Petroneft Resources Share Discussion Threads

[steelwatch] 15/4/2014 09:23

PetroNeft Farm-down edges closer

A brief statement from PetroNeft this morning indicates that legal documentation and due diligence on the planned farm-down of Licence 61 is now complete and that a binding agreement is expected "within the next week". The news would appear to mark a conclusion to protracted re-financing efforts. Prior commentary from PetroNeft has indicated that successful completion of the farm-down would eliminate debt (estimated at $30.5m at year-end) and provide funding to invest in Licence 61.

The timing of this morning's announcement is opportune in light of the EGM convened for May 9th at the request of majority shareholder, Natlata (14.7% interest). Proposed Natlata resolutions at the EGM seek to replace five current directors with Natlata appointees and to review options on the re-financing of the Macquarie loan facility.

A conclusion of the farm-down on the terms outlined above would be welcome in that it would enable the development of satellite fields, albeit at an obvious cost in terms of the equity ceded. Post the recent Placing of 62.3m shares at 5p per share and the securing of additional debt ($1.5m) from Licence 67 partner, Arawak, we lowered our core NAV for PetroNeft from 7.7p to 6.6p

Recommendation: Buy
Closing Price: £0.05
Gerry Hennigan+353-1-641 9274 [e-mail]

"Majority Shareholder" ????????????

[steelwatch] 15/4/2014 09:17

Farm-out update
DAVY VIEW
The brief Petroneft update on the status of the farm-out deal provides comfort that it will close very shortly. The company advises that it will be within the next week.

Deal to close within week
Petroneft says that the deal to farm out a 50% share in Licence 61 will close within a week with the only outstanding item being the execution of binding legal documents. We suspect that the update is intended to reassure the company's shareholders that its lenders are fully aware of developments, especially given the rights that Macquarie has over Licence 61 as part of the original lending package.

As we have said previously, the farm-out deal will be transformative, allowing a complete extinguishing of group debt and enabling capital expenditures to properly access the reserve and resource base on Licence 61. Following the deal we think the group will be worth over 11p per share, rising to 14.2p if exploration is included.

[katsy] 15/4/2014 08:39

Apart from any initial reaction and subsequent settle down again, probably back to these levels, nothing will happen to the share price until they start developing and producing oil. That won't be for a while yet. WE all know that any money raised won't last long in the hands of this BoW.

[nz2456] 15/4/2014 08:31

hope so...but wishful thinking me thinks...

[dbarr0n] 15/4/2014 08:28

10p once announced, 12p + by month end and a gradual rise after that.

[currypasty] 15/4/2014 08:07

Woodstock, they say they have a deal, lets wait a week and see the detail ?

[steelwatch] 15/4/2014 08:04

Woodstock - bet you're more worried than them.

[rcturner2] 15/4/2014 08:04

Well since the EGM is not until May, I think we have plenty of time to find out if the deal is real or not.

[woodstock17] 15/4/2014 08:00

My worry is if all the legal stuff is complete, as they claim, why do they need another week to "execute" it. Is this yet another case of over optimism by the BoD? Or are they just hoping this will stop us voting against them?

[jyoti1] 15/4/2014 07:46

Processing but never processed ....

[paulmurphy777] 15/4/2014 07:31

But on what terms?

[jyoti1] 15/4/2014 07:22

Hope it's not like RRL Texas money ?????

[dbarr0n] 15/4/2014 07:10

Looks like the deal is in the bag, hopefully there are no hiccups before is signed and sealed...

[steelwatch] 15/4/2014 07:04

Licence 61 Farmout Update

PetroNeft (AIM: PTR) owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, is pleased to announce an update on the negotiation of the farmout agreement for a 50% interest in Licence 61 (the "Licence 61 Farmout").

All legal documentation and due diligence is now complete and the Company expects to execute binding legal agreements within the next week. Macquarie Bank Limited have been advised of this timetable. Shareholders will be updated fully once the agreements are signed.

[seangwhite] 14/4/2014 22:17

RCTI would love to see a deal at this $1.5 level which would equate roughly 7p at this number I would be happy to support the BODGLTA

[rcturner2] 14/4/2014 16:44

There are 117m barrels P2 in licence 61.

117m x 1.5 per barrel x .5 = $87.75m

This seems about the likely figure to me.

[seangwhite] 14/4/2014 16:38

RCT

At that rate the license is being priced at nearly $2 per P2 a figure I cannot see our lot getting with their backs against the wall due to the various financial calamities they have brought about.

GLTA

[steelwatch] 14/4/2014 15:55

Hay - based on what?

[denis black gold] 14/4/2014 15:20

By diluting Nat the BOD would in effect also be diluting their own meager holdings also..... then again that has never stopped them before, has it.....??? Lets "hope" for some excellent news asap as this share price is really stuck in the mud...!! GL2A

[hayfield] 14/4/2014 15:09

i hope i`m wrong but I think the deal is dead in the water now.

[katsy] 14/4/2014 14:04

I hope any deal (If there is a deal) doesn't also include equity as well! I'm sure the BoW are desperate to further dilute away Nats. holding.

[rcturner2] 14/4/2014 13:54

I believe we are looking something like $80m to $100m for half of the licence, of which probably $50m will be up front to clear the debt and start drilling.

This will clearly push the price up from the current level, but not by as much as some here are hoping.

[seangwhite] 14/4/2014 13:51

RCT

I think your price is a tad high for the near term.I think it will only reach that level if the deal is very good and can be easily understood to be so.
If the deal does clear debt and give substantial money/ commitment to develope the license double figures could be on the cards. Once there is some positive news on drilling and increasing production we could really see a decent price as I believe the P2 figure will increase by a fair ammount.
Most long term holders have lost faith in the BOD and will view even good news with a high degree of scepticism.

Anyone planning a trip to Dublin,I may go if the news announcement is the usual opaque type as has been the norm for our BOD.

GLTA

[rich2006] 14/4/2014 13:36

depends on the terms imo