Regal Petroleum Share Discussion Threads

[j drama] 20/4/2012 10:50

Ilamarama

I suggest you do some more research on RPT, you are jumping to poor conclusions based on partial knowledge.
The current production numbers, margins & overheads indicate a $4m profit for Q1.Getting to $20m+ for the full year is entirely possible with favorable workovers especially considering SV-66 used to produce 1,392 boepd alone.RPT previously produced nearly 3,000 boepd with the same wells, where as they are currently producing less than 1,800 boepd.
Surely even you can see the the potential of producing $20m+ from that?

I am no ramper but you appear to be a derampers who has come out of nowhere posting inaccurate numbers & derogatory statements.

You don't get demoted for making poor investment decisions, you get fired!
Denis Rudev could have left those positions for any number of reasons, are you jumping to conclusions again or would you like to quote your sources?
The Ukrainians don't appear to me to be people who would give someone a second chance.

[j drama] 20/4/2012 10:41

Yes Spec, the use of the velocity string to sort out too much liquid interfering with gas flow on SV-66 ties with the RNS 30th Sep 2010.

'SV-66

A coiled-tubing intervention to remove an obstruction at the base of the
production tubing was completed. The well is producing steadily to the gas
plant, and was tested on 26 September 2010 at a rate of 246 boepd (39,140 m3/d
gas and 0.3 m3/d condensate) on a 6mm choke without any need to periodically
cycle the well to remove fluids.'

If this allows them to reduce the size of the choke it could substantially increase production rates from this well.

[llamarama] 20/4/2012 10:33

JD, he was CFO before - its called a demotion. He was also on board of Metinvest - largest company in Ukraine.

I am Nothing to do with Ukrainian Energy and what that has to do with anything? I posted something and you challenged my ability to read financials, whilst spouting complete nonsense about 20million profits coming your way next year.

What I can't tell about you is whether you are a ramper or a muppet.

[j drama] 20/4/2012 10:28

Beeksy
Your new header isn't working properly on my iPhone, all I'm getting is a bouncing W & N.
What does it say?

[j drama] 20/4/2012 10:11

4 posts on RPT today & nothing before that since 11th Feb post complaining about CAD mngt.
Mmmm I smell a rat, are you connected with Ukrainian Energy llamarama?

Denis Rudev is still an executive of Smart, the investment director no less.
Seems a strange appointment to make if RPT was such a bad investment making him in charge of future investments!!!



In fact that would suggest they are very pleased with his last investment:)

[llamarama] 20/4/2012 10:02

That made me smile, thank you JD. I am sure Denis Rudev's prompt resignation from Boards of RPT, Metinvest and as CFO of Smart Group was his reward for arranging this amazing deal.

[j drama] 20/4/2012 09:53

' As part of the 2012 investment programme, the Company intends to carry out work-overs on three existing wells with a view to maintaining and improving production. The first of these work-overs, the installation of a velocity string on well SV-66, has been completed and testing is now underway.'

'velocity string
1.  n.  [Well Completions] ID: 2882

A small-diameter tubing string run inside the production tubing of a well as a remedial treatment to resolve liquid-loading problems. As the reservoir pressure in a gas well depletes, there may be insufficient velocity to transport all liquids from the wellbore. In time these liquids accumulate and impair production. Installing a velocity string reduces the flow area and increases the flow velocity to enable liquids to be carried from the wellbore. Velocity strings are commonly run using coiled tubing as a velocity string conduit. Safe live-well working and rapid mobilization enable coiled tubing velocity strings to provide a cost effective solution to liquid loading in gas wells.'

[j drama] 20/4/2012 09:50

Investing $80m for a 54% share of a company that will likely generate $20m+ of profit in 2012 doesn't seem like too bad a deal to me with the huge production upside going forward.

[stonefold] 20/4/2012 09:48

The Ukrainian Government have been shifting taxation from the back end = corporation tax -- which is being reduced.
T0 the front end = production royalty -- which is being increased.

JKX in their finals on 28-03-2012


Make reference to how those tax changes in late 2010/ early 2011 negatively affected their margins for production in 2011.

.............." In December 2010 a new Ukrainian tax rate was introduced. New corporation tax rates in the Ukraine for 2011 are as follows: from 1 January 2011 to 31 March 2011 - 25%; from 1 April 2011 to 31 December 2011- 23%;and the expected corporation tax rates in 2012 - 21%; in 2013 - 19%; after 31 December 2013 - 16%.

........."In addition a new tax code became effective in Ukraine on 1 January 2011 in the area of production related tax. The fees are levied on production volumes in accordance with a rates schedule which may change from time to time." ............

----------------

Recently reported two stories on production tax affecting gas being sold to the Ukrainian industrial market.

The first story (10-04-2012) would effectivly signal to stop current production by making it unprofitable.

"Planned hike in gas royalties to hurt private oil & gas producers
Ukraine's Cabinet of Ministers has drafted a law that increases royalties on the extraction of natural gas by 4x,
........... ( tcm = 1,000 cubic metres)
Royalties on natural gas extraction in Ukraine, USD/tcm
----------------------------------------------------------
Depth of gas deposit
5 km or less More than 5 km
----------------------------------------------------------
Base royalty 30 15
Coefficient applied* 2.3x 2.3x
Effective royalty, current 69 34
Effective royalty, expected 276 138
Cap on gas sale price 439 439
* Effective in March
Source: Tax code, Ministry of Economy, Concorde Capital
Vitaliy Vavryshchuk: The document, if passed into law, would squeeze the gross margins for gas extraction operations by about 47 pp (24 pp for companies with gas deposits below 5 km). That would decrease EBITDA margins by 2x-4x for local oil & gas producers..........................."


The second story on 13-04-2012
"Ukraine delays hike in royalties on gas production
Ukraine's government took off the agenda the draft law which called for a 4-fold increase in royalties on production" ........

--------------

So the Ukrainian Government who are currently trying to encourage international investment in shale gas projects may shortly be debating an act to allow a further increase in gas production tax.
Then again Ukrainian parliamentary elections are in October 2012 so maybe it will get kicked into the long grass.

I intend to hold onto RPT, as while Ukraine are locked into their Russian gas import contract, prices will remain high enough to make it worthwhile.

[j drama] 20/4/2012 09:46

'So fine - its gross profit of $40 per barrel - that sure that justifies admin expenses of $60 per barrel + Capex with no new wells online until 2014.'

Still wrong.
Using your basis it's closer to $46 GM per barrel.
$11.8m FY admin, over 5 months that's $4.92m divide by your 250,000 barrels is less than $20 admin per barrel!

Two new wells online in 2013 not 2014!
Lots of scope for production increases. SV-66 produced nearly 1,400 boepd when first put into production, pre shutdown it was producing 246 boepd.
SV-66 alone could double production.

[llamarama] 20/4/2012 09:35

JD

I simplified, but wasn't miles off.

From interims, cost of sales for first 6 months of 2011 is $1.7million. So the other $8.5million were incurred in second half when production restarted.

So fine - its gross profit of $40 per barrel - that sure that justifies admin expenses of $60 per barrel + Capex with no new wells online until 2014.

Guess Mr Novinsky will need to rename his company after spending $80million on 54% of this. What were they thinking?

[j drama] 20/4/2012 09:13

Jam
There's hasn't been any mention of fraccing since offer.
Chevron have had huge problems re Barlad & planned fraccing in Romania so maybe they don't want to go there unless they have to?

Based on results today & Q1 prices / production I calculate they made around $4m profit in Q1 generating $5.25m cash on $11.625m revenue.

Results of SV-66 will be a very significant one way or another.

[jam2day] 20/4/2012 08:58

JD
Edit re post on work over.
Low impact on production numbers also they must feel that a good potential to increase production - do these work overs include the option to fracturing the
gas / condesate bearing sands and deeper shale deposits?
SV 66 could be very interesting once stabilised.

[j drama] 20/4/2012 08:50

2011 H1 revenue 204 GM -1,543
2011 FY revenue 19,069 GM 8,944 GM% 47%
2011 H2* revenue 18,865 GM 10,487 GM% 56%

Your $35 per barrel GM is wrong, the GM you are using includes the FY costs with only revenue from 22nd July to 31st December.
The cgs in H1 was 291k pm, deduct 2 months from H2 above & you get
Revenue 18,865 GM 11,360 GM 60% for the 4 months after production resumed.

[j drama] 20/4/2012 08:34

'Before stellar admin costs ($16m), which are in not far off from JKX ($25m) who drill in two countries and have $236m revenue.'

$16m admin costs include $4.2m of one off costs relating to offer for company, ongoing rate is less than $12m.
Where you drill has nothing to do with admin costs, drilling costs are in cost of goods sold.

[j drama] 20/4/2012 08:29

Pleased with level of effort being employed to try to boost production with workovers, drilling, upgrade of facilities etc.
Plus intention to increase number of rigs if two wells being drilled are sucessful also encouraging.
$425 m3 gas price is fantastic plus $103 barrel for condensate very close to oil price.

Also nice to see results being released nearly month & half before deadline.

Would like to find out explanation for Gm% slide.
Looking at the 2010 interims & the last year for 2010 in today's RNS you get the following comparison.

H1 2010 revenue 15,942 GM 10,695 GM% 67%
FY 2010 revenue 29,033 GM 15,579 GM% 54%
H2 2010* revenue 13,091 GM 4,884 GM% 37%

*FY 2020 - H1 2010.

The other possibility is that they've made some reclassification?

[llamarama] 20/4/2012 08:19

Production of 150 days at 1653 boe day is around 250'000 barrels. Gross profit is $9mil. or around $35per barrel.

Before stellar admin costs ($16m), which are in not far off from JKX ($25m) who drill in two countries and have $236m revenue.

[j drama] 20/4/2012 08:14

Strange choice to workover the very old well GOL-1 next, last production level released was only 50 boepd.

[j drama] 20/4/2012 08:12

There's something very strange with the gross margin.
The 2010 interims when the average production was 1,452 boepd, gas price $249 & condensate $73 yielded a Gm% of 67%.
How can an average production of 1,653 boepd, gas price of $400 & condensate $103 yield a Gm% of 47%?
Unless they've included the production payroll costs for the whole year in the cost of sales even during the shutdown?

[jam2day] 20/4/2012 08:03

Please keep up;-
Edit
Removed as above

[volkswag] 20/4/2012 08:00

Don't forget production only resumed on 22 July 2011.

[llamarama] 20/4/2012 07:43

Results look pretty shambolic. Amazed at cost of sales and admin costs - gross profit before admin costs of just $35/boe and admin expenses + cost of sales 40% more than the revenue.

Situation will worsen drastically once the new royalty tax is in place.

[jam2day] 20/4/2012 07:24

I thought that we had purchased Compressors ie plural as opposed to singular as suggested in the results. with That aside quite engouraging SV66 on test after work over results of which pending

[d4ytrad3r] 20/4/2012 01:06

I made almost 100k from this first time around. If I'dkept my holding would have been over 1Million. Looking to see if it moves again.