CanAsia Energy Corp V.CEC

Reserves Report Dissapointing

[nozzpack]

Proved plus probable oil reserves (2P) decreased 3 per cent to 4,625,000 barrels at Dec. 31.
Whats worse is that we actually lost 745,000 barrels which was converted from possible , reducing Possible by that amount.

The other aspect is that there are only sufficient Reserves for another 4 years or so left in the reserves.

This will definitely be reflected in a reduced price to the buyer.

Our current valuation of our investment on the books is $24.6 million cad.

We will be very lucky to get that amount, given that the oil field is nearing the end of its productive life.

My call is that we get about $20 million or $0.40 per share for our Thailand assets.
This would value the stub ....after.  $0.40 divy is paid...at about $0.60 per share.

[Lucky2021]

what is the point of selling thai assets for 20 million if at current prices and oil production POE makes this money running production for 12 months

[nozzpack]

These are late in the cycle legacy assets that are in their sunset years . They would have been sold in 2020 had oil prices not collapsed.   Book value is now listed as $24.6 million in cad. Risk discounted and you get about $20 m.

[nozzpack]

This is the fair value quoted on the balance sheet. Why would any buyer pay more ? Q4 will see a further decline in Fair Value. The share price was trading in the $1 range before the dividend was announced. Thats its fair value according the balance sheet book. The dividend did not add any value, just positive investor sentiment.

[101OilMan]

I don't think the shareholders will vote for if the resolution is to sell Thai assets at $20 m CAD. BOD members also hold 8+% of listed shares. Why would they sell at the said price? If the buyer shares the same view as your assumption, why would the buyer buy the late cycle oil field? The reserves report showS the value of 2P NPV10 is ca. 1.04 cad/sh. Or I might misread it. Thank you.

[101OilMan]

Sorry, typo. It should read 1.09 cad/sh. Thank you.

[nozzpack]

You have to look at it from the buyers side . Even at these strong prices, there is only very modest free cash flows, perhaps $3 million per year . So, why pay $54 million for a 5 year field life and get maybe get $15 or so as gross ROC over 5 years. Your $54 million is gone, the field is dry and you are left with just  $15 million of your cash. That's a terrible investment . So, $20

[101OilMan]

Thanks for clarification. If you were POE's BOD, would you proceed to put the resolution to sell at $20 m cad to shareholders. As a shareholder, would you vote for on the proposed transaction?

[crocks31]

To reference Billy Madison: I think everyone on this thread is now dumber having read Nozz comical attempt at valuing the thailand asset. Nozz i strongly recommend you sell everything immediately because if thailand only generates $3M a year in cashflow then this is extremely overvalued trading at $1.30...

[nozzpack]

I am not talking about cash flow. I am talking about Free Cash Flow which is what is left over when all expenses are paid including taxes. This free cash flow goes directly as additional cash to the cash position. You can check my calculations by examining  Q3 financials on Sedar. I apologize in advance if I am wrong . I am not the buyer so I go by fair value analyses of the Investment

[Lucky2021]

3 mil per year? last quarter was around 4 mil

[radcat]

This is what Malcolm Shaw at Hydra thought POE is worth on Oct 4, 21 and oil prices are much higher now with calls of $100 by years end.  Pan Orient Energy (POE.V, last at $1.02) I mention POE because it’s a fairly pure play on Brent oil prices. POE has lowered its operating cost structure in Thailand and improved its sales pricing materially over the last year. Drilling has also gone

[radcat]

Not included in the Reserves Report is 12 workovers and 3 new wells at the DD field.  That has to be worth something. P3 reserves is values at $1.32. Again estimated at a lower oil price in 2021 than today.  Preliminary plans for 2022, subject to partner approval, include 12 workovers, with ten of these in the Kamphaeng Sean fields (L53-A, B, D and G) and the remaining two in the DD

[nozzpack]

Approximately $250,000 was added to cash position in Q3. Thats the free cash flow....not the marginal cash flow defined by gross margin..to which you refer 

[bfw]

It is not a dividend. It is an ROC. It will be worth your while figuring out the difference especially prior to tax time! bfw