context of your portfolio in the current market....

so market cap of $145m
recoverable oil to Cue stands at 3.4million barrels in CUEs hands...
and gas valued at roughly $250million in revenues, recoverable Gas to CUE...
145m/3.4m=$42.... CUEs market value on recoverable oil alone has the company valued at $42 per barrel , not including gas, not including exploration, Jeruk...
I believe that CUE could be one of the next oilers to become an upper tier oiler... much larger potential is present beyond that of current development

.^sc