Since the start of the year, the ASX energy stock has lost 50% of its value.

Is this a buying opportunity for investors? Let's see what analysts at Macquarie Group Ltd (ASX: MQG) are saying about the gas company.

What is the broker saying?

Macquarie highlights that Strike Energy has completed a capital raising, which has seen Carnarvon Energy Ltd (ASX: CVN) increase its stake in the company. Unfortunately, the accompanying share purchase plan (SPP) wasn't overly successful. It said:

Cash injection: STX has now completed its capital raise (we estimate ~ $84m after costs). CVN raises its stake in Strike to 18-19% and already has one board seat (Will Barker). SPP has closed with light participation (11%), as expected, given it was out of the money.

The broker also notes that Carnarvon Energy is arguably getting the better end of the deal. It adds:

Cash is king (CVN had cash): CVN has established exposure to the endgame at West Erregulla/Erregulla Deep with Hancock for its holders; however, STX shareholders do not gain any exposure to Dorado, Pavo, or the significant upside potential in the Bedout basin.

What else?

Outside this, Macquarie points out that the ASX energy stock has downgraded its reserves/resources estimate at Erregula. This has led to the broker reducing its gross production assumptions. It explains:

STX has been re-basing reserves/resources estimates across the portfolio – Walyering 2P gas reserves -55% (STX now needs to drill Walyering West-1 to support) and Ocean Hill contingent resource -41% (upside to MRE if successful). We have preemptively lowered EP469 gross production to 572PJ (was 700PJ) – includes Erregulla Deep – exercising some caution ahead of reserves review (post the Natta 3D seismic across northern area of block).

Should you buy this ASX energy stock?

In light of the above, it may not come as a surprise to learn that Macquarie doesn't see the 50% decline in the Strike Energy share price as a buying opportunity.

According to the note, the broker has resumed coverage on its shares with a neutral rating and 10 cents price target. This implies potential downside of 9% for investors from current levels.

Commenting on its neutral rating, it said:

We are Neutral-rated on the shares following a period of restriction. CVN has established an effective blocking stake and is now integral in any commercial negotiations if Hancock was seeking to fully consolidate the Perth basin Kingia acreage. Power strategy now key for STX.

The post Down 50% this year: Is this ASX energy stock a buy, hold, or sell? appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) energy stock is certainly grabbing plenty of attention this week.

Santos shares closed down 2.2% yesterday and are down 0.7% in intraday trade today at $7.08 apiece.

Tuesday's move lower followed news that the company has put the brakes on its joint venture, the $3.2 billion Dorado oil and gas project in Western Australia.

Here's what's going on.

Dorado project delayed

On Tuesday Carnarvon Energy Ltd (ASX: CVN) reported that Santos had decided not to purchase the Floating Production Storage and Offloading (FPSO) vessel for the Dorado Phase 1 liquids development project.

Santos owns 80% of Dorado and is the project operator. Carnarvon owns 10% of the joint venture and CPC Corporation owns the other 10%.

Carnarvon shares plunged 22.6% yesterday, far more than the 2.2% drop in Santos shares, as the smaller oil and gas explorer has a lot riding on the success of Dorado.

Carnarvon noted that Santos had also opted not to enter Front End Engineering and Design (FEED) at this stage. That will see the Final Investment Decision (FID), originally planned for 2025, deferred as well.

Commenting on the setback, Carnarvon CEO Philip Huizenga said:

Given the quality of the Dorado project, we at Carnarvon are disappointed by this latest deferral to the project. Carnarvon is fully supportive of the Joint Venture's desires to realise value for the asset and will support any initiatives for drilling as soon as possible.

A Santos spokesperson said (quoted by Reuters), "After a detailed assessment of all relevant factors, Santos recommended to the joint venture that the development concept for Dorado be revisited after further evaluation of Bedout Basin resources."

While this news is unwelcome to Carnarvon shareholders, Santos CEO Kevin Gallagher has made it clear that the company aims to maximise the value of Santos shares rather than invest in growth projects at all costs.

"Santos has been unrelenting in sticking to its strategy and implementing its disciplined operating model," Gallagher said at Santos' investor day presentation on 19 November.

The company remains focused on its Barossa and Pikka gas projects in 2025.

Gallagher noted:

With Barossa and Pikka coming online, Santos' production is expected to increase by more than 30% by 2027 compared to 2024, significantly lowering unit production cost which will support strong free cash flow generation throughout the commodity price cycle.

He added, "The simplified capital allocation framework announced today reflects our commitment to prioritise shareholder returns following the company's investment over recent years in new production from Barossa and Pikka."

For now, at least, this means that Dorado will remain on the backburner for Santos' growth ambitions.

How have Santos shares been tracking?

Santos shares are down 7.7% over the past 12 months.

So far in 2025, shares in the ASX 200 energy stock are up 4.4%.

The post Buying Santos shares? Here's the latest on this $3.2 billion deal appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

Brazilian Rare Earths Ltd (ASX: BRE)

The Brazilian Rare Earths share price is down 5% to $2.28. This follows the release of a drilling update from the Monte Alto project. Although the company reported record rare earths grades, it appears to have fallen short of what some investors were expecting. The company's CEO and Managing Director, Bernardo da Veiga, was pleased with the results. He said: "Less than a year ago, we announced the first drill 'discovery' of ultra-high-grade REE-Nb-Sc-Ta-U mineralisation at Monte Alto. Today, we are pleased to report new drilling results that include some of the highest grades ever reported globally, including exceptional rare earths grades of up to 45.7% TREO. These outstanding drilling results confirm Monte Alto's position as one of the highest grade rare earths and critical minerals projects in the world."

Carnarvon Energy Ltd (ASX: CVN)

The Carnarvon Energy share price is down 23% to 12 cents. This morning, this energy explorer released an update on the Dorado Phase 1 liquids development, offshore Western Australia. According to the release, the Dorado joint venture operator has decided not to purchase the Floating Production Storage and Offloading (FPSO) vessel that had been identified as an option for the Dorado Phase 1 liquids development project. The Operator has also decided to not enter Front End Engineering and Design (FEED) at this stage.

Computershare Ltd (ASX: CPU)

The Computershare share price is down 2% to $33.48. This appears to have been driven by a broker note out of Citi. According to the note, the broker has downgraded the stock transfer company's shares to a neutral rating with an improved price target of $35.00. It made the move on valuation grounds. Analysts at Morgans made a similar move on Monday, downgrading its shares to hold rating with a $34.43 price target.

Novonix Ltd (ASX: NVX)

The Novonix share price is down 6% to 61 cents. This morning, this battery materials and technology company shocked investors by announcing the sudden exit of its CEO. According to the release, Dr. Chris Burns is stepping down as CEO at the end of the week on 24 January and will be replaced by CFO Robert Long on an interim basis. Commenting on the exit, Novonix Chairman, Admiral Robert J Natter, said: "The Board of Directors would like to thank Dr. Burns for his exceptional leadership and dedication in what has been a dynamic market environment. The Board has great confidence in Mr Long's ability to continue this strong leadership during the transition period."

The post Why Brazilian Rare Earths, Carnarvon Energy, Computershare, and Novonix shares are falling today appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are climbing:

Carnarvon Energy Ltd (ASX: CVN)

The Carnarvon Energy share price is up almost 4% to 19.2 cents. This morning, the energy developer released an update on its strategic objectives. Pleasingly, the company revealed that they remain on track. As a result, management expects to be fully funded to deliver Dorado to final investment decision and first oil. Carnarvon CEO, Philip Huizenga, commented: "I am extremely pleased with the progress on the Dorado development. Our strengthened focus on Dorado and preserving our significant cash balance for this project gives us confidence to achieve these outcomes."

Goodman Group (ASX: GMG)

The Goodman share price is up 3.5% to $33.80. This may have been driven by the release of a bullish broker note this morning out of Morgan Stanley. According to the note, the broker has retained its overweight rating on the industrial property company's shares with an improved price target of $35.30. It is feeling very positive about the company's data centre pipeline.

Nickel Industries Ltd (ASX: NIC)

The Nickel Industries share price is up 3% to 97.7 cents. This may also have been driven by a broker note. This morning, Bell Potter reaffirmed its buy rating on the nickel producer's shares with an improved price target of $1.54. It said: "NIC is one of the world's largest listed nickel producers and one of few that offers diversified exposure across a range of nickel products and markets. It continues to trade on undemanding valuation multiples, offers a supportive (unfranked) dividend and has demonstrated its ability to make money through the nickel price cycle."

Southern Cross Electrical Engineer Ltd (ASX: SXE)

The Southern Cross Electrical Engineer share price is up 21% to $1.48. This follows the release of profit guidance for FY 2025 from the services company this morning. The company revealed that it anticipates FY 2025 EBITDA of at least $48 million. It also reaffirmed its previous guidance that FY 2024 profitability will match FY 2023's EBITDA of $38.2 million. Managing director Graeme Dunn said: "I am delighted to have been able to report a record-breaking year for the SCEE Group where we achieved our highest ever profits, cash balance and order book."

The post Why Carnarvon Energy, Goodman, Nickel Industries, and Southern Cross Electrical are rising appeared first on The Motley Fool Australia.

Let's take a look at the detail.

Praemium Ltd (ASX: PPS)

The Praemium share price is down 4.72% to 75.8 cents at the time of writing after falling as low as 73 cents this morning.

The ASX All Ords share opened at 75 cents following the release of its 1H FY23 results before the market began trading. This was a 6.25% fall on yesterday's closing price.

Praemium provides administration software, investment platforms, and financial planning tools to the wealth management industry.

The company reported unaudited figures showing total funds under administration (FUA) increased by 6% to $42.7 billion over the six months ending 31 December 2022. However, there was a big dip in net inflows, down 53% to $1,016 million compared to the half-year ending 31 December 2021.

Praemium CEO Anthony Wamsteker said:

Investor sentiment has been very subdued in the wake of three successive previous quarters of negative markets and high volatility.

The Praemium share price is down 46% over the past 12 months.

Alumina Limited (ASX: AWC)

The Alumina share price is down 7.35% to $1.575 at the time of writing. The ASX All Ords share opened at $1.64 following the pre-open release of its joint venture partner's 4Q 2022 results. This was a 3.5% fall on yesterday's closing price.

Alumina has a 40% equity share of Alcoa World Alumina and Chemicals (AWAC), which owns substantial global bauxite reserves and operates alumina refineries.

Alcoa reported a substantial decline in adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) for its alumina segment over the December quarter. Alumina's EBITDA was $27 million, down from $69 million in 3Q 2022.

Bauxite EBITDA was $24 million, an increase from $15 million in 3Q 2022.

This resulted in lower net distributions to Alumina at $4.5 million in the second half of 2022.

Alumina CEO Mike Ferraro hinted the board may not declare a final dividend for 2022 this earnings season. He blamed increased input costs and subdued alumina prices for the poor results.

Ferraro said:

Despite these near-term challenges, AWAC will benefit from an improvement in alumina prices. The re-opening of China, reduction in shipping costs, recent refinery curtailments, and smelter restarts in Europe and the Americas all provide support for alumina prices.

We note that the alumina price has increased since the start of 2023 to $360/t on 18 January 2023.

The Alumina share price is down 23% over the past 12 months.

Carnarvon Energy Ltd (ASX: CVN)

The Carnarvon share price is down 1.61% to 15.3 cents at the time of writing. The ASX All Ords share opened at 15.5 cents after the company released its December quarter activities and cash flow report before the market open. This was level with yesterday's closing price.

Carnarvon Energy is an oil and gas exploration company. It reported that operating activities over the quarter cost $1.06 million. It reported a cash or cash equivalents balance of $97.9 million with 19.8 quarters of estimated funding available and no debt.

Managing director Adrian Cook said:

The Company remains very focused on delivering several key Dorado based workstreams, all of which are expected to generate substantial value for shareholders and be reflected in the Company's share
price over time.

First, the Company's key strategic priority is to reach a Final Investment Decision (FID) for the Dorado development. The Company is also focused on integrating the Pavo North oil discovery which successfully added an additional 43 million barrels resource.

Concurrently, the Company continues to assess the huge exploration upside potential in the Bedout Sub-basin which we plan to progressively capture. This work has identified combined prospective resources of over 1.5 billion barrels of oil equivalent within the top 20 prospects alone.

The Carnarvon Energy share price is down 51% over the past 12 months.

The post 3 ASX All Ords shares getting hammered on disappointing results appeared first on The Motley Fool Australia.

Right now, the All Ords is down 0.04%. Meanwhile, its top performing constituents are boasting gains as high as 11.3%.

Let's take a look at some of the All Ords shares outperforming on Friday.

These All Ords shares are defying the ASX's downturn

It's been a rough week on the market. Indeed, the benchmark index is on track to finish the week 3.7% lower than it closed last week's trade. But it's not all doom and gloom. Plenty of All Ords shares are boasting notable gains on Friday.

The index is currently being led by three shares, each operating in vastly different spaces.

Oil and gas explorer Carnarvon Energy Ltd (ASX: CVN) is in the lead, posting a 11.3% gain to trade at 16.7 cents. It's joined in the All Ords top three performers by minerals explorer and developer 5E Advanced Materials Inc (ASX: 5EA) – up 7.5% to $2.28 – despite the prices of both oil and major commodities falling overnight.

The Cettire Ltd (ASX: CTT) share price is also posting a decent performance, lifting 7.9% to trade at 75 cents. That's despite no news having been released by the online luxury goods retailer.

Many larger ASX All Ords shares are also putting on a strong performance today.

The Macquarie Group Ltd (ASX: MQG) share price, for one, is lifting 2% right now. Meanwhile, shares in Clinuvel Pharmaceuticals Limited (ASX: CUV) are up 3.9%.

Finally, tech favourite and ASX constituent Life360 Inc (ASX: 360) is also well and truly in the green, having lifted 6.4% at the time of writing.

The post It's a cloudy day on the ASX, but some All Ords shares are still shining brightly appeared first on The Motley Fool Australia.

Carnarvon shares closed yesterday trading for 20 cents and are currently trading for 17 cents, down 17.5%.

The ASX energy share certainly hasn't been helped by sliding oil prices, now at six-month lows.

But the real pressure on the Carnarvon share price today looks to be an update on its Dorado development, located offshore in Western Australia.

What's happening at the Dorado project?

Investors are driving down the Carnarvon share price today after the company reported it will not make a financial investment decision (FID) for the project this year.

While the Dorado Front End Engineering and Design (FEED) works are "substantially" complete, the company said current instability in the cost environment and uncertainty around supply chain capacity will delay its FID.

Commenting on the progress and delays at Dorado, Carnarvon CEO Adrian Cook said:

Carnarvon is keen to see the timely sanctioning of the Dorado development and commencement of the construction phase, and we continue to work collaboratively with the operator to achieve this.

That said, given the current regional inflationary pressures and supply chain challenges, the risk of cost escalation is unacceptably high and requires fiscal discipline until this environment shows signs of stabilising.

As for funding, Carnarvon said a formal and ongoing process is underway to fund its share of the Dorado development. Carnarvon said it may divest some of its share in the project and associated exploration acreage prior to taking FID.

On the regulatory front, the Carnarvon share price could also be facing some headwinds. The explorer's offshore project proposal remains under assessment by the National Offshore Petroleum Safety and Environmental Management Authority.

Cook remained upbeat on the project's future, adding:

The analysis of the Pavo discovery to date shows that this is a tremendous resource with the potential to generate a significant amount of value for Carnarvon shareholders by utilising the proposed Dorado facilities. Accordingly, the Joint Venture is undertaking detailed studies to optimise an integrated Dorado development concept.

Carnarvon share price snapshot

The Carnarvon share price has struggled this year, down 53% since the opening bell on 4 January.

By comparison, the All Ordinaries Index (ASX: XAO) is down 7% in 2022.

The post Why is the Carnarvon share price cratering 18% on Wednesday? appeared first on The Motley Fool Australia.

The commodities boom helped ASX energy shares in FY22. The price of crude oil rose by about 40% and the price of natural gas increased by about 55%.

Plus, geopolitical unrest over the Russian invasion of Ukraine, and lockdowns in China, caused many supply chain issues which boosted the fortunes of many ASX energy shares.

But not every share had a great time in FY22.

Here are the five worst-performing ASX energy shares for FY22, according to Capital IQ figures.

• Washington H. Soul Pattinson and Co Ltd (ASX: SOL) down 29.7%
• Wesfarmers Ltd (ASX: WES) down 28.5%
• Carnarvon Energy Ltd (ASX: CVN) down 26.4%
• Energy Resources of Australia Limited (ASX: ERA) down 25.5%
• Strike Energy Ltd (ASX: STX) down 22.7%.

Why these ASX energy shares tanked

Capital IQ categorises investment house Soul Patts as an ASX energy share because it owns 39.9% of New Hope Corporation Limited (ASX: NHC), which is a diversified energy company in southeast Queensland.

As my fellow Fool Tristan reported this week, Soul Patts has fallen out of favour with ASX investors. While New Hope had a great year — its share price doubled in FY22 — other ASX shares that Soul Patts owns took a dive. Example: Brickworks Limited (ASX: BKW) — its share price dropped 26%.

The conglomerate Wesfarmers is also categorised as an ASX energy share because of its chemicals, energy, and fertilisers division. One of its more recognisable brands is gas producer and retailer Kleenheat.

Tristan reported on the near 30% drop in the Wesfarmers share price in FY22 this week, too.

Wesfarmers reported in its half-year FY22 results that net profit after tax (NPAT) had fallen 14.2% to $1.2 billion. This was largely due to store closures and trading restrictions during COVID-19.

What about Carnarvon and Energy Resources?

Carnarvon Energy is an oil and gas explorer. It's not yet generating revenue, and this combined with the rising interest rate environment has probably put some investors off.

In January, Carnarvon announced that its drilling at the Buffalo-10 well found the oil column to be residual and uncommercial. In April, the company announced that drilling at the Apus-1 well did not yield a commercial hydrocarbon pool.

Energy Resources of Australia is one of the nation's largest uranium oxide producers. It operated the Ranger mine, Australia's longest continually operating uranium mine, in the Northern Territory.

The Energy Resources share price has been in a steady decline since September 2021. That's also when the company announced cost and schedule overruns with its Ranger Project rehabilitation program.

The program is being undertaken as part of the mine's closure. In October, the company told the ASX the overruns would be "material" but they weren't yet ready to reveal numbers.

The following month, the company's CEO and managing director Paul Arnold resigned to take a job at Rio Tinto Limited (ASX: RIO). He was formally replaced in February 2022 by Brad Welsh.

In February, the company said the rehabilitation was going to cost between $1.6 billion and $2.2 billion — up from the initial estimate in 2019 of $973 million.

It also said the estimated completion date could be as late as the fourth quarter of 2028.

That same month, Energy Resources reported its full-year results for FY21. It recorded a net loss after tax of $650 million for 2021 compared to a net profit after tax of $11 million in 2020. A big part of this was the increasing costs of the rehabilitation program.

And the Strike out?

The Strike Energy share price experienced a massive 56% decline in value between August and December 2021. It recovered in 2022 but remained in the red by more than 22% at the end of FY22.

The decline in August began after the company announced problems at its West Erregulla 5 (WE5) well.

In October, Strike disappointed the market with its maiden Perth Basin Gas Reserve, which revealed gross gas reserves "significantly below" the company's guidance, as my fellow Fool James reported.

Although Strike released a number of positive announcements, it appears investors lost interest in the ASX energy share in the first half of FY22 before reengaging in the second half.

The post 5 worst ASX energy shares of FY22 appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are racing higher:

Block Inc (ASX: SQ2)

The Block share price is up 7% to $187.50. This follows a similarly strong gain by its NYSE listed shares during overnight trade on Wall Street. The payments giant's stormed higher amid a rally in the US tech sector and a bullish broker note out of Mizuho. The latter saw the broker increase its price target on the company's US shares to US$190. Mizuho notes that Blocks's CashApp product is growing in popularity with teenagers.

Calix Ltd (ASX: CXL)

The Calix share price has jumped 16% to $8.07. This follows news that the environmental technology company's LEILAC-2 project has passed the financial investment decision (FID) milestone. It will be integrated into HeidelbergCement's operational plant in Hannover, Germany, and will aim to address the plant's unavoidable emissions.

Carnarvon Energy Ltd (ASX: CVN)

The Carnarvon Energy share price is up 11.5% to 35.7 cents. Investors have been buying this energy company's shares today after it revealed a material oil discovery at the Pavo-1 well. The Pavo-1 well is part of the WA-438-P exploration permit, which Carnarvon Energy has a 30% interest in. The release notes that light oil was recovered from excellent reservoirs.

Imugene Limited (ASX: IMU)

The Imugene share price has stormed 10% higher to 28.7 cents. This morning the biotech revealed that it has received Western Institutional Review Board approval to start a phase one clinical trial of a new cancer treatment. Imugene will look into the use of its oncolytic virotherapy candidate, Vaxinia, on multiple solid tumours.

The post Why Block, Calix, Carnarvon, and Imugene shares are racing higher appeared first on The Motley Fool Australia.

In morning trade, the energy producer's shares were up as much as 36% to a 52-week high of 43.5 cents.

The Carnarvon Energy share price has since pulled back but remains up 16% to 37 cents at the time of writing.

Why is the Carnarvon Energy share price shooting higher?

Investors have been bidding the Carnarvon Energy share price higher today following the release of drilling results from the Pavo-1 well.

The Pavo-1 well is covered by the WA-438-P exploration permit, which Carnarvon Energy has a 30% interest in, with Santos Ltd (ASX: STO) owning the balance.

According to the release, drilling activities confirm that the Pavo-1 well has made a material oil discovery. Light oil has been recovered from excellent reservoirs and the highly porous and permeable sands contain a net pay thickness of 46 metres from within a gross hydrocarbon package of 60 metres.

These results are expected to add significant value to the Dorado development plan.

Carnarvon's Managing Director and CEO, Adrian Cook, commented: "Today we announce another important oil discovery in the Bedout Basin, with high quality oil having now been recovered to surface from excellent quality reservoirs. This discovery is material because Pavo lies only 46 kilometres from the proposed Dorado production facilities and is expected to be an ideal resource to tie back to Dorado."

What's next?

Mr Cook notes that it will soon be time to decide on the future of the Dorado operation.

He said: "Subject to the joint venture making a final investment decision (FID) this year, the Dorado production infrastructure is planned to be in-place by the end of 2025 and will have the capacity to tie-in other fields like Pavo with no material increase in operational costs."

"Pavo proves the extension of a working petroleum system some 46 kilometres east of Dorado. The well demonstrates that quality reservoir and trapping mechanisms are effective in this area, which hosts a suite of other exploration targets. These will now warrant further assessment for drilling."

"We have a number of additional drilling activities to undertake in the Pavo-1 well before moving the drilling rig to the Apus-1 well location. Overall, we are extremely pleased with the Pavo-1 result and are looking forward to it adding significant value within what is now expected to be an expanded Dorado production hub," he concluded.

The post Carnarvon (ASX:CVN) share price explodes 36% higher on 'material' oil find appeared first on The Motley Fool Australia.

At the time of writing, the energy producer's shares are frozen at 32 cents apiece.

Why is the Carnarvon share price halted?

Prior to the market opening, the company requested the Carnarvon share price be halted while it prepares an announcement.

According to the release, the company is planning to make an announcement in relation to the Pavo-1 well result.

Carnarvon has requested that the trading halt remains in place until Wednesday 23 March or following the release of the announcement, whichever comes first.

More on Pavo-1 well

Located around 160 kilometres north-east of Port Hedland in Western Australia, the offshore platform made news in recent times.

After spudding in early February, operations were halted due to cyclone activity in the region.

At the time, the Pavo-1 well drilled around 3,282 metres of measured depth (MD) before suspending works.

However, just over a week ago, the rig returned to full-manning levels with drilling and logging operations set to re-commence.

The Pavo-1 well is targeting a resource of 82 million barrels of liquid hydrocarbons in the Caley Formation sands.

Santos Ltd (ASX: STO) holds a 70% stake in Pavo-1, while Carnarvon retains the remaining 30%.

Carnarvon share price summary

Over the past 12 months, the Carnarvon share price has moved in circles ranging from 21.3 cents to 36 cents.

Particularly, since the start of the year, its shares have recorded wild swings of more than 50% in either direction.

The company's shares are down 5% in 2022.

Based on valuation grounds, Carnarvon has a market capitalisation of roughly $500.92 million, with approximately 1.57 billion shares outstanding.

The post Here's why the Carnarvon (ASX:CVN) share price is halted today appeared first on The Motley Fool Australia.

At the time of writing, the energy producer's shares are up 7.72% to 30.7 cents.

This means that since hitting a 52-week low of 21.3 cents on 24 February, Carnarvon Energy shares have gained 44%.

Let's take a closer look at what the company announced before market open.

How is Carnarvon Energy tracking along?

The Carnarvon share price is taking off today. This comes after the oil and gas exploration company provided an update on the Pavo-1 well in the WA-438-P exploration permit.

Located around 160 kilometres north-east of Port Hedland in Western Australia, the offshore well is currently being drilled for hydrocarbons.

Santos Ltd (ASX: STO) holds a 70% stake in Pavo-1, while Carnarvon Energy retains the remaining 30%.

Carnarvon Energy advised the Pavo-1 well had drilled to around 3,282 metres measured depth (MD) before suspending operations.

Management made the decision to temporarily halt drilling due to cyclone activity in the area.

The company said drilling within the Caley to Crespin reservoirs indicated "porous and permeable reservoir intervals with similarity to the Dorado reservoir". The latter is one of the largest offshore oil discoveries on the North West Shelf, a region of Western Australia.

Pavo-1 well will be drilled into the northern accumulation and is targeting a resource of 82 million barrels of liquid hydrocarbons.

So far, elevated gas readings and increased resistivity were observed between 2,944 metres MD and 3,001 metres MD. The company says this indicates the presence of hydrocarbons.

Carnarvon Energy stated the rig has now returned to full manning levels and is preparing to recommence drilling and logging operations.

About the Carnarvon share price

The Carnarvon share price dropped almost 40% from mid-January until 24 February before rebounding strongly.

When comparing against this time last year, the company's shares have gained roughly 14%.

Carnarvon Energy has a market capitalisation of around $477.44 million, and approximately 1.57 billion shares registered on its books.

The post Here's why the Carnarvon (ASX:CVN) share price is popping 8% today appeared first on The Motley Fool Australia.

Shares in the oil and gas explorer finished the week at 31 cents apiece, not too far off their 52-week high of 33.5 cents achieved in January this year.

Let's investigate further.

What's been fuelling Carnarvon shares lately?

It seems the elephant in the room is the price of natural gas, which has spiked to 5-year highs of US$6.215 per million British thermal units on 28 September.

The move began on 23 September, spurred on by the energy crisis in Europe in the United Kingdom that has unfolded in recent weeks.

In addition, the price of oil has climbed almost 7% in the past 2 weeks for both major oil contracts, after making a prior jump of 21% from August 20 for crude WTI, and over 20.3% for Brent crude in this time.

Around this time in September, Carnarvon announced a key update to its Buffalo project in the Timor Sea.

The release noted several progress highlights, including that the Buffalo-10 well is set to start spud in early November, and that "mid-case recoverable volume estimate is 31 million barrels".

Carnarvon said there was a "strong likelihood" the Buffalo-10 well would confirm a "sanctionable development project, based on minimum economic field size".

Just prior to this, Carnarvon announced that it had contracted the VALARIS JU-107 drilling rig to drill the Buffalo-10 well.

The rig will move to the Buffalo site in early November, once completed its current operations.

The report concludes that Carnarvon expects to ramp up operations at Buffalo-10 from November, but that the final timing will be "subject to the release of the rig from the previous operator… and receiving the necessary joint venture and regulatory approvals".

What did management say?

Carnarvon managing director and CEO Adrian Cook welcomed the results, saying:

Our preparations for drilling the Buffalo-10 well are in good shape and we're looking forward to commencing drilling relatively soon.

We continue to work well with and enjoy the support of our joint venture partner, Advance Energy Plc, who have contributed US$20 million towards the cost of the Buffalo-10 well and now hold a 50% interest in the project.

Cook said the company expected to reach the target in around 35 days once drilling started, adding that the well had the potential to be "value transforming" for Carnarvon.

The Carnarvon share price has popped from a low of 25 cents since the announcement on 22 September, to reach its highs of 31.5 cents in afternoon trade today.

Carnarvon share price snapshot

The Carnarvon share price has jumped into the green this past month, gaining 21.5% in this time.

However, it has only climbed 3.3% year to date, behind the S&P/ASX 200 index (ASX: XJO)'s return of around 9%.

Despite this, it has beaten the benchmark index over the last 12 months, posting a return of more than 44% in that time.

The post The Carnarvon (ASX:CVN) share price has jumped 17% this week appeared first on The Motley Fool Australia.

At the time of writing, the Carnarvon share price is trading 1.75% higher at 29 cents.

Let's take a look at what the company announced this morning.

Green diesel joint venture

Investors are driving the Carnarvon share price higher after the company reported its 50/50 joint venture with Frontier Impact Group will prioritise the production of renewable diesel from plant biomass.

The company reports the $100 million facility can also produce biochar, which can then be refined into graphene for use in the production of batteries and electronics.

The bio-refinery is poised to begin production in late 2022 and will rely on "internationally proven technology" which has never been implemented in Australia before.

Speaking about the company's latest joint venture, Carnarvon chief executive Adrian Cook said:

This joint venture demonstrates a clear and pragmatic start to delivering on our net-zero commitment, while ensuring long-term, sustainable shareholder value remains a key determinant in our decision making.

He added:

There is a clear link between the delivery of our core projects, securing carbon offsets for these through this venture and producing valuable products such as renewable diesel.

Pivoting to show climate-change risks

Carnarvon was on the Australian Securities and Investments Commission's radar in 2020, alongside a run of oil and gas players, for failing to report on its climate-change impacts.

Since these "climate pressures" emerged, the company has produced its first sustainability report, disclosing climate-change risks and actions taken to offset the same.

Carnarvon has today also committed to producing net-zero carbon emissions by 2050 or sooner.

Carnarvon share price snapshot

Over the past month, the Carnarvon share price has climbed by 16%. It has also posted gains of more than 52% over the previous 12 months.

Although the company's shares have outpaced the returna of the S&P/ASX 200 Index (ASX: XJO) over these periods, they have lagged the index on a year-to-date basis, dipping 3.33% since the start of 2021.

At the current share price of 29 cents, Carnarvon has a market capitalisation of $454 million. The share price is off its 52-week high of 34 cents but is aloft its 52-week low of 18 cents.

The post Carnarvon (ASX:CVN) share price jumps following renewables venture appeared first on The Motley Fool Australia.

This comes after the company released a progress report on its Buffalo oil field, located offshore Timor-Leste in the Bonaparte Basin.

What did Carnarvon announce today?

In this morning's update to the ASX, Carnarvon reported that it is progressing with plans to drill its Buffalo-10 well. Carnarvon plans to commence drilling in late 2021. The company has entered into a binding agreement with Advance Energy to support the redevelopment.

In the newly formed joint venture, Advance will fund the drilling of the well up to US$20 million (A$26.6 million) on a free carry basis. In return it will acquire up to a 50% interest in the Buffalo project. If additional funding is needed from third party lenders, Advance has agreed to provide that as an interest free loan.

Carnarvon will continue as the operator. The agreement remains subject to fulfilling the customary conditions, including obtaining government approvals.

Commenting on the partnership, Carnarvon's CEO, Adrian Cook, said:

Carnarvon is excited to welcome Advance Energy into the Buffalo joint venture and together we look forward to drilling the Buffalo-10 well next year and moving forward with the redevelopment of the Buffalo oil field.

The Buffalo redevelopment opportunity is well placed to succeed given its known production capability and low development cost and will be greatly enhanced as oil prices continue their recovery.

We look forward to Advance completing their capital raise activities and the joint venture is eager to get started, with drilling planning already underway. Carnarvon is incredibly well placed for an exciting 2021 as we add drilling at the Buffalo Project to our Dorado FEED activities and the Bedout exploration drilling campaign.

Carnarvon share price and company snapshot

Carnarvon Petroleum is an Australian-based company primarily engaged in oil and gas exploration, development, and production. Its exploration projects include Phoenix, Labyrinth, Condor and Eagle, Outtrim and Maracas, and the Buffalo oil field.

Like most ASX energy shares, Carnarvon's share price fell of cliff as COVID-19 saw oil and gas prices plummet. Its shares fell 69% from 6 January through to 23 March. Since that low shares have rebounded 143%, compared to a 52% rebound of the broader All Ordinaries Index (ASX: XAO) over that same time.

Year-to-date the Carnarvon share price remains down 19%.

The post Why investors are pushing the Carnarvon Petroleum (ASX:CVN) share price higher appeared first on The Motley Fool Australia.

The question is whether the meltdown represents the best buying opportunity in more than a decade or a devastating value trap.

The volatility won't help either. The Brent crude benchmark bounced over 10% in overnight trade to US$37.90 a barrel but it's still a far way from the recent peak of US$59.31 on February 20, which incidentally is when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index peaked as well.

Dead cat bounce

The coronavirus-induced correction was exacerbated by the oil price war that broke out between Saudi Arabia and Russia. The two major oil exporters continue to ramp up their battle to gain an upper hand, which makes last night's oil price rebound feel like a dead cat bounce!

But experts think this may be a good time to be picking up battered and bruised ASX energy stocks. They've certainly become significantly cheaper in the last couple of days.

Better placed for a downturn

Morgan Stanley believes the risk-reward is more attractive during this oil collapse than it did in 2014 as ASX energy stocks are in a better position to manage weaker oil prices.

"During the last oil price correction (2014-2016), there were a number of equity raises across the Australian Energy industry as companies were mid-way through a heavy LNG construction cycle," said the broker.

"This time around, balance sheets are better, operating costs are lower and spending really hasn't started on expansion opportunities.

"There is time to delay these plans and ensure the commodity environment firms up."

Morgan Stanley estimates that the market is pricing in a mid US$40 a barrel for the longer term, which is below what most commodity analysts are forecasting.

ASX energy stocks to buy

The analysts at Macquarie Group Ltd (ASX: MQG) are also feeling bullish about the sector even as they acknowledge the risk of widespread earnings downgrades from the weaker oil price.

The broker has an outperform rating on all ASX energy stocks under its coverage. This includes large caps like Woodside Petroleum Limited (ASX: WPL), Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO). These stocks have the potential to generate a total return of anywhere between 60% to 90%.

Higher risk, higher reward

But if you want a bigger bang for your buck, you'll need to look at the smaller end of the market.

The Karoon Energy Ltd (ASX: KAR) share price can potentially generate a 300% plus return, while Carnarvon Petroleum Limited (ASX: CVN) could return around 200% if they were to reach Macquarie's price targets.

The post Why experts are saying you should brave the meltdown to buy ASX oil stocks appeared first on The Motley Fool Australia.

Santos CEO, Kevin Gallagher, enthused: "The results are very encouraging for development of the shallow-water Dorado field, with the test indicating very high potential flow rates of around 30,000 barrels per day from each single production well in the Caley reservoir. This positive result represents a significant step in progressing Dorado as one of Santos' most exciting new development projects."

Santos holds an 80% stake in the joint venture with Carnavon holding the balance, but investors sent Carnavon shares higher as the project is more important to its outlook compared to Santos which is primarily a LNG producer.

Carnavon is no minnow though, with a market value around $630 million despite reporting no sales and a net operating loss of $39.7 million for the nine months to June 30 2019. 

The post Why the Santos and Carnavon share prices are racing higher today appeared first on The Motley Fool Australia.

Why did Carnarvon announce the placement?

Yesterday Carnarvon announced a fully underwritten $79 million institutional placement as well as a non-underwritten share purchase plan (SPP) intended to raise approximately $5 million.

The Aussie petroleum company said the proceeds from the offers will fund a number of important projects for the group which includes the following:

1. Ongoing appraisal of the company's Dorado discovery, including 3D seismic and well costs
2. Front End Engineering Design (FEED) studies for the initial Dorado development
3. Contribution towards the equity component of the initial Dorado development
4. General corporate purposes, working capital requirements and contingencies, including costs to progress the company's other projects.

What's happening with the Dorado development?

As per Carnarvon's release, Dorado is a major oil and gas field located on Australia's prolific North West Shelf in water depths of 70 to 100 metres.

The resource was discovered through the Dorado-1 exploration well, as announced by the group on 18 July 2018, and was further evaluated through the Dorado-2 appraisal well.

The Dorado-2 appraisal well confirmed the presence of a major oil, gas and condensate resource with high quality and productive reservoirs found across multiple reservoir tests.

Following the appraisal, the company engaged ERC Equipoise to independently review the Dorado-2 resource, which showed a 162 million barrel liquids resource, which is substantial in Australian resource terms and a valuable boost for the Aussie group.

How has the Carnarvon share price performed this year?

The significance of the Dorado-2 discovery in the past year or so has not been lost on investors, with the Carnarvon share price surging more than 200% higher since last July.

The company continues to deliver for its investors but remains cash flow negative for the time being.

The key to Carnarvon's future returns will be its ability to access capital easily and efficiently and successfully monetise the Dorado-2 resource while keeping its costs and timelines under control.

The post Carnarvon Petroleum down 5% after raising $79 million to progress Dorado appeared first on The Motley Fool Australia.

Four shares that have fallen more than most today are listed below. Here's why they have tumbled lower:

The Carnarvon Petroleum Limited (ASX: CVN) share price has crashed over 21% lower to 45.5 cents after the oil and gas exploration company released an update on drilling activities at its Roc South-1 exploration well. According to the release, an 8.5" hole has been drilled to a depth of approximately 4,508 metres Measured Depth. However, the interpretation of wireline logs indicates that there are no producible hydrocarbons across the Caley and Baxter sands.

The G8 Education Ltd (ASX: GEM) share price has fallen 10% to $2.76. The childcare centre operator's sizeable decline appears to have been driven by a broker downgrade this morning. This decline has wiped out almost all its year to date gains and left the company's shares trading at a two-month low.

The HUB24 Ltd (ASX: HUB) share price rebound was only short-lived and the investment platform provider is down a sizeable 6% to $11.07 today. HUB24's shares have come under significant pressure in recent weeks due to concerns over the impact that the Reserve Bank's cash rate cuts will have on its business.

The Northern Star Resources Ltd (ASX: NST) share price is down 2.5% to $11.46 after the gold price tumbled sharply lower at the end of last week. According to CNBC, the spot gold price dropped 1.5% to US$1,400.10 an ounce on Friday and has continued to slide during Asian trade. This has been driven by strong U.S. jobs data which dampened hopes of a rate cut by the Federal Reserve and put pressure on the price of the precious metal. At the time of writing the S&P/ASX All Ords Gold index is down 1.4%.

The post Why Carnarvon Petroleum, G8 Education, HUB24, & Northern Star dropped lower appeared first on The Motley Fool Australia.

At one stage the Western Australia-based oil and gas exploration company's shares crashed as much as 32% lower to 38 cents.

They have since recovered slightly, but are still down 21% to 45.5 cents at the time of writing.

Why did Carnarvon Petroleum shares crash 32% lower today?

This morning the exploration company released an update on drilling activities at its Roc South-1 exploration well off the coast of Port Hedland.

As you might have guessed from the share price reaction, the results of the latest drilling were not as positive as investors had been expecting.

According to the release, an 8.5" hole has been drilled to a depth of approximately 4,508 metres Measured Depth (MD). Unfortunately, the interpretation of wireline logs indicates that there are no producible hydrocarbons across the Caley and Baxter sands.

However, management remains optimistic on the other discoveries it has made in recent times.

Carnarvon Petroleum's managing director, Adrian Cook, said: "As we unlock this new basin on the North West Shelf we will find results that are unexpected and not as we should wish. The Roc South-1 result in the Caley and Baxter intervals is a case in point in that it will not build upon our current resource pool."

Adding: "… we should not lose focus on the fact that we have discovered a significant volume of resources to date, we are working on plans to bring the Dorado liquids (oil and condensate) into production as soon as possible and we have ongoing intentions to make new discoveries in the future."

Looking ahead, Mr Cook advised that the company will now "test the deeper sections in the Roc South-1 well before the rig moves to the Dorado-3 appraisal well where it will conduct a flow test from the Dorado reservoirs that proved successful in the Dorado-1 and 2 wells."

He also stressed that development plans for Dorado will not be impacted by today's disappointing results from the Caley and Baxter sands.

Elsewhere in the industry today, the Comet Ridge Ltd (ASX: COI) share price and the Santos Ltd (ASX: STO) share price are trading lower despite advising that their Mahalo Joint Venture has been actively working towards the submission of the Initial Development Plan and have recently reached agreement on a number of key inputs and expect to be finalising others this month.

The post Why the Carnarvon Petroleum share price crashed 32% lower today appeared first on The Motley Fool Australia.