Member Info for Brasso3

I bought the 134k today at 6.05p.

Based on my previous 2 posts we could we be getting back to or even above 500 BOPD in 20 days time. I hope the next RNS gives a comprehensive overview of current Argentine production. It would also be good to have a well schedule for the workovers but I doubt this will happen. As I have said previously we need to average 70+ BOPD from the shut in wells (10 wells) to hit 1200 BOPD by the summer

The next workover is on the DP1001 well. This is what I could find:- - In March 2012 PPC expected the new well to produce 380 BOPD from the A5/A6 sands. - After the first full month production in May 2012 it was producing at 300 BOPD. - In April 2013 is was down to 80 BOPD.

From PPCs previous announcements and presentations on the DP12 well:- - In 1985 it had initial production of 270 BOPD. - DP12 was shut in during 2015 when producing 40 BOPD. - In Jan 2016 the two previously shut in wells (DP10 & DP12) now at an aggregate rate of approximately 120 bopd. - March 2017 now producing 120 BOPD.

Somebody offloaded 1m shares today:- 250k x 5.5p 250k x 5.4p 250k x 5.6p 250k x 5.7p About £55,000 worth.

You mean they are targeting 1200 BOPD in 6 months? The same as they targeted 1200 BOPD in 2012. The same as they targeted 1500 BOPD in 2015/ 2016. Current Argentine production is running at 300 BOPD down from 500 BOPD in December.

NM They only started the Paraguay farm out in December so you should not expect anything on that until 6 - 12 months. 2012, 2015 and 2016 were supposed to be the years where Argentina production increased to well above 1000 BOPD. Here we are sitting at 300 BOPD albeit with 2 wells offline. To answer your last question... When have PPC ever achieved what they promised?

According to a poster on ADVFN the Argentina production is down from 500 BOPD to 300 BOPD in January. This is probably due to the 2 wells that are offline for maintenance/ workovers as per the last RNS.

I expect the market does not believe much what is stated by the company. The Puesto Guardian assets were purchased by PPC in 2011 when they were kicking out 500 BOPD. PPC promised 1200 BOPD from Argentina in 2012. PPC upgraded its facilities in Argentina to cope with 6500 barrels of fluid a day in 2014. They stated that they would reach 1500 BOPD from Argentina in 2015. In 2017 PPC is producing 700 BOPD from Argentina.

PL is already at 29.99% of the shares in PPC. He cannot buy anymore unless he plans to buy the company out.

You are correct that at the end of 2016 the company announced that they would start the farm out process of their Paraguay assets. This could take 6 - 18 months. Farms outs do not happen quickly especially with oil at $50/ barrel.

They have 6 more months to drill another 5000 metres at Pirity. The cost to them at 100% WI will be around $20m so I doubt this will happen. An extension to the terms of the license more likely IMO. There are no requirements on the Hernandarias license in 2017. 2017 will be about Argentina and hopefully this time they will achieve their objective (1200 BOPD)!

I bought in to LGO today at 0.142p (still hold PPC aswell). There are a lot of comparisons with LGO and PPC. Similar revebues, lots of shares in issue, unloved, failed to live up to the hype etc. Before I bought in I considered the costs and likelihood of the projected production increases being proposed by LGO and PPC. Apologies for the slightly O/T post. PPC Share Price = 6p Shares in issue 1b Mkt Cap = £60m Production = <700 BOPD LGO Share Price 0.15p Shares in issue 7b Mkt Cap = £10m Production = >500 BOPD PPC is embarking on a workover campaign where it will workover old wells at $1m per well with an aim of achieving 70 - 90 BOPD increase per well. However, previous experience tells us that 25 BOPD per well is optimistic at the PG concession. That is $14k per BOPD at the 70 BOPD target. LGO is embarking on a drilling programme that will see 10 wells sunk at $500k each to depths of around 1200 - 1500 feet (12 day drilling time). The previous wells returned 30 day IPs of 50 - 100 BOPD. LGO is targeting 50 BOPD per well. That is $10k per BOPD at the 50 BOPD target. My money would be on LGO to achieve what they are targeting and PPC to fall short.

They both took part in the 6p placing so are getting cheap shares well below their average price. It is not surprising they have increased their holdings.

I think the copper and silver production is already capable of servicing the debt repayments going forward. The low end estimates for 2016 are used below. I expect copper to be in excess of 2000 tonnes for 2017. 160,000oz of silver at a price of $17/ oz 1700 tonnes of copper at $3000 / tonne. 160,000 x 0.87 x $17 = $2.3m 1700 x 0.87 x $3000 = $4.4m I am sure they will make $3m - $4m profit on the copper and silver production in 2017. $32m debt going into 2017 at 12% interest rate is $3.8m in repayments for the year. AAZ should no longer be so sensitive to movements in the gold price.

I remain unconvinced as to how PPC will achieve production of in excess of 1200 BOPD from this new 10 well workover campaign. The statement from the 15th November RNS was as follows:- -- The proceeds of the Fundraising will be used as follows: Approximately US$10.0 million will be used to fund the Group's initial 10 well workover programme of shut in wells in Argentina in order to increase Group production. In the placing circular it states the 1200 BOPD target:- The Concession contains 36 wells which still have undrained oil and have been shut in over several years without benefit of the types of new stimulation technology and re-completions that would typically be deployed in onshore wells in North America. These wells are located in the same reservoir formations that are currently producing in the Concession and the Directors are confident that they will yield significant incremental production and value when worked over. As a result, the Group is planning a rolling workover programme in 2017, initially of 10 of these shut-in vertical wells targeting increased production from the Puesto Guardian Concession of up to 1,200 bopd by the end of summer 2017. I think in the last 18 months PPC has done 12/13 workovers in Argentina. The best result (increase) was around +60 BOPD and the average is below 25 BOPD. The last 5 workovers do not seem to have offered any new production. I would be very interested to know how these next 10 wells can therefore average >70 BOPD to take us to this magical 1200 BOPD figure being quoted. Based on the historical evidence it would suggest this figure is not achievable without drilling. Furthermore I would guess that the workovers already been done were on the best well candidates which would be logical so I cannot see the latter workovers being better than the historical ones. As usual with any PPC communication it should be what they don't say that should concern us.

Still no news on the 5 well Argentine workovers that commenced on the 8th October. Its been 7 weeks now so I can only assume they were unsuccessful or were abandoned due to lack of cash. These simple workovers using coiled tubing equipment were supposed to bring in an additional 100 BOPD.

Even with gold below $1200, AAZ are still making a tidy profit with the AISC at $703/ oz. Some respective figures for gold at $1200, $1100 and $1000 per ounce:- 70,000oz x 0.87 x ($1200 - $703) = $30.3m 70,000oz x 0.87 x ($1100 - $703) = $24.2m 70,000oz x 0.87 x ($1000 - $703) = $18.1m With further weakness in the Manat, electricity sub station connection and pending installation of the water treatment plant, the AISC numbers can only go lower. Furthermore the large increase in copper prices will also be helping the bottom line.

The usual problem with AAZ post quarterly results where everyone expects a news vacuum until January now when the Q4/ FY figures will be issued. I cannot see any other news in the next 6 weeks. It would be great to get something on re-financing but that is even a bit remote. I wish they would be a bit more proactive on the RNS front as we know there is a lot going on. On the plus side the Manat (Azer currency) weakness keeps bringing AAZ in country costs down so maybe with the other improvements $700 AISC is not far away. The Manat has gone from 1.05 to 1.73 (today) in the last 1 year against the USD.

I do not expect 2017 to be a blockbuster year for PPC. The best we can now hope for is that they stabilize the business and get it close to being self funded. If they achieve 1200 BOPD from Argentina with the $10m allocated I will be happy. The only way Pirity will be progressed now is with a Farm out. I think it is more likely PPC will have to seek an extension of the license into 2018 as farm outs do no happen in weeks/ months and the availability of a drilling rig will be 3 - 6 months after any deal is signed. I also hope 2017 is a year without any more fund raisings at these all time low share prices.