CUE-> Pantheon of small oil stocks

[jdg]

i note also that the production drilling in the Moki sands at Maari will be used to better assess the shallower M2A sands that could, according to CUE, "provide upside production in the future".

-j

[ScrappyO]

First cargo of ~ 480,000 barrels of crude oil offloaded on 7 April 2009
§ Plan is to drill Manaia appraisal well at end of development drilling phase, likely from the platform.

This was from HZN latest Presentation.

[jdg]

well spotted, ScrappyO, i wonder why they didn't release this news? i also wonder why more isn't being made of the flow rates to date. 10,000+ each from the first two production wells with three yet to come on line when they were expected maximum flow rates of 35,000 is news to crow about. what does everyone think? are they playing it cool in case a couple end up to be duds? or are they expecting the flow rates to drop quickly? surely the water injectors will keep the flow rates up - particularly as they are currently choked and flowing naturally. it would be nice to get a good clear announcement from the company stating what their technical experts think of progress so far. am i asking too much?

-j

[macduffy]

Just the normal delay on CUE's part.

They are a junior partner in Maari and always seem to lag well behind HZN in announcements. Or at least that's how it seems.

[ScrappyO]

Article...........Dated 9.4.2009

THE first cargo of crude has been offloaded from the Maari oil field off Taranaki, New Zealand, with the Nassau Spirit tanker taking on about 480,000 barrels of oil earlier this week, according to minority partner Horizon Oil.



Raroa FPSO in New Zealand

Horizon said yesterday that the vessel loaded its cargo from the Raroa floating production, storage and offtake vessel on Tuesday.

Horizon also said the previously delayed development drilling program by the jack-up Ensco Rig 107 was now “several days ahead of plan and gaining” in terms of execution and geological results, having drilled and completed the MR5P12 development well.

The well is now awaiting hook-up to the Raroa, where it will join the first two wells, MR3P8 and MP4P9, which are currently producing more than 20,000 barrels per day on “25 per cent production chokes”.

The jack-up is currently drilling the first of three water injection wells, the next phase of the drilling campaign, before drilling, completing and hooking up the last two oil development wells.

Once completed, oil production is expected to ramp up towards the expected initial gross rate of 35,000bpd by the start of the fourth quarter.

Horizon also said the Maari development would provide “strong, long-lived cash flows” for perhaps the next 18 years or longer, which would help fund future capital programs.

However, the slump in world oil prices – from nearly $US150 ($A211.3) last year to less than $50 per barrel – is also affecting its forecast financial returns from Maari.

Horizon said that at $50/bbl, it estimated earnings before interest, tax, depreciation and amortisation from its 10% share of production to be about $US54 million for the first full year.

It said cumulative production after two years, of about 20 million barrels, would generate net EBITDA of about $81 million at $50/bbl, while cumulative production after four years, of about 31MMbbl, would generate about $117 million.

The company also said the partners still planned for the Ensco rig to drill the Manaia appraisal well, in the nearby licence PEP38413, at the end of the Maari development drilling phase.

While the Moki sands are the main producing reservoir at Maari, with proven and probable (2P) reserves of 60MMbbl, the M2A sands have the potential to add another 12MMbbl and the Manaia prospect another 25MMbbl to recoverable reserves.

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

[Ketel One]

Noticed this in todays HZN financing arrangements announcement:

"Bringing Maari onstream - Field currently producing 32,000 bopd from first 3 production wells." (from p.3 http://www.asx.com.au/asxpdf/2009041...gkwgflvnzc.pdf)

So much for 35,000 bopd from 5 wells!

[jdg]

yip, that appears to be good news, but the first two wells were producing at a max flow rate of 26,000 choked at 25%. so either they have dropped off (or choked back further) or the third well is not producing as well as the other two. still, with water injectors now being drilled to keep the pressure up, 35,000 appears to look pretty conservative. i'd like to here what CUE has to say about this.

the HZN release also said that Matariki has been deferred. probably sensible with the price of oil so far off its highs and a great deal of expenditure on other developments due, but, again, i would like to be kept better informed by CUE.

surely an announcement is due...

-j

[STRAT]

Whats goin on with CUE Shrewdy ?

[Crypto Crude]

strat,
Matariki deferred ruins a 50c-$1 potential shot this year (with what would have had a downside protected SP on failure)....
boy we have had bad luck at every step of the way...

Zeus failure.
rig problems causing spikey to be abandoned before it even got to spud, when rig was on site, and probably a reschedule in one million years..
Maari delay, and strike threats.
Bariweka delay. Jeruk postpone.
and now Matariki.

the later 3 market related...
The others, just risks of this sector we invest in...

Yeah we are losing, but considering company failure to deal with total market failure and the resulting pressure on our projects, and other unforeseen risks such as Weather, drilling risks etc... we are not doing too bad on a risk return basis for our shots at riches, given the fact that our debt levels have risen substantially, and our earnings have fallen with the price of oil and gas, our negative cashflow position (which wasnt the case when I invested, and all the delays which allowed the markets to swoop... (all of which is only now turning around with Maari really impressing)...
If you look at other ASX oilers who had bad company performance... you will see them down 80-90% in the same period...

Its great to have a World Class project to protect us, and hopefully some other assets can come through in time, im really thinking these PNG assets are the most likely and are not decades off with the PNG LNG, spear headed by OSH who set the bench mark...

lets hope Matariki is still on somehow... OMV takes HZNs position or something... HZN pulls out, but CUE remains..
Im clutching at straws...I will wait on a market update / quarterly for more info, or I will have to call Bob Coppins.....
Im also after clarrification from Andrew Knox on Oyong gas development expenditure, because I can see CUE have pumped alot of cash into Indonesia in the last year from the Annual report, but it is not sub classified as Jeruk, Oyong oil, Oyong gas, Wortel... just a total amount...
Andrew is going to get a knock knock on his door... hehehehe...

Ive never had to call anyone at CUE before, because ive never had to worry...business takes care of business... I virtually never contact managers of any company...
But I am worried (for the sake of major returns this year if Matariki is gone)...

so giant returns have pretty much been eliminated...and that is a killer... healthy returns are still on the cards...

we have 3 core activities to enjoy this year

Maari, Manaia, Oyong Gas...

a fundamental approach with less drilling risk but lower possible returns...

... Manaia becomes much more important... I still believe we are onto a successful winner up dip on that appraisal target...

nothings changed other than the timing of our assets, and projects...
still sitting on gigantic proven assets...a few bucks per barrel of oil inground 2P...
still sitting on large developing projects set to kahuna our cash flows over the next 1,2,3,4,5 years and further, even at these prices...

perhaps I might hold this one all the way through...
Maybe my old age is starting to show as im looking for strong cashflows to protect my future...
grind the cash balance path from lows to highs like a few other great ASX/NZX oilers have...

I am confident CUE can get to one dollar per share over the next 5 to 7 years based on the development path of current undeveloped assets, and thats without any exploration success...

Its now official...
All Maari development expenditure from here (the cost of 3 water injectors, and two production wells, and Manaia) are all covered by current revenues...

with Oyong gas coming through, CUE will sustain strong revenues from its gas and oil assets for decades to come (maari, Indo gas), and only abit of debt, from what are heavy capital expenditures to get assets into production...
the fundamental growth phase is closer as we turn from a 'pumper of funds' to develop projects... into a collector of riches.....


I hope that helps...
to smart to sell... Just like Bermuda (with his stock picks), I will also sell when I dont believe I could return 100% in 6 months... hehehehe...

Im coming to an Auckland sharetraders meeting later this year... I will have to get mackdunks address so I can pop in unexpectedly just in case he does a no show....
hehehehehe...

.^sc

[STRAT]

Im coming to an Auckland sharetraders meeting later this year... I will have to get mackdunks address so I can pop in unexpectedly just in case he does a no show....
hehehehehe...

.^sc

Be good to see ya. I was disappointed to miss you in Christchurch.
A surprise visit on Macdunk??? haha
Id come for that ride