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.

You could also argue that Fortune Oil over past years didn't achieve any new milestones that would add to the bottom line. Deregulation of oil products is coming about as is the flow of gas in the near future. My overall investment in FTO is a very small part of my overall portfolio, if all goes to plan over the next 6 months I'll add but we need to see milestones met first. I think FTO carries a minimal risk over the potential upside.

Liulin met milestones but also slippage..
Bluesky won 5 new airport contracts... A big part of doing business in China is slippage..
The diesel conversion programme has not delivered..the carbon credit business did not even get a mention in the last annual accounts...Liulin was suppose to go commercial in July 2012..all missed there targets...not to mention the current state with the bid which the MOFCOM can not even address to another state enterprise sinopec.

This is business life in China...

This from LSE bb....
HONG KONG--Shares of China Gas Holdings Ltd. (0384.HK), a target of a takeover proposal by ENN Energy Holdings Ltd. (2688.HK) and state oil giant China Petroleum & Chemical Corp. (SNP), or Sinopec, were suspended from trading Monday morning after it signed cooperation agreements for the expansion of its natural gas and liquefied petroleum gas businesses.

China Gas President Eric Leung told Dow Jones Newswires the suspension wasn't related to the takeover proposal by the two energy companies and the company will issue a statement on this matter later. However, he declined to give more details.

China Gas, which controls gas pipelines that serve more than six million customers in China, said Monday morning the suspension was due to an announcement "which is price sensitive in nature." The stock closed Friday at HK$4.30 per share.

In September, ENN Energy and Sinopec extended to today the deadline for the completion of negotiations on their $2.15 billion planned acquisition of China Gas.

The acquisition faces an uphill struggle as major shareholders of China Gas--including Fortune Oil PLC (FTO.LN), founder Liu Ming Hui and Beijing Enterprises Group Co.--have been increasing their holdings in the company since ENN Energy and Sinopec launched their takeover attempt in December.

Gaining a controlling stake in China Gas--which has a market capitalization of $2.2 billion--won't be cheap. But the jockeying for control of the company highlights the industry's view that China Gas, which has exclusive rights to operate pipelines in 151 cities across China, is worth the effort

I wonder if FTO is involved WOOPPEE fingers crossed.

China Gas Holding broken up today. at 4.3.

2012-10-15 17:32:22




















ENN ENERGY (02688.HK) and SINOPEC CORP (00386.HK) announced as of the long stop date (15 October), there is no material update on the outstanding pre-conditions for the CHINA GAS HOLD (00384.HK)'s acquisition which remain unfulfilled. In the circumstances, the offerors will neither further extend the long stop date nor despatch any offer document. Accordingly, the offerors will not proceed with the offers.


AAStocks Financial News
Web Site: www.aastocks.com

News Provided by AASTOCKS.com

CHINA GAS HOLD (00384.HK) and SINOPEC CORP (00386.HK) entered into strategic cooperation agreement.

Pursuant to the agreement, the parties will form a joint venture company which will utilise the Group’s LPG assets, brands and sales channels to distribute the LPG produced by Sinopec’s refineries in the PRC, and jointly develop the LPG retail market in the PRC; the parties will form a joint venture company which will utilise the Group’s city gas pipeline network and Sinopec’s network of petrol stations in the PRC to convert these petrol stations into petrol/compressed natural gas refilling stations, and jointly develop the rapidly growing car and vessel natural gas refilling market in the PRC; Sinopec will allow the Group priority access to its natural gas resources and LPG supplies; Sinopec will (in principle) allow the Group to participate in the investment in interprovincial natural gas pipelines and related infrastructure constructed or to be constructed by Sinopec; Sinopec is willing to use the Group as its platform and partner to develop city gas projects in the PRC, and the parties may jointly tender or apply to city or provincial governments for concessions in respect of large city piped gas projects in the PRC.

CHINA GAS HOLD will resume trading tomorrow.

HONG KONG--China Petroleum & Chemical Corp. , one of the country's biggest state-owned firms also known as Sinopec, lost a battle for China Gas Holdings Ltd. in its home market Monday.

On Monday, Sinopec and gas supplier ENN Energy Holdings Ltd. said they terminated their US$2.15 billion hostile bid for China Gas, as the pre-conditions of the deal--including Chinese regulatory approvals--remain unfulfilled.

The failure of the offer, the first hostile bid by a state-owned business for a privately controlled company, shows that a private Chinese company can resist the entreaties of a state-owned giant.

Sinopec had made the bid in late December with ENN, one of China's largest gas pipeline operators by sales, as a way to expand its pipe gas distribution networks.

However, shares in China Gas rose following the hostile takeover attempt, as the company's founder, Liu Minghui, opposed the offer and bought shares continuously.

Companies such as Beijing Enterprises Group and Fortune Oil PLC also sent the company's share price higher by buying shares.

Shares in China Gas had been depressed after Mr. Liu was arrested in December 2010.

Expect big fall in CGH share price tomorrow...
Should fall back below HK4
Its a failed bid no matter which way you look at it...JV or not.
Well that's that..

HK4 .15 at the moment,wait for news again.

From another board,interesting.:= I don't think we should under-rate FTO's position
They are after all the second largest external stock holder!

Beijing Enterprises Group, 20.3%
Fortune Oil Plc (FTO) controls 16.01% as of July 31 plus strong relations with Mr.Liu
Korea’s SK Holdings owns 15.33%
Sinopec only 5%

Sinopec is a big company but still only holds 5%
g.

Yes, and I think the assumption that all the other big holders are stupid is not valid.

Mr.Liu proved to be very influential too.

But you have to understand, this stake is costing money to hold...Its not like it has been bought with our own cash...Its borrowings.
Fortunemax is holding shares that are incurring a cost should CGG take them..
And contrary to what is been indicated on other BBs...the yield on our investment is about 1.3% not 6% as some mistakenly believe..

So it is an ongoing cost to book.....

The market clearly feels that the deal has no benefits to FTO...

I think you are right ruthbaby,CGH sp is doing ok closed @Hk 4.24.

The report says that all the costs will be borne by FortuneMax. FTO has 50% of the stake in FortuneMax. So, There shouldn't be much difference.

I agree that, no matter who pays the cost, it is interest to be paid by either of those.

But how much of the cost was borrowing? FTO was cash rich a year ago, what about now?

Ahoj:
FTO do not own 50% of Fortunemax!!
Fortunemax is a private company owned by Daniel Chieu set up, most probably for the sole purpose of buying shares in CGH.... for CGG.....which is the 50% owned JV.
All interest will be paid by the JV to Fortunemax on release of the shares should they be asked for..This was an agreement solely for the prevention of the recent bid succeeding...
Under the original announced deal FTO were spending around £24million on the initial stake....but we have clearly gone beyond that now. I suspect some of the money came from a borrowing facility put in place 18 months ago and could be drawn down...
My issue is how much is left if any?
FTO is going to be spending quite a bit of money over the next few years with Bluesky expansion plans..Liulin development....Possible Armenia spend
Diesel conversion outlets to name but a few..a new LNG storage plant (which is £20 million alone)..
This draw down facility is probably nearly exhausted now and we have a large minority stake worth over $220 million (which is not liquid now)

And only Bluesky Aviation is really making money in all of this..
These are concerns that the market is very aware of.
Our board gambled a lot of money and at the moment....the market isn't to impressed with the results...

CMB sales expected to commence early 2013, @ 27,000 cubic meters a day @ $200 per 1,000 cubic meters we're looking at a conservative $164K a month if not more. Bluesky is profitable as you point out, as is Maoming SPM and West Zhuhai Products Terminal. Whilst I agree the balance sheet must be running out of liquidity the company still has sufficient revenue streams to cover its expansion plans.

CBM sales have slipped each time due date has been announced, so until it happens I will take it with a pinch of salt..ODP has not been submitted yet so pilot scheme does not allow for sales just yet...Dart expect second half of next year....on approval...which may take some time.. Maoring SPM may be shut for some time due to upgrading of main transportation pipe.... West Zhuhai is in decline and has been for some time...

I accept you view...my point is that the expenditure side can not be met by these small profits when compared with the out lays ahead.....

Afghanistan signed a 25-year contract with National Petroleum Corp (CNPC) last December covering drilling and a planned refinery in the northern provinces of Faryab and Sar-e-Pul. It is the first major oil production in the country.

"The company will extract 1,950 barrels per day, which will crucially help Afghanistan towards self-sustainability and economic independence," mining minister Wahidullah Shahrani told Reuters on Sunday as huge machines started drilling next to mud houses in remote Sar-e-Pul.

The venture with CNPC, which has invested hundreds of millions of dollars, was expected to produce billions of dollars over the next two decades - CNPC will pay a 15 percent royalty on oil, 20 percent corporate tax and give 50-70 percent of its profit from the project to the government.

From January 1, CNPC will extract 1.5 million barrels of oil annually, Shahrani said. Up to 87 million barrels of crude are estimated to be in Amu Darya.

Its inauguration on Sunday should lend confidence to nervous Chinese investors who have halted work on the $3 billion Aynak copper mine project in eastern Logar province, where insurgents trying to wreck the project have stepped up attacks. Afghan officials have been trying to convince the investors to restart.

http://www.zerohedge.com/news/2012-10-21/historic-first-china-begins-oil-extraction-afghanistan