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.

Oil & Gas Sector: Fortune Oil shares rise after amending an option agreement
StockMarketWire.com
Fortune Oil saw its shares rise after it announced it had increased its investment in Armenian iron ore mines.

In January, Fortune (LON:FTO) took a 35% equity interest in Bounty Resource Armenia, a company which controls three iron ore mines in Armenia, for $24m with an option to increase this holding to 50% for an additional investment of $16m.

Fortune says it has successfully amended the option agreement to allow it to increase its equity interest from 35% to 65% for the same original consideration of $16m.

Prior to exercising the option, Fortune Oil's effective equity interest in the three Armenian mines is 33% which after option exercise increases to 51%.

The option exercise consideration of $16 million will be financed from the company's existing cash reserves.

Egdon Resources (LON:EDR) was also up after reaching an agreement over three petroleum exploration and production licences - 180, 181 and 182 - and has assumed operatorship of PEDL180.

Egdon said it had reached agreement with Europa Oil and Gas and Celtique Energie Petroleum to equalise working interests across contiguous PEDL 180 and 182 in the East Midlands.

Egdon is the current operator of PEDL182 and will assume operatorship of PEDL180.

On conclusion of the transaction, which is subject to approval from the Department of Energy and Climate Change, Egdon will hold a 33.33% interest in both licences reducing from its current 50%.

A joint 3D seismic survey is planned for later in 2011 to firm up drilling locations for the licences.

It is hoped to drill during 2012 as part of a planned multi-well drilling programme in the East Midlands.

Egdon has also reached agreement with Celtique whereby Celtique will acquire a 25% interest in PEDL181 from Egdon, again subject to approval by DECC.

Following completion, Egdon will hold a 25% interest.

Europa is the operator of PEDL181 with a 50% interest.

Egdon's interests in PEDL180 and 181 were acquired from Valhalla Oil and Gas earlier this year.

The licences are covered by an 'area of mutual interest' agreement between Egdon and Celtique.

Celtique will assume 50% of the consideration to Valhalla.

This will comprise the payment of a 10% net profit interest on each 25% interest in PEDL180 and PEDL181 assigned to it by Egdon (2.5% net).

The NPI is payable from revenues after recovery of pro-rata exploration, development and production costs.

Elsewhere in the East Midlands, Egdon reports the successful completion of a 13 kilometre 2D seismic programme over the Burton on the Wolds prospect in PEDL201 where Egdon holds a 50% operated interest.

The Burton on the Wolds prospect is located on the southern margin of the Widmerpool Basin to the south-east of the Rempstone oil field and is a four-way dip-closed prospect associated with an underlying seismic anomaly.

Indicative prospective resources are estimated by Egdon at around 1.5 million barrels.

Empyrean Energy (LON:EME) saw its shares fall by over 5% after it issued an update on the Sugarloaf project in Texas - including production data from the Buehring No.1H well.

The company - which has a 3% working interest - said 60-day production averaged 645 barrels of oil equivalent per day.

It also said that the PMT #1H well commenced production on 10 May.

Empyrean will provide a production update when this well has achieved 30 days of production.

The fracture stimulation of the Davenport #1H well is now complete, the isolation plugs will shortly be drilled out, production tubing run and then the well will be unloaded and flowed to sales.

The Best Huth #1H well reached a Total Depth of 16,159ft on May 19th 2011. The fracture stimulation of this well is presently underway and once complete it will be unloaded and flowed to sales.

The fracture stimulation of Jordan #1H well is complete and it will shortly be unloaded to sales.

The Best Fenner #1H well has been drilled and reached a total depth of 18,020 ft on the 27 April.

This well has been successfully cased and will be fracture stimulated in due course.

someone is adding quietly. no move yet!

yep

Still very quiet.!
They have been investing in various companies over the last few years.

from today's Telegraph
http://www.telegraph.co.uk/finance/china-business/9117072/China-claims-worlds-biggest-shale-gas-reserves.html

Kernow, I see no link between FTO and the news. Can you enlighten?

The growth of gas in China. This is a possible threat to FTO's cbm projects and also a possible opportunity to FTO gas distribution/supply/infrastructure. As usual the bare bones of a press report are inadequate for conclusions.
PS why send me an internal message as well - especially as you are not enabled for a reply?

Thank you, and sorry for the message.

CGH shares is breaking up. FTO holds quite a lot at much lower prices.

http://uk.finance.yahoo.com/echarts?s=0384.HK#symbol=0384.HK;range=5d

fallen back to 11p again.

Surprised to see it falling after such results. ANy other views?

Recent announcement by Beijing Enterprises Group that it has bought 9% of CGHs will make for an interesting opening on Tuesday....http://www.reuters.com/article/2012/05/04/chinagas-idUSL4E8G44JD20120504?type=companyNews

The share price is under going a bear raid and has been since it announced its results last week. There may be news out of the far east on Monday trading there.
Keep an eye on CGHs sp....

Yes...this looks like it has legs on it....
http://blogs.wsj.com/deals/2012/05/06/battle-for-china-gas-heats-up-again/

Big volume in CGHs shares resulting in near 4% rise in sp to HK$4.06 per share.
Hang Seng down heavily
BEG buying heavily in market again have lifted their holdings to over 12% now.

Fortune oil sitting on a healthy profit in the ££Ms now on their 16% stake.
Interesting trading day ahead tomorrow.
Quite a few short trading positions will be closing tomorrow.
Sinopec has got it wrong in its pursuits of CGHs....as had the LSE got it wrong about FTO.
Prices will have to be raised now!!

China Gas Holding is up over 2% today.

This T/O seems to be gathering pace.
SK Holdings announced it is selling 95m shares next week!
I wonder to who as they hold about 12% in CGHs
I believe a few more twists and turns in this one!

Volume has been at record levels over the last two days, over 100mln today and 200mln yday, etc while normal volume is 18mkn, and price has been rising.

A Beijing-government gas company increased its stake in the gas distributor, paying more per share than Sinopec has offered ...
http://online.wsj.com/article/SB10001424052702304451104577389770517541692.html?ru=yahoo&mod=yahoo_hs

I will be surprised if CGH does not fly by Monday when SK informed the market about its sell. FTO paid lower prices for its 17%.

Oman oil has sold its 5,2% stake yesterday for HK$4.10.
Explains the 200m plus trade the other day.
I think SK Gas sale will be to its parent company SK Holding.

http://wellstowatch.com/2012/06/dart-energy-and-fortune-oil-pleased-with-liulin-cbm-progress/

Fortune Oil has revealed material progress on its Liulin coal bed methane business.

Total field production from the Fortune Liulin Gas horizontal wells now exceeds 14,000 cubic metres per day with the most successful well to-date (H3) now producing over 7,000 cubic metres per day, a rate which exceeds all previous wells drilled by FLG.

These flow rates have been achieved with a bottom hole pressure of 2 megapascals (MPa) and gas flow rates are predicted to increase as the BHP is reduced further to a target of around 0.2 MPa.

In 2012 FLG has drilled two more horizontal wells and these will be dewatered and put in to production testing.

All of these wells in aggregate are expected to provide sufficient production volumes to meet the requirements of the existing gas sales agreement (of 100,000 cubic metres per day.

Pricing under this GSA, is RMB1.58 per cubic metre which equates to gross sales revenues of RMB52.1m (£5.01m) per annum (£2.50m net to FLG).

Chief executive Tee Kiam Poon said: "We are extremely pleased with the progress we have made in 2011 and 2012 at Liulin and are starting to see commercial gas flow from our horizontal wells.

"Our partnership with Dart Energy brings leading design and technical supervision to ensure the successful drilling of FLG's wells in Liulin.

"Our focus is to accelerate the development of Liulin to position the company as a significant developer of unconventional gas, in line with China's resource strategy, and pave the way for commercial gas sales and revenue generation for the company."

PE is 0.09
Is that correct?

http://wellstowatch.com/2012/06/dart-energy-and-fortune-oil-pleased-with-liulin-cbm-progress/