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?

Fundy,

Good news on the drilling front for 05/06, although some firm dates would have been nice. What do you make of the production for 05H1 of 18.8kboepd? Perhaps a bit less than some were expecting hence some sellers today, although the 22-24k boepd average for all of 05 is quite a bit ahead of the 18604 boepd for 04.

I see you made the news today: FUNDY FINDS DIAMONDS IN LIBERIA ;-)

Gav

the wifes had me looking for them for ages - had to get lucky sooner or later :-)

H1 production figure was a little disappointing and to be honest the full yr is lower than i have pencilled in (27k) - they may of course be playing down expectations early in the year. That said, with current oil prices (and production unhedged) this should lead to a huge jump in profits. The drilling programme is highly impressive (agreed some dates would be nice -reportedly from the actual AGM it was said that Faucon would be drilled late sept/early oct). Also mentioned at the AGM that Faucon could well be a billion barrel prospect (though i guess this is total not recoverable). Barbara announcement very positive and was played up at the AGM with potential for Dana to increase their stake. Also very bullish on Kenya.

Fundy,

Hope the wife appreciates all your drilling efforts in Liberia!

Even with less production than perhaps some had thought, high prices and no hedging should more than make up for it over the year. As for drilling dates, perhaps they can't give specific dates due to rig demand right now, although at least they have the Bredford Dolphin rig for their immediate plans.

It's good to get a rough timescale for drilling of Faucon, not long to wait from here. As I understand it, Dana have 60% of the licence, do you have any idea of chance of success here? Using a 20% chance of success of 1bn barrels, that would still work out at 120mmb to Dana and using a 50% CoS 300mmb. Even taking a low conservative figure to value the oil in the ground, and assuming that drilling goes according to plan, it still works out at a healthy profit. I'm assuming that once Faucon has been drilled they will then be moving on to drill Petrel which they claim to be another 1bn potential target, of which also lies in block 1 so Dana have 60% of this.

For block L-5 in Kenya, I understand it that this should be the first target to be drilled by end 05 followed by block L-7 and Dana have a 30% interest here. Interesting names, Pomboo and Sokwe, both again with potential of 1bn each. With regards to Kenya, found this earlier Kenya

Happy days all round if all of these targets are successful!

thanks to Fidra across the way for his AGM report:



fidra - 28 Jul'05 - 19:47 - 6928 of 6939


WARNING THIS IS A LONG POST!
Summary of some of my notes from the Agm.
Probably about 25 people in attendance.

There was a good presentation done by Bostick and Cross.The directors worked the room before the meeting,introducing themselves to Shareholders and answering questions from them on a one to one basis informally.I spoke with Goodall,regarding hedging.He said no plans to hedge at present they are happy dealing in the spot oil price.And had made a lot of cash.I asked about a payment then of a dividend.His reply was that the drilling operations were going to cost a lot of cash.

On the open forum I asked a few questions .

Regarding Cap ex the reply was 65/70m per year in 05 and 06.

I then followed this up with asking about a return to shareholders.Cross answered this differently.He said they would take a long hard look at this in September,when the 6 month results come out.Prior to this in the meeting they had said they were throwing up lots of cash.All expenditure would be out of cash flow.
My estimate for cash flow for half year is 100m.Therefor Cap ex 32m and expenses 3m.My total revenue estimate is 239m based on 22K bboe per day.(I would be interested to hear others as this is above the estimates on Yahoo.)

I also asked about Rig availability.They have the rigs for the north Sea work.
Faucon they expect to start in Sept /Oct and they have this Rig (Ithink)for Kenya they expect to start in Feb 06.Woodside will be doing this.This rig is now probably available to start then.DNX have a 30% interest but only pay 10% of cost.This and mauratainia are both billion barrel opertunities.They have the equivelent of 700 North Sea blocks offf Africa whch they will drill.The smaller block of Morroco will not start till 07.

Cross particularily mentioned on at least three occasions that the time to get the rigs available was not being wasted .They had commisioned seismic 3D (EMS)surveys of the areas.This was not available to them when they had taken the blocks.The inference being that because of innovation in the industry these surveys were a great saver of future time and energy.As they located where the oil/gas was most likely to be and the rig could be deployed directly in these areas first.The EMS study was"very encouraging".

on Morrocco he said the Geology was the same as east coast offshore Canada where oil and gas was coming from.As they were joined millions of years ago.
Therefore he was excited by the jurrasic deposits in the area.

He also mentioned that they were doing well in collaboration with Woodside.Of particular note he went on to say that because woodside had found oil and gas in neighbouring blocks because of the geology of the area he reconds they would find the same.The inferance being we will find the same as them.So look out for others reporting on the same area.

The north Sea production could increase rapidly and tie back throught the existing structure.
he said thety would soon have 75% of Barbara at no extra cost because of the new finds there.Barbara"was a very good story "(for us).

Enoch and F16E we will here about soon.Cavendish in next few weeks.Crusader in next few months.Therefore good news flow expected

They expect to grow production(without new finds)at about 20 to 30 % per year.

In the North Sea six rigs at present working.

Area of Mutual interest pact signed with Woodside.
Ghana low priority Govt dragging heals.

Expects 05 22/24kbboe 80/20 oil to gas
06 28k bboe 75/25
0731k bboe 65/35.

said gas prices were looking like being very good.

The 18 wells 7 this year and 11 neext target is 900bboe oil 400 gas.
if they found 10% it would double companys reserves.I think he expects at least 30% or more.This conservative evaluation done for the major American shareholder.

Probably a stupid question- but when was the consolidation was it a100/1 or 200/1 and old sp. and new sp. cannot remember dnx that far back.

mbugger
I'm sure it was 100/1

It was 15-1 - went from approx 15p to 225p on consolidation if memory serves me right

Fundamentalist
You may be right there, I was thinking of EEN.

Broke through the 700p at long last.

GRRRRR

i sold my holding this am at just under 700p on the news of the mauritanian military coup - the news hit every other oil company exposed to Mauritania (HNR -9%, SEY -6% for example) and expected Dana to suffer too - looks like im going to have to pay more to buy them back (at least what i missed out on here i saved on SEY).

rumoured to be a broker note today suggesting switch from BUR to DNX and CNE and also some city rumours that chinese oil co is looking at DNX or BG. after failing in a takeover in the US

Fund a list
I don't believe it!!! After all that research you shouldn't be looking at the news, you didnt listen to your own research, you got a nice few bob though.

Driver

it was a risk reward short term decision - i thought the impact the coup was having on HNR, SEY et al was going to effect DNX and thought I was being clever (thought the max upside over a few weeks was 5% with a potential downside of 10-20%) - let it drop back to 600-650 and buy back in rather than let it rise to 750 then buy back in. Knowing my luck there will be an RNS tomorrow morning and theyll be over 8 before i can get back in

You win some you lose some.............

Am starting to regret selling these at 160p (ish) last year- or was it 2 years ago - whenever - a bum decision

Baza

Fundy,

Sorry to hear you got caught out like you did. If I had a sizable position here I might have done the same as you did with your sell before the market reacted to the Coup news. Do you have any thoughts on why the sharp rise in DNX on Wed? Have you seen the actual note? I thought there might have been an drilling update today to back up Wed's price movements but not today. I think the CNOOC rumours were also around PMO and Woodside, usual media stuff perhaps.

Gav

I dont have an issue with my sale - it still strikes me as the sensible thing to have done, and what i have lost here i have gained on sterling. Im still amazed that DNZ went up 5% on the day the coup news came out.

Havent seen the note, though the comment was from one of the more reliable posters across the way (he holds both so not likely to be a ramp).

Now trying to find a point to re-enter - could have done without the rise again this am lol

Thread for the more intelligent.

http://www.moneyam.com/InvestorsRoom/posts.php?tid=8461#lastread

800p here we come.

Deramp warning!!!! 700p here we come

Driver - only managed to get half my original holding back at 725 so would appreciate a quick dip just to allow me to top up.

In all seriousness - while the oil price continues to rise then the SP will run away with all current and future production unhedged. Strong newsflow expected will only add more impetus

Fund a list
Welcome back, you can have a quick dip for one day only then onwards and upwards.

Fund a list
It doesn't look like a quick dip today we are through the 800p.