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.

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/

No!
Current PE is 9.4 on last years profits.
Companies of similar sector are around PE of 13.
Which ever way you want to value FTO....they are cheap.
Yield still above 2% with over 4 times cover..

Thank you.
They hold big chunk of China Gas Holding and increasing to wards 25%, which is very strategic company in China.

Thats right..
That bid is coming to a climax soon as well.
It makes for an exciting time in Fortune oil...:)

Heavy trading on Friday (relatively)
Over 6 million shares traded and many in the last hour.
The Liulin cbm announcement on Thursday marks the end of the exploration.It now turns its attention to production and development stage.
This asset until Thursday was carried with little value on FTO books (purely exploration license) It is now producing saleable gas for contract, which means it can now get 2P certification for asset.
Initially sales attributable to FTO yearly will be £2.5 million....but expect that to rocket as the dewatering process continues and more wells are targeted.
Also head well gas prices are set to rise as China makes exploration more attractive to companies.

Agm today.
sp back in to double digits..@ 10p
It has now run up 25% in the last 4 days on the back of good all round news....

The move justifies the previous moves to 14p. I thick 17p is a reasonable target.

China Gas Holding rose 0.1 to 3.8 in Hong Kong. Not bad.

China Gas Holding's results tomorrow.
Expect good growth and increased dividend, also news on current bid...

There will not be anyews about current bid as such information could be withheld. BUt t the results is going to be good and assets revised substantially upward.

CGHs will say something on the current situation regarding the bid..:)

bid extended....again.
SP falling back now...could be heading back below 9p at this rate4....