Member Info for Gambier

Result of Annual General Meeting Thu, 10th Nov 2016 10:25 RNS Number : 8713O Urals Energy Public Company Limited 10 November 2016 At the Annual General Meeting Andrew Shrager, Urals Energy's Chairman, made the following statement: "We remain confident in our chosen strategy, as laid out in the report and accounts for the year ended 31 December 2015. Over the course of 2015 and 2016 we have developed a significant portfolio of additional proven and probable reserves and will continue to pursue new development plans and seek operational efficiencies wherever possible. We remain cautious in the current environment, and whilst oil prices and exchange rates may present medium-term challenges, we believe that we have gained a strengthened position for when conditions in the oil markets improve. We are confident that through our strategy we can build significant longer-term value for all of our stakeholders and look forward to updating the market as we progress our strategy."

Two key points here: 1) 'the company's approach to drilling and development wells is scalable and can be applied universally within the boundaries of the license area' One of the major problems for RPO was that the geology was very heterogenous. Within a very small field area you could have very different geologies making it hard to scale up a success from a particular well. If they have developed a model that is scalable they can be very aggressive with drilling and more accurately predict future production. 2) 'According to forecasts of the company's revenue will exceed $ 120 million in 2017 and EBITDA will rise to $ 55 million, even with low oil prices (Brent at $ 50 mark per barrel of oil). At the same time, the rate of debt / EBITDA (debt focuses on the members of the group of companies Ruspetro "INGA" and "Trans-Oil") will drop to 8' Debt/EBITDA is falling which is very positive. A ratio of 8 is still very bad, it needs to be below 4. However, this is with current oil prices and with Rusptero MET exemption any increase in oil price leads to a strong increase in EBITDA. If oil goes to $80 dollars or above then the debt issue could be dealt with.

Maybe sometime in 2017 some significant news will justify your confidence. It will be a very quiet 2016 in the meantime.

Of course UEN has down steam refining returns to factor in, but this makes little difference. As has been pointed out by UEN themselves this year, without a tax exemption large scale field development is not viable.

Currently, oil and gas companies working in Russia are subject to a corporate income tax, a value added tax (VAT, with certain exceptions for the gas sector), a mineral resource extraction tax (MET), a subsurface use tax, and an export duty. MET for oil is currently calculated by taking a figure of 766 rubles per ton of oil and multiplying it by a coefficient K, where K = (PUrals – 15) * (PUSD / 261) When oil is priced below $15 per barrel, the oil export duty is 0. When oil is between $15 and $20, the duty per barrel is calculated as S = 0.35 * (PUrals – $15). For oil between $20 and $25, the formula is S = $1.75 + 0.45 * (PUrals – $20), and for oil above $25, the duty can be calculated as S = $4 + 0.42 * (PUrals – $25). For natural gas the calculation is much simpler: the export duty is 30% of the export price (with LNG as well as gas going to Belarus and Kazakhstan not being subject to export duty). FROM FT 03/10/16 Russia’s oil tax regime (explicitly) and the free-floating rouble (in effect) are tied to the price of oil. The combination of an automatically-adjusting tax burden and rouble work to act as a very effective cushioning mechanism for wellhead operating margins. The union of only modestly lower, and generally stable, wellhead margins and sharply lower upfront well costs has served to keep new well economics for producers surprisingly stable in almost any oil price environment for Russia’s oil companies. Indeed, we estimate that the returns of a standard vertical well in West Siberia today are the same or even higher than what would have been earned on that same well in June of 2014 when oil was around $112 a barrel. http://www.ruspetro.com/downloads/presentations/agm_pack_ceo_final_.pdf Provides a illustrative graph of net back per barrel before and after MET exemption. This is for horizontal fracks and not vertical drills, where higher oil price is more strongly correlated to higher net backs. Even then a move from $40 to $50 probably adds less than a dollar to net back.

Your welcome. We all know how respectful rampers of any share are, particularly towards anybody who offers reasoned criticism of that given share. I would love to know how many people have been suckered in to buying on the spikes of this share, each time losing 30 to 40 percent within a few days of the inevitable collapse. Appalling stuff.

Total nonsense. Do you have any idea how the Russian oil tax system works? With MET, oil companies do not benefit greatly from higher oil prices but nor are they punished with lower oil prices - it is a tax escalator. A move from $40 a barrel to $60 would provide a minsicule improvement in profit as the MET formula removes the extra profit through tax. So it is not 'profit in the kitty'. What affects UEN the most currently is the ruble dollar exchange, not oil price. What UEN needs the most is a MET exemption on the basis of their difficult field geology and performance. If they obtained such an exemption their net back per barrel would go through the roof and we would be looking at serious profit. This has already been stated this year by the company, but should be known by anybody who invests in Russian oil. Unbelievable ignorance on this board.

And back down to the 2 - 2.25 trading band

Nope, but somebody is auto trading hundreds of thousands of shares and chasing the SP up in the process.

You are you really that stupid. I read the RNS - I find that there isnt anything substantive that isn't already known from previous company news - I suggest the spike is therefore irrational. Where in that thought process is inside information required? Debt has increased to acquire new assets - already known, reserves being reviewed at end of year - already known, two shipments will be made each year to improve cash flow - already known, 2015 accounts differ due exchange rates differences - already known, current production rates - already known, EBIDTA improvement - already known. Nothing that has been announced could legitimately change a metric based valuation of UEN. How would you value UEN? What specifically in the RNS (beyond calling it 'good') do you believe justifies the spikes towards four pence?

Which would normally come under expenditure on a column of the accounts. There is nothing that justifies what is now an obvious irrational spike.

Can't wait for what , the one day spike followed by the three day collapse back down to the low 2pence band? This cycle has repeated three times this year and the same mugs fall for it. So this RNS, what is in it that we didn't already know? Everything in that RNS was already known, so why has anybody paid four pence because of the same news reworded? Cringe worthy stuff

Maybe Ruspetro is actually worth something beyond its debt

Central to Rosneft’s plan to revive production at Yuganskneftegaz is the development of deposits known in Russian as “hard-to-recover resources”. The terminology is important: until 2014, such resources were often described by western and Russian companies in English as “shale”. When the US and Europe imposed sanctions restricting sales of equipment and services to Russian shale oil projects, many feared they would scupper development of such projects. But Russian executives say only the giant Bazhenov formation, which is estimated by the US energy department to hold 75bn barrels of oil, has been affected. Meanwhile, work on other “hard-to-recover” deposits, such as the Tyumen or Achimov, has continued. Like shale, these are low-permeability formations which require horizontal drilling and fracking to exploit, but the executives say they are geologically distinct from shale and therefore do not fall under the sanctions. There are some things connected to the Bazhenov which fall under sanctions,” says Alexander Vitevsky, chief geologist at Yuganskneftegaz. “But in fact the main part of our hard-to-recover resources is not the Bazhenov: it is prospects in the Tyumen and Achimov formations.” He says the Bazhenov accounts for an “absolutely insignificant” share of Yuganskneftegaz’s resources. Mr Tatriev predicts that output of hard-to-recover oil atYuganskneftegaz will increase more than threefold to 200,000 b/d by 2020. At well pad number 258, Mr Stefanishin rattles off a list of western service companies working with Rosneft. “We have working with us very successful companies — Baker Hughes, Halliburton — we’re using their rotary steerable systems for drilling horizontal sections.” There are signs that Rosneft is preparing to use Yuganskneftegaz as a model for its other brownfield assets. It has lifted drilling at Samotlorneftegaz, another western Siberian subsidiary, by 50 per cent this year. “We’re applying the same strategy as Yugansk — the plan is to turn around all these brownfields,” Eric Liron, Rosneft’s first vice-president, told investors earlier this year.

PNG Drilling Company successfully continues drilling horizontal wells on the license areas of Ruspetro and Rosneft oil companies 14.09.2016 PNG Drilling Company successfully continues drilling horizontal wells on the license areas of Ruspetro (UK) near Talinka settlement, Khanty-Mansiysk Autonomous Okrug - Ugra, using two mobile drilling rigs “Viking” and “Eskimos” with the hook-load capacity of 340 tons and 250 tons accordingly.

The MM doesn't care whether you want to be long or short or to buy or sell, it makes not difference to them. By keeping a book on a low liquidity share like this they open themselves up to being caught on one side, so the spread has to be wide. Of course, when people lose money they make claims for MMs and their dark arts, but a cursory review of the situation proves them to be factually incorrect and logically incoherent, as you would expect from emotionally driven conspiracy theorists. UEN has a tiny market capitalisation and is off the radar for most investors, so liquidity is low/spread is wide. It does tend spike a lot when the emotional incoherents misunderstand an RNS or get carried away in an emotional frenzy of 'good news'. There isn't anything untoward going on with UEN trading, all looks pretty textbook. Just pick a price and leave an order for whatever price you want. Nothing is going to happen this year so the SP will drift downwards in my opinion. Management are very competent so I don't see any RNS shockers coming through, more an investor malaise.

Nobody wants to buy in quantities that would justify the trading costs, nothing the mm's can do about that. It is a very boring share because the management dont make outlandish claims and behave conservatively. Oil prices, tax regime and exchange rate prevents UEN from doing anything major. None of these factors look like changing in the short term so what is the incentive for investing right now?

Calm down and stop projecting your own behaviour onto me. I don't think I ever had one person make so many comments on my posts like you have. At one point I had you stalking me on two different boards making comments on multiple posts without even a single instigation from myself. I can see that you are using diversions once again to avoid a very reasonable question about an objective valuation of a share. Now I understand you are a very emotional character and logic and reason are not high on your agenda but if you would stop trolling my posts I will let you off and pretend that you have a very solid metric based valuation for UEN that you would just prefer not to reveal. Believe me, rampers like yourself are not ever going to put me off posting from a negative perspective whatever insults and accusations you post.

Calm down and stop projecting your own behaviour onto me. I don't think I ever had one person make so many comments on my posts like you have. At one point I had you stalking me on two different boards making comments on multiple posts without even a single instigation from myself. I can see that you are using diversions once again to avoid a very reasonable question about an objective valuation of a share. Now I understand you are a very emotional character and logic and reason are not high on your agenda but if you would stop trolling my posts I will let you off and pretend that you have a very solid metric based valuation for UEN that you would just prefer not to reveal. I can go back and forth forever with you if you want, believe you ever put me off posting

Yes, solid movement upwards, but minus the cash in the bank you are looking at a SP of around 70.