President Energy Share Discussion Threads

[crimestoppers1] 05/7/2022 15:29

please see the link for description of PL partners in Paraguay. The chief of staff of Cartez and his partner is the key PPC partner in Paraguay. see below the recant discovery. no wonder the drilling keeps on getting delayed and delayed.


hxxps://www.abc.com.py/nacionales/2022/07/05/en-2017-ya-ligaban-negocio-de-cartes-con-el-financiamiento-del-terrorismo/

[activmojo] 04/7/2022 08:52

I might hazard a guess based on what we learnt about the last drills in Paraguay. Some or all of these and possibly cost to negate. Unionised local labour, access roads, utilities, accommodation and logistics. Paraguay doesn't have oil drilling infrastructure or high skills so most everything is coming in for a one off drill. The fact that the drill rig had to be refurbished and modified plus and operated by an inexperienced crew doesn't inspire. The access roads being built will have to be to a good HGV standard just incase of success.

[piperpeter] 03/7/2022 23:07

What is the general opinion on drilling costs in Paraguay?

The Tapir 1 exploration well, at 3750 metres target depth, is not particularly deep, and is relatively close to our Salta fields in the Puesto Guardian Concession in Argentina.

The original budget for the three Salta wells just drilled in Puesto Guardian was US$3.5 million each and, although the third well, PG-13, was not actually one of the originally planned wells, it was however successfully drilled to a target depth of 3,513 metres. Let's assume this well cost US$3.5 - US$4 million.

So, why would the Tapir 1 well in Paraguay, at just 237 metres deeper than a well we have just successfully drilled just over the border in Argentina, cost in excess of US$10 million?

And, would the rig that has just drilled the three successful wells in Salta, Argentina, likely to be the preferred choice to drill the Tapir 1 exploration well in Paraguay?

Pp.

[brasso3] 03/7/2022 12:27

We have to pay 40% of the costs and the well should be $10m - $15m.

The Jx-1 and Lx1 in 2014 ended up costing $25m each.

[bengal1] 03/7/2022 09:40

Brasso, are we not getting carried for this?

[brasso3] 03/7/2022 08:51

Total debt is now around $33m.

What would happen to the profitability of PPC if the oil price dropped to $50/ barrel again now the major economies are entering a recession?

Do we really want to go into a high risk drilling programme in Paraguay in Q4 with $33m in debt?

[chris cat] 03/7/2022 00:14

I assume they weren’t able to get anyone else to loan them that kind of money at the time as we were a bigger risk back then than we are now. Also by putting in the loan PL probably has a better chance to get some kind of returns for his investment. Further, if we’d have got
the loan elsewhere they’d have wanted security which would further have limited PLs control. He’s put fortunes into PPC however if he hadn’t, he’d have likely lost what he’d put in at each point as funding was difficult to obtain each time. All IMVHO

[brasso3] 02/7/2022 17:16

With US operations generating very good revenue and profits at the moment it would easily cover debt reduction by $400k - $500k per month.

Current USA revenue : 250 BOPD x $100 x 30 = $750k

[piperpeter] 02/7/2022 14:54

I cannot understand how it can be that Peter Levine doesn't recognise that such a huge cash drain in interest payments, plus a pretty enormous personal salary, can be of any benefit to the Company.

What would that total, US$2 million per year?

In return, he presides over Company whose share price is creeping towards all time lows.

I personally believe the current arrangement to be unacceptable.

Pp.

[brasso3] 02/7/2022 14:15

If it was not for Trafigura coming in and forcing PPC/ IYA to convert $7m of the loan to equity I am sure it would still be sat around $20m.

[brasso3] 02/7/2022 14:14

PP

There are three reasons that the rates are so high relative to current loan terms:-

1) The terms were agreed around 10 years ago when most interest rates were around 3% - 4%.
2) The debt is unsecured so it allows IYA to get a higher risk premium.
3) The debt is with a related company.

[piperpeter] 02/7/2022 14:07

Can anyone actually explain why the interest rate on the IYA Loan is set so high?

It obviously is not beneficial to the Company, or the majority of shareholders in the Company. It's just a major drain away of cash.

Pp.

[brasso3] 02/7/2022 09:23

The current 6 month LIBOR rate is around 2.8%. Therefore our repayments are the following:-

$16.5m at 10.5% + 2.8% = 13.3%
$4.0 at 12.5% + 2.8% = 15.3%

I was therefore being a bit too generous in my earlier post suggesting that the interest is 12.5%. The lowest we are paying at present will be above 13% and the rest at 15%.

[brasso3] 02/7/2022 09:21

PP

Regarding to IYA loan I will provide you with the numbers for the last 3 years:-

2021 FY
Balance of the beginning of the year : $11,175,000
Converted to equity : $140,000
Interest and loan fees : $1,647,000 (14.7%)

2020 FY
Balance of the beginning of the year : $18,083,000
Converted to equity : $7,213,000
Interest and loan fees : $2,045,000 (11.3%)

2019 FY
Balance of the beginning of the year : $19,851,000
Converted to equity : $1,036,000
Interest and loan fees : $2,232,000 (11.2%)

Extract from the annual report:-
The total amount committed under the IYA loan facility is US$20.5 million with US$16.5 million at a 10.5% interest rate and additional borrowings of US$4.0 million at 12.5% plus 6-month Libor in line with previous bank borrowing. The facility is repayable in December 2024. Further details on borrowings are given in Note 20.

[chris cat] 02/7/2022 00:44

Dismal beyond belief. How low will it go if the energy prices revert to normal. Getting 2 low interest bonds away in the past 6 months shows that there’s interest and the bond holders must have done enough due diligence to be convinced to invest. Why can’t the board market the company to the share buying world using the same info provided to the bond holders. If PLs loan went up by $200k in the year but he earned c$1.2m then he’s obviously had $1m in cash out of it. In his defence he could have done atome privately, outwith PPC.

[piperpeter] 01/7/2022 23:01

You state in post 5720, Wayne, that "PL" is making US$1.4 million a year in interest payments on the loan. I assume by PL, you mean Peter Levine. Is this interest at 10.5% or 12.5% rate?

You also now favour a share buy back arrangement, which I would also support.

Another possibility to encourage wider interest in the Company...a cash dividend, combined with a slight twist.

At this stupidly low share price let's say declare a 0.125 cent dividend (approximately 0.1 pence). One tenth of a penny. Not much, I accept, but the principle remains, whatever level is set (it obviously could be higher). This would cost approximately US$2.5 million.

The twist...in order to restrict the total amount of cash actually paid out from the Company's free cash flow during the year, why not drastically reduce the interest rate on the loan, or even waive it completely for the year?

This way, all shareholders would benefit from the dividend, including, of course, Peter Levine, with the added possibility it would also stimulate the share price, and so the shareholders, including Peter Levine, would benefit again.

After all, Peter Levine would ultimately be far better off with a higher share price, and considerably better off with a share price that represents true value for the Company, than he ever would be with just the interest on the loan.

As things stand, there cannot be any happy shareholders.

Something needs to change.

Pp.

[barony] 01/7/2022 17:26

I think Brasso has it right. Ppc is a vehicle for paying wages in Argentina and a high, stable, return on PL’s loan. Now and again, hopefully, a bit of activity outside of Argentina, which may reward investors. (Atome, poss Paraguay.) Activities in core/Argentina ppc will not reward us chumps.

[bengal1] 01/7/2022 17:07

I also see someone on the other thread has thrown in the towel.

[bengal1] 01/7/2022 17:02

Do you have a view, explanation or agenda masergt or just trolling?

[bengal1] 01/7/2022 16:57

Yep, I just can't understand this. There seems to be so much going here. Should be multiples surely but just keeps going down. Can anyone explain. I try to remain positive but...

[masergt] 01/7/2022 16:25

bengal1 - 26 Jun 2022 - 16:17:50 - 5644 of 5725 President Energy 2021 Oil gas and Green Hydrogen and Ammonia production - PPC
Easy worth 5p a share now.

bengal1 - 29 Jun 2022 - 07:12:54 - 5712 of 5725 President Energy 2021 Oil gas and Green Hydrogen and Ammonia production - PPC
I think we will see a rise today.

bengal1 - 29 Jun 2022 - 07:30:21 - 5714 of 5725 President Energy 2021 Oil gas and Green Hydrogen and Ammonia production - PPC
Looking good now.

bengal1 - 01 Jul 2022 - 14:42:44 - 5722 of 5725 President Energy 2021 Oil gas and Green Hydrogen and Ammonia production - PPC
This really is quite dismal.

No offence - just made me smile. DYOR.

[brasso3] 01/7/2022 15:05

By my calculations IYA has received $11m - $13m in interest payments from PPC now since the loan was first established.

[brasso3] 01/7/2022 15:01

The BoD do not look at the share price. It does not matter to them as they get paid regardless.

[bengal1] 01/7/2022 14:42

This really is quite dismal.