Insights

Why the Cue Energy (ASX:CUE) share price is soaring 9% today

Cue Energy Resources Limited (ASX:CUE) shares are up 9% today on news the company has started oil production from Mahato PSC in Indonesia.
The post Why the Cue Energy (ASX:CUE) share price is soaring 9% today appeared first on The Motley Fool Australia. –

asx shares in infrastructure primred for take off represented by builder preparing to run

Cue Energy Resources Limited (ASX:CUE) shares have accelerated upwards today. This comes after the company announced it has started oil production from Mahato PSC in Indonesia.

At the time of writing, the oil and gas company’s shares are up 9.21% to close at 8.3 cents.

What did Cue announce?

Cue Energy advised that it has now begun extracting oil from its PB field in the Mahato PSC.

Located in Indonesia, Mahato PSC is a 5,600sq km basin that is close to several producing oil fields. Multiple surveys and exploration results have mapped the area to contain a highly lucrative resource opportunity.

According to Cue’s release, the start of operations follows the settled dispute between the company and its joint venture partners. The disagreement arose from Texcal Mahato EP, which operates the Mahato PSC.

Cue previously stated that Texcal and other joint venture partners attempted to exclude the company from two wells, named PB-1 and PB-2. Cue’s subsidiary, Cue Mahato holds a 12.5% interest in Mahato PSC.

As part of the settlement, Texcal will issue a cash call for roughly US$300,000 from Cue to conduct exportation activities in PB-2.

Furthermore, Cue will pay US$380,000 to the joint venture partners, which it will tap into its existing cash reserves of US$111,000. The remaining amount will be paid from the company’s share of the PSC performance bond.

Both payments are due to be finalised at the end of this month.

What is the status of both wells?

Since the resolved dispute, Cue revealed that the PB-1 well is producing around 600 barrels of oil per day. The oil is refined and exported through existing third-party facilities.

In regards to PB-2, Cue noted that is it working to bring the well into production with 3 further drills planned. Its anticipated that the drilling program will start sometime in the current quarter.

What did the CEO say?

Commenting on the production launch, Cue Energy CEO Matthew Boyall said:

Cue is excited to see oil production from the PB field after exploration success in late 2019. This is a rapid progression from exploration to production. The PB field will be a third revenue stream for Cue and will further strengthen our business.

The differences between the joint venture partners and Cue have now been resolved and we look forward to a fruitful partnership as production from the PB field increases and further exploration is undertaken in the Mahato PSC.

About the Cue Energy share price

The Cue share price was gaining ground through the course of last year before it lost more than 60% in December. This is when it advised the market it was abandoning the Ironbark-1 exploration well.

Its shares hit a low of 6 cents in March and reached a multi-year high of 24 cents prior to the December announcement.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Cue Energy (ASX:CUE) share price is soaring 9% today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!