Anybody know anything about this....EK is in.....rising, but I don't know a thing about this newcomer....,

RPO RUSPETRO

19 Apr 2012

RusPetro
Don Wolcott, CEO and Tom Reed, CFO

RusPetro 2011 results
Operational Update - Don Wolcott, CEO
This is RusPetro's first set of results since listing on the London Stock Exchange. Can you take me through the latest developments?

What we promised the market originally was four key issues - production growth and putting in the infrastructure to support that production growth, to enable that production growth and what is our prime focus after 90 days after the IPO is basically to bring those results to the market. The key things that we needed to put in to support that production growth was a sales pipeline. It's a 27km sales pipeline and I'm very happy and proud of our team that I can announce that we've put that pipeline in. We put the pipeline in ahead of schedule, significantly. We promised the market we would have the pipeline in and commissioned, with crude going through the line, at the end of May. We've in fact been pumping crude through that line since the beginning of April. We had budgeted that pipeline at $10m and we put it in for $8m, so we also saved a significant amount of money. Also, the reason it was a compelling thing to put in was because we get $2.20 per barrel of cost savings on OpEx as well.

The second infrastructure upgrade is the power generation. And on power generation what we wanted to do there is also save OpEx in terms of electricity costs for our production as well as reduce some of our CapEx in drilling our wells. We use power of course to power up our rigs and we can save about $150,000 per well using these new gas-fired generators that we've put in. We are also able to use the flare gas. So those are OpEx savings that we get - we targeted about $1.60 a barrel for OpEx savings because we generate our own electricity as well as the $150,000 per well that's a target to reduce our new well costs.

So between these two first infrastructure upgrades we are targeting nearly a $4 decrease in OpEx per barrel and both of these things combined really put us towards our ultimate goal, which is to be the low cost producer in Russia.

The other big challenge we had to do post IPO was to put in place the drilling pads so that we could go ahead and drill. At the end of the year we only had one rig operational. With that one rig operational we had drilled really to the extent of the drilling pad that we had built and in addition, we built three more pads and with those three more pads we've had the ability now to stand up additional rigs.

So, in summary, what we've managed to do in the first 90 days is we've put in some very key infrastructure which has given us the ability to keep our costs, to push our costs down to be a competitive low cost operator and in addition, is going to facilitate our production growth which we're now poised to move ahead and begin to put wells in the ground and grow our production.

Production Growth - Don Wolcott, CEO
Picking up on production growth, what can we expect from here?

Okay, currently we're at 4,600 barrels a day and we're ready now to start putting online and completing wells. Our exit rate is still targeted at 10,400 and we'll stick with that guidance and we'll also stick with the guidance of drilling approximately 24 wells this year and we do have the rig capacity to do that and we have good locations, so those targets are still going to be our guidance and our plan.

Our asset is a very large asset. We have 1,200km² of asset area and across that area we have more than 1,000 well locations identified, so it's truly a world class large asset with over 1.5 billion barrels of 2P reserves and with the recent reserve report, we have 173 million barrels of proved reserve.

Our recent Competent Persons Report that we did at the time of IPO has defined the size of the prize as a peak rate of around 300,000 barrels a day. So our charge as management of this company is to go out and execute and develop this asset.

And what makes you confident you can actually get it all out of the ground?

We have a good management team. We have a good exploration, production, development team in general in our company. We were able to put that together as part of leading up to the IPO and since that time. Myself personally I've had a long history in the oil and gas business and specifically in Russia developing and producing assets in Russia. The rest of our team has a lot of very good and applicable Russia experience and also oil and gas and business experience in Russia. So we have a great team. It's all about having a good plan and executing on that plan and we feel we have both.

And how about the location, why does that suit you?

One of the things that I knew about Russia's production after having run one-third of Russia's production in my previous company that I worked for was that I knew the best way to keep an operation that was low cost, and therefore competitive through all kinds of market conditions, was to get an asset that was near existing infrastructure. So we fully hooked up into the good low cost, federal grid in all of its different versions: roads, power lines, pipelines etc. So this helps to keep costs low.

In addition, we have a number of big fields nearby. We are in the area of Russia where two-thirds of Russia's production comes from, so we're surrounded by good low cost Russian service industry. We're also in an area where the rest of the fields are off peak production. We have services available where they're looking for places to go and do work and then additionally, I understood the geology. I developed fields like this in the past, so it fit.

Finance - Tom Reed, CFO
RusPetro has a clear growth strategy, but how are you going to finance this growth?

Well historically we've financed growth at RusPetro through our own means. Shareholders have contributed a significant amount of money to the company and Sberbank provided strategic support from the very beginning when we acquired the assets.

The IPO of course helped improve that situation considerably and all shareholders and our senior lender Sberbank came together in a very supportive, very constructive way during the IPO. We were able to restructure the debt for an extra two years with Sberbank out to 2015, gave us some room to grow and investor loans, shareholder loans were restructured as well. Most of them not for cash, so we were able to conserve quite a bit of cash and to have significant funding now for the next two years. In short, the development plan that we brought to the market is fully funded, at least through the end of 2013 in today's price environment.

And can you just give some more detail on the cost of development in Russia?

Costs in Russia are actually relatively modest if you control them directly and accurately yourself. What we've found is that we can drill wells for less than $2m. Our empirical average for 2011 was about $1.6m and at our initial rates and in today's price environment the payback on those wells can be considerably attractive relative to other markets.

We're working now on reduction of OpEx, reduction of lifting costs per barrel and the best way in our industry to do that is to increase the denominator, to increase your barrels produced. Those costs are relatively inelastic and they stay semi-fixed while your denominator grows. So we've done that this year both by increasing production and we had some major infrastructure builds already from the IPO that will help directly reduce OpEx by eliminating trucking and transport costs for a while and reducing our electricity costs.

And can you briefly cover your sales strategy and your margins?

Historically we've sold oil through the Transneft pipeline system. Most of that is delivered domestically to refineries. In 2011 we began exporting. We used Glencore as an off taker and our export quota given to us by the Russian Federation was for Hungary. So we're able to use those routes competitively depending on where we think we can get the best netback.

But I think an important aspect of RusPetro's business is the quality of our oil. We have very high quality oil at 41 API in the western part of our field and over 50 API in the eastern part of our field and if we are able to sell that oil outside of the Transneft system, considerable premiums are available. Just this month we've been able to, for the first time in the company's history, sell oil directly by truck from our field and we were able to achieve a contracted premium of $9 a barrel relative to our domestic Transneft deliveries.

Future Plans - Don Wolcott, CEO
How is 2012 looking so far and what are your plans for the rest of the year?

I'm excited to say 2012 has gone really well. Obviously starting out with the IPO, that was a huge milestone to get through. I'm very proud that our team did that. It was unique for the market and we as a team we put together a great sales line, we've put in the power generation, we've built out the pads, put in in-filled lines, so we've, as we discussed earlier, accomplished a lot in the first 90 days.

So key things that we need to do now is go ahead and ramp up that production, get the wells in the ground and we do have the infrastructure to hook them up and we've got the equipment in place to do that, so now it's execution. Execute, get the wells in the ground. We do have some oil treatment facilities that we've got to get online and that is really our main focus now from an infrastructure point of view is to get the oil treatment online to support that production that's coming online with the new ones.

And how about over the medium and longer term?

Medium and longer term we will put in significantly larger oil treatment facilities. We will have roads and paths and pipelines out into the centre portion of our field where we have a major fairway and a significant number of new wells that we will need to be putting online. Also, in the southern area of the field there is a new area down there that is very promising. That will require some 3D seismic. We'll shoot that. We need to integrate that. There will also be in the medium-term a number of new revisions for our geologic modelling. So those are medium-term issues that will get us out into some new areas and really help us ramp up the production.

And longer term, what we will do is be the low cost producer in Russia as well as harvest the prize, which is to get to that 300,000 barrels a day.

@commercia: I met with the company and CEO a while back, the management are top notch and indeed very clever. There are political risks, you are right, but with RPO these are minimised first of all because of the ties to Androsov and Likhachev (latter is the ultimate beneficial owner of Limolines, which owns 29.74% of co) and also because the company (unlike a lot of of the other oil interests in the region) is split between several main founders. In Russia a lot of conflict is often personal, and this division acts as a negating effect for a controlling stake through one individual. Obviously the other risks are typical of an E&P - licence extension, production rate, execution risk (and specifically in Russia taxation rates) - but you must remember that all the brokers discount their target prices by a risk factor, which is usually around the 15% mark for this company, hence all the risks are very much taken into account.

This company is just at the beginning of a great journey with a fantastic new management, and there is so much upside (check out their CMD powerpoint for those who have access to it, graph on page 8) as they ramp up production. You think it looks expensive here but looking back in a year's time this will look like a blip on a much bigger chart, its all psychological - check out Ophir, Africa Oil recently, and Tullow - everyone thought Ophir looked expensive at 350 when it had a big one day rally, but looking back now with the sp at 570, that looks insignificant! Same with Africa Oil etc. RenCap rate this 750p (and they were underwriters/bookrunners for the company), Credit Suisse upped their target price yesterday to 345p and Mirabaud have it at 250p. Future updates will have great potential for reratings and new coverage as the stock gains traction within the oil E&P universe (watch out for IMS on 17 May)

Not performed as hoped, gf? I have been watching this one, but so far have stayed out, fortunately!

I managed to make some small profits on the rise (not in now)...as switched over to the Falklands...but everything has been knocked down....even Afren.....

Why the rise?.. whats going on here?.

Safe haven :-)

Yep cheers, plus Evil k says buy as its at bottom.

RPO Evil K says BUY at bottom and

http://www.finance-ol.com/2012/05/russia-will-cut-oil-export-duty-down-to-6-4/

Interim Management Statement.

HIGHLIGHTS

· Reserves increased

o proved oil reserves up 10% from 157m to 173m barrels
o proved and probable oil reserves up 7.5% from 1,437m to 1,545m barrels

· Revenues up 28% from Q4 2011 to $19.2 million; up 447% from Q1 2011

· Four rigs in operation

· Execution capacity expanding with key team additions in drilling, geosciences, engineering and operations

· 3 Wells now testing on Pad 1 in the North East of the field producing 51 API oil which is selling at a $9/bbl premium from the wellhead; treatment facilities being fast tracked

· Year to date average production of 4,000 bpd

· Three new wells scheduled to be completed in May

· On track to achieve production guidance of 10,400 bpd by the year end

· Strong progress on infrastructure build-out

· Inclusion in FTSE 250 index as at the end of March 2012

Superb results and outlook statement.

BRIEF-Ruspetro says Q1 2012 revenue up to $19.2 mln
17 May 2012 - 07:07

MOSCOW, May 17 (Reuters) - RusPetro PLC says:

* Proved oil reserves up 10 percent from 157m to 173m barrels;

proved and probable oil reserves up 7.5 percent from 1,437m to 1,545m barrels

* Q1 2012 revenues up 28 percent from Q4 2011 to $19.2 million; up 447% from Q1 2011

(Moscow Newsroom, + 7 495 775 12 42, moscow.newsroom@reuters.com)

Good report........

http://www.oilvoice.com/n/FoxDavies_Daily_Monitor_Melrose_Resources_RusPetro_and_Cairn_Energy/6a07e49586a1.aspx

http://www.investegate.co.uk/Article.aspx?id=201205251602431602E

gf sp seems to be in free fall?

Ohhh i love this stock so undervalued. Ill keep adding and adding.

EK must be chewing his bits!

Hes adding by the day give him a ring.

020 7835

Go on dont be frightened.

gf will he answer with his mouth full?

Good day yesterday on a roll now.

Soooooooo glad I stayed out. Very tempted but.................