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Buying shares?

I like this company. They have several supermajors on board (albeit on a trial basis) and the technology seems to work based on the last few drills. They are talking two supermajors about a royalty based mechanism - rather than fixed fee as they currently do.

big.chart
 
Tom Winnifrith is slating VIY seems on the money as well. They have been talking for years but not delivered meaningful revenue in all that time. Would need to see volume chart break above 200 day MA
 
Gents,

I usually stay clear of russian oil exploration companies, i cam accross ruspetro today, which listed on ftse 250 in jan 2012 at 125p. It surged to 240p before the decline and it stands at 68p today. It was down today by 20% due to missed deadline announced last Friday evening.

Mcap 224m
Proven reserves 187 m barrels
Probable reserves 1.8 billion
Debt $340 million

They are producing around 6.5 k bopd and once technical issues are resolved, production will exceed 10k bopd and become cash positive. It should happen this quarter. Thy have 4 rigs working currently on the licenses. If they can move majority of p2 into p1 reserves, it will be up for a big re-rate.

As i mentioned, these guys are lse lited and not on AIM. Has anyone else looked at them?
 
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Eagle_Eye said:
Cashed your gold?
Click to expand...

Still holding on, and still buying Gold and Silver Bullion on a regular basis.

I thought I diversify my portfolio by investing some of my profits from bullion in UK Banks. Just RBS and Lloyds, with a long term view. (Plan to sell the shares near 2020).
 
Eagle_Eye said:
Gents,

I usually stay clear of russian oil exploration companies, i cam accross ruspetro today, which listed on ftse 250 in jan 2012 at 125p. It surged to 240p before the decline and it stands at 68p today. It was down today by 20% due to missed deadline announced last Friday evening.

Mcap 224m
Proven reserves 187 m barrels
Probable reserves 1.8 billion
Debt $340 million

They are producing around 6.5 k bopd and once technical issues are resolved, production will exceed 10k bopd and become cash positive. It should happen this quarter. Thy have 4 rigs working currently on the licenses. If they can move majority of p2 into p1 reserves, it will be up for a big re-rate.

As i mentioned, these guys are lse lited and not on AIM. Has anyone else looked at them?
Click to expand...
EE - have had this in my watch portfolio since OCtober having done some research at the time, and had it down as a buy back then for 100p.. It deffo seems of interest and given where they are at now, I would consider it to be a discount buy. However I would invite the other 2 Bhai saabs to comment..
 
Eagle_Eye said:
Gents,

I usually stay clear of russian oil exploration companies, i cam accross ruspetro today, which listed on ftse 250 in jan 2012 at 125p. It surged to 240p before the decline and it stands at 68p today. It was down today by 20% due to missed deadline announced last Friday evening.

Mcap 224m
Proven reserves 187 m barrels
Probable reserves 1.8 billion
Debt $340 million

They are producing around 6.5 k bopd and once technical issues are resolved, production will exceed 10k bopd and become cash positive. It should happen this quarter. Thy have 4 rigs working currently on the licenses. If they can move majority of p2 into p1 reserves, it will be up for a big re-rate.

As i mentioned, these guys are lse lited and not on AIM. Has anyone else looked at them?
Click to expand...

Looked at them a few weeks ago mate.

Pros

- They've had director buys at 125p as recently as 3 months ago, and others at 150p.

- They also were given a licence extension a week ago

- just proven reserves give NAV of 110p

Cons

- Is this just a production delay, or something worse?

- Management that publish nasty RNSs at 1830 on a Friday night don't fill me with confidence
 
Russia/Ukraine etc puts me off
That is far too much debt for that production level
Big concern for me would be any covenants on that debt and/or floating charge ?
The debt holders could destroy the equity if production targets not met?
 
s28 said:
Russia/Ukraine etc puts me off
That is far too much debt for that production level
Big concern for me would be any covenants on that debt and/or floating charge ?
The debt holders could destroy the equity if production targets not met?
Click to expand...

Well thats it... usually I stay clear from Russians and Ukranians as you said. But they have 187 million barrels of P1 reserves and 1.5 billion in P2! Their acreage is surrounded by BP-TNK, Gazprom and Lukoil.

If you look at their production, it includes both condensate and crude oil. Their condensate contains 51 degrees API oil, which is sweetest of the sweet oil! Hence it is sold at premium locally. Their profit per barrel from:

crude oil = $20-$25
condensate = $40-$45

So they decided, lets get condensate production up as that is more lucrative, but in doing so they underestimated the technical challenges as the gas to oil ratio increased. They then missed the deadline of 10k bopd set by themselves. The drop in production is due to shutting wells to build the above ground infrastructure required for increase in condensate production.

They had $64.7 million in the bank at the end of November.

At the end of 2011, they had net debt of $405 million and now it stands at $310 million with production around 5-6k bopd average over the year.

I actually like how much information they provide in RNSs, they give quite a bit of information compared to some charlatans on the AIM.

To me they have done quite OK in one year of listing. I am keeping a close eye on this, probably wait till the next RNS comes to decide to either go long or short.
 
Problem with any of these debt funded oil companies is you don't know who owns the debt and what covenants are attached.

IF the debt has covenant specifying a particular production level and that covenant is breached then the debt holders can take the Company equity holders to the cleaners.

Even so the usual value applied to 1k bopd production in the West is c.£10m EV ( for comparison EOG produces 200 bopd and was until recently valued c.£5m odd but EOG had a lot more upside optionality and diversification )

At 10k bopd Ruspetro is only worth £100m EV however given the Debt the actual shares look worthless to me.

Furthermore I would be wary of Companies which claim reserves of say 100x but produce at a rate of only 1x. Given decline rates that is unsustainable and it makes it look like the 100x reserves are overstated i.e. bull ****

I'd expect a Company with 100x reserves to be producing 10x annual production wouldn't you.
 
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SCSW tips for 2013 due out next week I think. Usually come out with some good picks.
 
I think you are being a tad harsh on Ruspetro.

Rus Petro debt:


1. Sberbank credit facility. The Group has a non-revolving US$ denominated credit facility from Sberbank. The annual interest rate on the facility is 10.9% per annum. The Group provided its shares in INGA and Trans-oil to Sberbank as collateral for this credit facility.

According to an Amended Agreement with Sberbank, payment of a portion of the accrued interest, which amounted to US$27 million as at 31 December 2011, is payable out of the proceeds of the Initial Public Offering (IPO) with the remainder to be paid in April 2015 on the maturity date of the credit facility. Annual interest is payable half-yearly in May and November each year. The change in terms is not considered to be a substantial modification, it is therefore considered not to result in the extinguishment of the original liability. On 3 February 2012, under the Amended Agreement with Sberbank, Ruspetro made a repayment of US$45 million, which represented US$27.1 million of outstanding interest and US$17.9 million of principal.

2. Loans from shareholders of the Parent. The Group has a number of US$ denominated loans obtained from the Shareholders of the Parent. All of these loans are unsecured and the effective interest rate on most of these loans is Libor+10% per annum. Certain loans have matured by 30 June 2012 and are presented as current liabilities as at this date.
On 17 January 2012, the Parent and one of the shareholders agreed that the Parent will issue new Ordinary Shares to that shareholder on the date that is 13 months from the date of Admission in full settlement of a loan obtained from the shareholder.

There is no production covenant. The worst case scenario will be if they convert the debt to shares and then start shorting it. I do not think the Banks will do this, if it was death spiral companies then yes.

In about month or so, $60 million debt from parent shareholder (my guess) will be converted to equity and net debt will be around $250 million.

working out yearly revenues from H1 report:

4000 bopd = $60 million

8000 bopd = $120 million

1000 bopd = $150 million

At the end of 2012, production is at 6540 bopd. Prior to starting the condensate infrastructure work, they had already shut in 1500 bopd and with the work over run, they have shut in another 1000 bopd. If work was to be completed successfully, my estimate is that they would be at 8000-9000 bopd straight away.

They have another 8 wells waiting completion in first half of 2013. They actually think 15000 bopd is quite achievable in 2013.
There were one off infrastructure costs like processing facility for condensate and transport pipeline etc.. which is quite heavily skewing the quarterly figures. These costs should not reoccur in subsequent years and infact will save them about $3-$5 per barrel cost wise.

As far as I can make out, the model is quite viable providing something does not go disastrously wrong.

My theory for 1830 Friday RNS is that, the parent shareholder loan will convert on 17th Feb. Lower the SP, the more shares to that person. The work is then completed month or two down the line, the SP recovers and he makes a fortune. That person is someone close to the Board I should think as he was from the parent company. Ofcourse my theory could be all rubbish as well ... but years in AIM makes you cynical :)
 
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Roxi Petroleum BoD are pssibly the best negotiators of all time?

Was the Kazakh businessman drunk before agreeing to invest $40 million at premium of 300%? :)))
 
Thanks for some headline stuff on the debt attached to RusPetro EE. However I'd imagine the devil in such agreements will be in the detail although can't see anything re a Floating Charge there which is one relief.

The chart looks awful and you're right there looks no support for that falling knife so being short looks the best idea.

The valuation just looks totally bizarre. Western producers trade on single digit multiples of cashflow. Given the risk inherent in Russian operators it seems bizarre Ruspetro looks to be valued in double digit multiples of cashflow judging by those figures. Given the debt the gearing effect on the shares is high and thus it could trade anywhere between 0 and the current price. Paying the debt in the EV down could grow the Market Cap quickly but that 'hockey stick' effect still looks at least 3 years away from coming to fruition.
 

Darcon
8 Jan'13 - 19: 44 - 491 of 491 0 0


I also saw checked FT for articles on Ruspetro and was reminded that apparently the debt needs to be "refinanced" in the first half of 2013. So even if they don't need new cash, the recent poor operational performance may lead to adverse impacts with respect to bank's evaluation of risk and therefore on the interest rate and various bank covenants.
 
EOG - apparently in that interview I posted earlier (which is behind a paywall) CEO confirmed news on Kiernan due January and that was when data room would be opened up to potential farminees.

The other thing which got people excited is he said something about his aim is to get EOG to be a top quartile AIM Company by 2017 which apparently implies a Market Cap north of £100m at current prices. I think his options have a pretty high exercise price so he is certainly incentivised to get the share price up.

Kiernan news and then Exxon Dunquin drill Q1/Q2 should be enough to get this moving but there is also the Wressle/Broughton drill due in Q2.

Whilst EOG have not been drilling they have been increasing cash balance so I think this all looks very healthy for next time there is a comprehensive update.

France and Shale Gas is all gravy on top.
 
thanks for that Jaspa888 - much appreciated.

EE - what do you make of the RNS from LRL? would you say this is the time to get out or is it wise to stay in till the hype builds for the frack testing?

XEL - good run today. Also CEY decent results, SP moved considerably.

EOG - still waiting for something to happen - no news..?
 
LRL - Personally I would be out and possibly short. I actually missed the RNS, even though Jaspa mentioned the rise today. Had I checked, I would have gone short as it was above 15p today.

Clearly, no real value information will come out till May and even then I think the odds are stacked against them. 80 meters of net pay in 15 zones, suggests the flow even with fraccing may not be commercial.
 
IRG

apparently worth watching. Down from 50p to 7p because of Italian authorities messing them around on their gas projects. Italian elections due soon and the Center-Left coalition leading in polls and they have stated they will address the Country's gas shortage/pricing issues.


Italy's Bersani: Natural Gas Would Be at Center of Energy Policy

Today : Wednesday 9 January 2013

By Liam Moloney

The head of Italy's center-left alliance, which is leading opinion polls for late February's general elections, Wednesday said natural gas would be at the center of his energy policy and incentives to promote renewable energy would be reduced.

"The real issue in the coming years is called gas," said Pier Luigi Bersani in an interview broadcast on SkyTG24, adding prices for the fossil fuel in Italy are too high.

"We have to see how we can manage to reduce the costs of importing [gas], we need a system that is more open, that may move among spot [prices] markets," said Mr. Bersani.

He also said his political bloc, if it were it to win the elections, would be open to greater local oil and gas production.

Italy is scheduled to hold general elections Feb. 24-25.

Write to Liam Moloney at liam.moloney@dowjones.com
 
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PET - on the move again with talk of Exxon farm in


Petrel Resources gushed 4.25p to 23p on revived speculative buying and talk of a ‘farm in’ agreement with an oil major, possibly Exxon. The shares more than trebled in November after the company announced a target off Ireland’s West Coast with a billion barrels of potential oil. Tony O’Reilly Junior’s Providence Resources, which has risen more than £1 already this year on prospects for its flagship Barryroe field off the coast of Ireland, touched 691p before closing 15p off at 670p.


Read more: http://www.dailymail.co.uk/money/ma...fence-group-Chemring-siege.html#ixzz2HcNgUjIc

EOG actually seem to have licence prospects bigger than Exxon's Dunquin and more advanced than PET's

Europa-Oil-Gas-Seeking-Partner-to-De-Risk-Mullen-Prospect.jpg
 
Hearing some whispers about placings in oil and gas exploration companies. Hope it isn't EOG but many of the bruised and battered execs running these companies probably thinking now is the time to get some money in and avoid a SEDA. Doing it early might be a good idea if this current dash for trash does not last beyond Q1 and thus sort out funding for rest of the year and beyond.
 
Jaspa what do you make of GAS and Haresh Kanabar ?

I see you mentioned AFR above. GAS was meant to be some LNG infrastructure play in association with AFR. It has been forgotten due to financing issues I think but Kanabar has maybe repaired his reputation with IMIC/Affero recently so is GAS worth a look again ?

big.chart
 
Lots of shells seem to be on the move again. PLMO looks interesting. Formerly PMK and run by an associate of Lenigas with a view apparently to African oil and gas opportunities.

big.chart


big.chart
 
S28 - you following continental coal and the takeover malarky? Apparently 2 billion onnes of coal etc.... I have stayed out as its from the okap stable of companies.. Meaning Landau is on the board.
 
There really are so many charts in small cap / resources world which are looking good right now I think rest of January and maybe even up to traditional Summer doldrums could be good as the Wall of Money hits equities.
 
COOL - Lots of naff talk about 'takeout at multiple of current market cap' but they actually have a lot of debt and I think sailing close to insolvency so I won't touch it myself. If the parties on the other side of that transaction have any sense they will wait for those guys to hit the wall and then buy from the administrator/liquidator.

Chartwise about to hit 200 day MA and don't think it can break that easily given poor fundamentals.
 
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s28 said:
COOL - Lots of naff talk about 'takeout at multiple of current market cap' but they actually have a lot of debt and I think sailing close to insolvency so I won't touch it myself. If the parties on the other side of that transaction have any sense they will wait for those guys to hit the wall and then buy from the administrator/liquidator.

Chartwise about to hit 200 day MA and don't think it can break that easily given poor fundamentals.
Click to expand...

Personally, i am hoping for it to spike lot more. The okap companies are great for shorting as they almost never deliver value!
 
Getting a bit fed up of writing Dash for Trash and Wall of Money and reckon they will be consistent themes so will shorten to DfT and WoM henceforth.
 
AME

Not a very well written RNS from them today but encouraging. They talk about completing their RC drilling programme and expecting initial resource statement in H1 2013. However there is too much 'check assay' results in their which are historic and of little consequence (and on the face of it 'low grade') and it isn't made very clear at all that the results they are giving are just surface sampling / trenching and the real meat will come when they get the results back from RC drill assays.

On Mali they confirm that they are able to go about their business unhindered so overall it is looking well set going forward.

big.chart
 
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AME - starting to get some attention


idontpost
11 Jan'13 - 09: 51 - 984 of 989 0 0


was 23p at one point I think in 2011, pre Kossanto. And that came into the portfolio summer 2012, but nobody noticed. Just as they didnt see that if AME find 500k ounces gold at Kossanto they pay a final consideration based on a share price of 36p per share. 12 x the current price.

Maybe a few more people will realise how many times this might go up in the coming months.
 
TYM - they've given themselves some warrants whilst the price is cheap I reckon. News due end of the month and it really should be transformational.
 
s28 said:
Jaspa what do you make of GAS and Haresh Kanabar ?

I see you mentioned AFR above. GAS was meant to be some LNG infrastructure play in association with AFR. It has been forgotten due to financing issues I think but Kanabar has maybe repaired his reputation with IMIC/Affero recently so is GAS worth a look again ?
Click to expand...

I thought Kanabar was only a non-exec with GAS these days?
 
Are Afren involved in any material way?

AME could break 50 and 200 on volumes today
 
s28 said:
TYM - they've given themselves some warrants whilst the price is cheap I reckon. News due end of the month and it really should be transformational.
Click to expand...

S28 - what do you feel the odds are that the results are not going to be as maybe they would hope? do we have a date?
 
?

Don't think the Directors buying cheap suggests they think odds are bad.

I'm looking for increase in price targets for TYM in the multiples. 60p+

RHPS currently have it as a buy up to 15p with 12 month target of 30p

Thats bull ****.
 
Lenigas and Ritson are complete ******* but they have awarded themselves options around this level so I think this could be a final 'friends and family' round prior to sale/farm down of Ruvuma Basin interests. They tried to puff the stock a bit with the RNS earlier but I think in the 0.4's if you buy and hold a few months one should see a decent return.
 
http://www.thesundaytimes.co.uk/sto/business/Industry/article1193201.ece

Shale driller for sale

Danny Fortson Published: 13 January 2013

THE shale-gas driller that claims to have found sufficient reserves to last Britain 70 years has launched an auction to attract a big energy group as a partner.

Cuadrilla Resources, which is chaired by former BP chief executive Lord Browne, has hired Jefferies, the investment bank, to sell a stake.

It is understood that Centrica, the owner of British Gas, as well as Exxon Mobil, Royal Dutch Shell and BP are among those considering buying a share of the company or, more likely, its assets.

Cuadrilla has exploration rights over part of the Bowland shale, a giant underground formation that stretches from the Isle of Man through the northwest and down to the East Midlands. The firm estimates that it could hold up to 200bn cubic feet of gas.
 
Algy Cluff a well known figure in UK small/mid cap natural resources sector has made a move into UCG today (Underground Coal Gasification) by taking a couple of small licences.

This could be significant for EOG and INFA.

EOG have some very large UCG licences (in addition to all their Conventional and Shale Gas stuff)

INFA gas storage projects could potentially be used allied to UCG to reduce carbon emissions by storing C02 in the salt caverns they were initially expecting to utilise for natural gas storage.

I don't expect any real investment in the area short/medium term but it should highlight potential long term to investors.
 
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GBP - after a long period of silence have alluded to their billion barrel prospects offshore Namibia. Looks like Repsol/TRP may drill late 2013/2014 so the prospects for a new drilling campaign look promising. I believe HRT the Brazilian company are also due to drill at some point. GBP trading pretty much near cash. GBP have opened data room to start farm in process. Claim to have confidence in their licences in Walvis Basin. Not sure which basin CHAR have been drilling dusters in ?

big.chart
 
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big.chart


AGL sounds like blockbuster news there today. Due to present at Proactive Investors forum in the next month or so. Interesting chart juncture.

PARSORTIX CELL RECOVERY

ANGLE plc (AIM: AGL), the specialist medtech company, is delighted to announce that the Company has achieved a major new breakthrough in the potential use of its Parsortix non-invasive cancer diagnostic product.

In addition to the technology's ability to capture and count very rare circulating tumour cells (CTCs) from the blood of cancer patients, ANGLE has developed a process for recovering captured cells from the Parsortix cassette.

This recovery capability gives the potential for the cells captured by the Parsortix cassette to be analysed by a variety of contemporary molecular techniques. Enabling CTC analysis using these techniques substantially extends the Parsortix technology's capability, opens up many new diagnostic, prognostic and treatment applications for cancer patients, and greatly increases the size of the market available to ANGLE.

There is no device currently in the market designed to recover CTCs and as a result there is a major unmet medical need. Of the various systems known to be under development, a major differentiator of the Parsortix technology is that it offers the potential to recover intact, living cells.

Analysis of CTCs can be used to screen and diagnose patients and importantly to monitor response to treatment in a non-invasive manner without having to perform a tumour biopsy. ANGLE's research partner, the Paterson Institute for Cancer Research, is a world leader in developing medical applications in this field and it will be investigating the potential for the Parsortix system to be used as a source of CTCs for these applications.

ANGLE's Founder and Chief Executive, Andrew Newland, commented:
"This major development means that our system now offers two approaches to analysis of CTCs: counting and identification of cells captured within the cassette; and molecular analysis of cells recovered from the cassette as a liquid biopsy. We know from discussions with researchers and physicians that there is market demand for this versatility."
 
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AGL todays looks like being a big re-rating day with the stock breaking out above the 200 day MA on Volume. Will look to buy some if it retraces to and tests successfully the 200 day MA line at c.40p.

However will definitely look to buy some towards close because the newspapers should be full of that and the overnight press could lead to strong follow through buying tomorrow. Daily Mail in particular loves all these 'cancer/muslims/immigrants are going to kill us all in our beds' type stories.

p.php
big.chart
 
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When they first announced Parsortix the stock went up from 30p to 80p in the space of about 24 hours

this looks to be a major development so all other things being equal the stock should go from 80p to 100p+ of course in the mean time we have had a savage bear market in small caps and thus a lot of retrenchment of positions even in Companies which have been delivering and do have huge blue sky potential

£20m Market Cap seems ridiculous for a Company which can put Johnson & Johnsons Cellsearch/Veridex out of business (for which J&J spent over $200m) and a cancer diagnostic market put at over $4bn p.a.
 
Have you seen that new listing on AIM today ? Northcote (NCT) ? 26 bopd ! valued at £10m !

EOG - 200 bopd looks dirt cheap at £15m but with loads of Irish + UK onshore conventional + UCG + Shale Gas optionality
 
s28- all new listings are prime targets for a short especially in O&G. I have had good time in the last 6 months with shorting stock on AIM, requires little patience but always a winner in the end :)
 
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