Member Info for Brasso3

Very significant news! 19,000 barrels of oil allowed to be exported in Argentina is much more than I had expected. Hopefully this can get us back to 2p in the short term.

30th Sept 2021

The conditions attaining to the long-awaited farm-out in Paraguay are well on their way to being satisfied with drilling of the large-scale oil prospect scheduled for H1 2022.

25th Nov 2021

The location of the exploration well within the complex has been identified and planning has begun for the drilling of the well in H1 2022 after the end of the rainy season.

13th Jan 2022

As announced in the year, the long-awaited farm out of the Paraguay exploration asset was both agreed and completed on favourable terms with CPC Corporation, the State owned energy company of Taiwan with President remaining operator and the asset being held jointly 50/50 between the parties. Consequently, shareholders are now able to look forward to a high impact exploration well being drilled later this year targeting management estimates of 230 million barrels of unrisked oil in place

25th Jan 2022

President is pleased to announce that its partners in the new exploration well to be drilled, OPIC Paraguay, the wholly owned subsidiary of the Taiwanese state owned energy company, CPC, have approved the budget and work programme for 2022

14th Feb 2022

Work is progressing to prepare for the high impact exploration well in Paraguay to be drilled this year targeting, based on internal estimates, 230 million barrels of unrisked oil in place

PPC have not actually stated that the Paraguay well will be moved to H2 2022 but all of the commentary would suggest that to be the case.

DRichi

I would worry about the drilling actually taking place before worrying about the oil price in the region.

If Paraguay is commercial I doubt very much PPC will be the company to take it into production. The asset or PPC will get bought out very quickly.

WTI at $114/ barrel.

Those Louisiana barrels are going to be very important now.

230 BOPD x $114 = $26k revenue per day. I would estimate that that could be $18k - $20k in profits.

We were around 3000 BOEPD in January 2021 but we had less debt then so it is not as clear as just comparing the share prices between those time periods. The concern here is always how much more money has to be thrown at Argentina to keep production at 3000 BOEPD?

The production profile over the last year does not indicate that there are any deliberate restriction of flow rates:-

Enero '21...........Petroleo 9.203,441 [m3]
Febrero '21.........Petroleo 7.610,289 [m3]
Marzo '21...........Petroleo 7.904,337 [m3]
Abril '21...........Petroleo 8.283,923 [m3]
Mayo '21............Petroleo 9.053,542 [m3]
Junio '21...........Petroleo 8.323,987 [m3]
Julio '21...........Petroleo 8.422,365 [m3]
Agosto '21..........Petroleo 8.391,015 [m3]
Septiembre '21......Petroleo 7.814,645 [m3]
Octubre '21.........Petroleo 7.574,273 [m3]
Noviembre '21.......Petroleo 7.323,696 [m3]
Diciembre '21.......Petroleo 7.831,326 [m3]
Enero '22..........Petroleo 7.346,703 [m3]

Enero '21...........Gas 5.226,979 [Miles de m3]
Febrero '21.........Gas 4.726,241 [Miles de m3]
Marzo '21...........Gas 3.841,369 [Miles de m3]
Abril '21...........Gas 4.159,609 [Miles de m3]
Mayo '21............Gas 6.106,850 [Miles de m3]
Junio '21...........Gas 5.972.658 [Miles de m3]
Julio '21...........Gas 5.286,880 [Miles de m3]
Agosto '21..........Gas 4.871,660 [Miles de m3]
Septiembre '21......Gas 4.494,636 [Miles de m3]
Octubre '21.........Gas 4.601,645 [Miles de m3]
Noviembre '21.......Gas 4.255,044 [Miles de m3]
Diciembre '21.......Gas 4.800,315 [Miles de m3]
Enero '22..........Gas 4.424,526 [Miles de m3]

I am not sure we can assume that PPC deliberately chokes off production due to seasonality. The fluctuation in prices is only related to gas in Argentina but we have hedging contracts for a percentage of the gas. The communication is so poor with PPC that we have to constantly have these discussions about production, pricing etc.

Whilst the RNS is positive today a lot of damage has been done now to the share price that will take time to repair.

We are still in the dark on current production levels. I think January was running around 2000 - 2200 BOEPD. The US wells will bring us back to 2300 - 2500 BOEPD. As the two DP wells require stimulation to get to the forecast 250 BOPD per well it is a fair assumption that they are probably not performing well at present.

The optimist in me would like to think 2800 - 3000 BOEPD is possible within a month. My brain is telling me that this either won't be the case or if it is we will never know as it will not be communicated.

We were averaging 2473 BOEPD for 2021. The H2 2021 production was 2200 BOEPD. January 2022 was lower than any month in H2 2021.

Production was 2000 - 2200 BOEPD in recent months so I doubt these 2 wells will take us above 3000 BOEPD.

Poor communication is adding fuel to the fire here. Congratulations to the PPC BoD!

There are some simple thing PPC could do with regards strategy to improve sentiment here.

- Pay down the high interest IYA loan
- State that there will be no further acquisitions in Argentina
- Be more transparent about production (monthly updates)
- Do regular interview with Proactive Investor (for example)

Instead PL persists with the same stubborn approach and treats the PI base as an inconvenience. Going so deep into Argentina has been a miserable failure. Making comments like "I don't look at the share price" is something I never want to hear a CEO say!

Steven

I think PPCs assets are undervalued. The problem here is the management and their poor performance.

3 years ago I bought Argo Blockchain shares at 10p, then 8p, then 4p. There was a change of management and strategy in 2020 and a change of fortunes. It was grim for a while but those shares rose to 330p. That investment has changed my life.

I am not suggesting that PPC could do similar but a change of strategy/ management here would make a big difference. That might come with Paraguay...

We are back at the same debt levels pre Trafigura now albeit on slight better terms with the $9m bond at 1.3%.

We now no why the share price stagnated through 2021 and recently declined to the 1.5p level. The company got very fortunate with high oil/ gas prices in 2021 but production dropped from a peak of 3000 BOEPD to a low of of 2000 BOEPD (Oct). The average production in H2 2021 was 2200 BOEPD. As a result of the poor production figures PPC had to take out a $9m bond to cover the Argentine drilling programme at DP/PG. This has increased PPCs dent to above $25m.

Hopefully all of the bad news is now out of the way. We really need the 3 Argenine wells to all be commercial now at least in line with predicted rates (250 BOPD per well).

WELL NAME - ROB 3-5 RA SUA; TRICHE ESTATE

WELL NUM - 001

REFERENCE NUMBER - L#0035-22

APPLICATION DATE - 01/26/2022

EXPIRATION DATE - 02/02/2023

WORK PERMIT TYPE - PERFORATE

WORK PERMIT STATUS - APPROVED

WORK PERMIT STATUS DATE - 02/02/2022

TOTAL DEPTH - 11023

WORK PERFORMED - N

TEST SAND - ROB 3

WORK DESCRIPTION - SET CIBP IN GP ASSY @ 10358' & DUMP BAIL 12' CMT ON TOP; PERF F/ 10094'-10101'

As usual with PPC you have to look a bit deeper than the information that is presented. H2 2021 production was running at 2298 BOEPD.

- H1 2021 - 2648 BOEPD
- H2 2021 - 2298 BOEPD
- FY 2021 - 2473 BOEPD

No comment on how they failed to achieve the 3600 - 4000 BOEPD target production for 2021.

Mixed bag of news as usual. Production actually down 250 BOEPD on 2020 and P2 reserves up slightly. Somehow they managed to not improve on revenue from H1 2021 ($17m) despite high oil/ gas prices!

Paraguay is definitely delayed until H2 2022.

'Work is progressing to prepare for the high impact exploration well in Paraguay to be drilled this year targeting, based on internal estimates, 230 million barrels of unrisked oil in place'

The 3rd well has not even spudded yet so I am not looking at the 4th well.