Petroneft Resources Share Discussion Threads

[denis black gold] 25/4/2014 09:28

Splitting hairs again..... glass half full.. glass half empty.....??? Compared to where PTR were a few weeks ago the glass is now overflowing. YES... the money invested by our new partners is set to benefit OIL I too but what price can you put on stability and renewed hope...!!! It works "both ways" you know, just like PTR, for the $80 to $85 mill OIL INDIA have invested they hand back 50% of production also.....Having been here for so long in the wilderness i WILL NOT be selling now.....GLA

[steelwatch] 25/4/2014 09:28

RCT - I was talking about the &45m only. Suppose, for arguments sake, the $45m is expended with no result, then the benefit is 0/2. On the other hand, if the benefit were, say, $200m, then the net benefit to PTR would be $200m/2 =$100m. Either way, OIL will be contributing the $45m and PTR $0m.

[scallywagkid] 25/4/2014 09:28

In today's Pheonix

"...the OIL deal looks the more favourable than the Russian proposal. The only way Korobov can win is by buying bucket loads of shares...over the next couple of weeks, for his current 15% stake will clearly not be enough to win the day."

[rcturner2] 25/4/2014 09:23

This is what Davy said:

"Petroneft has entered into an agreement with Oil India which will acquire a 50% stake in Licence 61 for a capital commitment of $85m. This involves a $35m cash payment to Petroneft, a gross $45m work programme and a final $5m cash bonus due to Petroneft if the large Sibkrayevskoye field is developed. The value transfer to Petroneft is up to $62.5m. The $62.5m value transfer to Petroneft is equivalent to 5.5p per share for its remaining 50% share in Licence 61. This also values the barrels at just over $1."

[eric76] 25/4/2014 09:21

Yes think the house broker have it wrong here too. PTR get all the upside from half a field they couldn't afford to develop without any financial risk. Seems a no brainer for a cash strapped co that had assets it couldn't afford to develop.

[woodpecker25] 25/4/2014 09:16

I think the house broker have it wrong.

The farm in allows OIL/PTR to EACH share half the proceeds of whatever is produced from Licence 61.

It does not give OIL half the plot of Licence 61 to develop themselves.

Neither does it allow them to split the $45m so that half goes on PTR's wells and half on their own wells, thereby owning 100% of their "allocated" well.

All of the $45m goes on explo/dev of L61 and the all proceeds (from whichever corner of the licence, or from whichever rig) are split 50/50.

Therefore I would argue that you should not split the $45m by 2. PTR are gaining from the full $45m that is going to be invested.

[rcturner2] 25/4/2014 09:15

You can't have it both ways though. You cannot say that PTR are receiving $85m and that $45m is being spent of which PTR is not contributing a penny.

[steelwatch] 25/4/2014 09:04

RCT - I think my explanation of that is simpler. The value transfer includes what it saves PTR in future expenditure, but does not alter the fact that OIL will fund the next $45m going forward with not 1p from PTR to match it. Let's face it, they didn't have the 1p anyway.

[rcturner2] 25/4/2014 08:59

steel, the house broker have divided it by 2!

OIL own the other half of L61 now, so half the development budget is for their benefit alone.

[eric76] 25/4/2014 08:52

Agreed and it seems a very good deal for a co. that was completely cash strapped and had its share price throttled by the monthly 650k payments the market was never sure it would be able to keep up?

[steelwatch] 25/4/2014 08:50

RCT - don't see how you can divide the $45m by 2?

The benefit derived by that expenditure, yes, but not the expenditure going in which PTR does not have to match.

[munkychunky] 25/4/2014 08:29

OIL will invest $45m into License 61 - without PTR having to do invest anything:

US$45 million of exploration and development expenditure on Licence 61. The only condition in relation to the availability of these funds is that they are spent on agreed work programmes and budgets. Until the $45 million is fully invested PetroNeft will not be obliged to invest any additional funds for Licence 61 exploration and development.

- That $45m should increase production vastly, no? Once it hits 5k bpd then PTR will be earning from the field the same as it was pre-farmout.

[omzy] 25/4/2014 08:15

$45 mill to spend on development of lic.61 and overseen by an oil major. No debt. Revenue from 1200 bopd. Approx $10 mill in the bank. 14 mill bbls p2 reserves. At 6.4 p per share is this a reasonable investment for future gains?

[rcturner2] 25/4/2014 07:57

Unfortunately I agree with Katsy, the $85m figure is misleading and once I had digested that fact, it was part of the reason I sold.

Only half of the $45m development expenditure is attributable to PTR, hence why Davy and Goodbody are using the lower figure of $62.5m.

[steelwatch] 24/4/2014 20:52

-- Total investment by OIL of up to US$ 85 million consisting of:
-- US$ 35 million upfront cash payment
-- US$ 45 million of exploration and development expenditure on Licence 61
-- US$ 5 million performance bonus
-- PetroNeft to remain operator of Licence 61
-- Subject to regulatory and shareholder approvals with completion expected around end-May 2014
-- Up to six well drilling campaign to start on completion of farmout

[denis black gold] 24/4/2014 18:39

THEY did NOT pay $62.5 for 50% of L61.....OIL paid $80 mill + the chance of an extra $5 mill bonus to PTR for 50% of all L61 oil production if all goes well in the future..!!!! Yes.. some of this investment will benefit OIL also re. 50% of all oil produced, but without OIL's investment and expertise we were looking at ZERO extra production and meltdown of PTR.... Regardless of how folk try to split financial hairs i'm sure OIL would state that they are primed to hand over $80 to $85 mill for 50% of production of L61 and NOT $62 mill....GL

[bloodinthestreet2] 24/4/2014 17:36

SP much higher ??? i wonder , thats provided natlata don't start dumping their stock into any share price strenght and make a tidy profit on the way out ....and go fry other fishes

[denis056] 24/4/2014 17:35

Is that poster bad robot taking proverbial with talk of a ball formation ?

[steelwatch] 24/4/2014 17:26

Developed, it's worth much more than Macquarie would raise in a fire sale. Farm in secures funds to get the ball rolling and see off the vultures.

[chris cat] 24/4/2014 17:03

Would selling the licence be a bad thing - If OIL are prepared to pay $62.5 for 50% of it...

[denis black gold] 24/4/2014 12:00

Have to say it reads well, and even Nat have stated that if the deal is as attractive as it seems that they may even consider supporting it...!!!! Once the air clears and drill bits are turning this flagging share price can only move in one direction.....NORTH..

[munkychunky] 24/4/2014 11:07

got 100k more based on that...

US$45 million of exploration and development expenditure on Licence 61. The only condition in
relation to the availability of these funds is that they are spent on agreed work programmes and
budgets. Until the $45 million is fully invested PetroNeft will not be obliged to invest any additional
funds for Licence 61 exploration and development.

- Thanks for the link steel