CUE-> Pantheon of small oil stocks

[STRAT]

I received a call from Andrew Knox the CFO after lodging a complaint with the ASX ...

After making him aware of my frustration at several aspects of the rights issue and the companies poor record in keeping shareholders updated on the recent progress of projects ... I asked why the issue was needed just a month after the company had stated to the ASX it had no plans for an issue ...

"The company is performing very well"

"The oil & gas industry is a rapidly changing business ... with opportunities arising that may require funding"

From my conversation with Andrew I surmise that an opportunity has arisen ...
Given that Santos appears to be disposing of non LNG assets in PNG, It is easy to believe that CUE may have the (pre-emptive) opportunity to acquire the PDL3 interest of STO (15.92%) increasing their holding from 5.57% to 21.5%

Given the current low oil price this could be a nice time to increase CUE's holding in PDL3

Thanks for that Colin

[colinm_au]

The response from the ASX to my query:

Cue Energy Resources Limited (the "Company") – Rights Issue

I refer to your correspondence with ASX's Customer Service in relation to the Company's recently announced rights issue.

In relation to your points of concern, I advise as follows.

1. Shareholder approval is not required for the Company to offer shares pro rata to all shareholders.
2. Without a formal underwriting agreement which is disclosed in offer documents sent to shareholders, related parties are prohibited from subscribing for any shortfall shares without prior shareholder approval.
3. According to the Company's announcement of the offer, it has availed itself of an ASIC Class Order which permits it to make offers under the rights issue without a prospectus. If you have concerns with the Company's compliance with the Corporations Act this should be taken up with the Australian Securities & Investments Commission.


Yours faithfully


Sent electronically without signature


James Gerraty

Manager Issuers, Melbourne

[gazprom1]

Thanks Colin. Pro-active shareholders are invaluable to most companies. While I have benefited from some SPP's recently, I do not like them as typically big shareholders/ insto's have already been allocated millions of dollars worth of shares at discounted prices. Pro-rata to all shareholders with an underwriter able to pick up any shortfall is best practice or a shareholders meeting to approve a large issuance of shares!!!

[colinm_au]

I made Andrew Knox (CUE's CFO) aware of my preference for renounceable rights issues because shareholders can at least sell the rights, rather than see their holding diluted if they cannot take up the offer.

I also felt the need to impress upon him that shareholders are the owners of the busines and deserve to be kept fully informed ...

[Crypto Crude]

Colin-From my conversation with Andrew I surmise that an opportunity has arisen ...
Given that Santos appears to be disposing of non LNG assets in PNG, It is easy to believe that CUE may have the (pre-emptive) opportunity to acquire the PDL3 interest of STO (15.92%) increasing their holding from 5.57% to 21.5%

Wicked...
in that permit we have 2.5BCF gas 2P...
if we did buy STOs stake, then our stake would increase to a tasty 9.65 BCF gas, plus current oil production...
Gas alone is worth around 30-40 million in revenue terms...
I have two words for you...
"fold Belt"...
Central field...

It is of my understanding that STO need funds to cover its PNG LNG capital reqduirements..., (STO recently made a placement)...
STO has a credit rating to protect, whereas Oil Search does not...
Meaning that Santos wont raise debt to put that rating at risk...
This will dilute shareholders, so STO as aswell as some of the other major PNG LNG partners are selling non core assets to get their cash commitments for PNG LNG off the ground...
Great news for CUE to pick up more PNG exposure...
OSH funding for PNG LNG is going to be a whopping 5 billion US dollars... plus another 4 billion for financing, operational costs...
OSH will not dilute their shareholders and will raise debt...
This is by far the most optimal outcome, leverage for the firm...
and not major dilution...
its going to take another 5-7 years for our assets to come through, worth more than twice the current market cap down the line......
When the market realises these proven gas assets then watch out...
it could take years though with production not until 2015...


Thanks Colin...

.^sc

[Crypto Crude]

MEO is up a whopping 40% today?...
is it something to do with CUE's NWS assets...
its either that or a serious case of manipulation...
...
Colin,
Did you ask Knock Knox about Maari?

.^sc

[colinm_au]

Hi SC !

Andrew was not forthcoming about Maari injector progress ...

Good to see that the closing date for the issue has been extended by a week
after my complaint about the short time timeframe as I will have to raise 300K !

:o

[Corporate]

Hi SC !

Andrew was not forthcoming about Maari injector progress ...

Good to see that the closing date for the issue has been extended by a week
after my complaint about the short time timeframe as I will have to raise 300K !

:o

Now that is what I call a holding!!! Good work :-)

[geezy]

CGT in Australia is at the investors marginal tax rate unless the shares have been held for more than 12 months in which case a 50% discount applies to the gain. note: this rate applies to individuals who are not classed as traders.

Different tax rates and discounts apply to companies, trusts etc.

Hi Colin, many thanks to your reply, what if i hold to circa 3-5 years, will i still be taxed?
NZ does not have a CGT on its share holdings for NZ companies and OZ companies(not including ones that have income coming from overseas)

[Crypto Crude]

yep...
good to have colin onboard...
Read the June presentation from HZN...
heres a summary from the latest market info...

3 injector wells now drilled... two water injectors online pumping 26,000 barrels of water per day into the reservoir (moki)... the third awaiting hook up...
4th production well drilling horizontal section...
Flow rates are now 'severely hampered' with production well drilling... I did not foresee such large decline of production rate while drilling of the last two Production wells... I didnt think at this stage they would be this far ahead as water injector drilling stage should not have effected flow rates....
at 31st May 1.4 million barrels produced from Maari...
CUEs share so far is 70,000 Barrels of oil...
...
Manaia drilling early August...
and after that possible testing/development of other zones in main field...
(M2A) I would assume...
...
the steady grind of fundamentals...

.^sc