Petroneft Resources Share Discussion Threads

[granto2] 21/1/2015 11:40

FX hedging. It would make sense that any cash on deposit or payments are hedged in multiple currencies, US-Eur-Rub. Greta that Oil India funding is in US$. Local inflation will erode some of it mind you.

[dbarr0n] 21/1/2015 11:38

RC its not that clear cut... also they can exchange Dollar income for Rubles on payment..

[rcturner2] 21/1/2015 10:45

Surely their income is in dollars and their expenditure is in roubles?

[loganair] 21/1/2015 10:27

Danny111 - Hopefully PTR will be patient and keep any of their rouble income as roubles until the exchange rate against the dollar has risen.

[seangwhite] 21/1/2015 10:07

Wonder if the long awaited news on T5 and production will help the current share price gain some momentum as when it finally comes the financial markets could be in meltdown after Greece fleeing thé Euro.Might be time for Putin to look for a bailout from Mr Draghi to complète thé farce.VGLTA

[danny111] 20/1/2015 21:02

Thanks for that Logan, makes sense, but until it happens the results for PTR will likely suffer due to the conversion.

[loganair] 20/1/2015 20:16

Danny111 - when the oil prices rises again so will the rouble against the dollar. The reason for the dramatic fall in the rouble against the dollar is to maintain Urals oil at 3,600 roubles/bbl which is the price needed to keep the Russian state budget in balance.

[steelwatch] 20/1/2015 18:51

ravin - spoke to the company today. If not next week, should be the week after. Won't just be about T5 apparently. Basically confirmed all Db said above. Skype call from UK cost me just 18p by the way.

[seangwhite] 20/1/2015 18:48

Nice summary Db and we now await a nice clear and unambiguous RNS very soonVGLTA

[ravin146] 20/1/2015 18:35

Decent response dbarron on oil and capex, past, bad management and bad pr is what I still believe. Improvement has yet to be seen post farmout, with share price value eroded most on oil drop but not helped by lack of news to attract investors.So you believe news next week dbarron, let wait and see.

[danny111] 20/1/2015 18:28

Surely the currency is swings and roundabouts? We may get the benefit of more value from the original farmout dollars, but unfortunately, as we sell the oil domestically and report in dollars, won't we see a currency hit in the next results?

[steelwatch] 20/1/2015 17:51

toon - there were c.35 Rubles to the US$ at the time of the farm out. There are currently 65 Rubles/$ now so considerably more bang for the Buck.

[thetoonarmy2] 20/1/2015 17:41

Dbarr0n. Defo one of your better posts sums it up pretty much sit back and wait perfect scenario buy everything in rubles with $, POO will recover at some point soon.

[granto2] 20/1/2015 16:59

sorry I dropped 5.4%. hence the 5,6 difference

[granto2] 20/1/2015 16:57

Ravin, I'm down 38% here. luckily I had a reasonably luckily year in 2014 and only lost 6& on my portfolio, which is a really good result given I mainly invest in oil lies, mining, and emerging markets, with a high degree of Russian stocks. and Still only 5% down in 2014. That was a top performance by in a disaster, even if a pat my own back. so so lucky I didn't drop 25%

[ravin146] 20/1/2015 16:39

Granto ouch, hope your average is achievable. Gl

[granto2] 20/1/2015 09:35

I have never sold a share here and I still just about believe in it. I agree with Seam and others that the communication is vague and rare.

[dbarr0n] 19/1/2015 22:04

ravin...

1, The Bod gave forecasted production figures based on a drilling programme that did not happen because of a bad result from pad 2 and the financial downturn, they haven't given any projections since..
2, We get updates every 4 - 8 weeks when there has been any material news.
3, Petroneft has got as much as other companies of its size maybe even more.
as for share tips, there are thousands of companies out there that could be tipped, Petroneft can not be on the list all the time..
4, Petroneft have been operating in Russia for the past 9 years and have not had any problems there..
5, We will get an update when there is something to update the market about, we don't need an update every time they turn a spanner..
6, Hardly any company gives individual well details, the RNS would be pages long and mean nothing as individual wells naturally fluctuate from day to day, besides a well could be down for clean up or pump maintenance or coming back online after a cleanup.
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I gather we will get an update on T-5 and Arb late next week,
The company is still generating cash at current oil price, being helped by the ruble / dollar exchange rate.
At present the current capex plan is still in place (depending on results of course.

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Oil price is not going to stay down long term and with the Dollar / Ruble exchange rate more or less halved since they done the farmout deal they could get up to twice as much done with the $ 45 million Oil India is going to invest. In my opinion as they have no debt and have $ 45 million to spend, this is a good time to spend it as it takes 1-3 years to bring a field into full production. Nobody knows where oil prices will be in 1-3 years and if they were $ 100 + today it would be the same ( just a guess ).

Deferring capex might be a good idea if you have to borrow but Petronefts situation is different as they don't have to borrow.
Running costs are not going to change much whether they put a new field into production or not, but production will continue to decline with no new drilling.
So in my opinion unless the oil price drops to a point where it costs more to extract the oil than what they get for it and looks like its going to stay there for a considerable length of time they should continue with their capex programme..

[seangwhite] 19/1/2015 20:11

Have to say I think the Company has always seemed to manage to get Its news out in such a manner as to leave ambiguity in most of Its PIs minds. Lets hope the T5 news is good and clearly presented.I fear whatever news is forthcoming the share price will remain arround current levels for a while. The present chaotic period in the Oil market is one in which the BOD would have a good excuse for stating that they are reviewing Capex and it would be viewed as prudent.VGLTA

[rcturner2] 19/1/2015 19:35

PR is bad from the very simple fact that the RNSs released by the company are always so full of holes. I remember when Arb first started to come on stream they would always fudge the figures referring to wells offline and so on and it was impossible to work out the true position. It was quite clearly done deliberately and was terrible PR.

[ravin146] 19/1/2015 19:06

Bad management in terms of the history of pumping the stock up- doesn't really help attract investors.Pr in general, ptr doesn't get as much share coverage, that's good and bad. Let's put it this way it's not on any tip sheets, at best the Irish papers will mention something. Volume just explain the story, since farmout you would think new investors would be interested in a company backed by a large player.Communication, difficult to admit...is very poor. Poor in that it is not regular updates, it is not thorough enough, and at times unclear. Eg last rns, why the drop in avatar production. A one liner explaining why would have been nice, especially with this stocks history, even if it was natural decline. As for Russia, politically and economically it is lets say has a lot of uncertainty recently. The hedge is fair enough, but that is not reflected in the share price, which has tracked oil anyway.Overall, potential is there, but this stock needs clear, unambiguous and a thorough rns soon. Explaining it all, i.e has oil and ptr sat down looking to hold back on capx until oil improves? How is each well performing to contribute to the average or which has changed the most. I'm not a big fan of investors saying, that if news is available, it's better to group all news together and wait until the markets calm down. Rubbish, other oil companies are still releasing news. Positives are there, but need regular news. Gla

[dbarr0n] 19/1/2015 17:52

ravin..
Explain how the management are bad or pr is bad ?. What would you have done differently without the benefit hindsight ?.
And as for being in Russia, That is a plus at the moment as some of the decline in oil price has been offset by the fall in the Ruble against the Dollar.

[ravin146] 19/1/2015 17:14

Logan market will re-price...doesn't mean it will be back up considerably after hitting bottom. This time it's politics holding supply, in 2008 it was a complete collapse in confidence and demand. As for this stock, bad management, bad pr, russia location and lack of general interest in the shares is a real problem. It will take a lot for this to even get back to 6p levels

[loganair] 16/1/2015 21:01

A related article from oilpro.com by Don Minter:


I've been in the oil patch for more than 25 years. During that time, I've seen quite a few rounds of ups and downs in the industry. I mainly work upstream, but I've done some refinery and petrochemical plant work as well.

Right now, people are nearly panicking because the price of oil is at $45/bbl, more or less.

I just want to add a little perspective: Oil first hit $45/bbl in 2004. The next shock headline to follow up today's "Oil Prices at 6 Year Lows" could very well be "Oil Prices at 10 Year Lows." The last time we saw this type of volatility was the exuberance and panic of 2008-2009, which was both short-lived and extreme. During the 7 months from July 2008 to February 2009, the price of a barrel of WTI went from $133 to $39. From that point, it was a steady rise until roughly June 2014 when the present fall started.

No one knows where today's price will bottom out, but everyone should have the perspective that "this, too, shall pass." If this cycle follows the 2008 trend, then we should start to see prices stabilize within the next two to three months. Personally, I will just wait and see. This isn't the first cycle in the oil patch, and I sincerely doubt it will be the last.