The tiny Irish stock on the brink of landing 'the first' post-sanction oil deal in Iraq. Ref 'Fleet Street Letter' 12-04-04..

also, this what block 6 is all about,


WESTERN DESERT IRAQ: BLOCK 6 - EXPLORATION WORK

PRE-SEISMIC EXPLORATION PROGRAMME

Acting on the recommendations of leading international geological advisors, we developed the following work programme, the phase at which will be carried out in parallel, so that the company can carry out seismic acquisition during the coming winter season:

1. Field data collection

The Mesozoic section in western Iraq crops out north west of Block 6, and to a lesser extent on the Block itself. We need to examine, and get familiar with, this sequence and also collect samples. This work could be carried out in two stages. The first phase, subject to security considerations, would involve the immediate collection on Block 6 of suitable samples for micro-palaeontological, source and maturation analysis, to act as verification of the surface mapping and also to provide background control for the later drilling programme. A second phase of fieldwork, possibly in September, would collect additional samples and make a more detailed examination of potential reservoir and source rock sequences outside Block 6. GPS hand-held control would be required for the second phase of the operation. It is possible that we would require permission to carry out work outside Block 6 assistance from the Geological Survey would in any case be valuable.

The target Palaeozoic section is exposed in western Jordan and again, should be studied and samples collected.

2. Sample analysis

Prof. Geoff. Clayton in Trinity College Dublin and Prof. Ken Higgs at University College Cork have been involved in the project to establish palynological zonation for the Palaeozoic in Saudi Arabia. The company will make use of this Irish expertise to provide sample dating, TOC (Total Oil Content) and maturation data from the field samples.

The end product of the field and sample work is to have knowledge and confidence in the stratigraphic sequence which is in the subsurface in Block 6, and to have sufficient data to critically assess any play concepts from the point of view of source, seal, reservoir and timing of migration. The data will also provide control during the drilling phase.

3. Satellite interpretation.

Petrels current seismic interpretation has possible plays/leads controlled by major lineaments and folds. These structural controls are visible on remote sensing imagery and a structural interpretation and fracture analysis will assist the seismic interpretation. There is considerable expertise in Ireland for the processing and interpretation of these data. The end product would be in digital format for adding to other datasets on the base maps. It is essential at an early stage in the work to have available good digital format map bases. We could produce good bases from satellite data allied with existing topographic maps

4. Regional data collection

Through the Iraqi authorities we should acquire any additional useful wells, examining the critical sections if samples are available, and obtain copies of any logs etc. There are probably informative water wells in addition to the deeper petroleum exploration tests. Other wells from Saudi or Jordan should also be accessed. Any important logs can be scanned into digital format for future use.

Regional data points and any maps produced should all be on a standard regional base. There is a geological map of the region, together with many publications relating to the surface geology. All these data need to be synthesised into a single geological database. This will provide control for the second phase of field sampling, and also assist in the planning of the seismic programme and in interpretation of the seismic data.

5. Seismic interpretation

Petrel carried out an interpretation of the seismic data provided by the Iraqi authorities. However, more refined velocity information was provided at a later stage and these new data need to be applied to the interpretation to provide a second-generation suite of subsurface maps for Block 6, which will also incorporate the results arising from the satellite interpretation and the regional data set.

6. Seismic reprocessing

We can improve the quality of the older seismic data by reprocessing the tapes. The approach would be to reprocess a few trial lines first to judge the level of improvement, before reprocessing larger parts of the data. The Ministry of Oil quote 3325 km of data on Block 6 from 4 surveys in 1979-81 period, all from vibroseis. It could be that some of the surveys give better results than others, or that there are parts of the block, which we consider to be of lower interest. However, if the results are good and the per/km costs reasonable, then the recommendation is to reprocess much of the data. The cost of seismic reprocessing will depend on the state of the data presented to the contractor, and particularly whether the surveying data, shot-point & geophone location data are in digital or paper form.

The second-generation seismic maps would probably be sufficient for planning of the new seismic programme and for laying out the additional lines. The total seismic set, both newly acquired and reprocessed, could then be interpreted to provide the final prospect maps for drill site selection.

Hi everyone,

Thanks to everyone for sharing your thoughts and in particular your research, I know how much time it can take up. I've been tracking PET for a couple of months, and this BB, and not sure if anything has been posted re the potential value of contracts that PET is tendering for, but thought these recent comparatives from "hydrocarbon-technology.com" might be useful, I wondered what the investment would be for a 120,000 bpd facility, well according to this site... http://www.hydrocarbons-technology.com/projects/qeshm/


Good luck to all.
Steve

Hi all.

Found this on Irish Independant

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1299039&issue_id=11777



Petrel shares soar on Iraq move

Saturday December 4th 2004


SHARES in exploration group Petrel soared yesterday after it said it has finalised its tender for two huge oil concessions in Iraq.

In trading on the AIM market in London, Petrel shares surged by 22p before easing back to close up 15.5p, or almost 18pc, at 104.43p.

A brief statement from the group, chaired by Dr John Teeling, said the group had finalised "all outstanding matters on the tenders for the Hamrin and Khurmal projects in Iraq and awaits a decision". The deadline for submission of the final commercial offer on the Subba and Luhais project is December 15, it said.

The two applications centre on the Khurmala Dome in the north and the Hamrin field, both capable of producing about 120,000 barrels per day and which will cost about $250m each to bring on stream. If successful, Petrel would be given a contract to develop one or even both of the fields.

The contract would allow for the recovery of its costs, together with a profit margin, and would run for something like five years. After that, Petrel would have to hope the Iraqis would award it a 'rollover' contract to continue working the field.

Pat Boyle



Irish Independent



wilbs

wilbs very interesting post which i personally find more optomistically worded than the RNS from Friday. Re my earlier posts Friday I feel like if pressed they may still be able to say more as i find the breaking of silence a significant event. What does anyone else think??- especially you Tokyo....have you rung your mate at PET lately?perhaps he can talk now?

willfagg - afraid I don't have a mate inside PET, unless you are joking about my e-mails to DH, which by the way DH if you are reading this I'm very happy to become penpals, I'll tell you all about my company if you tell me all about yours, LOL, but seriously as for DH giving you any more info, they have released an RNS, I think we should be grateful for that, now is the time to just sit back and wait. Lets allow DH & JT to go on with their day jobs.

Tokyo

An interesting point from the Irish Independent article concerns the nature of the contract, i.e. cost plus profit margin. This doesn't seem to tie in with the idea of risk sharing which I believe has arisen late in the day. $250M doesn't sound an awful lot for setting up a field. If we say 135M (obviously in euros I would have thought) and 15% profit margin we have 20K gross profit much of which should come through to the bottom line. There would need to be a fund-raising exercise. If, which seems unlikely, all the money is raised by PET, then existing holdings will be diluted. Following the SEY (and YOO) models this could well be a placing but at a price which takes the assured revenue into account. The calculation must be an iterative process. But lets guess a result and say the price goes to 3, that would be a cap. of 175K. Raise 135K (development cost only) by placing 50M shares at 2.70. Total shares = 108M. Suppose first year completes development and operations goes into second year. Then revenue per share in year 1 is about 145p; gross profit is about 22p per share; pbt, say, is 20p per share; pe ratio is 15. Certainly not too high! Thus the assumption of a share price of 3 is reasonable and may be over-cautious. That is for one field; don't see why 2 fields shouldn't double the result.

The oil specialists will, no doubt, have much more sophisticated ways of doing the sums. One underlying assumption is that the operational years revenue and cost profile are similar; the actual oil revenue going to the Iraqi government. Another assumption is that the other players are not sharing the risk but rather providing services at cost.

I remember Tokyo looking for a bid success price of 3 which is supported by this calculation. Some previous workings seemed to assume that the oil revenues would flow through PET; this model seems more likely. This is just back of the envelope stuff, but how do others see it? Have these Irish Independent figures been seen before? Would they quote them if they didn't have substantiation? The fact that actual figures are quoted increases my own confidence level. Probability up from 75% to 80%! TUT?

Eric

Hi all.

Just got back from christmas shopping in Norwich. What Fun I had!!

Has anyone else seen anything in the press today? Maybe the sunday papers will carry some news. Theres not alot else anyone can say on this till an RNS. This is worse tahn christmas shopping!.

wilbs

wilbs,
went there the other day, b*****d to park!!

dexter

Its a nightmare. I went on train, its easier.It made a change from having PET on my mind all day.

wilbs

wilbs appears to be having a conversation with himself! Hope it doesn't distract from responses to my post 1444! wilbs is so gob-smacked with his shopping expedition, he hasn't even read the post re the Irish Independent article!

Sorry, wilbs! Realised (Monday) that you did the Irish Independent post!

Eric

The way I see it is that the rns was released because they are sick of being contacted by shareholders asking whats happening. So there we have it, what they have said is "We don't know either" so please stop pestering us.(Includes myself) Bit surprised about the 5year mentioned by the Irish paper so the odds in our favour may have increased as I can't see for one minute a Major accepting these terms. Was it not 23 year contracts for exploration and recent discussions have been of reducing these to 12/13 yr? Can only see 1 contract coming from the pot but then again 12/13 yr for block 6. Has to be extra shares hitting the market via institutions (cheapest way.) As far as Subba+Luhais, can't see it coming off, as yes, it is the largest and estimated cost of $300m but not only that, a service contract was expected (earlier posts) to be signed only 2 yr ago by a joint venture and I can't see these not retendering. The important thing is to get any kind of contract and put a floor below these shares. Why people talk about Halliburton being a possible partner of Pet I don't no. This is a company guilty of fraud and charged for work never done, infact did they ever tender for contracts.z

Morning all! Just a thought ill share. At what point does anyone out there feel/know that institutes will get involved in PET? At this stage its small fry to the instistutes, who, look at fundementals etc, but surely they look for unique opportunities, like us!!!!!!!

Any thoughts guys

Gentle downward drift ahead for the next couple of weeks. Thereafter excitement starting to build again. That's my take on the RNS anyway.IMO

MOSCOW (AFX) - Iraqi interim prime minister Iyad Allawi has arrived in Moscow for the first time since taking office six months ago, to take part in talks focused on future economic prospects.

However, he will also aim to soothe tensions with Russia over the latter's opposition to the US-led war in Iraq.

US-backed Allawi will hold a meeting with President Vladimir Putin at some point before his departure on Wednesday, when both sides will discuss oil and debt.

Officials in Moscow said Russia will try to win back lucrative oil contracts it signed under Saddam Hussein's regime, in exchange for Moscow's promise to write off 90 pct of Iraq's 8 bln usd Soviet era debt.

Iraq tore up most of the oil deals amid confusion over the approaching war and despite furious protests from such Russian oil giants as LUKoil.

One reason for Russia's vigorous opposition to the war was its fear of losing its oil interests, observers said..

'Both sides are discussing the question of expanding Russia's involvement in post-crisis Iraq', said foreign ministry spokesman Alexander Yakovenko.

He however added that this involvement must 'include previously signed agreements', in a clear reference to the oil deals.

LUKoil, Russia's second-largest producer, had major interests in Iraq under Saddam and is now holding talks with the current oil ministry in Baghdad for authorization to extract Iraqi oil.

The company is trying to win back the Iraqi market through US major ConocoPhillips Inc, which it sold a 10 pct stake earlier this year under an agreement that the company will push the Russians' interests in the Iraqi oil industry.

LUKoil in 1997 signed a contract worth several billion dollars to develop Iraq's vast West Qurna 2 field.

But, it was expelled from the country before the start of the war in March 2003.

Iraq's ambassador to Moscow, Abdel Mustafa, told ITAR-TASS news agency that 'Russian companies have great experience in Iraq, and many of them are interested in returning to the country.'

'Iraq thinks very highly of Russia's decision to write off 90 percent' of the country's debt, Mustafa said.

'There are no problems between our two countries', he added.

However, he gave no hint of any specific agreements and said only that LUKoil will invite 150 Iraqis to Russia for training in the oil industry.

Allawi's visit comes as Iraqi and US officials continue to insist that elections in Iraqi, scheduled for Jan 30, will go ahead despite a sharp upsurge in violence which has left 90 people dead in the past three days.

However, the UN continues to question the feasibility of this timetable.

Putin said last week in India that continuing violence in Iraq 'will certainly call into question the chances of holding fair and democratic elections in Iraq', but other Russian officials have indicated that Moscow is resigned to vote going ahead as scheduled.

'The upcoming elections are a very vital step' in stabilising the situation in Iraq, Foreign Minister Sergei Lavrov said ahead of Allawi's visit, as quoted by ITAR-TASS news agency.

Lakhdar Brahimi -- a special advisor to UN Secretary General Kofi Annan and, until recently, UN envoy in Iraq -- said in an interview published on Saturday in the Dutch daily, NRC Handelsblad, that the January vote can only take place 'if first and foremost, security improves.'

ingrid.smith@afxnews.com

zak-cb/mb/ims/

gra1969. there are so few shares institutions would be in danger of owning the company because they only deal in millions+ what does anyone else think

I dont think institutions would be interested in PET yet!

They dont do outright gambling with their funds.

This is a gamble make no mistake, however good the odds may seem.

All imho etc.

And yes, I do realise buying stock is a gamble what ever you buy!

Some have better odds.

If PET do win the contracts(s), then they may cast an eye towards this, but till then.............

Tokyo, dexter

Surprised that there hasn't been interest expressed in the Irish Independent article, nor my analysis from it. The financial nature of the potential contracts appears to be realistic and fresh news. Not surprising that a Dublin newspaper should break the story. The really big plus point to me is that it answers the question as to why the Iraqi Governement should take the risk (possibly of bad publicity rather than risk of failure) of letting the contracts to such a relatively small player as PET. The answer is that PET are prepared to undertake the contracts on a cost plus basis. They need a smaller player who will give this top priority and effectively act in a front role to bring in the majors where they have specific expertise, such as Haliburton and Caterpillar. Is this how you read it?

Eric

Good Morning Pet Lovers!

On Friday we had an rns telling us the 2 tenders awaiting decisions and the 3r one ready and deadline for submission is the 15 december!

Look at it this way: Would you encourage a company to bid for the 2nd tender if you weren't happy with 1st one, conidering that this involves your time and money! Remember pet received an urgent email to discuss urgently the 2nd Tender. Once again, would you still encourage them and waste you time and money again to tender for the 3rd tender, if you weren't happy with the previous 2 or at least one of the two?

Further, would Pet make last Friday announcement raising investors expectation, only to few days later (announcement has to be soon)say sorry we've got it wrong! And if you were the iraqis would you be happy with and trust such a company who may appear to be misleading their investors! Do you think Pet is not aware of all the above?

In my strongest belief todate, Pet has been given the nod, hence Friday rns and the next one to follow very soon indeed!

Good luck to all pet Lovers!

Hemacik16, well put!!!!! I look forward to all PET holders rejoicing their good fortune.

Morning Eric

sorry I haven't got back to you, but I'm really busy at the moment, probably until the end of the year, as I have to put together a business plan for next year.

Anyway on to PET, I agree 100% with the Irish article, at first I thought the delay may have something to do with the contracts being changed to risk sharing, but from what I've found out, it does appear that any risk sharing or profit sharing agreements will not be awarded until after the elections, and then even after those it is debatable.

PET look set to be awarded a cash contract if indeed they are awarded the contract (my gut stills says "yes", but we await that RNS to confirm it) The PET RNS last week told us nothing we didn't already know, but atleast confirmed that everything was in and they were just waiting on the MOO to make a decision, we've seen in the press that the Iraqi have said by the end of the year, so December will be the month, when well there you have the 64 million dollar question, I'm going for later in the month. I've have two big plays at the moment NBR & PET and I feel NBR will come good before PET.

With a cash contract we will of course have to look at the terms, but you all know that DH would have negiogated some that had a significant risk/reward % for PET. I think again my estimate of 3 pounds a share is not too far out there.

anyway back to work, speak to you guys later

Tokyo