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?

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!!!

Fund
Thanks for your reply very encouraging, looks like its a hold then or even a top up on the dips if there is any.

Dana Petroleum lost 18p to 1050p. After the market closed, Gaz de France said it was cancelling a deal to sell Dana a 20% stake in an Algerian gas field after objections from the Algerian state oil and gas company, Sonatrach, but will go ahead with asset swaps in Britain, Egypt and Mauritania

No comment from Dana rather diappointing. Sold my trading batch this am though holding onto the long term ones in the ISA

Also a sell recommendation from IC today on all accounts, though they have been saying sell from about 600p lol

Huge selling today with over 35m shares changing hands - thats 12% of all the shares in issue - not a great sign on a large down day

edit : on all accounts MHR placed there 17.7m shares into the market today

Great article in the Guardian in regard to Merrill Lynch views on Dana. Disappointed in the sell reccommendation in the IC followed a week later with a buy on Tullow.

Based on total capitalisation is Tullow worth three times as much as Dana ?. Look at the respective balance sheets and oil reserves

churchill

IC have been saying sell DNX since it was approx 600p - makes their current opinion worthless to me

Fund
I'm In GOO as well do you fancy it.

Havent looked at it to be honest Driver, will take a peak

Only had a quick look Driver, its clearly a pure exporation play. Havent looked at any of the assets which is effectively what you are buying as you have no current production. Ultimately a gamble as to whether they hit oil before they run out of cash. Too small and too much of a gamble for me but could come good if they find a decent oil field

fund
If they find the black stuff I'll let you know.

Fund

Venture Production yearly figures due out shortly. Will make an interesting comparison with Dana seeing as there total capitilisation is comparable with ours.

I would not be surprised if we received a takeover approach. In my opinion for what it is worth Dana would make a perfect fit for at least two companies Gaz de France and Tullow.

Merrill Lynch raised it's price target last week on DNX to 1350 that plus the clearing of a stock overhang is due to the latest sp rise onwards and upwards from here.

Driver

I will be a multi millionnaire many times over if the price hits 1350 (it was 1350p lol)

The overhang is interesting, surprised we havent seen an RNS or 2 to know where (at least some of) the shares have gone

fund
I thought you was a multi millionnaire still it made you sit up, would be nice though it would even make my small amount look good.

This is how the times article reads, ML raised its price target to 1350p after last months placing of a 20% stake by MHR which cleared a stock over hang, if that helps.

Cheers Driver

I wish :-) havent got close to making the first one yet, still plenty of time

Did see the ML note, would still like to know where all these shares have gone

churchill

I wouldn't worry about dana. It's got great long term potential. Tlw only went up a lot last week because of the IC's recommendation. But you have to be aware how a large find will affect the sp of certain companies. eg. cairn's find in India was 2.5 billion barrels and since then the price has gone from 3.50 to 21.00. Tlw's field in africa could and i stress could (or rather the IC does) contain 1 or 2 billion barrels, we'll find out. Currently tlw have reserves of 352 million which makes up about two thirds of the company I think the rest is gas and some if not a lot of the price must be on potential finds. That's why I think tlw could double or triple if it has a find of this magnitude. Dana on the other hand, has I think about 1.8 billion barrels of potential North sea oil it's drilling for, I think this is why the upgrades have come recently, but this is still medium term and isn't going to move the sp in the short term necessarily. Don't worry about it. Venture production's results aren't as soon as you make out, I believe they're in a month's time. Very Good news for them today I think and a good value recommendation from the IC this week. VPC and Tullow are the two mid cap oils with the most in common because they're mainly north sea and have the most exposure to reliable north sea gas of any of the mid caps. Venture is , of course, a "scavenger" and it is on this basis that it got the private equity agreement announced today.

Regarding your point about different market caps , I haven't done the maths but of course it all depends on how many shares there are in each company.they don't all have the same number of shares, and in this caluclation it's also important to include ALL the options, possible awards, bonus schemes which may be forthcoming, etc.

Cheers,

Saintserf

some good points, with regard to Dana, it has some very large drilling prospects outside the north sea (mainly africa) though as you say with regard to timing, the next big news is likely to be second half of the year (unless Cross has something up his sleeve for the AGM). One area where Dana are very much ahead of some of the comparators is that they are fully unhedged and have been since the oil price started its relentless climb

Doing a quick comparison between Dana and Venture's final results for 2005.
Dana profit numbers far superior on less production presumably on the hedging issue. The balance sheets are even more revealing.Venture has some large liabilities with total net assets of 134 million compared to Dana's 270 million. Presumably at some stage there will be a correction in share values or am I missing something?.