Let's stay sober Longjohn.Reading the annual report CVN has 2P...

Let's stay sober Longjohn.

Reading the annual report CVN has 2P reserves of 2.8mm bbl (which don't flow too well) and 2C contingent resorces of 11.7 mmbbl (basically their mean value for NS/NSE - and this flows pretty well, cheap to develop etc). At 45 cps the market is valuing 2P+2C at just over A$20/bbl. I reckon that is pretty fair for these bbl after considering costs, 55% govt take, discount for time, and the 10% discount to WTI they are getting.

Therefore imo in order to justify a much higher sp the market needs to start factoring in a lot of value for the other structures that they have not yet drilled in the permits, and/or for untested zones in NS/NSE. I'd prefer to patiently wait for the sp to track this future exploration, rather than to build too much into the sp in anticipation. Meanwhile if the sp exceeds 60 cps I"d be concerned about how much bluesky I was holding. 45 to 50 cps looks very fair imo.

Of course like many others here I am very hopeful for a 3 digit sp next year, but a sp of $1 implies the JV has over 80 mm bbl of oil at a NPV of A$20/bbl. Quite a bit more drilling before this can be established imo.

EL