Holding for the longer term

This is why I am going to hold CVN for the mid to long term.

1. Shell is producing some 22,000 barrels of oil (Phet crude) a day from its onshore Thai leases and some of these leases are adjacent to those held by CVN and PTE in the Central Thailand Basin.

2. Shell's leases total 1,227 km2 while CVN and PTE now have access to over 8,000 km2 in a proven oil province. They have a number of new prospects to drill (eg HP in December) and are yet to define the northern extension of the F sands or test the productivity of the E and G sands.

3. I am assuming Shell's "Phet crude" is of the same or similar quality as that found by CVN so it suggest to me that if there are any flow problems they are not with the oil but with the reservoir characteristics. These characteristics can change depending on where you are in the reservoir.

4. The JV will presumably have continuing access to Deutag's T-48 drill which performed so well on the recent new wells. Deutag's web site states "with dramatically increased level of performance we (Deutag) have drilled additional wells in 2001 which were not regarded as economical before". In other words CVN and PTE should have access to a high quality, high performance drilling rig at reasonable prices.

5. Whenever I have rang and asked to speak to the Company Secretary in Perth he has always been available and has always answered my questions to my satifaction. I have no reason to believe thay have told me porkies or have deliberately mislead the market. The latest CVN press release says production is currently at 60 barrels from the fracced wells which is the combined total output as detailed on PTE website. What CVN did not say in its press release is that PTE has not given up on these two wells, that the pumps are not at optimal speed and that the operator is bringing in special equipment for a sand clean up. I personally don't hold out much hope for these wells but you never know what the engineers can achieve.

6. CVN is a high risk play like all the junior oiler's but that is a risk I am prepared to take. If the new wells test positively and the signs are they will, then the JV will have the cash to develop the rest of the field which is estimated at 23 MMBO (P50) though I have seen higher figures mentioned in posts.

7. Maybe I am rationalising a poor investment choice but at least the above shows that I have done some homework and think there is a lot of upside to the CVN price.

8. Happy to have any errors in my thinking pointed out. DYOR. JBC