Carnarvon Petroleum NL (CVN, formerly Metana Petroleum NL, MTP) is an oil and gas exploration company with projects across Australia and Thailand.
The company continues involves generating exploration success and transforming that into larger reserves, stronger production and higher earnings. At the same time the company remains fiscally disciplined, with no debt and a strong cash position of around $80 million, despite difficult market circumstances. This has meant financial stability and no prospect of dilution for ordinary shareholders, unlike so many other distressed resource companies out there at present.
From a charting perspective, there has been an encouraging improvement to the outlook for CVN over recent months. As evident on the daily chart, a solid range of support has emerged in the 25 cent to 23 cent region. In my opinion, downside risks are limited to this region.
Although initial rally attempts have been limited to the 37-cent level, the recent period of base building has the potential to support a sustainable rally in the months ahead. Combined with the resilience of the broader upward trend, CVN continues to offer solid longer-term potential.
In the Elliot Wave 09, we can see that wave for is between the 32 cent and 34 cent region. This will be a good buying point. That will complete with wave 5 at the 41 cents region.
CVN’s interim net profit after tax was $21.7 million, a substantial increase from $5.1 million a year earlier. The increased profit primarily reflects higher production combined with lower operating costs. For full-year 2008/09 , anticipate earnings of around $43 million, putting the company on a prospective price-earnings multiple of just five times, dropping to just three times in 2009/10 as anticipate profit growth to around $80 million.
This is outstandingly value, particularly for a company that has a proven track record of delivering on its exploration and production ambitions. CVN is in a good position with no debt, medium to long-term production and a growing bank balance compared to other peer in the same industry.
Disclaimer :This is just an opinion for general information only.
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