Coastal Eng Share Discussion Threads

[dukedosh] 26/2/2013 20:12

Edison Investment Research - Oil & Gas - Macro Outlook

* Very interesting in depth piece by Edison with their take on regional and world O&G outlook. Looks like they think 2013 will be generally a bit tougher for the sector.

Oil & Gas - Macro Outlook: Prices look vulnerable

Prior to the 21 February setback, Brent was close to $120/barrel, the upper end of the trading range and a level that has historically had negative implications for economic activity. We believe that the upward trend in Brent in the early weeks of 2013 was divorced from the fundamentals and reflected unduly bullish expectations for the world economy and the potential for supply disruptions. In the coming months we think that oil prices could trend down in the face of a comfortably balanced market.

Full report:



This bit of particular interest to Coastal:

Brent-Dubai: Dubai Fateh is a Gulf-sourced light but relatively sour crude popular with Far Eastern refineries. Historically, Dubai has traded at a discount of about $2/barrel to the higher-grade Brent. During the second half of 2012 the Dubai discount, however, ran at a significantly higher $3.5/barrel reflecting strong demand in the Far East for grades with a high middle distillate yield and a plentiful supply of sour grades. In the first month and a half of 2013 the Dubai discount has widened still further to a historically high $5.4/barrel. Strong demand for middle distillates in the Far East appears to have been driven at least in part by colder than average winter temperatures in the region, which has boosted diesel and heating oil usage.

[naeclue] 26/2/2013 16:02

I'm becoming more of the opinion that bigger buyers are holding off until the update is released. It's a little surprising given the additional information in the updated presentation, but we seem to be at the mercy of flukey low volume trading.

Will look to pick up some more trading shares on further weakness over the next 2-3 weeks.

[dukedosh] 26/2/2013 09:48

Try this one:

The last few Jans and Febs have been bad weather but usually GoT weather improves March onwards.

This bad weather has inevitably caused ops delays and shut ins but as FE say, the share price has been way oversold.

[melf] 25/2/2013 14:20

Very nice Riv and at least you weren't in the Gulf of Thailand where the weather hasn't been too great for oilies.

For anyone interested, here is a link to the weather reports for Songkhla:

[douglasallen] 25/2/2013 12:51

hi duke...slow reply mate.

currently holding CEO, MONI, SIV and AN., have a few on the radar but will let these run their course as more upside top be captured from fundies/ trends.

[rivaldo] 25/2/2013 12:23

Hi Melf, Antigua is very, very nice this time of year :o))

The trouble is, you then have to come home and drop 50 degrees F...still, at least I didn't have to be in front of the screens getting depressed about the bloodbath! Hope you and others didn't suffer too much. Of my other oilies I see TPL has rocketed, GKP is stagnant waiting for the court case verdict, whilst despite my great hopes for it and its seemingly incredible undervaluation TRAP continues to be plagued by a seller, who hopefully will be cleared soon given all the imminent news flow. So pretty reasonable overall.

[melf] 25/2/2013 12:07

Been anywhere nice Riv? Yes, the middle of last week was a blood bath!

[rivaldo] 25/2/2013 11:47

Been away on hols, so surprised to see the pullback, especially given the new FE note in post 445.

With news due soon it wouldn't surprise me to see a quick bounce back assuming the markets remain reasonable.

[melf] 25/2/2013 11:04

The downgrading of Britain's triple A rating not doing us any harm as the pound weakens. Currently trading at c$1.549.

[tommy51] 24/2/2013 22:41

Thanks dukedosh

[dukedosh] 24/2/2013 21:12

tommy51, I did not like the last news which was contrary to the information we were told just the week before so I sold the lot. Shame as there's good potential but for me decent management is lacking.

[tommy51] 24/2/2013 18:51

dukedosh, are you still holding Pan Orient Energy,POE ? They still intrigue me but never bought. Sorry for o/t.

[pyemckay] 24/2/2013 12:42

suits me sir. i wouldnt like to be bought out at a cheap price.

i bought in at 2.84 and sold at 13.10 last year. I recently bought back in at £13 as i made a mistake selling. The decision wasnt company related but more economic at the time and was concerned regarding the markets in general. I need my holdings to manage their-self regardless of market conditions as i spend less time on research. Im still intending to keep 15% in short term cash incase of any real opportunities. sorry for the o.t.

looking forward to forthcoming coastal news in next couple of weeks.

pye

[dukedosh] 24/2/2013 12:05

Melf,
I reckon there's more than that as this story unfolds. The 3D is the start. Massive acreage, new targets, massive upside and that's before Malaysia which management say will be as big again. Maybe a case is developing for the 3rd rig? C$30? I see that as low ball now.

Pyemckay,
Don't count on it yet. There's so much upside for this team to develop as i said above and with most shares in old safe hands, it would cost C$40-50 a share or more to even tempt them.

[pyemckay] 24/2/2013 08:35

surely this must attract attention from a major oil company. according to the latest report it is 15% below core nav with 18 years reserves life. Also scope for adding reserves in the near term as well.

Its a ripe takeover target if ever there was one.

[melf] 23/2/2013 23:44

Thank for that Duke - You still targeting c$30?

[dukedosh] 23/2/2013 18:17

Here's First Energy's full report courtesy of belt on iv:



Makes for really good reading with the abundance of upside clear to see.

Some excellent comparisons with peers.

Looks cheap, strong buy.

[douglasallen] 22/2/2013 13:33

Nice recovery today, which is a positive.

[scottishfield] 22/2/2013 12:14

Cannuks to open higher hopefully.

[tommy51] 22/2/2013 11:15

Cheers dukedosh, that adds perspective. CEO remains a core holding in my ISA , although I sold quickly after BBS 01 I'm happy to hold through these short term spikes ,the fundemental story is still good I dont see any news to cause me long term concern.

[dukedosh] 22/2/2013 11:03

This note from First Energy courtesy of iv:

Coastal Energy (CEO LN/CEN CN, Top Pick, Target: £19.00/C$30.40): Low Production In January On Bad Weather and Downtime

Market Reaction: slightly negative. The Ministry of Energy of Thailand reported 19,823 bbl/d for Coastal Energy offshore production in Thailand in January. This is about 10% behind our expectations given bad weather, downtime and wells being off line. With the share price down 5.3% yesterday and 13.3% since 15/02/2013 on the TSX, we believe the market has over reacted. What matters is the upcoming operating update in 3 weeks. Bua Ban South wells are not on stream yet (+3-4 mbbl/d) nor is the newly drilled Bua Ban North Well. Overall cashflow deferred by delayed production is US$13 mm representing only 0.6% of the current market cap.

The Ministry of Energy of Thailand reported 19,823 bbl/d for Coastal Energy's offshore production in Thailand in January. This is about 10% behind our expectations given shut-ins for setting surface casing at Songkhla and Bua Ban North, downtime due to severe weather, and no production from Bua Ban south as the fracs took longer than expected. The company also had a couple of wells down.

Note that the A04/A03 ST/A05/A01 wells at Bua Ban South (drilled last year) are expected to add 3-4 mbbl/d from Miocene and Oligocene reservoirs once in production after fracking operations are completed. Production will be further boosted by additional development wells drilled at Bua Ban both in January and February but not online yet. This could boost offshore production to 26 mbbl/d even assuming downtime of similar level to January.

1Q13 offshore production is now expected to average 21-22 mbbl/d (FCC: 24.4 mbbl/d). Assuming 21.5 mbbl/d offshore production would reduce our forecasted cashflow from operations from US$93.7 mm to US$80.7 mm. The associated cashflow deferral represents 0.6% of the company market cap. This has to be compared with the company's share price dropping 5.3% on the TSX yesterday.

What matters is the upcoming operating update due in two or three weeks time. The company will provide an update on the current production level, but also results of wells with an overall unrisked value of £2.75/C$4.40 per share. This includes flow rate results of (1) fracking activities at Bua Ban South (£1.07 per share Unrisked NAV), (2) Songhkla 15 exploration well at Songkhla (£0.25 per share unrisked NAV), (3) Songhkla M exploration well (£0.63 per share Unrisked NAV),(4) Updip appraisal well of the SA-13 well (£0.80 per share Unrisked).

[melf] 22/2/2013 10:47

Duke...I'm holding tight here although it would be nice so see the rot stop today. Like you, I'm overweight here but believe in the long term story.

As an aside, it winds me up, the fact that few weeks ago when the price was flying up on bid rumours trading was suspended mid session yet when it comes crashing down in the last couple of days no such luck!

[dukedosh] 22/2/2013 10:12

Ricky,
Like you I was disappointed with the last couple of sessions but I am not worried here. I use these bad days to get rid of any under performers and buy into quality. Look back at the Feb presentation, make no mistake, there isn't many out there that will out perform these guys.

[dukedosh] 22/2/2013 08:31

Doug,
Currently I own: CEO, MMT:CA, SMDR, ELA, HOIL, GTE:CA, SIA, ATW:US.
What are you holding?

[ricky46] 21/2/2013 22:26

There are some great posters on this board and IV.... For me this has been a rocky ride held these for around 2.5yrs and I think they are a giant in the making....these go up as quick as they go down as well so don't think its anything to worry about.