Asx200, page-134

JL,

Whether Total or someone else, whoever, they might like an extra 5% or so from CVN. Selling a little of ours might make sense if the capex for a development was getting a stretch.

I would expect this to be the one asset that CVN would wish to retain. Once the Dorado oil flow commences the who area should be self funding, and unlike Buffalo will yield franking credits for most SHs.

Once the gas is flowing then theres likely to be several decades of high margin steady revenue. So many junior oilers step up a level towards being midcap on the back of one or several short lifed projects, then shrink away again as they fail to replicate the success. A few examples ARQ,ROC,AWE/NZO/PPP,TAP,CUE.

20% of say a 50 bcf pa domgas project well thats A$100mm of revenue at a modest A$10/GJ and likely $40mm or more of pretax cashflow. Perhaps even double that to $80 mm pa from the associated liquids at 100 bbl/mmscf. Enough to fund overheads and a reasonable level of exploration, and even dividends.

Why would CVN want to sell an asset with a short/med term oil bonanza and a longlife gas asset like that. There are rocks in the head of many a hc poster. Selling down to say 15% to minimise CRs I could understand, but selling out entirely to focus on highly uncertain exploration and/or the short life (still relatively risky) Buffalo project makes no sense to me.

Anyway I rate AC as a fairly shrewd operator who is likely to make at worst reasonable decisions.

EL