These are some relevant pieces of data that impact CVN:
1) Pan Orient has forecast 2011 production in L44 and L43 permits of 4,000 net boo per day which is 2,666 boo per day net for CVN.
2) At US$90 TPI Pan Orient had forecast net operating of CAD$72m (CAD $ = AUD$) from those permits. I assume that CVN's cash flow from those permits is shared proportionately. That means that cash flow for CVN will be $48m at a TPI Oil price of US$90.
3) As TPI has been tracking at US$110 boo I imagine that cash flow in point 2) has an upside of $10m-$20m at 1m boo production per annum.
The above is fantastic cash flow even at approximately 1m boo production per annum.
I have been reviewing CVN announcements and feel that the WA permits are not given great coverage. I feel that ultimately that they will be far more valuable than anything that is on offer in Thailand. Phoenix is a gas discovery! I can see this being huge when it gains some traction.
Another fact that I like is that CVN Directors and Mgt own 10%+ of the company. In the 2010 Annual Report I noted that Adrian Cook (GM Corporate) has a $700k loan from the company that was used to buy stock at $0.52 or so. Do you think that he would have entertained this arrangement if he (as an insider) thought that CVN was a dog?
Does anyone really believe that CVN is not severely undervalued?
CVN Price at posting:
32.4¢ Sentiment: Buy Disclosure: Held
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