Just look at the last quarterlyfrom the 30th April...

Just look at the last quarterly

from the 30th April report.........

Revenue net to Carnarvon up from A$11.8 million in December 07 quarter to A$23 million in March 08 quarter

Carnarvon’s share of the planned June 2008 quarter production, exploration, evaluation and development expenditure is currently estimated at around A$4 million, primarily consisting of ongoing drilling and testing operations in Thailand. Ongoing costs are being funded from
oil proceeds.

• Growing cash flows with consolidated cash balance at quarter end of A$23.4 million

Crude Sale price is 75-85% of WTI daily price

...............................................

So 4qrt x $23.4mill = $93.6 million revenue.
expenditure on production etc = $4mill

This works out at 4.27%.

So production + exploration + development expenses are 4.23% of revenue. VERY LOW.


The sovereign risk is more about the type of reserves, fractured volcanics can have declining production over time, so reduction in production at presently estimated by the company at approx 12% p.a. therefore the field has a projected reasonably long life.

The region is politically pretty stable for the area, thailand has had some ructions, but the respect for the royal family and especially the king of thailand keeps things in check (i.e. coup's).

The fiscal regime is as follows (per tenement, that is each tenement is treated as separate and independant for taxation purposes)......

Royalty tax - 5 – 15% sliding scale on monthly production levels (2008 estimate ~8%)

SRB tax - 0 -75% of profits once capital recovered (2008 estimate ~50%)

Company tax - 50% on net profit after royalty and SRB
Based on Gaffney Cline’s report, company take equates to approx 30% future net revenue after taxes
and costs

.........................................................

So James99 please do some research prior to posting here, it isn't hard just check companies reports at asx or through your broker and build up info on cvn's position.

I also see that CVN is way undervalued at these prices, but this is part of the overall market conditions at present, every one is being punished at present regardless of "value".
She will be rerated, and get back past recent highs, within next few months. There is plenty of good news to come.

I have been in CVN since the 5-7 cent days so I have seen this baby get hammered and pushed around. Fear is driving things at present, so buy on the dips and sell at the peaks, or hold long term. Up to you.

Hope this clears up the confusion


cheers

steve