RE: JD comments Extcffan
Don't like my math. Which part of the equation do you have problem with? What you are really saying is that the market is right and management and myself value estimates are incorrect. Again this gets back to who is driving this stock. Again Mr Flipper and his band of marry men are. It is clear through the trading patterns. Who dumps 500 shares 3 minutes before the close to drive the stock down a penny? Look at the stock trading since we were at 24 cents - sure there are sometimes of strong selling volume but most of the down ticks are very thin volumes.
If you think there is a lot of money out there for exploration projects you are grossly mistaken my friend. Today is harder than last year and last year harder than 2009-10. Look at the TSX Venture exchange its down 25% yoy - against a S&P up 25%. Fund management companies involved small caps have redemptions coming out their behinds and are bleeding money. That is the market and companies good and bad are suffering for it as we the shareholder.
As for the 1Tcf - you have gas to surface on a single isolated well - proof enough. Show me anywhere else in the world you get gas to surface on single isolated CBM well. It is huge. NSAI gave CBM Asia's property a 50% chance of commerical success which includes country risk, development, pricing etc with no production facilties - that is an amazingly high number. Country risk - are you from Canada where the government retroactively changed the tax regime on Canada oil producers, are you from England or Australia where they did the same? Indonesia has NEVER retroactively changed the fiscal terms on their PSC contracts. Gas in Indonesia sells for US$6-11/Mcf and export prices up to US$19.
I understand that us Canadian's don't understand Indonesia and we still remember Bre-x. Heck I cant even remeber studing South East Asia in high school geograph or history class. I travel all over the world and evaluate risk for investments and I had the same thoughts as you before until the Canadian, UK and Australian government changed the tax rates. Imagine making an investment into the project and then pop you have to pay an extra 10-25% tax. BTW they don't do that in Indonesia or Thailand or Malaysia. Just because Indonesia is far away and Bre-x management which is Canadian cheated their investors does not mean the Indonesians well.
Yes this company will be taken out after the derisking has taken place. If management hits their 15 Tcf target most of which comes from the Exxon project - 8-11 Tcf according Scott Stevens then you will have Asian national oil companies lining up. Where can they buy 8-11 Tcf in Asia - no where its dry. The last two big transactions was PTTEP (Thai state oil company) buying Cove Energy for US$1.9billion for 4.5 Tcf of recoverable and CNPC (parent company of PetroChina) buying 10 Tcf of recoverable from ENI for US$4.5 billion. Both transactions where in Mozambique Africa where there is no domestic market, no LNG facilties and this was based on appraisel results.
It is a simple story. Derisk a huge asset and have the oil majors fight over it. The stock behavior is more a reflection of the TSX V exchange down 25% yoy and the negative attitude of most of the investors not just in CBM Asia but every stock. CBM Asia is only down 7% yoy - relatively the company has done great.
Enough of this. I wrote all the bs in the hope us small time investors keep our eyes on the prize. This management team has put together a portfolio of great assets but is finding it hard to fund them because of market conditions. Best thing to do is pick up the phone or email them ask to participate in the PP. That is our what I am going to do and you should to. Put your money in the drill bit not Mr. Flippers bank account.
JD