Just cannot understand recent SP volatility!

As a Dana shareholder I find it difficult to
find any reason to sell, even at current price. The Company has recently
entered a number of agreements which will have
considerable benefits:-

1. Reserves from 31st December 2003 of 123.7 mmboe
must now be in the region of 200.0 mmboe.( 100 million
North Sea 70 million Mauritana 30 million Russia ).

2. Production will rise to 25-27 thousand boepd in
2005 from 18 thousand in 2004.

3. At 30th June 2004 a Net cash position which will
have been enhanced significantly year to date.

4. Exciting exploration potential.

5. Management that seem to know what they are doing
with an excellent chief executive.

6. Recent deals by other oil companies have seen oil
assets bought at prices between 7-11 dollars a barrel
( see last weeks Investors Chronicle ) Dana must have
a value well in excess of the current 300 million.

I am holding firm and looking towards 800 pence.

Any other views out there?

Nice little read.

oilbarrel.com

03.01.2006
Drillbit Disappointments In Mauritania, Angola And The North Sea But Good News For Burren In Congo
High oil prices have triggered increased levels of exploration spending across the sector. Rig owners are enjoying soaring day rates and busy order books while oil companies are making friends with rivals that have access to spare rig slots. Yet all this spending and spudding doesnt necessarily equate to more discoveries: the black stuff is getting harder and harder to find.

Mauritania may be an explorers favourite - there have been a string of exciting oil and gas finds in these previously undrilled waters - but it has also seen its disappointments. The most recent of these is the Faucon-1 wildcat in Dana Petroleums Block 1, which lies outside the hot zone of blocks 3,4 and 5 (home to the likes of Woodsides Chinguetti oilfield, now on track for first oil in the first months of 2006).

At first hopes were high for Faucon-1. There were pre-drill estimates of a possible one billion barrel prospect and shares in Dana jumped 82 pence to 973 pence in early December (even in the face of Gordon Browns North Sea tax hike) on news that the well had encountered a fluid influx of 27 barrels and penetrated hydrocarbon-bearing sands in the upper Cretaceous - but at that time the well had not been logged or tested.

Further details released later in the month were less encouraging and shares in Dana Petroleum dropped by more than 10 per cent, making the Aberdeen-headquartered companys earlier decision to reduce its 60 per cent exposure by farming out 24 per cent to French company Gaz de France seem eminently sensible.

The well is now being plugged and abandoned, after finding two hydrocarbon-bearing sandstones some 150 metres apart, of which the upper zone was gas-bearing and the lower sandstone appeared to contain light oil or liquids-rich gas-condensate. Further details will be released in January once the fluid samples recovered downhole have been analysed in an onshore lab, said Dana in a statement.

It was left to partner company ROC Oil (2 per cent) to give a little more detail on the well: a regionally significant but sub-commercial, discovery. The City backed this analysis and a number of analysts downgraded Dana in the wake of the Faucon-1 results.
Even so, the well has proved the existence of a working hydrocarbon system outside the Mauritania hotzone: Faucon-1 was drilled 140 km south of Chinguetti. As ROC Oils CEO John Doran noted, Exploration offshore Mauritania is still in its infancy: more than 14 million acres/50,000 sq km; barely scratched by the drill bit."

It wasnt just exploration offshore Mauritania that proved disappointing in the days running up to Christmas. Tullow Oil, which recently signed up for its first exploration project in Angola, announced that two wells there, Ngueve-1 and Henda-1, had come in dry. The company has a 15 per cent stake in the Devon Energy-operated 4,800 sq km Block 10 in the South Kwanza Basin and believes there is further prospectivity on the acreage.

Closer to home, Elixir Petroleums Muness well in the UK North Sea is being plugged and abandoned after finding only minor gas shows. Elixir has a 7 per cent stake in the block and is already looking ahead to its next North Sea project: the high impact Jaguar well, which is due to spud later in January.

It wasnt all doom and gloom at the drillbit in December, however. Burren Energys MBoundi field in Congo (Brazzaville) yet again delighted the market as new development drilling produced some exciting production rates. Well MBD 1201 on the northwest perimeter of the field is flowing at 3,200 bpd, MBD 1104 to the west at 700 bpd and MBD 1006 on the northeast perimeter at 2,600 bpd. Development wells MBD 1202, 1105 and 1903 are currently drilling and, if successful, are expected to be placed on production later this month.

Nice to see a revisit of the 1000p level on the back of a rising oil price. Not too long now till results, will we get any more drilling news beforehand?

Be good to see it hold the 1000p level for a couple of days.

Likely to depend on the short term oil price i would think Dil, but yes would be nice to see it hold above 1000p

Good old Dana my only blue today.

Interesting trading update released this morning which imo was positive but the sp has been hit by 2 1m+ sales so far today.

A lot of drilling to come throughout the year and production targets raised, with pleanty of cash to cover the drilling program.

Steve,

Like you I have a long term core holding of DNX which won't be swayed by market gyrations, - maybe I was being modest about my modest holding, lol. Aside from today's sells (which could be viewed as positive - into strength?), I am reassured by the broker upgrades earlier this week.

Since the Manchester am event I have used Sputnik's Sharescope setting to get another view of FTSE350 stocks generally - basically 1-year line chart looking for with-trend support and resistance. It works rather well. Just now DNX is testing a slightly falling resistance line around 10. If it breaks and pulls back I'll add to my holding with a long CFD to try and ride up the rise.

It is such a volatile stock that I'll only get out my microscope if support around 9 is broken.

Edward

support at 900p breached ?

still not worried

Worrier

not worried at all, topped up with some more at 898p this morning.

Appears as though Fidelity are increasing there holding

Still got mine too.

fund dil
Still in there with you.

Added long CFD

Results on 28th March, nice blue day on the SP

fund
Cheers

added again this morning 946

Looks good timing Edward, a couple of stronger days for the SP and sitting on the 1000p level ahead of tomorrows results

fund
What's your make on the results and do you think the share should be split say 1 to 4 making the sp 265p to bring in the small punters.

Net profit for the year to December 2005 rose 406 pct to 64.2 mln stg, while pretax profit grew 232 pct to 107.8 mln stg. Turnover climbed 51 pct to 165.6 mln stg.

Driver

no need for a split imo, they might as well wait until its 20 a share before they worry about that ;-)

my take on results is that they were extremely positive, both in terms of the historic numbers and also in terms of the forward exploration plans:

Current year EPS of 80p gives a current PE ratio of 13.4. However, if you look at the half yearly splits, the second half EPS was 50p which puts it on a second half PE ratio of just over 10. With average production for the year 19,700 boepd and this forecast to be 40,000 in 2 years time, potentially the forward Pe of 2 years time is approx 5 or 6 (assuming oil prices stay at current levels as all production is unhedged currently). Factor into this the current cash generation (107m this year) and balance (net funds of 92m), which gives them the funding to back up the drilling programme (and most of the rigs are already booked).

In terms of reserves, net 25 million boe were added to proven and probable reserves (all from the North Sea) making 111m in total. Total reserves of 235m. Future reserves is now where a lot of the focus will be switched, with some very exciting prospects within the drilling programme. In 2006 11 exploration and appraisal wells are planned (10 have rigs booked). Of these, 4 are offshore in Africa and all 4 have company transforming potential (all of these are second half of the year). With particpation in upto 40 wells by the end of 2008, the total potential reserves targetted is 2.1 billion barrels net - 10% of this would double current reserves!!! The only slight negative on this front was the news re Algeria, with the agreement with Gaz de France not being permitted to divest currently.

Long term the company continues to perform and grow and the plans are clearly in place for the forseeable future for this to continue. I still think there is considerable upside to the current share price with limited downside (the obvious risks being a falling oil price and drilling failures) and will continue to hold these for the long term.

From a point and figure chart perspective, the day before results saw a triple top breakout, combined with a breakout from a triangle pattern, a strengthening on the continual uptrend. This is also confirmed with the line chart having broken out to an all time high. Targets can be seen at 1110p (near term) and 1460p (medium term)

Dana Petroleum on track with output target as FY profit soars UPDATE

(Adding comments from CEO)
LONDON (AFX) - North Sea oil and gas producer Dana Petroleum PLC said it is
on course to deliver its production target of 40,000 barrels of oil equivalent
per day by end-2007 after it unveiled a dramatic increase in annual profits.
Net profit for the year to December 2005 rose 406 pct to 64.2 mln stg, while
pretax profit grew 232 pct to 107.8 mln stg. Turnover climbed 51 pct to 165.6
mln stg.
Average production rose 6 pct to a record 19,683 boepd, which it sold for
around 42.24 usd per barrel, up 43 pct from a year earlier. Oil accounted for up
to 90 pct of output.
Dana said an accelerated drilling and field development campaign will bring
output to over 40,000 boepd by end-2007.
With crude prices still hovering above 60 usd per barrel, chairman Colin
Godall said: "The outlook is very bright."
Another three North Sea fields will be on stream later this year, taking the
group's total number of producing sites to 15.
The three fields will start production between September and December,
lifting Dana's overall output to "at least 30,000 boepd" by year-end, or an
average of 27,500 boepd for 2006, Tom Cross told AFX News in a phone interview.
"Right now we're producing 28,000 boepd from our existing fields," he said.
Dana has 11 fields in the North Sea, which contributed 91 pct of overall
output, equivalent to 17,901 boepd in 2005, up 10 pct year-on-year. The rest
came from the South Vat-Yoganskoye field in Western Siberia.
It will be drilling seven wells in the North Sea, two in Kenya and two in
Mauritania this year.
"We have all the drilling rigs and equipment in place," said Cross.
Production should reach an average of 48,000 boepd by 2008, even without the
benefits of acquisitions or further exploration success, he added.
Dana currently has proved and probable reserves of 111.5 mln boe and
recoverable hydrocarbon resources of 235.8 mln boe. It will spend 140 mln stg
this year within its existing fields and exploration licences, around 100 mln
stg of which will go to its development activities in the North Sea.
Annual spending over the next two years will likely be similar to the 2006
budget, which will be funded by internally generated cash, added Cross
Dana is planning to drill up to 40 wells through 2008, targeting 2.1 bln
barrels of net potential reserves.
The group is not worried about the increasing North Sea taxes. At his
pre-Budget report, Chancellor Gordon Brown doubled the supplementary charge for
North Sea producers, effectively raising the industry's corporation tax to 50
pct from 40 pct.
Cross said the UK taxes are the same anywhere else, with some countries even
charging as much as 80 pct.
"North Sea is still a profitable business even with the increased taxes," he
said.
Dana has no immediate plans to pay dividends while it invests heavily on oil
search, he stressed.

These latest comments from Tom Cross make the situation look even better. Current production is already 50% higher than the average 2006 production and is likely to remain as high if not higher by next year end and the target for end of 2008 (nearly 3 yrs away) is 48,000 boepd - this equates to 3 times as much as the 2005 average!!!