Patersons ValuationCARNARVON PETROLEUM LTD (CVN)ONGOING DRILLING...

Patersons Valuation

CARNARVON PETROLEUM LTD (CVN)
ONGOING DRILLING PROVES SUCCESSFUL
We have revised our recommendation for CVN to a HOLD with a price
target of $0.77/share due to the markets recent recognition of this
sound oil and gas producer. While we are anticipating further upside
from CVN’s drilling campaign and future reserve additions we believe the
stock is fully valued at present. At the centre of CVNs success, is a low cost
environment with operating costs of less than $5/bll and drilling costs of
~US$1.5m (completed). This low cost environment allows CVN to self-fund
an active development, appraisal and exploration drilling campaign. High
success rates from its ongoing drilling program plus appraisal of the recent
NSE-I1, NSE-H3 and in particularly the L44-W discovery will drive short-term
growth. Exploration of the L20/50 and the L52 &L53 application permits
plus potential corporate/asset acquisitions have potential to add longer term
value.
BUY