CUE-> Pantheon of small oil stocks

[Crypto Crude]

tricha-
Hi Shrewd

1)Whats was Cue's cash backing per share last quarter ??? I think it will answer your question.

2)What will it be this quarter, we shall see this week most likely.???

3)Problems for CUE is the oil price is so low that last quarters oil sales in $ will be extremely low.

4)Multiply that by more money required for Maari because of long delays and interest payments.

5)And no guarantee of it producing as per company statement, Otto and AED testify to that. Tui says otherwise

6)My way of thinking is CUE is a gambling stock, with lots of nice juicy things happening, which could multiply its price, but and we all know the buts.

Happy hunting Shrewd.!

wow tricha... Im glad I asked you to explain your statement... we have a lot to discuss.......
first of all...

1)cues cash backing per share?...
well, the last cashflow update was for the quarter ended september 30th 2008...
here are the numbers from that report...
cash 17.459 million dollars... shares 628million...
cash per share of 2.8 cents...
not bad with a share price of 13.5cents...

2)what will it be this week?
Yes im very interested to see...
One thing though... CUE had massive exploration expenditure in the quarter ended 30th sept because of drilling expenditure on Cobra... which took forever... (successful discovery, money well spent)....
So in that quarter exploration costs of $7.941 million... and for the quarter just been, that was expected to drop to $2.6million dollars...
Development costs were set to increase 2.8million (Maari coming online)...
Holding all other expenses equal, we have a net decrease of cash costs of 2.51 million, (on exploration and development)...

This will help offset some of what you are saying in 3)

3)even if CUE earnt 10million dollars of revenues per quarter (40million per year), is still pretty ddaaamnn good for a company valued at 85million...
considering the fact that CUE's main wealth and leverage is held in its portfolio of proven assets... and developing projects...

4)Rising development costs are just apart of investing in this sector... its norm for every single company... Projects never come in under budget...
delays are norm in this industry.... Big assets, and higher discount rates of projects, makes up for all of that (and more) when we get the projects up and running (fact)... This is why the oil sector can have great returns...
I dont think this is a valid explanation tricha...
did tui have cost overruns? what about Kupe?

5)When I look back at AED in particular, and OEL... I realise that these companies were first time producers... and either had no JV partners, or JV partners who did not have the technical expertise to fix problems as they arose...

we are operating with the Todds, and OMV...
OMV is one of the largest oil companies in Europe... 2nd I think...
2008 sales of 19 billion Euros... 41,000 employees... oil producer... oil refiner... gas stations...
come on man.. this is like clock work for them...
they eat these project startups for breatkfast...
read the last update announcement... 1518m horizontal section drilled in entirely clean and oil bearing...

what about Todd Energy... produced 8 million barrels of oil in 2005 (BOE)....

These companies did not get to the size they are today through making mistakes...

6) far from a gambling stock mate...
We had revenues supporting a cashflow positive position at 3rd quarter last year... we have good cash... we are on the brink of production...
we have Oyong Gas coming up this year...
We are set to earn more in revenues than the market cap of the stock...

to add to CUE being a gambling play... I specifically choose CUE because of its list of Joint Venture partners in all its assets... The only real one of concern is the Northwest shelf farmin of Zeus, with MEO and RDI....
MEO have the technology but have not proven themselves with the drill bit yet...
CUE's partners include Santos, OMV, Todd Energy (and shareholder), Coogee Resources... Oil Search (big PNG play)... Beach Petroleum free carry... Singapore Petroleum...
CUE have a very strong Board....

BOPD set to ramp up to 35k... We have Manaia to tie in which could offset adverse production risks that some think we might have...

happy as here... It would hurt me to if you thought I was a gambler...
a gambler of market risk maybe...
Sometimes I gamble on stocks, never on a large position...
opps... I did make a play on MEO, but I studied the craap out of that and picked it to bits and was very confident of a discovery... I dumped the day that Heron flow test at a measley 5MMCF...
That was a very lucky day for me...

.^sc

[tricha]

Great summary Shrewd.

One last question.

Shrewd - "1)cues cash backing per share?...
well, the last cashflow update was for the quarter ended september 30th 2008...
here are the numbers from that report...
cash 17.459 million dollars... shares 628million...
cash per share of 2.8 cents...
not bad with a share price of 13.5cents..."

Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available
$A25,000,000
Amount used
$A17,681,000
3.2 Credit standby arrangements
- -
(i) Project finance for the Maari oil field development in the Taranaki
Basin, New Zealand. The facility is for US$20M with BOS
International (Australia) Limited, a part of the Bank of Scotland’s global
oil and gas business.

I'm not an accountant Shrewd, but do they have a loan for OZ $17,681,000, weird I could not see interest taken out for the last quarter if there was.?????????????

it's on page 10

http://www.stocknessmonster.com/news...E=ASX&N=307591

[shasta]

Great summary Shrewd.

One last question.

Shrewd - "1)cues cash backing per share?...
well, the last cashflow update was for the quarter ended september 30th 2008...
here are the numbers from that report...
cash 17.459 million dollars... shares 628million...
cash per share of 2.8 cents...
not bad with a share price of 13.5cents..."

Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available
$A25,000,000
Amount used
$A17,681,000
3.2 Credit standby arrangements
- -
(i) Project finance for the Maari oil field development in the Taranaki
Basin, New Zealand. The facility is for US$20M with BOS
International (Australia) Limited, a part of the Bank of Scotland’s global
oil and gas business.

I'm not an accountant Shrewd, but do they have a loan for OZ $17,681,000, weird I could not see interest taken out for the last quarter if there was.?????????????

it's on page 10

http://www.stocknessmonster.com/news...E=ASX&N=307591

Very weird indeed, unless:

1. CUE are capitalising the interest as part of development costs?

2. Interest is paid & included in the loan draw down (unlikely the ASX would allow such shabby cashflow reporting)

3. Shrewd arranged the whole thing interest free

This was the initial ann re the finance...

http://www.stocknessmonster.com/news...E=ASX&N=277917

Probably #1

[Crypto Crude]

Tricha-

Great summary Shrewd.

One last question.

Shrewd - "1)cues cash backing per share?...
well, the last cashflow update was for the quarter ended september 30th 2008...
here are the numbers from that report...
cash 17.459 million dollars... shares 628million...
cash per share of 2.8 cents...
not bad with a share price of 13.5cents..."

Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available
$A25,000,000
Amount used
$A17,681,000
3.2 Credit standby arrangements
- -
(i) Project finance for the Maari oil field development in the Taranaki
Basin, New Zealand. The facility is for US$20M with BOS
International (Australia) Limited, a part of the Bank of Scotland’s global
oil and gas business.

I'm not an accountant Shrewd, but do they have a loan for OZ $17,681,000, weird I could not see interest taken out for the last quarter if there was.?????????????

it's on page 10

Hey Tricha,
Obtaining debt is healthy for any business... Cue have a healthy amount of debt... This was required to get Maari off the ground...
Debt creates leverage for the firm, and for the shareholder (as their return on investment increases as debt increases) but also places more risk on the firm....Leverage through debt can be used to greatly enhance the value of the company.....
Also, debt raising is more preferrable to Placements as we are not diluted by a a larger amount of listed shares...
I think you are knit picking Tricha...
Interest recieved from 17million in bank cancels out most of interest paid for 17million dollar loan.... Whats your point?

Down the line CUE will make enough money in one week to pay for a whole years interest on its loan...
Money well obtained...

You know what its like, yourve been through the same thing with PPP...
Pan have 10% for 50Million barrels of oil...
CUE have 5% of 50 Million barrels of oil, likely to upgrade closer to 100million, and CUE have everything else... Some would say you are getting an unfair deal down the line ...

.^sc

[tricha]

Hey Tricha,
Obtaining debt is healthy for any business... Cue have a healthy amount of debt... This was required to get Maari off the ground...
Debt creates leverage for the firm, and for the shareholder (as their return on investment increases as debt increases) but also places more risk on the firm....Leverage through debt can be used to greatly enhance the value of the company.....
Also, debt raising is more preferrable to Placements as we are not diluted by a a larger amount of listed shares...
I think you are knit picking Tricha...
Interest recieved from 17million in bank cancels out most of interest paid for 17million dollar loan.... Whats your point?

Down the line CUE will make enough money in one week to pay for a whole years interest on its loan...
Money well obtained...

You know what its like, yourve been through the same thing with PPP...
Pan have 10% for 50Million barrels of oil...
CUE have 5% of 50 Million barrels of oil, likely to upgrade closer to 100million, and CUE have everything else... Some would say you are getting an unfair deal down the line ...

.^sc

Sorry Shrewd

Here is where we disagree.

Debt in this market is toxic. The rules have changed, so much so.
It is not like before where any company can make a mistake or two and ask for more cash and have your wishes granted.

Basically CUE have 0 cash per share backing. The only way, one is to survive this bear market from hell, is to leave no stone unturned or leave the market.

If Zeus comes in, you will be laughing all the way to China if not 10 cents till Maari comes good.


Shrewd -"1)cues cash backing per share?...
well, the last cashflow update was for the quarter ended september 30th 2008...
here are the numbers from that report...
cash 17.459 million dollars... shares 628million...
cash per share of 2.8 cents...
not bad with a share price of 13.5cents..."

[Crypto Crude]

Basically CUE have 0 cash per share backing

Tricha,
CUE has 2.8cents cash per share..Its not as simple as saying, oh well lets just minus debts from cash...for this company it is about having all possible funds available so we can continue to meet all our expenditure requirements of getting multiple projects into production... as we sure this path up, then attainable cash is less important as we enter natural growth phase...
im not going to tell you we are at that stage when we are not.... basically last year, we got cashflow positive when only pip sweakers of Oyong oil and SE gobe were in production... Now we are seriously going to start growing revenues, (even in this market) but it will take time... 20 months to get 3 further projects fully into production...
In 20months We will be talking about New growth phase as we develop other assets, and dont have to worry about cash again...
You are correct in part that debt is toxic…
Healthy debt is another story, when taking into account healthy projects...
Blue chips hold debt…. Large caps, medium and small caps hold it, households, consumers, we all hold it…
It is apart of you and I as if it were an arm or a leg…

The very basis of forming large contracts, unattainable natural growth through large project development, high cost drilling on a small springboard is impossible without raising some form of debt, or capital placement (which dilute our holdings)…… Im not denying that CUE have bitten off a big chunk by being expansive… its just like what NZO was a few years ago…

Come on Mate, you have not really come here to have a go at CUE have you?… It sounds like you have come here to question the foundations on which the oil industry is built on!

Tricha->
Let me break this down…
You started by having a go at CUEs cash backing per share (which is strong)…
You pointed to the downturn of oil prices effecting operating cashflows…
Which inpart was explained off by falling exploration costs…
You then babbled your way through Maari project delays, cost over runs impacting the company and interest on the Loan facility...
These are foundations of this industry… These practices are just apart of what we invest in... and especailly debt for companies with leverage that cant grow naturally without injections...

mate--->I hate the likes of taxes, and royalty payments… This is what it is...
Our oil create’s externalities which effect other people who do not directly consume that next barrel of oil.... so we have to pay for it…
You posted about your suspicions of Maari Production start up… you are entitled to that view with what we have seen over the last few years with other dubious production start ups….
You and the market have been very cautious on what will be a successful profitable project no matter what markets, or oil prices throw at us...
In this sector we invest in companies at different stages based on what we perceive they will be like in the future… All previous stocks I picked (apart from NZO), are now well below where they were when I first tipped them… This industry can be very fickle, as we invest in companies where information changes at any given time… In all those previous picks of mine, I sold and moved on when that information changed…

This might sound stupid, but I would feel cheated if I got bailed by Zeus hitting…
If it hits, I wont be jumping up and down... If CUE gets taken over, I wont feel like ive succeeded… Im going to proceed through this step by step, and theres lots happening...
Im happy for you and Pan… I dramatically changed my perception on the company when market info changed, (ie, when I realised what looked like unproactive management decisions infact were rather savvy)…
I just don’t have the financial backing to take advantage of all the opportunities that I see…
So instead I decided to have a punt on Central, and TEXO and try to hit big time, albeit small positions…
I was being greedy, because I should have just bought NZO last year and held it… I thought I could outperform that stock, and I did easy until I bought this company...

I will sell CUE in a heartbeat if I thought this were going the same route as previous (but yet profitable) stocks that I held…….Its just not the case this time… or at least it is not the case this time off current information/expected info…
That’s even with oil prices falling $80 US per barrel since I bought, before further cost overruns announced…before Delay after delay….
I cant be sure over the years if Ive been just plain lucky, or really smart……I cant be sure if ive really been able to affect the share price of a stock...
I know that many people have gotten into CUE and they should feel good about that... this is still the best oil stock Ive ever seen...
Time will tell where im headed with my calls…

I follow what I believe in, I get into stocks for a reason at that time… and I don’t sell until the asset change from when I first bought in…
im holding until im proven wrong (ie forced sale on asset quality turning bad), or proven right with profits…

Back me up buddy… If you want to have a go at the oil industry, or the current market situation then that’s ok….
I want to hear negatives… im open to opinions… Im not concerned about oil industry foundations impacting on CUE, because it will always be like this no matter what oil stock I hold, or no matter what type of market we are in…

Markets wont realistically rally for years and years…
CUE will perform…
Stock market fell so hard last year, that the real economy is still in catch up mode…

Happy hunting to you too Tricha…
Im going to catch myself a wild bore... cook it in the kitchen simmering with an old friend ‘mr future oil bull’... oh popa... hehehee....
I believe im positioned as good as I can be for my future...

If Zeus fails, then this is a screamer around 10cents...
...if that is to be our destiny...
post closer to the time...
peace out...

good luck all cuers...
we gamble on Zeus...
next week is the week....

.^sc

[boysy]

FIRST oil from the offshore Taranaki, New Zealand Maari oil field is expected within the next five weeks as the jack-up Ensco Rig 107 finishes the first of five production wells and spuds the second.



Ensco 107 jack-up drilling rig

Sydney-headquartered minority partner Horizon Oil said on Friday evening that subsequent to the Ensco rig successfully batch drilling the surface holes for the first three production wells to depths of about 900m, it had now completed the MR3P8 well and skidded over to the next production well slot, MR4P9.

Horizon said the MR3P8 well was drilled to a depth of 2052m with a horizontal section drilled over 1518m in the upper part of the primary reservoir, the Moki reservoir formation.

On reaching the total depth of 3570m, the lower completion assembly, consisting of wire-wrapped screens, was installed into the open hole.

Subsequently, Horizon said, the upper completion assembly, containing the electric submersible pump and subsurface safety valve assemblies, was run on 6-5/8 inch tubing and stabbed into the lower completion.

Finally the heat tube, which is designed to prevent wax deposition in the tubing, was installed inside the completion string and terminated at the wellhead.

According to Horizon, the MR3P8 well is now being hooked up to the wellhead platform production facilities and will begin producing to the floating production, storage and offloading vessel, Raroa, later next month.

The company said production will ramp up towards the expected initial gross rate of 35,000 barrels per day, as the development wells are progressively drilled, hooked up to production facilities, and oil is pumped to Raroa.

The initial peak plateau in production should be achieved by August, the company added.

The Maari development, in mining licence PMP 38160, is scheduled to have a total of five production and three water injections wells.

Horizon late last year said anticipated final capital expenditure was about $US600 million ($A932 million).

The Maari partners are: operator Austrian firm OMV New Zealand (69%), Todd Energy (16%), Horizon (10%) and Cue Energy Resources (5%).

[Crypto Crude]

that was a crappy quarterly report...
a few good points in it...
the numbers came in below my expectation...

production costs increased... exploration costs above estimates...
revenues slashed because of falling oil prices...
but, oil prices have rallied abit...
Oyong Gas 54% complete and still on track for 3rd quarter production...
Maari first production expected 3rd week of Feb, so 20days away...
we need this online quickly...

I read ages ago that these horizontal oil producing wells are expected to flow at 5,000 BOPD...
5 of them makes 25,000 BOPD...
So I guess we wont have the full 35,000 BOPD until the Water injector wells are completed...
all in all, not good report today, but my overall sentiment remains the same as Maari starts to deliver we will start to grow cash pile...
Cost for Matariki well questionable now...
Next quarterly will add at least 500k to revenues from Maari first production well... 2nd well online in March....

costs up front, cash in the hand down the line...

.^sc

[Dusty]

Cue lost 5 1/2 days due to cyclone Dominic and a seal failure on BOP.
Progress halted and drilling rig being secured due to another potential cyclone due thursday.
http://www.asx.com.au/asx/statistics...idsID=00924431

[ELYOB]

Under current market and econ conditions , CUE appears to be ok ....2 weeks away from 35,000 USD flow from Maari , small but all is to build ?

If Zeus fails , we move onto a good time by July...