Petroneft Resources Share Discussion Threads

[danny111] 30/9/2015 11:10

Dbarron - good summary. The only point I would question is in respect to the 50% for 3D seismic on licence 67. Why would Oil India allow the use of JV funds for a licence they have no involvement with?

[steelwatch] 30/9/2015 11:09

DB - just viewing on my phone, so difficult copying/pasting, but something in the notes to the accounts re currency gains re. the ruble weakness...

[dbarr0n] 30/9/2015 11:02

crudde ...
The 45 million will be more or less gone at the end of year.

It has and will be been spent on
5 wells at Arbuzovskoye,
1 well at lineynoye,
1 delineation well at Sibkrayevskoye,
25 km pipeline and infrastructure at Tungolskoye.
5 vertical and 5 horizontal wells at Tungolskoye.
1,000 km of high resolution 2D seismic on licence 61.
Drilling pad on south Arbuzovskoye.

After the 45 million is expended Petroneft have to fund half of the costs going forward.
They conclude that with current oil price and production they will be able to fund their share of costs on Arbuzovskoye south from cash flow.

[crudde99] 30/9/2015 10:03

Is Jasper in his 29336 post correct when he states that ALL of the Oil India cash 45 mill will have been drawn down and spent by year end. He sees us as having to "borrow again" to fund other projects in the near future...

[dubhgeannain] 30/9/2015 09:48

Oh I remember the good news Db. I'm quite excited about what the reserve update will be :) I just would like to see them getting a bit more luck in it getting it out of the ground in an economical manner.

[cfccfc1970] 30/9/2015 07:29

Toon - any views on how this will pan out?

Many thanks.

[ravin146] 30/9/2015 07:11

Dbarron I hope we reach 3500, but imo I just feel other wells will ease back and 2*450 wells may not be enough.

[dbarr0n] 30/9/2015 00:37

ravin ..
The goal posts haven't been moved.. Why some here keep harping on about it baffles me.

T-5 on Tungolskoye was a vertical and 300 mtr horizontal test well.
It was drilled to see if and how a horizontal well would improve flow rates.
It proved horizontal wells could be drilled on the licence and it proved a horizontal well would substantially improve flow rates over a vertical well.
The lesson learnt is that on Tungolskoye horizontal wells are not accurate enough to avoid water bearing layers beneath the J12 reservoir so they decided to avoid the J12 reservoir and target just the J11 reservoir with horizontal wells on Tungolskoye.

[ravin146] 29/9/2015 22:59

Though volume was high compared to recent times...there has new larger sells. Today's move was significant. It must hold and I hope we don't reach low lows. Moving goal posts hiding weeds. It's been done again imo. 'Learned lessons'...it's time this bod look at reality that that 3500-4000 expectation is looking tough to reach imo.

[dbarr0n] 29/9/2015 21:40

crudde99.

How the calculated the NPV is beyond me as they can only guess what the price of oil and production figures will be going forward, would love to know what price the used.

Worldace group holds licence 61, which Petroneft and OIL both have a half share.

Dubhgeannain.

As you know the T-5 well started to produce water, so the following wells were and will be drilled in the J11 reservoir.
If T-5 horizontal had not produced water we would have been well on target to reach the boards expectations.
That is the nature of exploration and production, it don't and wont always go to plan, some will be better some worse.
Nobody remembers the better ones, like the good news recently that based on the latest seismic it looks we can look forward to a doubling in reserves over the next couple of years.

[crudde99] 29/9/2015 20:29

Lots of oil stocks down today, but Ptr's fall of 9.2% is shocking and brings us sub 4p again...!!! Any views guys...?? Ps. excuse my ignorance Jasper but who is WorldAce.....??

[jasper2712] 29/9/2015 20:27

This is what I think is the cause of the fall today
"As at 30 June 2015 WorldAce had cash at bank of US$2.5 million and had drawn-down US$41.5 million of the US$45 million Oil India investment. It is expected that the entire US$45 million will be drawn by the end of 2015. Based on current forecasts it should be possible to fund the development of south Arbuzovskoye from 2016 operating cash flows but additional funding would be required to advance other projects, such as Sibkrayevskoye, in 2016."

Burning a lot of cash and by the end of 2015 they will not be debt free but will again be looking for more cash.

[seangwhite] 29/9/2015 20:10

About £55k of trades in PTR shares in London today which is well up on usual daily totals.That figure shows how little interest there is in this Company which sadly is a reflection on the BOD's long tenure.The next RNS if it comes with a decent well result will surely raise more than this same level of interest.VGLTA

[kevjones2] 29/9/2015 15:37

Pretty much carnage for oilies today. Providence, MSMN, Landsdowne, Europa and many others all down consistently for the last few days and today. Tullow is up 5% as I type but is down 25% in the last two weeks. I haven't checked the price of oil. If that is not down I have no idea why oilies are being hit so hard these last few days.

Tens machine, the problem with La Sirenuse is that one cannot see the McGillycuddy Reeks from it. Otherwise it's nice.

[dubhgeannain] 29/9/2015 15:34

I understand Db. Call it an expectation then if you will so it was what was expected to be attained by more than a few investors. I'll be happily surprised if it comes to pass given the experiences this year.

It's my reasoning for the dip in price on the news today. I'm not playing a short game here but still follow daily fluctuations with interest. Do you have any thoughts yourself on the apparent negative market reaction to the RNS?

[crudde99] 29/9/2015 15:33

DbarrOn I Understand it means Net present value. In a takeover scenario would you expect a predator to pay a premium on top of this NPV to acquire a Co....??

[dbarr0n] 29/9/2015 15:05

Dubhgeannain ..
There was no target set..
They said in march "we expect gross production to almost double and reach between 3,500 and 4,000 bopd by the end of 2015."

We are currently at around 2700 bopd have 2 horizontal wells to be drilled and put on line before year end so who knows, they may reach the expectations they had earlier in the year.

Crudde99 .. NPV = Net present value

[tens machine] 29/9/2015 14:28

Natlata fodder ... Possible shake for stock .Might have a look at the lake hotel next year... I can recommend the world famous la sirenuse Italy.

[crudde99] 29/9/2015 14:14

Canaccords TP of 6p wont exactly set the world on fire. What exactly do they mean by an NPV of 12.5p central value...???

[dubhgeannain] 29/9/2015 14:01

I'd guess it's the confirmation that they will not be near their initial year end target. Hey, if it's still going up I'll satisfy myself with that for now. Lets see what the reserves update brings.

It does show how tricky forecasting production can be though and I'd say they were being conservative with their initial forecast so as to make it achievable. I think much higher production was really expected at this stage. Not reaching the target is disappointing but not the end of the world. That's just my opinion. Interested to hear what others think though.

[crudde99] 29/9/2015 13:53

Sub 4p today, down over 8% as I write. Any views on this sudden fall in the share price What has suddenly scared investors guys. Was it something in todays RNS...????

[dbarr0n] 29/9/2015 13:48

ravin ..
If both of the next 2 horizontal wells on Tungolskoye are on production before year end we will be above 3000 bopd gross baring a disaster.
They plan to drill up to three horizontal wells next year on south Arbuzovskoye if these come in on prognosis ( producing around 750 bopd each we will surely average 3500 bopd next year..

I read the report and the figures were actually a little better than I thought they would be ...

[ravin146] 29/9/2015 13:17

sharp fall today, hitting a low, not good at all on sentiment side, especially post a rns.

"We expect exit '15 gross production to be c.3,000 bopd and for '16 we believe that average production of around 3,500 bopd is achievable." cannacord......+500in average for 2016...imo that seems low increase?!

anyone see anything in the half year report, and the above haven't seen?

[scallywagkid] 29/9/2015 11:58

Canaccord morning note...

On the right track

What's new: H1 results were impacted by low oil prices combined with the knock on effect of relatively quiet drilling activity in '14. Gross production in H1 '15 was 1,744 bopd and the domestic sales oil price was $29.9/bbl resulted in net revenue attributable to PTR of $4.9m and a loss of $1.8m from the producing licence 61 in Tomsk region of Russia. Overall reported net op.cashflow was -$0.82m and the company had net cash of $2.6m at half year. The outlook - oil price aside - looks rosier with current production of 2,700 bopd, with the increase primarily due to the Tungolskoye development.

Production: Operationally the focus continues to be on production growth with the completion of the Tungolskoye development expected before end '15 (2 horizontal wells) and a shift to the Arbuzovskoye southern lobe development drilling in Q2 '16 (2 or 3 horizontal wells). The Tungolskoye horizontal wells have a typical IP of c.500 bopd, but the greater thickness and better quality of the reservoir at Arbuzovskoye is expected to deliver IP rates of c.750 bopd/well. The gross capex for the three horizontal wells there, including new pad construction and pipeline tie-in, is expected to be $5m, and that can be funded from projected PetroNeft and JV cash.

We expect exit '15 gross production to be c.3,000 bopd and for '16 we believe that average production of around 3,500 bopd is achievable. The impact of the incremental production is significant given the substantial fixed cost base.
Reserves: PetroNeft has net 72 mmbbls 2P reserves (at 31/12/14, Ryder Scott CPR at 1/4/13 adjusted for production) of which 58 mmbbls are on licence 61, the development focus. However, the company believes that the combination of successful new drilling on Sibkrayevskoye (vertical well 373 drilled earlier in '15 tested 100 bopd without pump) and new 2D seismic over that field and Emtorskaya is likely to lead to a significant reserve uplift. This may be tempered a little by a reduction in Tungolskoye reserves following a disappointing appraisal in the south west of the field but the overall reserves trajectory appears to be firmly upwards.

Canaccord view
PetroNeft and JV partner Oil India are making good operational progress building production and assembling the evidence for increased reserves on licence 61. We think that sustaining gross production above 3,000 bopd in '16 is an important milestone and the scope of the reserves indicates that there is plenty of growth potential beyond that, provided macro circumstances improve.
We expect PetroNeft and the JV to have combined net cash of c.$7m at end '15, which looks ample to push ahead with the Arbuzovskoye south development. The ability to drive production growth from internal resources in '16 puts the company in a strong position relative to many smaller E&P players.

Valuation
We maintain our TP of 6p/share, based on our NPV12.5 central value, and our Speculative BUY rating, which reflects the risks of a Russian focussed E&P.

[steelwatch] 29/9/2015 10:38

sean - lovely weather during our week in Dingle, Killarney, Kenmare and Bantry. Dingle and Kenmare best of all, but all fantastic area for holidays. Previous week in Waterford and Galway also great except for a couple of showers. Heading back to Rosslare shortly.