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 drill discovery and a decent set of results to boot

I have had these for about 13 years up 400% they just tick over in the back ground, I know its a stupid question but do we get a divi.

driver
Yes I think you do

driver
Thanks driver.

Driver

no you dont -the company stated at results that it still feels that any cash generation is better employed in further growth/acquisitions

Fundamentalist
Thanks for that, I seem to have heard that one before mind you they are doing OK with out a divi.

Driver

im quite happy for there to be no divi if they continue to deliver the capital growth. whilst we are in a high oil price time i am more than happy for them to continue to re-invest it in the business - the recent deals all seem value enhancing.

Fundamentalis
Totally agree I will put this stock to the back of the draw and let it carry on slowly growing.

Blimmy Dana steady on 6+ WHATS going on.

Driver

maybe the market is finally waking up to the fundamentals and putting a fairer value on the stock :-)

been rumours that MLR are close to agreeing the sale of their stake in the business, oil prices high (and many expecting to remain so)

Fundamentalist
Thanks for that, putting it to the back of the draw again.

I'm sure that Shell's reported comments over the weekend re $40 oil will have done no harm at all for DNX and indeed the rest of the sector today. I'm still kicking myself for not getting in on these previously!

Gav

i know you are well committed elsewhere in the sector but despite the rises these are still quite lowly valued imho. if as rumoured there are more planned swaps with future african assets for current north sea production then it will bring the forward pe back down close to single figures again.

Hi Fundy,

Agree with what you are saying and am taking another look here. I do like the strategy of swapping more risky assets for producing assets in the NS. Quick look at the last results, they say they want to increase boepd from 18k just now to over 30k by end 06. Looks like there is an excellent mix here of exploration prospects with solid producing assets. Seems to be quite an active drilling program to end 06 with 17 drills planned. Do you have any idea when they plan to drill block 1 in Mauritania and block L5 in Kenya? Yes I am well committed elsewhere in the sector, especially with SIA, but in this current market, I cant really see past the oil sector. Of course though, I am an oil bull. Cant really see oil tanking over the next few years so companies like this should have bundles of cash over the next few years.

Cheers

Gav

Forgot to say, I've got a couple of brokers reports from Canaccord and KBC. They date back to August 04 and March 05 and they both cover a few companies in the sector. Although they are a bit out of date, email me off board if you want me to send them to you. They both cover DNX.

Gav

Like you im also an oil bull currently and cant see any reason for that to change in the coming years. Personally think oil price is likely to remain above $50 for this year, with every chance that it is going to spike up quite soon towards and maybe even through $60.

I have seen the KBC reports and a small warning that i would check the detail in their reports. they have been challenged by a couple of respected posters on advfn (a few do exist) about the accuracy of their asset valuations on DNX, especially the one accompanied by a sell recommendation just after the last set of results and were unable to justify their numbers and comments (they had made an adjustment to an out of date report rather than their previous released report if my memory serves me right)

As for drilling dates i have posted what i think is the last announcement re mauritania - i cant currently find the same for kenya - i think it its early 2006 but i need to check.


From Dana's announcement of the Woodside deal:

Mauritania Block 1

The Petrel-1 well, located in Block 1 offshore Mauritania, is designed to test a large Cretaceous age structural trap with a first quarter 2005 spud date currently being targeted by Dana. Subject to sufficiently encouraging results from the Petrel-1 well, a second well on Block 1, to test the even larger Faucon prospect, is scheduled for later in 2005. Following a separate agreement with Tullow Oil plc, the participating interests in the Block 1 PSC at the time of the Petrel-1 well will be:

Group
Dana 60%
Hardman 18%
Tullow 20%
ROC Oil 2%

Fundy,

Thanks for that. I too agree that oil will stay above $50 for the rest of the year, and that we will see 60+ reasonably soon. Looking past this year, I cant see oil falling back to anywhere near 30's etc. Cheap oil is long gone IMO. I posted a link on the SEY thread to Simmons's last presentation, makes interesting reading.

As to the brokers notes, those taking their advice would be kicking themselves even harder than I am just now, especially with the sell note. I havent really looked too hard into the notes so thanks for the heads up re the accuracy of the asset valuation of DNX. I dont base my trades/investments on brokers notes, as Im sure you dont either, but they are good to read to try to see where they are coming from. A prime example of brokers making mistakes is with SIA. Some brokers have been saying sell for a while now, and indeed, with the last I have, they were talking with regard to well CNV-2X when in fact the last well drilled was CNV-3X! Anyway, I just mentioned the notes in case you didn't have them.

Thanks for the info on Block 1, got a lot more research to do.

Cheers

Gav

Gav

i read the simmons post earlier, very informative.

As for brokers notes, i agree they are worth reading, if only because other people will be following their recommendations, though as far as numbers go i always try to cross reference them back to my own f/cacsts.

That said, its a while since i revisited my figures on Dana, i have been quite happy just to let this one look after itself. Must try and revisit this in the next week or so. Ill also try and dig out some other articles ive got on dana and will post tomorrow

Cheers Fundy, look forward to reading the articles. Simmons's new book will be out soon and is at the top of my shopping list. No doubt it will get plenty of attention in the media, especially in this climate!

Wednesday, 24 November, 2004

Offshore Kenya survey underway for Aussies.

OGTA 3,600 km 2D seismic survey of Blocks L-5 and L-7 offshore Kenya is underway for Woodside and its partners, Brisbane's Global Petroleum and UK-based Dana Petroleum.

The survey covers nine key leads mapped on the basis of the seismic data recorded in 2003.

It is expected to be completed by mid January 2005.

The JV expects the first well will be drilled in the fourth quarter of 2005.
The leads to be investigated by the new seismic are in water depths of 500 to 2,500 metres and range in size up to several tens of square kms with very significant reserves upside potential.

Interests:
Woodside 50% (operator)
Dana 30%
Global 20%