Member Info for GKahn

How wrong you are Hamm

We shall see. I don't know the current delivered cost of Russian Crude Oil into NW China with which Heron oil would have to be competitive.

WOS & Hamm, do you own economic assessments

WOS, nothing sneaky, just facts. In any event I am holding for block V potential

I agree badprophet. It seems that nobody on this board has addressed the economics of producing Heron oil and transporting it to a refinery in NW China. I saw a post earlier today postulating a value based on Brent with no consideration for: competition with deeply discounted Russian crude oil delivered to NW China, trucking cost over a considerable distance, the Mongolian government’s 5% royalty, and the 40 % production share for the Mongolian government. And PM meets all operating costs.

If producing Heron oil to China is not currently economic, there is no rush to get the land use licence.

The key to the profitability of Heron production for the 2+ years until the Mongolian refinery comes on stream is the cost to refineries in northwest China of discounted Russian crude oil. Heron oil will have to compete with Russian crude oil with adjustments for quality etc.

To determine the netback to the Heron wellhead, the costs of trucking a considerable distance and a commission / facilitation fee payable to PetroChina. The Mongolian government is entitled to a 5% royalty and a production share pursuant to the PSC. The government’s production share will be initially 40%, rising in steps to 55% linked to production levels. PM bears the operating costs for the well and the short pipeline connection to PetroChina’s facilities.

But Coursier, if her attendance was of no consequence, why was she there?

Tiffany Tuul attended the meeting in IoM. She is a long-term trusted senior employee of the company and speaks excellent English. Her participation suggests that whatever was discussed / agreed in IoM was not related to the grant of the Heron block land use licence or block V licence. More likely a corporate deal, e.g. for the renewables.

Doc 83, many thanks appreciated

WOS
I am invested because of the enormous potential in Mongolia long term, the Block V Raptor prospects and Block XX when oil is delivered to the Mongolian refinery. What is your problem?

Many thanks Ojay
I much appreciate your comments. As you know I seldom post, simply because the board is currently swamped, mostly with inconsequential rubbish.
An area where positive contributions would be most welcome is analyses and considered opinions of Block XX economics, once Heron is producing in the period before Mongolia’s refinery comes onstream, two years hence.
China is currently benefitting from significantly discounted crude oil from Russia and production from Heron and indeed from PetroChina’s Mongolian blocks must be competitive with crude delivered to refineries in NE China. After deducting trucking costs over a considerable distance, a marketing / facilitation fee for PetroChina, 5 % royalty for the Mongolian government, 40% initial production share for the Mongolian Government, Petro Matad will have to meet the well operating costs as well as costs of the short pipeline connection to PC’s facilities.
Enthusiastic posters on this BB expect very heathy net cash flow from Heron. I am not so sure that the economics will be that favourable, but we will see when hopefully Heron production starts.
GKahn

Ojay apologies for the misspelling

Okay
I have been a shareholder since the first day on AIM, May 2008. I still have a significant holding despite the recurrent dilution and added earlier this year. Such a long period of patience and my recollections are not as good as Dinger's
GKhan

PM is an Isle of Man company and holds quarterly board meetings. The attendees will have participated by telephone from anywhere in the world but not UK. In all likelihood, the only person physically in IoM would be the company secretary. What may be of significance is the attendance of those people who are not board members.

Hamm
Don’t forget to deduct the cost of transport to a refinery in China, 5% royalty, operating costs and the Mongolian government production share under the terms of the PSC. Also, what is the relational between crude oil delivered to refineries in Northeast China and Brent.

Rookie
42 US Gallons per barrel
35 Imperial Gallons per barrel
1 litre = 0.264172 US G
1 barrel = 158.987 litres

159 Rookie

Excellent post, Ibiza, many thanks
GK

Given the massive discount my reading is that resolution of the Heron land-use permit is certainly not imminent and may never be granted. This fund raise is all about the risk / reward for the first Velociraptor exploration well. At 2½ p hopefully a good bet.