Ruspetro Share Discussion Threads

[ranj79] 11/1/2013 17:40

Two huge sells of 250,000 shares.. Someone is offloading.

[darcon] 11/1/2013 17:30

2Bung, interesting graph. Looks like someone may have had wind of the company's predicament

[darcon] 11/1/2013 17:24

meijiman, in short, no. The point I was making to cricketer in post 518 was that governments and presidents can be unpredictable and can introduce changes swiftly. If you're holding a short position overnight then the price could gap up. The company doesn't control when the Russian government decides to make changes to legislation.

As to the point you're making which is related to the fact that the company can control whether it releases its RNS on a Friday night or at 7am on Monday morning, then I fully agree with you that a 7am Monday RNS would most probably have been interpreted as the more transparent approach. People would still be sore and probably asking questions why no earlier warning was given, for example, in Dec. No doubt the company will now spin that they did this to give people time over the weekend to dwell on the implications. But personally, I think that argument a tad disingenuous. My suspicion is that they didn't want marketwire and journos to pick up the story on the Monday. Looking at the market reaction this week I think that PR advice was wrong.

[2bung] 11/1/2013 16:19

stock on loan:

[ntbb] 11/1/2013 14:31

added some here

[zooshare] 11/1/2013 14:11

anyone with any concern should e-mail the company, I did re the friday's RNS.

shorts should start closing, imo. I am long. gla

[meijiman] 11/1/2013 10:18

Darcon-would you feel that the stupidly timed RNS was linked to the fact that Russia is aheadtimewise??. But the market for trading the shares is London and there seems no reason why the RNS could not have been put out on Monday morning first thing.
One reason why I invested here is the Chairman. He has had a career which has ticked alot of boxes. Think he might want to take a rather closer interest in what is going on here.
Im not panicking, but clearly the share price needs to be back over 100p in 3 months time and hopefully much higher. I cannot believe the management here are fools having bought in at much higher levels.

[eastwind] 11/1/2013 10:16

Limolines debt to be converted into new shares in Feb 2013, converted at volume weighted, average price of the ordinary shares for the 30-day period, immediately prior to conversion date, subject to LSE regulations.

Limolines debt is $55m plus interest. The lower the share price, the more number of shares to be issued. So it is in the interest of Limolines for the share price of RPO to be kept low.

I think it is the main driver of lower share price. The lower production numbers and problems in the oil field may not be coincidence.

So the good news will only be announced after Feb 2013.

[darcon] 11/1/2013 04:29

criketeer2,

There are also other things that the company could be doing in the background with or without the market knowing and then "surprise" the market with an announcement. For example, announcements:

- of early processing facility development completion
- of an end of the "significant production shut-in"
- giving clarity on monthly average production numbers (eg, EXI as a means of rebuilding confidence after its own production misses started announcing monthly production numbers from end of 2011 through 2012)
- clarifying the financial position and/or signing of a heads of terms in relation to refinancing
- of a new reserves update (a new reserves update would probably be required by lenders as a condition of any refinancing)
- of a M&A transaction (eg, a farm-in or a jv into one or all of the licences that brings in more operational tight oil expertise and/or funding)

could lead to a sudden re-rating in the price that could burn shorters.

[darcon] 11/1/2013 03:10

criketeer2, I would be wary of going short on this share unless you are monitoring Russian tax legislation on tight oil incentives.

The company in its RNS of 19 Nov 2012 stated:

"In addition, we continue to closely follow developments on new incentives for tight oil reservoirs that are expected to be implemented in 2013. According to the latest media reports Ruspetro's Jurassic zones would be entitled to a Mineral Extraction Tax reduction of up to 80% for ten years and Ruspetro's Bazhenov and Abalak zones may be entitled to a 100% reduction for 15 years."

If such incentives are introduced then they would likely have a material impact on the commerciality of the fields and could in due course lead to substantial reserves upgrades.

Owing to the time difference between Russia and UK it is conceivable that if Russian govt were to introduce such incentives in a manner that market participants did not anticipate, then the price would gap up substantially on market opening burning shorts (whose stop losses, if they have any, might be triggered at a multiple of the current price as a result of the gap up). As to the amount by which the price could gap up I would suggest you look at reports of what analysts were reported to have stated regarding the impact of such tax changes, although you may take the view that they were talking their book (or that of their colleagues who were marketing the IPO) in which case you may wish to apply an appropriate discount.

[darcon] 11/1/2013 02:56

Re Licence extension RNS I wrote in post 479:

"It's worth also noting that the licence extension RNS of 28 Dec 2012 was only in respect of one of the three licences. That begs the question of what is the status of the other two licences? Does RUSPETRO expect similar new conditions on APG flaring prevention to be imposed for the East Inginsky and Pottymsko-Inginsky licences? How much extra capex might be required as a result? Does it remain in compliance with their licence conditions?"

The previous company RNS that I could find that mentioned the plan to extend the licence (let me know if you find other mentions) was in the operational update dated 12 July 2012 where the company stated:

"Polyanovsky license extension

Application for a 50 year license extension for the north-eastern part of the field (Polyanovsky license block) has been submitted by RusPetro and accepted by the authorities. The new license is expected be granted in December 2012 upon acceptance by RusPetro of the license terms."

Then on 28 Dec 2012 the Company states:

"...Ruspetro is currently implementing a programme for gas utilisation that it expects to be completed by the end of 2014. The Ministry has reviewed this programme and has indicated that, if completed as planned and if the company remains in compliance with its other obligations, it expects that the newly extended license, currently due to expire in December 2015, would be extended for the economic life of the field, currently indicated to be 2063, upon review at the end of 2015..."

Notice the difference? The first RNS states that an application for a 50 year licence extension was made. The second states that the licence was extended for two years (not 50 years) with a new licence condition on APG. I would guess that the Ministry's "expectation" about extending the licence for a further fifty years in Dec 2015 can turn on a kopek

[cricketeer2] 11/1/2013 00:54

This is a down right sell if there ever was one.

Dont be left holding the babay.

Btw, i am short on this share.

[darcon] 10/1/2013 04:24

On my back of envelope calculations (suggest you do your own) there is a large variance in the projected production data in tables 6 and 7 of the DeGolyer and MacNaughton report for 6 mo 2012 against the actual reported exit rate. Worth remembering that the projected exit rate for 2012 had already been lowered once. Then, they missed their adjusted lower target exit rate.

[darcon] 10/1/2013 03:55

Pugugly - table 6 of the DeGolyer and MacNaughton report ( has projected revenues for the proved developed reserves and table 7 has projected revenues of total proved reserves and revenue.

table 4 of the DeGolyer and MacNaughton report has estimates of original oil in place

DeGolyer and MacNaughton's average projected cost per barrel of production can be calculated from the data in table 6 by multiplying the 10 3mt figure by 7.578 barrels (table 1 has English units and Metric units presented together from which this conversion factor may be calculated)

[ranj79] 09/1/2013 19:16

Articles not that interesting considering he has CEY as a sell and it jumps 15%! Don't make judgements on someone else's views! Like someone said here before he's probably buying some RPO shares right now!

[minky65] 09/1/2013 19:08

interesting article?

[gwr7] 09/1/2013 16:37

zooshare, the shorts have been around all along.
Anyway I'm finished. Good luck with your investment.

[the ballcock] 09/1/2013 16:33

anyway i won't post here no more, boys probably losing - good luck with it.

[pugugly] 09/1/2013 15:59

Assuming TW's calculations are anwhere near correct then for one (imo) he may be correct to call this down to 35p - What is not clear however from any of the data I have been able to access is the riginal oil in place and the recovery %age PLUS of course theh average cost (per barrel) of production

[mcpaulas] 09/1/2013 15:42

Are we looking at a penny share in the making here??One for Tom Bulford.

[the ballcock] 09/1/2013 15:39

i'd say they in for the falling price ? or what caused it to fall ? i know nothing about this