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.

PapalPower, yes the share is indeed moving nicely but I believe we could see around the 10p mark by August. Coal bed methane production isn't exactly rocket science so could well be implemented quickly.

explosive, it was an explosive close today with someone paying 7.5p for an over 600K lump of FTO.

Should be another blue day coming :)

We also have the Prelim Results due around 25th to 27th April 06, so that should provide not only a forward looking statement for the rest of the business (and FTO do generate plenty of profits), but also a chance to further update on the CBM project and also future plans in the front end of the the gas business now.

We are off again :) 8p target today ?? :)

IT IS FLYING ,THIS IS GREAT STUFF,PATIENCE HAS PAID OFF!!!

Certainly very strong :) and hopefully plenty more to come, 8p has been touched this morning, so how about 9p then ;)

MAybe DB didn't make a mistake when bought around 9p over a year ago.

ahoj,

Patience is key!

A good rise on increasing volume bodes well for the results I think!

Dare we breathe the 10p that the sp hit a couple of years ago?? :-)

bought these december 04, 10p my target was 16p now with this news should be a lot easyer.

We could see 10p today.........

Looks like another burst upwards coming :)

queen1,

Very possibly!

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thanks for your time

OILVOICE

Fortune to take an Interest in CBM Company

Wednesday, April 19, 2006

Fortune Oil Plc has today announced a conditional agreement to take a 60% interest in a company formed to develop coal bed methane (CBM) gas reserves in the Liulin block in Shanxi Province, China. The other 40% shareholding will be held by Molopo Australia Limited, an ASX-listed company with significant experience in the development of CBM in Australia.

In 1999 a subsidiary of Molopo signed a Production Sharing Contract (PSC) for development of the Liulin block with CUCBM (China United Coal Bed Methane Company), a PRC government entity responsible for all CBM PSCs. Subject to approval by the Ministry of Commerce, the foreign contractor rights in this PSC will be extended and transferred to the new company, Fortune Liulin Gas Company Limited, registered in Hong Kong.

The initial obligation of Fortune Oil is to commit US$2.5 million for further field appraisal, to be financed from the Company's cashflow.

China has one of the world's largest reserves of CBM and its development is being encouraged because of resource limitations and the need to remove gas from coal reserves on safety grounds.

To date CUCBM has signed over 20 PSCs with foreign companies but the industry is only just emerging and China's CBM output is small at 100 million cubic metres per year. The industry has now been spurred by the development of local gas markets and supply infrastructure, particularly in Shanxi Province, which has the two largest CBM basins.

Fortune Oil is the only foreign company controlling pipelines and reticulation networks for supply of natural gas in Shanxi Province. This gas is sourced from the Shaanxi-Beijing trunk pipelines, which pass through the province and are operated by our partner in the Fu Hua natural gas business.

As CBM fields are developed the gas will be supplied initially to local markets by truck as compressed natural gas (CNG) and ultimately to Beijing as pipeline gas. Therefore, once the Liulin block has been commercially developed, we envisage the gas being supplied to Fortune Oil-controlled gas distribution companies such as the Tongzhou CNG station in Beijing. This will provide Fortune Oil with an independent source of gas and increase reliability of supply for our downstream businesses.

The Liulin block is one of the best geologically proven CBM blocks in China. Analysis from coal holes and exploration wells has indicated an in-place gas resource of approximately 0.8 trillion cubic feet (TCF). With a successful appraisal programme, this resource may be converted to recoverable reserves in the order of 400 billion cubic feet (12 billion cubic metres) in an area of approximately 200 square kilometres.

The gas recovered to date is over 95% methane, located in three main coal seams at a depth of 400 to 700 metres. The coal parameters such as permeability, gas content and seam thickness are favourable for CBM drilling, as advised by our technical consultants, Advanced Resources International, Inc of Virginia, USA.

A Molopo subsidiary, Lowell Petroleum NL, started to explore the Liulin block over 10 years ago and drilled 4 vertical exploration wells under the PSC in 2000. Under the terms of the agreement with Molopo, approval will be sought from PRC authorities for the PSC to be extended and the rights transferred from Lowell to Fortune Liulin Gas Company Limited. Fortune Oil would then commit US$2.5 million for further appraisal over the next year and be entitled to a 60% shareholding in the company, with Molopo retaining a 40% interest.

This would involve further drilling, in particular using techniques recently applied successfully in China and Australia. Should this appraisal work prove successful, then we anticipate commercial development of the block commencing after two years.

http://www.oilvoice.com/Fortune_to_take_an_Interest_in_CBM_Company/6188.htm

OIL & GAS JOURNAL

Companies to appraise Chinese CBM field

By OGJ editors

HOUSTON, Apr. 19 -- Fortune Oil PLC and Molopo Australia Ltd. have signed a conditional agreement to jointly develop coalbed methane (CBM) reserves in the Liulin Block, Hedong field, in Shanxi Province, China.
Fortune Oil will acquire a 60% interest in a new company, Fortune Liulin Gas Co. Ltd., while Molopo will hold 40%.
A Molopo subsidiary, Lowell Petroleum NL, began exploring the Liulin Block more than 10 years ago. It drilled four vertical exploration wells in 2000 under a production sharing contract (PSC) with China United Coal Bed Methane Co., a government entity.
Molopo's rights in the PSC will be extended and transferred to the new company, subject to approval by the Ministry of Commerce.
Fortune Oil initially will commit $2.5 million for further field appraisal. If successful, commercial development of the block is expected after 2 years.
The Liulin Block covers 198 sq km with an in-place gas resource of about 800 bcf. Gas recovered to date is more than 95% methane. It occurs in three main coal seams at 400-700 m.

http://ogj.pennnet.com/articles/article_display.cfm?Section=ONART&C=ExplD&ARTICLE_ID=252987&p=7

Fortune to take an Interest in CBM Company in the above artickles.

Looks like the oil/gas press are now picking up on the news.

Bought @ 5.67 on the 20/01/06 so up some 36%. 10p by August, I can't this going much higher without CBM forecasts/milestones being reached.

i have had fto shares for some time,and it how looks like it might go huge!!!!

IIewellyn - Yes it could do well, however there are milestones that need to be completed first. Some such as infrastructure could well be already in place, FTO should hopefully report on this. Once known and a couple of milestones knocked out the way the sp should gather momentum.