Urals Energy Share Discussion Threads

[neftanik] 01/6/2018 15:28

No refinery at Arcticneft, only a very small storage facility and basic tanker loading hose

[djmoggy] 01/6/2018 14:25

Guys the yearly loan is here to stay whilst production remains <3000 bopd.

Hopefully the below will explain why.

Take 2017 H1 production

Petrosakh (Oil Sold locally revenue is constant)
Revenue total for H1 2017 = $17.7m
Excise tax paid H1 = $3.1m (paid on an ongoing basis each month)

Arcticneft (Oil Exported - 1 shipment in July)
Revenue = $10.2 (only realised in July)
Export tax = $2.4m (paid in advance in May)

On top of the above Mineral Extraction tax is paid each month (no later then the 25th of the month following extraction of oil)
The tax is a set rate multiplied by the extracted amount.
Total paid in the 6 months for Petrosakh and Arcticneft = $6.4m (again for Arcticneft tax is paid in the month following extraction prior to revenue)

So H1 2017 for Urals
Revenue actually recieved = $17.7m
Taxes paid $11.9m

Other Costs directly attributable to sales (Pet/Arc subsidiary salaries, materials, Oil services, rent, other taxes added = $8.5m

Finally add up head office costs (Head office salaries, office expenses, rent, prof services, etc) - this came to a further = $2.7m

So total 2017 H1 costs (taxes + cost of goods sold + head office costs)= $23.1m
*note i haven't included stuff like depreciation which isn't a cash cost so wouldn't affect the cash position or loan interest / foreign exchange gains which would

As you can see from above prior to Arcticneft revenue being paid you can see a shortfall of cash of about $5.4m (based on 2017H1) which is equivalent to the loan from Petraco.

Once Revenue for Arcticneft was received from Petraco less loan amount this would mean the company are cash positive in the region of $4.5m for H1 2017. (which then can be set aside for drills and loan interest repayment

Note 2018H1 tax costs should be less as export taxes in 2017 were calculated at a much higher price to the actual oil price when shipment was made in July (this was reversed for the shipment in October).

[chavitravi2] 01/6/2018 13:37

The oil refinery at Art is for their own and local use. It should be noted Clangers there is only1000bopd produced for shipment the other 1000 is at Pet.

[darren81] 01/6/2018 11:48

they have a refinery at Pet, so they extract/refine, as such netback will be more - they also get this revenue all year round. With the drilling at South Dagi they'll be able to utilise the refinery more and increase netback further.

they also have a refinery at Art but its not as big / they export most of the oil in the two shipments each year.

[theclangers] 01/6/2018 11:41

365 x 2000 bopd is a lot more than the two shipments being exported.
The rest must be being sold locally, but at what price?

[bangers and cash1] 01/6/2018 11:32

Also, that chunk was cleared with oil prices around $60 and now they are around $75. So probably going to be sitting on a considerable cash pile with no debts and also looking for acquisitions and we are trading multiples below asset value. This has serious potential.

[darren81] 01/6/2018 11:20

the loan was taken out 7 months after the last tanker so we almost made it through to this tanker without the need for it.

It should be noted that we paid off a huge chunk of our debt after the last shipment, it was reduced from US$12.3 million as at the end of June 2017 to US$3.8 million in October - it's increased again by $5 million but hopefully we should be neutral debt-wise after the July shipment and anything received from October can be ploughed back into drilling/acquisitions

[jiggsyboy] 01/6/2018 11:00

Correct me if I am wrong here, as we also have domestic sales which should have cash coming in on a regular basis? Would this not take of the operational costs, maybe just not the cost to charter a tanker and that?

[chavitravi2] 01/6/2018 10:16

Nothing wrong with borrowing if that money brings you riches. Nothing wrong with giving back 20-30-40% of that extra for a while if your keeping the rest to let you do more that you can then pay for. It's called good business.

[spandy83] 01/6/2018 08:11

Oops my bad, sorry Darren! When I'm wrong I'll admit it.I agree with you in which case, should be no need for additional borrowing.

[darren81] 01/6/2018 08:03

ermmmm, perhaps you should read a few comment before mate - when neft said they'd get another loan (on top of the one they just got) to pay for additional drilling.

[spandy83] 01/6/2018 07:57

Wow that's insightful, I'm sure the business weren't capable of thinking ahead to those shipments when deciding they needed a loan. They must have forgotten about them. The loan is to provide free cash flow to allow to do things like, oh I dunno; pay salaries and suppliers on time! It makes perfect sense as this company has cash influx only twice a year. The loan is tiding them over until the shipment. Simples.

[darren81] 31/5/2018 19:17

July shipment

150000 barrels * $77.5 = 11,625,000

October shipment

150000 barrels * $77.5 = 11,625,000

Total

$23,250,000

That’s revenue from Art alone in the next 5 months Neft...as said before...no need for a loan!!!

[neftanik] 31/5/2018 18:57

Mobilisation and Day rate of work over hoist, drill pipe and production tubing, completions and perforations, beam pump, power supplies, surface facilities including separator and flare, pipe work and storage vessels, tanker loading. Yeah, no loans for that

[martyn9] 31/5/2018 15:46

Cheers chav,i'm still optomistic these will come good.

[chavitravi2] 31/5/2018 15:42

Have a good holiday and birthday out there Martyn. It was my 70th when I was out there in Benidorm last month and getting ready for off again. It seems ages ago now.
That said a good rise here will do us all good if it works the same for you as well.

[darren81] 31/5/2018 13:35

Let’s hope Martyn!

Tomorrow is a new month and the last of Q2...only 21 business days left for th m to release accounts and details of the drill results.

[martyn9] 31/5/2018 13:12

Thanks darren,let's hope it brings us all something to celebrate.

[darren81] 31/5/2018 13:07

The 1240 from this morning was me.

Happy birthday Martyn, have a good break! Hopefully UEN will give you a decent 60th present!

[martyn9] 31/5/2018 12:54

cheers geoff.

[geoffmanana] 31/5/2018 12:45

Have a goodun Martyn.

[chavitravi2] 31/5/2018 11:52

I thought someone had sold 36k for min till I looked and saw it was just 36.
They probably pocketed £20 after fees. 1,240 buy at 8am not showing.

[chavitravi2] 30/5/2018 22:30

South Dagi.
During 2018/19 3 exploration wells are planned using the new recently acquired rig.
Also 2 wells will be worked over for production.

I have stated in brief what was stated in 11-5-18 rns. South Dagi bit.

[darren81] 30/5/2018 19:53

The recent loan was obtained in order to pay taxes due - we are pumping/storing oil all year but haven't received any revenue in Art in 7/8 months - we will clear the loan as soon as the shipment is made.

Given they have two tanker shipments in the next 4/5 months and they are paying dividends I cant see anyway they would need another loan for drilling - they haven't exactly been rushing things so they'd only drill once funds were available.