Eight wells drilled adding an extra 3066 bbl/day. The average flow rate per well was 383 bbl/day. A further well will be drilled and connected this month adding around 220 bbl/day. Approximately 750 bbl/day were not connected until October. Approximately 2000 bbl/day were not connected until the middle of September. Now production increased in September by around 700 bbl/day from the July/August average, which would make sense if the new wells only contributed during the last half of that month (assuming some natural decline from old wells). If we take the July average of 16,678 bbl/day, round down to 16,500, discount the ninth well for Nov (220bbl/day) and then add the 3000 bbl/day, we get 19,500 bbl/day. Still not an acceptable drilling campaign. Ten wells is a paltry number at this stage of development. Thirty wells per year is the bare minimum for this sort of company. Additionally they have chosen easy wells, not the TP area or more difficult areas of WS. The board behaviour is quite bizarre, it's cloak and dagger manner and randomness is impossible to interpret. It is made very difficulty for anybody to invest in Exillon, yes it a great asset and has a excellent financial position, but quite frankly - it is Russian. After news the SP went down after most of the day having zero volume, the market is not interested. It is still my guess that it gets bought over in next few months at a below market average price.
8 Nov '14
SP Angel Brokerage
Nov 07 2014 Production Update Solid, Future Brightening Today's announcement, that production for the period has shown an updated trajectory is pleasing, and should bout the shares. What is more important for us is that the recent exploration wells have also made discoveries with oil flowing to surface. Given that reservoirs in this part of the world rely primarily on expansion drive and are relatively shallow, they can be characterised as "low energy." As such, to maximise recovery rates from these types of reservoirs, it is best that a pressure support programme be undertaken as soon as is practically possible, so given that one of the Company's exploration wells "failed" by intersecting an aquifer is actually positive news too. We now need to understand the forward programme better and have an update on the Company's future expectation for production and exploration, and perhaps start looking further in to the future, now that the cash flow in the Company has started to make it permissible. The only headwind for the Company is the geopolitical situation in Russia. However, here too there is a silver lining, as the depreciation of the rouble has slashed fixed costs significantly, further boosting cash flow. All a management team can do is ensure that their businesses are in the best condition possible and that every opportunity is maximised, and this operational team are doing that. As a consequence, this is one of the Russian companies that investors should consider holding when the Sovietisation of Russia's outlook is reversed.
3 Nov '14
re end game
i guess an email to the russian finance ministry for the attention of the minister would at least draw their attention to it though i doubt they would act on it . Given the current isolationist mood in Russia they might even applaud their actions!
30 Oct '14
Re re endgame
The West have never had any confidence in Russian markets, that is why Russian stocks have such low values. There is still a chance of other oligarchs wanting this asset, so they can't go too low. There are takeover rules and minority shareholder rights to be taken account of. Anything over 200p keeps them out of trouble, they won't be offering anything near 365 again.
30 Oct '14
Has anybody got any contact details/email addresses for someone in the Russian Finance Ministry? I think a comment from them regarding the possible consequences of breaking stock exchange rules might be quite interesting. I just can't believe the Russians are so stupid that they'd allow one individual to profit from shady practices that could so easily destroy all western confidence in their markets.
30 Oct '14
|Excellent analysis and unfortunately you are probably right on the price. Anything we can do to draw attention to this to a wider audience which would probably make no difference to the price but it might cause some bad publicity for Russian business and put off others from investing there in future. there was the Sibir energy scandal a few years ago and small investors got screwed here as well. Might make a good case analysis for anyone wanting to publish in a well known business publication about the perils of investing in Russia!
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