Speaking at the company’s annual general meeting in Melbourne yesterday, Richard Tweedie said despite hurdles, Cue intends to pursue expansion.
“We continue to seek to grow the company through acquiring new acreage and producing assets,” he said.
“Last year I mentioned our bid for an Australian producing asset, but again the vendor did not proceed to complete a sale.
“We were, however, granted a new exploration permit to the north of our existing areas in the Carnarvon Basin of Australia.
“We plan to continue to evaluate opportunities to enhance shareholder value.”
Tweedie described Cue’s exploration portfolio as “substantial” and said he held high hopes for its Bass Strait permits.
The company plans to run a large 3D seismic survey over the Pelican gas condensate discovery there. It is also conducting a scoping study on the potential of the field, which may hold several trillion cubic feet of gas-in-place and associated liquids, Tweedie said.
He said the company also planned to run a significant seismic over its permits adjacent to the giant Rankin gas condensate fields in the Carnarvon Basin.
“Cue has been steadily laying the foundations for a substantial growth phase in which we expect to see the company develop rapidly over the next few years,” Tweedie said.
He said the company’s gross revenue from 2007-2012 is projected at $265 million from its gas and oil production interests at the Southeast Gobe oil field in Papua New Guinea, the Oyong field in Indonesia and the Maari field offshore Taranaki.
But he said the market was failing to fully appreciate the company’s value.
“In the view of your directors the market is substantially undervaluing Cue Energy,” Tweedie said.
“We believe a fair market value of production and contingent production alone comfortably exceeds our present share price.
“On top of that is the upside from our exploration portfolio.
“Therefore a fair value of the company should be substantially in excess of the current 13-14 cents.”
The company posted a 2005-06 profit after tax of $2.2 million and a before-tax profit of $4.6 million.
Its sales revenue was $8.4 million with cash reserves of $30 million at the end of the 2005-06 financial year.
