buy, page-25

I thought Cue showed a great deal of resilience yesterday and today and I also suspect there has been some significant buying on fundamentals around the 30 cents mark.

Personally I thought 40 cents short term was a bit rich, but was happy to send people back into the fray at 30 cents, no problem at all.

Bear in mind some of Cue's basic fundamentals are getting better as time passes. The oil price is up from $70 odd through into the late $80s (notwithstanding perhaps some US$ weakness as part of this). The cash is flowing from Maari, Oyong and a smaller amount from Gobe, but also the Wortel gas (sold at a much more favourable price) will start to bring in the cash at the end of 2011. Also Cue has exited some assets it no longer wished to hold and has cashed up out of them as well. This money should be in the kitty now. Their debt from Maari must now be starting to fall away more quickly as production ramps up.

I think what will drive Cue forward in the next few months is the very rosy financial situation that will be borne out each time they produce a quarterly report. If the profit from Maari keeps on racking up and wipes away any NZ tax losses they may still have, then they will also have to start paying NZ tax as well, and that at some point could lead to a dividend being declared as well, which would be gratefully received.