Carnarvon Energy (ASX:CVN) is currently trading around cash-backing, and represents a "compelling buying opportunity" for "patient and value-based" investors, said Euroz Hartleys in a Tuesday note.

Due to a delay in its Dorado oil project and lack of new projects, the company has proposed to return up to AU$125 million to shareholders, or AU$0.07 per share, to shareholders, pending a tax ruling from the Australian Taxation Office.

The research firm said the company's current share price does not reflect the $90 million development capital expenditure carry, the discovered oil resources in two projects, or its significant exploration portfolio.

Euroz Hartleys maintained its buy rating and price target of AU$0.18.