Main Web Site : http://www.fortune-oil.com/

CBM Partner Web site : http://www.molopo.com.au

IC Write Up : 21st Apr 2006 IC Write Up

Last Major News : 18th Apr 2006 Coal Bed Methane Project

Prelims : 27th Apr 2006 Prelim Results Link

Latest Broker Forecasts : Oriel 7th April 2006 BUY

Prelim Results and Further Updates due around 25th to 27th April 06

ABOUT FORTUNE OIL

For over a decade Fortune Oil PLC has focused on investments and operations in oil & gas infrastructure projects in China and remains one of the few overseas companies operating oil terminals and supplying natural gas in China, all in partnership with the countrys largest oil & gas companies
Fortune Oil PLC is incorporated in England and Wales and is subject to UK Listing Rules and compliance regulations. The largest shareholders are First Level Holdings Limited, Vitol and major Chinese state-owned corporations.

NATURAL GAS :




China will be the world's largest growth market for natural gas as supplies of this clean and economically attractive fuel become more accessible. Fortune Oil's investments in natural gas are principally through Fu Hua, a joint venture with a PetroChina affiliate, which on-sells gas from the pipelines supplying Beijing. In north China Fortune Oil controls and operates distribution pipelines and city gas reticulation systems as well as facilities to produce and transport Compressed Natural Gas (CNG).
Fortune Oil is now one of the leading providers of CNG in Beijing, providing clean fuel for buses, households and factories. In October 2004 Fortune Oil also became the first overseas company to supply LNG (Liquefied Natural Gas) to users in China, delivering LNG by road to the ancient city of Qufu, the home of Chinese philosophy.

OIL TERMINALS :
Maoming SPM

Fortune Oil established the Maoming Single Point Mooring (SPM) in December 1994 to supply crude oil to Sinopecs Maoming refinery, the largest in southern China. The SPM now delivers 10% of Chinas crude oil imports. It allows VLCCs (Very Large Crude Carriers) of up to 280,000 tonnes to moor and deliver crude oil via a 15 km sub-sea pipeline. The SPM is owned and operated by a joint venture company, Maoming King Ming Petroleum Company Limited, and the other main shareholder is Sinopec Maoming Petrochemical Corporation.
The SPM buoy is commonly used throughout the world for loading and unloading liquids but the Maoming SPM remains the only buoy system in China used for importing crude oil. Fortune Oil believes that the SPM concept is a cost-effective solution for importing crude oil into China as many ports are shallow and will become more congested as demand increases. The only alternative to a buoy system in many ports is to dredge channels for large tankers. The SPM has provided significant cost savings to the Maoming refinery through its low operating costs and VLCC capability.

Products Terminals

The oil products market in China is in the process of deregulation and this will allow a larger role for foreign companies in the import and distribution of refined products. Fortune Oil remains one of the few foreign companies with interests in products terminals.
Fortune Oil and Vitol jointly developed the West Zhuhai Oil Products Terminal at the western entrance of the Pearl River Delta. These facilities came on stream in 1998 and comprise 240,000 cubic metres storage and jetties for receiving and distributing refined products. It is one of the few products terminals in south China able to handle 80,000 dwt ocean-going tankers. A controlling stake was sold to PetroChina which uses the terminal for supply of diesel to south China.
In addition Fortune Oil controls a LPG terminal and supply business (Fu Duo), which has 80,000 customers in Zhanjiang city, and owns storage facilities in Shantou. Prior to the restructuring of the China oil industry in the late 1990s, Fortune Oil was also a major participant in the gasoline retail market and in oil trading. We continue to operate two gasoline stations in Beijing but our trading activities are limited to low-risk domestic trading.

Blue Sky Aviation Oil

The South China Bluesky Aviation Oil Company owns and operates the refuelling infrastructure at 15 airports in south China. These include Wuhan, Guilin and the new Guangzhou Baiyun International Airport. Fortune Oil and BP each hold 24.5% of the joint venture and Beijing-based China Aviation Oil Supply Corporation (CAOSC) holds 51%. The consumption of jet fuel in China is rising significantly, particularly at Guangzhou because of pent-up demand in the Pearl River Delta.
The new Guangzhou airport was opened in August 2004. The construction cost was US$2.3 billion and it is almost four times the size of the old airport in downtown Guangzhou. The new airport is capable of handling 25 million passengers and 1 million tonnes of cargo per year and ranks number three for aviation fuel sales in mainland China.

Not the re action I would have expected...
We shall see...

Some nice little buys coming in again.

Fully listed Fortune Oil (FTO) has announced a string of transactions which has left many investors pretty confused but broker VSA Resources reckons it is good news for investors. It has published a detailed note explaining all.

It writes:

Fortune Oil has announced what is a very complicated, but ultimately beneficial, package of transactions which aim to drive future share price performance and increase its exposure to the growing Chinese gas market.

1. Fortune has acquired the remaining 15% interest in Fortune Gas Investment Holdings Ltd (FGIH), for a total consideration of US$60m. This interest is currently owned by Wilmar International Ltd (WIL SP) and has been conditionally sold to China Gas Holdings Limited (384 HK).

2. Fortune has arranged a working capital loan via a Vitol-backed vehicle, to bridge commitments while it awaits Ministry of Commerce of the People’s Republic of China (MOFCOM) approval for its asset disposal to China Gas Holdings.

The short-term benefit for existing shareholders is the special dividend of 2.36p/share, which should counter the dilutive effect (c600m new shares to be issued) of these transactions.

In the longer term, the acquisition of Wilmar’s interest will increase Fortune’s exposure to China Gas Holdings (CGH), and therefore to the rapidly expanding Chinese gas market. Vitol’s involvement in today’s announcement shows that it, too, has expansion plans in China, and this relationship should yield additional growth in due course.

Given the share price performance since March, this news should come as some relief to the current shareholders, as it delivers a special dividend as well as the opportunity to create more value in China.

We continue to be of the view that Fortune Oil is a misunderstood company and is undervalued on its CGH interest, alone, with the Fortune portfolio in for “free”.

We maintain coverage with a BUY recommendation and target price of 20p.

Fortune gets go-ahead for FGIH stake sale

StockMarketWire.com

China Gas Holdings Limited informed the Company that the MOFCOM regulatory approval had been obtained. It is anticipated that completion of the FGIH Transaction will occur after all of the normal handover procedures have been completed.

" It is expected that these proposals will ultimately provide additional sources of demand for, and improve the marketability of, the Ordinary Shares of Fortune Oil."

I dont understand that part of the rns the other day..
Danny Chieu and Vitol will go from around 37% to 55% of FTO shares in issue..
Thats hardly creating demand...Perhaps they may want to take FTO private at some stage...

CGH is being traded around HK$ 8.5, and if I remember correctly FTO has a right to buy at much lower levels, below HK$6 I think.

Does anyone know this?

They dont have an pre options on purchase price....
They buy at market price with in a time frame once they notify CGH they want shares....
So market price is the answer...

If I remember correctly, the price was average over 10 days before the close 30 Dec 2012.
The price was around HK$ 6.2.

No...it is the average over 10 days when they decide if they want to take shares...going forward ahoj..

The Avanti Group comments on the promising future for China Gas Holdings Limited as they continue to grow and expand.

The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to China Gas Holdings Ltd a company that distributes and sells natural gas to residential, commercial and industrial users, operating and managing gas pipelines.

CGHL based in Hong Kong is growing at an exceptional rate year on year. Their main area of business is in the construction and operation of city gas pipelines. At present CGHL owns the exclusive city gas concessions for 184 cities and regions, with over 33,000 kilometers of gas pipeline serving over 7 million households. With a strong hold all over China and with its expansion into India and South Korea they are perfectly poised for further growth.

The gas giant similar to many corporations in China use a five-year plan strategy, now approaching their 12th year of successful business seeing growth figures never accomplished by Gas corporations within the U.S. or Europe. Involved in the supply of over 1,600 industrial customers and 43,000 commercial customers and adding their 120 processing stations and over 130 refilling stations you can see the magnitude and depth of this colossal company. These are astounding numbers and with China’s move away from older and less green industries like coal the future of CGHL looks very bright.

“With China Gas Holdings ongoing expansion of their city gas concession network last year they grew from 157 concessions to 184 giving an additional 27 new city locations or regions to their portfolio which is the largest in China. CGHL is growing in all aspects of their business. Their commercial, Industrial and residential bases all see improvements adding value and gains,” said Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.

The corporation’s subsidiary holdings include Iwai’s Holdings Ltd also based in Hong Kong, Hai Xia Finance Limited, Wellgem Asia Limited, Elegant Cheer Limited and Zhongran Gas (Shenzhen) Company Limited among others. China Gas Holdings Ltd. annual report show record high revenue, profits and dividends net profits up 85% last year. In the coming year along expansion is set to continue at record pace, expanding their CNG and LNG network of refilling stations for vehicles and vessels and growing their ventures overseas with projects underway in India and South Korea all set to generate similar profit yields.

“The future of China Gas is clear and we will continue to advise clients as to the best solutions for adding related stocks and acquiring shares within this market place. With continuing expansion and growth both at home and overseas China Gas Holdings Ltd could be one of the biggest stories on the Hong Kong Stock Exchange over the next 12 to 24. We will be closely monitoring this growing company and associated industries that will benefit within this sector,” concluded Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.

Some very large (for FTO) trades gone through quite late in the day...
Interesting...need to watch that...
I believe from reading some other BB that a large seller may be close to completing sale...
Possible room for real advancement soon...

Fortune Oil: 2013 half year report: Wenesday 21 August.

The Company is pleased to announce that the entire issued share capital of Fortune Gas Investment
Holdings Limited has been transferred to China Natural Gas Investment Limited which is a whollyowned
subsidiary of the Company. Fortune Gas Investment Holdings Limited has become an indirect
wholly-owned subsidiary of the Company.
By the order of the Board of
China Gas Holdings Limited
Wong Sin Yue, Cynthia
Chairperson
Hong Kong, 20 August 2013

Shares in Fortune Oil (LON:FTO) are a compelling proposition, reckons Oriel Securities.

“The shares are trading at a c.45% discount to the see through value of expected net cash and the stake in China Gas, with no value attributed to the on-going business,” the broker argued, as it reiterated its ‘buy’ recommendation in the wake of Fortune’s interim results.

The results confirmed Fortune will seek approval from shareholders for a special dividend of 2.36p a share, and a waiver from Rule 9 of the UK Takeover Code for a general offer to be made for the company by persons owning more than 56.9% of the company.

Net assets increased 32% to £327.4mln following a further appreciation in Fortune’s investment in China Gas Holdings. Net debt at 30 June 2013 stood at £69.3mln, versus debt of £61.1mln at the end of 2012. The group does not envisage any difficulties meeting loan repayment obligations or investment commitments, the broker notes.

(proactiveinvestors.co.uk Aug 21, 2013)

I am not sure what the next news flow is here..as the gas component is now gone.
A regular poster on another board seems to think that the price above 8.80p on the bid is a vital next move (not sure why)up. To be honest..I am surprised the sp did not fall more after the very boring results yesterday...
But I am getting more optimistic that the big seller is now finished and we may find that the buyers are now more comfortable that stock is not now going to be dumped.
Also most of the big volume trades are now on the buy side. This could be in anticipation of the next announcement which may be associate status been granted.
If it were the case an acquaintance of mine has said it could mean as much as £33.9 million before tax profit, been attributed to FTO on a consolidated bases, based on CGH's 2012/2013 year end profits recently announced..which were in GBP £169 million. That plus our remaining groups profits could put us close to nearly £50 million before tax!!!!
Not including CGH stake and cash from deal... With gearing around 21% and very manageable...this stock is beginning to come through the smoke of the last year in an exceptional position and will no doubt soon attract serious attention...
Big top up completed today on this new information and please....EVERYBODY DO YOUR OWN RESEARCH...but don't take forever..

CHINA GAS HOLDINGS LIMITED
中國燃氣控股有限公司* (Incorporated in Bermuda with limited liability) (Stock Code: 384)
STRATEGIC COOPERATION FRAMEWORK AGREEMENT WITH BEIJING ENTERPRISES HOLDINGS LIMITED

The Board is please to announce that on 23 August 2013, the Company, BE Group and BE Holdings entered into the Strategic Cooperation Framework Agreement pursuant to which the Company and BE Holdings will: (i) jointly develop and invest in the area of gas in various forms, such as equity joint ventures, as well as to develop gas related value-added services in the current market and to invest and develop city basic infrastructure, provided that such development and investment is permissible under the laws and regulations; and (ii) utilise and synergise their respective advantages, such as upstream pipeline transmission, downstream supply, refuelling station and trigeneration (i.e. combined cooling, heat and power) etc., to realise the joint development of the business areas of both parties to attain a win-win situation.

China Gas Holdings: Ex Divi:22/8/2013.
Divi payable: 30/9/2013

Fortune Oil should recieve: £1,838,000. are my sums correct?

No of shares held in C.G.H. 351,223,000 [7.6%]

Divi : hk$ .0628

hk$ 12 = £1.

Fortune Oil should recieve hk$ 200m from gas sale shortly.?.