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

Some advantage being in Canada sleeping through the day's activities and reading on a once per day basis. The thing I liked best today was Horgan's response to Dexter:

"...Wepush on with our work. We bid a technically excellent package - but fully costed and with a margin that if successful will be attractive to shareholders. Why take a service contract on any other basis. In the meantime we push on with our exploration work.
...We have nade considerable progress this past year and are now an accepted player in Iraq oil sevelopments"

If PET had bid this as a loss-leader,as their competitors may have done, this would have been a step back for the company and not in shareholders interest. I repeat ny point made last night that the shares and the share price are not the company. Don't confuse the company with markets. It concerns me the amount of badgering of company executives that appears to take place - not a criticism of selective contacts from this bb. They have had a year of progress and I accept that they are establisherd in Iraq (plus Jordan, which is presumably linked). If I buy shares because PET have been over-hyped in the market, that is my look-out. I suspect the present price is more realistic on fundamentals. If you look at the chart, including volume and momentum, then we are back to the trend line excluding the last quarter.

Whilst I am standing with a fairly significant, but acceptable loss, I would add two things: (i) I am appreciative of the efforts of Tokyo, dexter and others in researching this share and the Iraq market; (ii) I will remain a follower of PET whether from inside or outside as a shareholder - that will depend on a judgement of the charts and a prediction of buy/sell patterns.

Marvellous place Vancouver - apartment looks out over English Bay - the weather is super. All will be well! (to quote Julian of Norwich!) Eric

Dexter, another sensible post. Never hurts to remember that a company and its shares are not the same thing.
I've not had a reply back yet from OGI.

Hope the following (if true) from another bb satisfies the Pet lovers.
Tokyo and dexter in particular!!.

I pointed out in an earlier post on one of the bbs that this was the company Teeling was referring to when he made his statement re the reuter`s report on Thursday but was ignored as usual.

OGIhttp://www.ogi-sa.com/, is in fact a Saudi company, not a Canadian company although it has an office in Calgary.
It now would appear that the initial contracts will be granted to companies from muslim countries. This makes sense because it could cause friction before elections if non-muslim western countries were getting first refusal on the contracts involving oil.


from metronews (Canada),

Canada's OGI Says Won Iraqi Oil Field Deal

Saturday, December 18, 2004 9:46:02 PM ET

By Khaled Yacoub Oweis

BAGHDAD (Reuters) - Canadian company OGI Group said on Saturday it has won an Iraqi oil ministry contract to develop the Himrin field, but the deal needed approval from the cabinet.

"Oil officials have told us that we won. We do not consider the deal done until we receive official acknowledgement and council of ministers approval," said an OGI representative in Baghdad.

The oil field services and supply company has offices in Calgary, Houston, Sanaa and Baghdad. The company's Web site said it had experience in the Iraqi oil sector.

If approved by the government, the agreement, along with another deal to develop the Khurmala Dome field, will be the first oil deals with foreign firms Iraq has struck in the postwar era.

An Iraqi oil official said on Friday a Canadian company named IOG had won the Himrin deal. Canada's Ironhorse Oil and Gas Inc said it had nothing to do with the tenders. The official later said there was a mixup in spelling the name and that OGI was awarded the contract.

Turkey's Everasia, which has Iraqi partners, won the contract to develop Khurmala Dome, the official added.

Ahmed Chamma, the head of projects at the oil ministry, declined again on Saturday to confirm the two winning companies and said the council of ministers has not yet approved the names.

The projects aim to realise Khurmala's potential to produce 100,000 barrels per day (bpd). Himrin's potential is estimated at 80,000 bpd. Both fields are in northern Iraq.

The ministry is still studying offers for another contract to raise the output of the Suba-Luhais field from 50,000 to 180,000 bpd.

The projects comprise new flow lines, gas separation stations and measures to stop water emerging from wells. The ministry's crews will drill new wells.

Unlike production-sharing contracts Iraq could negotiate with oil majors after next month's elections, the deals do not involve contractors after construction or as operators.

The cost of the three projects combined has been estimated at $500 million. Their small size and scope has failed to attract the interest of major international oil companies.

Iraq produces 2.6 million bpd. The country has yet to restore production capacity lost in bombing during the 1980-1988 war with Iran and later conflicts, as well as crushing economic sanctions.

Bad news...lets hope for the bigger third contract and block 6.

kellman well found, a good post.

According to David Horgan, OGI is nothing more than a cash shell in need of backers, would the Iraqi offcials take such a risk with their own projects? If the answer is no then surely OGI have got backing and it must be technically ahead of PET.


extract from lemmings update 16-12-04

DH had this to say; Reading the latest Reuters piece it seems that the two names went forward for approval but that no award has actually been made. Also, I suspect that the Canadian group should be OGI (an ad-hoc Calgary Arab group looking for backers) rather than Ironhorse, which is a shell. For the last year, the Ministry had stressed that they wanted the best technology that would operate in a challenging environment. We accordingly pulled together the best suppliers (GE, Hanover, Weatherford, etc.) and solution.

On the technical side

We are confident that we will not be beaten technically - indeed we were told this at the technical discussions recently. But it is in a war zone and we have included a contingency and a risk-adjusted return. The Ministry engineers seemed impressed at our submissions.

According to David Horgan, OGI is nothing more than a cash shell in need of backers, would the Iraqi offcials take such a risk with their own projects? If the answer is no then surely OGI have got backing and it must be technically ahead of PET.


extract from lemmings update 16-12-04

DH had this to say; Reading the latest Reuters piece it seems that the two names went forward for approval but that no award has actually been made. Also, I suspect that the Canadian group should be OGI (an ad-hoc Calgary Arab group looking for backers) rather than Ironhorse, which is a shell. For the last year, the Ministry had stressed that they wanted the best technology that would operate in a challenging environment. We accordingly pulled together the best suppliers (GE, Hanover, Weatherford, etc.) and solution.

On the technical side

We are confident that we will not be beaten technically - indeed we were told this at the technical discussions recently. But it is in a war zone and we have included a contingency and a risk-adjusted return. The Ministry engineers seemed impressed at our submissions.

jonny english,
look at the punctuation, "rather than ironhorse, which is a cash shell". although i hope you are right,
dexter

Post from Vancouver - Mary, my Mrs, taken to hospital; quite a scare but it is Pancreitis which is not life-threatening. However, puts things like PET into perspective.

Helpful post from you, Kellman. I hope that the contretemps is over now. The explanation is probably part of the truth. I see two main reasons why PET have lost out (assuming that to be the case): the first is the placing of the contracts to Muslim countries; the second is price- it may be that the Saudi and Turkish bidders felt less need to put such a high risk allowance in their bids.

Lets assume that is the case. Whither PET and their share price? Positive from the last three days is Horgan's comments, particularly their progress in Iraq. The Jordan deal is progress: I see it as the rights to explore without ownership but that it would be quite likely to lead to a development contract. Perhaps more important is the likely reason for PET winning this contract is their linkage to Block 6 in Iraq. I suspect it is a matter for the new government and it may take a while therefore for the licence to be restored. However, I would base a fundamental analysis on Block 6 rights being restored. Suba-Luhais would be a lower probability. Sudan, something of an unknown, but could be another Jordan. My approach is to zero or one each option. Block 6 an Jordan would be 1 and Suba-Luhais and Syria, together with Khurmala Dome and Hamrin, 0.

I am trying to refine my investment approach with the help of johngtudor, to a combination of fundamentalist and technical analyst. I would appreciate comments from John, also any others with views to express.

First, as fundamentalist. Cap of PET is 25m pounds at 42.5p. Not very demanding. Once they have a drilling programme in place then the price should be higher based on a probability assessment of striking oil. Jordan is a longshot at the moment, so we come back to Block 6 where probabilities are quite high (Tokyo et al.?). I rate PET as a good stock to hold on this basis, and probably higher, say, than PCI. The hype has gone out of the price so, is it a good time to invest? That leads to:

Second, as chartist (novice!), Lets cut out the hype period and take the trend lines from January. As fundamentalist, I say there is plenty to go for as would be the perception entering 2004. Projecting the peaks and troughs says that the price should be in 55p to 75p range. Thus the fall has been overdone and PET is a speculative buy at prices between 40p and 60p.

I hope this helps to restore the rational debate of this excellent column. My question is, accepting that I am a market trader and not just holding a stake in the company as a long-tern investor, at what price would you (a) buy PET and (b) sell PET?

Eric

Pancreatitis is a life-threatening condition, Eric. It can be fatal if management is not prompt. Hope your wife has a quick recovery.

hyleo

Thanks for your concern. She is responding well to care which is largely a starvation diet - ultrasound tomorrow to see if gall stones are the cause. I wish we had UK hospitals as good as St Luke's in Vancouver. Snow at Whistler not that good anyway!

Eric

Looking at some other BB'S it would appear that OGI has won one of the contracts

http://www.metronews.ca/reuters_business.asp?id=46731

I'm sure we can expect to see red later today, no RNS from PET yet on this, very surprising

It was reported earlier that PET had been asked for their bank details by the ministry, if they had not won these tenders, why did the MoO need their bank details?
Tender No.3?, Block 6?, What?

Tokyo

Eric
Please give my regards to your wife and I hope she gets better very soon
Sharon

The metronews report as been described as a rehash of the reuters one.

I am on real tender hooks here! i so want Pet to give us all something today, something positive, but being realistic! Still i have a fund ready to go into Siber Energy tomorrow!

morning all,
eric , my best wishes to you and your wife.
could someone please tell me, if all these articles about IOG/IGO etc are`nt a rehash of the original reuters piece, why do they all call HAMRIN HIMRIN?, clinging to straws i know,but surely one reporter or co. representitive would know the correct name.
dexter

Any shorters about.

You could be dave if you can get in!

Be careful though!

Small short 34.50,morning sw very quite.

It'll go quieter as the week goes on...............

Prices may become exagerated as trading slows imo.

A liitle to be made if we are lucky and quick.

Morning PET, still no firm news from the Company then?

Good luck to all.