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

A very interesting read before the first coffee of the day!
Thank you for sharing, I had seen the phone report on advfn and can vouch for the authenticity of the poster there.

Tokyo, dexter, I am off to the shops in a mo to get a collectors item (the share mag 'before' you two get published). Having brought the occasional copy of said mag, would it be fair to say an entry in the mag on a positive note should give a little upwards movement? I appreciate the controlling that is happening with the price, but there appears to be no upward trading numbers, or would it be fair to say the sharks are swimming but not biting? RNS the bait maybe.

watcher

Morning watcher,
If you manage to get a copy i`m Tokyo and myself will be more than happy to sign your copy !!!!.
Dexter

Just come across this, could be interesting bearing in mind PET`s links with Jordan and Iraq. It`s from www.arabicnews.com.
There could be some other good stuff on there, have`nt had a chance to delve too much.
Dexter

Iraqi- Jordanian committees for co-operation, key projects approved
Iraq-Jordan, Politics, 11/4/2004

In its first meeting, the Iraqi- Jordanian higher committee chaired by the two countries prime ministers Eyad Allawi and Faisal al-Fayez approved the formation of cooperation committees in various fields and drawing the grounds of infrastructure projects of strategic significance for the two states including the installation of an oil pipeline.

Al-Fayez and Allawi signed the minutes of meetings of the first committee in Amman yesterday in conclusion of a meeting which was shortened only to one hour because the two premier were obliged to head for the UAE to give condolences on the death of UAE President Sheikh Zayed Bin Sultan al-Nahyan.

According to a statement circulated by the Jordanian government, the two sides agreed to implement key projects including the rehabilitation of the Jordanian al Karamah border center and the Iraqi Treibel border center, establishing linking al-Aqaba and the Iraqi borders, expanding al-Aqaba port and establishing a free zone at the Iraqi- Jordanian borders and railways links between the two states, establishing the Iraqi- Jordanian crude oil pipelines.

Moreover, ten sectoral committees were established covering military, security, trade, transport, oil and energy, financial co-operation and banking, IT, health cooperation, education and scientific researches, labor and training fields and encouraging investment between the two countries.

Tokyo and dexter

Thanks for the compliments - great to be linked with Jeremy as a 'seasoned investor'; can you have a greater compliment? I wouldn't have expected the 'Sleeping Beauty' article to attract short-term investors; the whole point was to promote them as a long-term play. Still a bit odd to see them there as you wouldn't buy them to lock away at the present time. Mind, if the argument is to hold some or all of them when the news breaks, it could well be excellent advice. Get drafting that success story for the Shares issue of 2nd or 9th December! One approach could be to extract quotable quotes from this BB (OK, Shares?).

Most encouraging post at 980, particularly as the original poster is confirmed as reliable. Sharpening the pencils, eh. Implies two things: (1) quite a lot of re-writing of the tender document; (2) being in a state of readiness for signing the contract, although that will need a pen (will the Irish know that?). No negative images at all. We are back to an all-embracing quiet confidence. Any more of this and I will be applying a CFD!

Eric

Eric, Im Irish lol, but no offence taken, but be warned we use pencils as an instrument of torture on occasion (see Blackadder series 2) :)

Livvy

That's a relief. Mind, my mum-in-law was a lovely lol Irish colleen whom I loved dearly - so I have a penchant for them! :) (don't understand it, but thought I would take risk of adding it).

Eric

Eric: Re your exchange with Shares - I can only add that there was some key research missing...the Iraqi Oil Ministry have announced that contracts will be awarded in November followed by signing in December (all in 2004). Plus I am not sure you should put any share under the mattress (which implies forget about it until some future date) let alone some of the high risk ones they have listed. Perhaps they have in mind the placing of a few hundred pounds stake on PET and the others whereas some of us have far, far more at stake, so it kind of ups the anti when you look at it from that perspective! As for the rating 2 stars out of 5! Uuummm....

John

John
I appreciate your point but leaving the original stake in place for the medium to longer term (end 2005?) doesnt preclude regular checks, albeit not on a daily/hourly level as of now! I am guess that most will opt for some liquidity in December followed by a 6-9 month rest - for the rest. Thats my plan anyway.

Still not sure about the apportioning of cash-in and residual shares.
Might continue to hold 15000-20000 down from my current 32000. Any thoughts?

Livvy: Thanks your response. Difficult for me to offer advice as everyones position is unique to them. May I suggest however that you take the value of your overall portfolio and determine the % of a stake you are prepared to leave in any one investment. I know many people who like to take out their orginal investment and leave the balance to run, but again it depends on the situation as there really are many approaches. I recently took some profits on another Oil share that had risen significantly in order to balance the portfolio, in that particular case I left around 50% running...BUT continue to watch all the time. The only way I would leave any investment unmonitored is if I had running SL's in place. Quite a few brokers now enable you to do that, so it takes the danger away...so to speak.

I have just been reading my weekly copy of MoneyWeek and there is a very interesting article on 'The scary reality about saudi's Oil'. It repeats last Sunday's Torygraph article by Liam Halligan...essentially we are likely to see Saudi's Oil exports starting to drop within the next six to 36 months. It concludes by saying that Oil at current levels may soon look very cheap indeed. All this information seems to suggest that if PET can pull this off they really are onto something really BIG.


John

Tokyo re your fag packet calculation of 3 Nov, c&p'd below;



03 Nov'04 - 14:16 - 949 of 995

joehargan1 - Take a look at PET's website, click on 2004 slides, go to slide 17, you'll see with a 30% chance of risk sharing they price the shares at 3.30pounds, of course if it a risk sharing agreement straight away then in reality we could be looking at 10 pounds a share on just one tender, but very speculative, really depends on what people are willing to pay, and if the majors make a play for PET.

Just for fun do these sums (I did a while ago and came out with crazy numbers, as I was only looking for 4 pounds a share)

number of barrels per day (120,000) x 365 = 43,800,000

43,800,000 x $60 (a barrel) = 2,628,000,000

*note - DH has already stated Any reasonable terms (say 30% production sharing) could literally be worth billions given the size of structure and relatively fast time to develop giving existing infrastructure. Petrel has few shares in issue (only 66m fully diluted).


2,628,000,000 - 70% = $788,400,000

$788,400,000 / 66,000,000(shares in issue) = $11.94(EPS)

Earnings per share = $11.94 x 10 (P/E ratio) = possible SP of $119.40

$119.40 = 65 pounds


With the above maths you can see the potential, but until the RNS is released and we know what we are dealing with, I'm afriad they just remain silly numbers

Also remember if they get a risk sharing agreement, they are still a long way from being able to pump the oil out of the ground, so 10 pounds a share seems more likely until the oil starts flowing.


The numbers were meant only for fun and to show what could happen in the future, and not for anyone to use now as investment advice!!!!


Good luck all

Tokyo



I am an avid reader of your posts and admire them greatly along with many others on here. You are an excellent source of info in these hazy purgatorial days!

HOWEVER, and I know you always correctly say DYO, I may have spotted an slight error (quite a big one too!!).

You put in $60 a barrel. Then you go straight to eps and do a simple multiplication. Surely 60 is revenue? Costs have to be deducted first before you can skip along to eps??? Which would surely bring your valuation of 65 down considerably. I have no idea as to what % of a barrel of oil is achievable as a profit margin, so I won't do the calculation myself.

I am hoping that I have totally made the wrong assumption here, but would be grateful if you could comment. Believe me I will be delirious with excitement if your calcs prove to be correct, cos I may not be in at the amount you are but my miserable little pile of PET shares would definately make a difference to my life at 65!!!!!!!

I am wondering if there are aspects to the 30% risk-sharing agreement mentioned that make it indeed correct to put $60 a barrel in as clear profit?

Here's hoping I am indeed an numpty!!!!

Beasties

PS I've just multiplied my small heap of shares by 65 and I think i may be having a heart-attack. Call an ambulance.......

John, ty for your response :)
Beasties: lol @ "these hazy purgatorial days!" Who said that place didnt exist!

Hey Beasties - Sorry mate it was only meant as a fag packet calculation to very generally answer the question asked before, and as I put in the post"to have a bit of fun while we waited", the figure of 30% of $60 a barrel, was by no means concrete, as I said in the post it was just for fun and to see what potential could be there. PET along with other companies have stated that the costs of getting oil out of the ground in Iraq is around $1 a barrel, if we think about 2 years down the road(which is really when PET are going to be in full production if all goes well), What will the price per barrel be then? $50,$60, a $100?, no one really knows. Really until we know the scope of the contract that PET get signed (if any), then the numbers are just silly numbers, and PET is still a speculative buy. How many investors are there just waiting in the wings to jump into PET once a contract has been announced.

Perhaps if all goes well, before we do any calculations and multiple it by all our holdings, we should have an ambulance standing by just in case!!!! LOL

Tokyo

Thanks for your prompt reply Tokyo.

As I'm in an industry where revenue and costs are about the same (ie. no profit!! That's farming for those who didn't realise....), I was speculating that costs might be around 30-40 a barrel, thus giving a margin of 30-50%ish at $60 a barrel. Which would make me VERY happy.

But I never dreamt that actual costs would be as tiny as $1 !!!!!!!
Flippin heck. I know it's all fag packet etc, but NOW I'm gettin a bit excited.
HUGE amounts of uncertainty, not least over the price of oil further down the line, etc. But IF any of the contracts come to fruition, then yes it does appear that this might be THE share.

Where's that ambulance?

Beasties

looks like the ideal christmas pressy could be a portion of PET. have a good weekend one and all. I think I might have a guiness weekend as a warm up for the big RNS.

watcher p.s. thanks for all the info another good week ttfn

John

To be honest, I was trying not to be too negative about the Shares article. As you say, it did miss the key point of the November decision promised by the Oil Minister. I expect though, PET was picked up by the author of the article to illustrate his point rather than the other way round; hopefully they will get a more relevant standpoint after the above exchange with the ed.

Livvy

You have a significantly larger holding than I have: either because you have lom or you enjoy the thrill of the risk! My approach, mentioned in post to JL, is to leave the original investment in place. So, if I had 30K shares which cost 1 (your cp may be much less) and the shares moved to 5, which they may do, then I would top slice down to 6000, thus keeping my 30K stake. I think this agrees with John. It does depend on what your view is about the future movement in price and, particularly, how its handled by the press. The contract award could come in the midst of Fallujah, Black Watch deaths (God forbid!), pessimism about the elections, etc. The price could therefore keep rising as the fears about the future recede.

Tokyo, Beasties

Won't the Iraqi govenment want a slice of the action as has Mauretanian government in the case of SEY / Hardman wells? What might that be? Perhaps it is not particularly relevant in the end of the day, given that the net number is still going to be huge, beggaring belief!

Eric

If there is any weekend press can someone please paste it here
thanks
Tokyo

Afternoon all,
Just some of my thoughts.There has been a lot of talk of share dilution etc.,well reading JT`s statement on the website he states "We will continue with a policy of small placements to minimise dilution until we need to raise money for developement and/or exploration".The way i see that is that if they get contracts etc. they will place shares thus maybe causing the share price not to reach levels of 25- 30 or other figures that have been discussed.

The other thing that has been mentioned is a share split if the price reaches sky high amounts, so IMO what we could possibly see would be eg. a placing of a few million shares then possibly a split in the shares to keep them at an attractive price to buy. Bearing in mind that i am only a novice at this, this might be complete balls,but it could be a way of keeping the price sensible and allowing the market cap. to increase.I would bee suprised to see the price go beyond 20 max, although i would love to be wrong!.

regards,
Dexter

Dexter, glad to see you questioning your investment, as am I(PET is not 100% in the bag until we get that RNS), although with all this research I started to get a little attached to Petrel, although nothing 4 pounds+ a share would make me give up in a heartbeat! Although I'm afraid in this case I feel your thoughts may not warrant any premature panic. Where did you read that? Was it from the May 12th RNS? If so check the AGM statement from July 28th. As of the AGM statement July 28th and the slides 2004 (October 2004), they have stated that they have full financial backing for the projects (i.e Japanese trading company), the above is obviously from an RNS prior to the securement of Japanese funding. Whether or not the PET SP reaches 20 pounds+ is pretty immaterial to most people I think as after 4 pounds who will not be thinking of cashing out, to be honest IMHO I see an initial rise of about 4 pounds(probably over the first couple of days after the contract announcement), then a retracement to around 3 pounds on profit taking, remembering that alot of people have been in this since April (30 pence) and that a ten bagger+ is pretty hard to resist profit taking especially when you see others doing the same, after that it really depends on the scope of the contracts and what the major oil companies do(i.e take over bid,etc), as for your share dilution query I do believe you are wrong from the evidence we have, but of course, PET could go against what they have suggested on their website and their intent from the AGM and still issue more share, but I see this a unlikely when there is Japanese funding available. The Japanese are investing all over the place at the moment on the lookout for oil(China being the latest example), and if there is a chance that they can secure crude from Petrel, then I'm pretty sure they will not hesitate to approve whatever funding Petrel ask for. In the words of David Horgan from my previous e-mail "The best place to find oil is in an oil field" - The field they will be drilling have PROVEN oil reserves, so it is not a case of if, but really how much is there.

below is one of my replies from across the way(yesterday)to the latest de-ramper trying to separte people from their PET shares (amazing how many of them have popped up recently, wonder why????)

Hey Guys,

Just popped in to see if there was any news in the Saturday papers, guess not, see we have inherited yet another ramper going on about dilution, and trying to back it up with an old RNS, I know people like this get under your skin, having to deal with Simple Simon everyday was enough for all of us, until we pressed that magic filter button. Now "Sandbanks" another name for Simple Simon as we had all filtered him? hmm I wonder.

Anyway the best response for the endless de-rampers is instead at looking at an old RNS from before the Japanese funding was secured, lets take a look at the latest AGM statement from July 28th.

"Given the economics and geology of Iraqi oil, Petrel believes that funding should not be a problem. We are more concerned to avoid excessive or premature dilution."


Old news Vs. the latest AGM statement(not to mention the 2004 slides on their website with all the latest info), doesn't really take a seasoned veteran to figure out which one you read to speculate on the company's intentions."Funding should not be a problem" - The Japanese are searching for crude oil from where ever they can get it, do you really think they won't increase funding if PET manage to secure 1 or even 2 Risk sharing agreements.

Just a tiny bit of research and the de-rampers are shown the door, if you are gonna try to scare the PET holders you'll have to come up with something alot better than Share dilution, I've got a whole file on my computer full of PET research, as I'm sure have Dexter, bahouse, Bartyboy, Jojo, Citywhispers, Rutter, and all the others. So the challenge is out there - You'll have to come up with something alot better to part anyone from their PET shares prematurily. As I see it, 4 pounds a piece will get some of the shares away from some of the holders, perhaps next month!!!!


Tokyo

Sunday News, Couldn't find anything on PET on the inter-net, is anyone finds something in the papers please post here, I found this article about another of Dr. John Teeling's companies, found this paragraph which refers to PET whether it will have an effect on the SP tomorrow is anyone's guess, but it is atleast positive

"Teeling is no stranger to the region. Petrel Resources, of which he is chairman, is currently in the final stages of negotiations to secure a potentially lucrative licence to operate one or more oil fields in Iraq."

enjoy all

Tokyo


The Sunday Times - Business

http://www.timesonline.co.uk/article/0,,2095-1347242,00.html

November 07, 2004

Mining tycoon heads to Iran for gold prospects
Ciaran Hancock



JOHN TEELING, the entrepreneur who heads five quoted mineral exploration companies, is planning to prospect for gold in Iran through a company called Persian Gold. The Clontarf-based businessman recently raised 300,000 (429,000) from more than 50 private investors to fund the first phase of the project.
Teeling has secured a one-year licence on a 1,250 sq mile field near the town of Takestan, northwest of the capital Tehran. A team of nine geologists will begin sampling at the site on November 20 for six weeks. The samples will be analysed by Omac Laboratories in Loughrea, Co Galway, with the results expected by next February.



As this is a greenfield site, with little previous data available, Teeling said the project was high-risk. The company has used satellite technology to identify potential deposits and plans to use new technology to mine the site. Its still very early days, we wont know what weve got until the sampling has been completed but were hopeful, said Teeling.

Iran is rich in natural resources although gold exploration has been minimal over the past 25 years, due in part to trade sanctions imposed by America. The country holds 10% of the worlds proven oil reserves and also has the second-largest natural gas reserves after Russia. The countrys government is now keen to attract western investment into other sectors.

The National Geoscience Database of Iran, a government agency, lists 25 gold-mining deposits on its website. A number of big mining companies, including Rio Tinto and and BHP Billiton, are active in the area although American companies are excluded due to US trade sanctions.

Registered in London, Persian Gold was formed about 12 months ago. There are currently 12m shares in issue and the recent fundraising, which was oversubscribed, valued the stock at 10p each. The company has three directors: Teeling, his son Jack, and James Finn, a long-time business associate of the entrepreneur.

Teeling is no stranger to the region. Petrel Resources, of which he is chairman, is currently in the final stages of negotiations to secure a potentially lucrative licence to operate one or more oil fields in Iraq. He also heads African Gold, African Diamonds, Minco and Pan Andean Resources. All of these are listed on the Alternative Investment Market in London.