Compass Venture Inc T.CVI.A

RE: Target price $7

[turks1]

I pasted some of the report  & here is the link.https://www.jenningscapital.com/reports/CVI20111110RaisingTarget.pdf

 

 

HAPPY NEW YEAR, NEW TRUCKING

FACILITIES, NEW DISCOVERY(S), NEW

PRICE FORECASTS,…

?? Trucking facilities at Block 51 should be

completed by month end. Once commissioned, we

anticipate that gross production will rise to

~10,000 Bbl/d over the ensuing several weeks as the

Company brings on the new wells. (page 2)

?? Qarn Qaymah-3 basement well nearing TD – first

results around month end. Drilling has resumed

after running an intermediate casing string. Absent

any drilling problems, the well should reach TD in

approximately two weeks. First results should be

available around month end, although the full testing

program will likely continue well into February. The

basement has potential for up to 300 MMBbl of

recoverable oil. (page 2)

?? Ras Nowmah-3 appraisal well underway. This is a

follow-up to the RN-2 discovery well drilled in 2010,

which tested at rates over 3,000 Bbl/d. Preliminary

estimates of 50 MMBbl OOIP could also be expanded

as the Company processes and interprets new seismic

recently shot over the discovery and offsetting

prospects. (page 2)

?? Looking for substantial reserve increase this year.

Between the Ras Nowmah discovery, improved

performance at Hiswah and potential reserves at Qarn

Qaymah, we believe that Calvalley’s 2P reserves

could increase by up to 30% vs. 2009. (page 4)

?? New price forecast and higher production rates

boost cash flow for 2011 and forward. We are

estimating cash flow of $84 million (
.84/sh) in 2011,

up from $20 million in 2010. We anticipate a further

increase of $151 million ($1.52/sh) in 2012, as

development drilling continues and a sales pipeline

eventually replaces the trucking. (pages 3, 4)

We are maintaining our recommendation of

SPECULATIVE BUY and increasing our 12-month

target to $7.00.