CALIMA ENERGY LIMITED (ASX:CE1) - Ann: Rising oil prices - Hedging Update, 70183907, page-63 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

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Quest09

975 Posts.

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05/10/23

10:39

Post #: 70183907
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Originally posted by Quest09: ↑

Ongoing tightness in oil supply, while US stockpiles plunge to critical levels. The US will have to start buying up soon, hence further increasing demand, resulting in even higher oil prices.

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Originally posted by Quest09: ↑

It is possible to position your hedge so you can still benefit from rising prices (as stated by CE1 in the below screenshot, and as described within the announcement).

Also, like i mentioned previously, hedging against price volatility is common practice in the oil & gas sector, so if CE1 didn't hedge, they would be leaving themselves vulnerable to downside risk in a way which is NOT in line with industry standards/practices.

Essentially, in the balance between risk versus reward, a hedged position provides for more predictable and stable outcomes while still allowing the producer to benefit from rising oil prices.

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Originally posted by Quest09: ↑

Auctus Advisors have a share price target of: $0.45c

Current share price: $0.09c

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Well, im seeing a lot of great news at a macro level, and also a lot of great news directly released by CE1 amongst the attached posts.

Originally posted by Quest09: ↑

CE1 looking primed for a breakout IMO.

- currently undertaking a drilling campaign for 3 new wells (Attachment 1 & 3).
- $7.5 million capital return, equalling 1.2c per share due this month (image of announcement below).
- oil prices in an uptrend and looking strong (attachment 2 & 3).
- Auctus Advisors have a price target of $0.45c (attachment 5).
- management have been recently buying on-market.
- top50 shareholders control 63.6% of CE1.
- Canadian players have presented takeover bids for CE1 in recent past, and future bids are being speculated.
- strong news flow expected in the short/medium term due to drilling campaign and due to talk of potential takeover bid.
- Annual revenue = AU~$98 million dollars.

Current market cap AU$~ $58 million

Significantly undervalued IMO

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Originally posted by Quest09: ↑

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Originally posted by Quest09: ↑

Given that the current drilling campaign has been so successful - 3 wells drilled under budget and early signs showing that production is "significantly above typical production curves" (as shown above in attachment 3).

I wonder if CE1 might announce that they have decided to extend the current drilling campaign and drill additional wells in order to exceed their current production target of ~4,000 barrels per day.

Considering the currently high oil prices, it might be worth doing so.?

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CE1 Price at posting: 9.1¢ Sentiment: Buy Disclosure: Held
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