Rheochem Share Discussion Threads

[empirestate] 16/8/2010 00:55

having looked a bit further, noted Ithaca (IAE)buying north sea assets as announced on 4th August

[empirestate] 15/8/2010 23:58

with the CEO stating 'and looks forward to updating shareholders on the progress with its E&P assets." i can't see how there can be a negative impact for shareholders at the end of the month

[empirestate] 14/8/2010 15:30

not normally my cup of tea, but this looks a pretty decent recovery play from what i have read so far. will pick up a few in anticipation of the full year update looking for that rabbit to be pulled out of the hat.

[giant steps] 13/8/2010 10:09

Not wasted by readers of this board, key reminder from last rns

"Rheochem expects to be in a position to report on progress later this month."


i.e. August 2010

[rivaldo] 13/8/2010 09:16

Perhaps the Oilbarrel article is attracting a little attention.

[giant steps] 12/8/2010 09:35

Thanks for that rivaldo, nice update - although i suspect
plenty will be keen to hear the next company announcement.

[rivaldo] 12/8/2010 09:13

New article on Oilbarrel:



"August 12, 2010

Rheochem Shares Close Higher On Positive Trading Update

With its full year results due out at the end of this month, drilling fluids supplier Rheochem took the opportunity to update the market on its progress reshaping a business that suffered during the oil price volatility and credit crunch of the past couple of years. For the year just gone, the AIM- and ASX-quoted company expects to report revenues of A$20 million with group EBITDA expected to be around break-even. For 2010/2011, it expects revenues to be 50 per cent higher as its restructuring of the past year starts to pay off and its services business continues to secure new contracts.
CEO Haydn Gardner said the 2010 financial year had been one of "strategic development". "Although the company has witnessed somewhat weaker short term trading, the board remains confident with a substantial future pipeline and looks forward to updating shareholders on the progress with its E&P assets," said Gardner in the trading update, which provided some comfort for investors with the shares gaining 9.5 per cent to close at 5.75 pence.

Rheochem's difficulties can largely be traced to its decision to move upstream in 2006, when it acquired interests in a number of North Sea blocks, including the Athena oil discovery. However, these properties looked rather less attractive when oil prices tumbled, the Athena oil development stalled and the industry lost its appetite for North Sea exploration, hampering efforts to bring in farm-in partners to help fund exploration commitments.

Four years on and oil prices have stabilized and the upstream business has been slimmed down and restructured to limit the upstream liabilities on the group balance sheet. What's more, the operator of the Athena field, Ithaca Energy, has pressed the greenlight on the development, creating the possibility of Rheochem finally monetizing some value from its 10 per cent stake in the field. First the dual-listed company needs to come up with its share of the development costs, reckoned to be some US$3 million, and a number of funding options are being examined including asset trades, equity raising, trade sale of the services business and the demerger of the E&P subsidiary with independent funding. Rheochem expects to be in a position to report on progress later this month.

On the oil services side of the business, there has been what Rheochem believes to be a short term downturn due to a reduction in traditional exploration and development activity in its key market onshore Australia. This was exasperated by widespread flooding in Queensland, which delayed a wide range of projects. Rheochem reports, however, that activity levels have already begun to improve.

It currently has a contract to provide services offshore North West Shelf until the end of the year and an onshore services contract that runs until May 2011. The company has tendered to replace the existing contract for a three year term onshore contract, with an option for a further two years, and expects a decision on this tender within 30 days.

While traditional drilling activity may have declined in Australia, non-conventional drilling is on the rise. Rheochem is an active player in this burgeoning new market, including geothermal where it has provided services to some of the hottest and deepest wells in Australia. It also has two current geothermal contracts in New Zealand. It is also a player in the booming coal bed methane market in eastern Australia, although some projects have been delayed due to the recent flood and some proposed taxation changes. Even so, the long term prospects here for a company that has a track record and a number of tenders outstanding is very positive.

Rheochem has successfully expanded into the Indian market, where ONGC, one of its new customers, has successfully completed its first well on its Tripura onshore asset in Agartala. This should lead to additional work. Work has also been completed on HOEC's appraisal well on the Dirok gas discovery in Assam, which could again lead to a contract extension. This is positive as it provides some diversification from the Australian market."

[rivaldo] 11/8/2010 14:47

I disagree - the North Sea interests could provide multibagger upside, and in the relative short-term too once Athena gets going and investors realise that RHEP have other, bigger North Sea interests too.

Ideally I would have liked to see the core (and hopefully very profitable again) business funding the North Sea investments, but I suppose if the drilling fluids business is sold for a decent amount - say £20m+ - then that would serve the purpose.

[varies] 11/8/2010 13:51

No mention of the Senergy claim. Let us hope this goes away.
For myself I would rather see RHEP sell off the North Sea interests and keep the drilling muds business.
Geothermal may hold promise but my only experience there so far has been an ill-timed investment in Panax (down some 60% in a couple of months). There are, I believe, only 2 or 3 quoted geothermal companies in Australia and I would be surprised if RHEP makes much money from them. I hope to be proved wrong in a year or two.

[giant steps] 11/8/2010 13:38

Gartmore with over 24%, have they added today ?

Prices bid 5.25p offer 5.75p, 4 v 1

[longshanks] 11/8/2010 13:28

lol. Right you are...."slight flush of activity coming"

[giant steps] 11/8/2010 13:26

but soon to be "not as we know it" !

[ducatiman] 11/8/2010 13:25

steady longshanks, this is rhep after all!!

[longshanks] 11/8/2010 13:23

4 v 1 - its going to blow.....

[lr2] 11/8/2010 13:22

Nothing available on line now.

[ducatiman] 11/8/2010 13:21

longshanks, correct, tried to buy a few but was told only 5k offered.

[giant steps] 11/8/2010 13:18

Perhaps folk will switch on to the 10% of athena opportunity (ignored by most)

Cash backed Rheochem (assuming sale of services) may give stock new life
Certainly a new direction beckons.

[longshanks] 11/8/2010 13:14

Could be tail end of the remaining loose placing shares being shifted now as online limits at the offer are down to 10K.

Volumes are looking very good though it is too early to know if it will lead to a sustained rise. On current evidence though we may get a surge to 8/9p relatively soon.

Edit: online limits down to 5K at the full offer (5.75p). Market is short.

[giant steps] 11/8/2010 13:03

Prices bid 5.25p offer 5.5p, 1 v 1 - turning point ?

[giant steps] 11/8/2010 12:50

Clearly a market bluff at 11:44

Prices bid 5p offer 5.5p, 4 v 4 - strength increases

Market is starting to decode rns, well done and thanks to longshanks

[rivaldo] 11/8/2010 12:20

Excellent spot longshanks. I suppose in the back of my mind there is a fear that the trading business might be taken over by MBO at a cheap price - but the institutional shareholdings should be big enough to put paid to any such shenanigans.

Interesting times coming up potentially, on both the trading business and North Sea asset fronts.

[giant steps] 11/8/2010 11:44

Volume picking up...

... but L2 weakening, prices bid 5p offer 5.5p, 1 v 7

[giant steps] 11/8/2010 11:02

Strange how in 2009 we didn't get notice of the huge asset writedowns. On this
basis you may have decoded not only the news but the sequence of announcements.

Thanks.

[longshanks] 11/8/2010 10:33

Makes you wonder why they issued the trading statement at this time - they don't normally.

Is this a "profits warning". If so is it necessary as there has been no material change in the company's performance since the interim results.

Final results are being brought out at roughly the same time as last year but my guess is we will hear other news ahead of this or at the same time detailing how they will fund Athena. I believe they are already in advanced negotiations and perhaps this notice is to update us small PI's with the same information they have given the insti's (albeit hidden in the blurb).