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Have been thinking about buying back shares of AURC that I sold before “dividend” announcement (still holding a small position). The reasons I am not going to do this:
1. Uncertainty with Klyon deposit and possible market reaction if the license is revoked.
2. The risk that January, 12 deadline for the first gold delivery will be missed. Imagine what will happen to the stock price if we pass this date without any announcement from Aurus (which would not be unusual, btw).
3. My recent experience with penny stocks paying stock-dividends (most recent - USSE) shows that price drop after ex-dividend usually eats all gains (if any). Looks like this is one of favorite “flipper setups”.
4. I have a serious doubt that Aurus is profitable at this point… even with all the gold produced by Krong. Russian branches of Aurus used to be bankrupt (or almost bankrupt) just a few years ago. I am not sure that situation has changed significantly. For example, according to http://egov-buryatia.ru/index.php?id=768 (Russian) “OOO "ZabaykalGeoprom" does not conduct production activity” in 2006.
This is just my subjective opinion. If I wasn’t so heavily involved with NWOG I would probably take a shot.
Today’s moves:
1. Added a few shares of SIBN. After completing of Kondaneftegaz acquisition, inspite of related dilution (1.9 mln of new restricted shares), I am back to my “strong buy below $2.2” rating. Don’t forget, for this acquisition SIBN has paid by warrants exercisable at $2.2 - kind of sets the floor for future share price.
2. Added to SPRL position. Actually, have done “end-of-the-year flipping” and increased position by 20% as a result.
Was thinking about another “averaging down” on NWOG but decided to pass this time – position becomes dangerously big, so I’d better diversify a little. NWOG, SPRL and CKYS (in lesser degree) are my bets for 2007 – “multiple baggers”. SIBN should be a big winner as well. Two kind of news will immediately send PPS in two digit range: 1. If drilling of Kurgan wells shows any signs of oil (means major victory, discovery of “new Tumen”); 2. If Siberian Energy is actually awarded a few licenses in West Siberia based on Kondaneftegaz applications (means geographic diversification, entering new perspective regions). The only problem – “if” in both statements. :)
All IMO and not a buy recommendation.
You were warned about the quality of BabelFish translation. :) This is how this paragraph sounds in my interpretation:
“Currently we are taking course on development of international connections that would have a big public resonance (“publicity”). Trying to enter American Oil Exchange (eik: don’t know what this means), and for this purpose preparing an audit. “
Thanks, antsquires. Reading BabelFish translations one needs to understand that they are not accurate and often completely wrong (the title I mentioned is a good example). The correct translation for “arrogant” is “ambitious” (the exact word used in Russian version). I like this article too: Libya, new acquisitions, Magma (the question is closed), etc. “NWOG is a new star (not “asterisk”) on Russian business-sky.”
Extremely interesting recent article with many answers (Russian):
Ernest Malyshev: "I prefer to go from the back door"
(Babel fish translation: "I prefer to go from the official entrance" is not accurate).
I don't know how anyone can read BabelFish version but this is all I have:
On the petroleum business- horizon one additional asterisk increasingly more loudly declares about itself. On the measures of the grandees of domestic hydrocarbon industry North Western petroleum group - company small. Small, but arrogant and in their time Russia's first obtained short term licenses on the basis of the undistributed fund for small and average layers. 06 histories of creation SZNG, its shareholders the President of company Ernest malyshev prefers not to say, giving, nevertheless, to understand that the rear in company is very predicted and it strongly stands on the feet. Ernest gurgenovich, SZNG try to enlarge active memberships due to the acquisition of different companies of petroleum sphere. This PR of the young, dynamically developing enterprise or is specific strategy in similar transactions? Yes, participation in some auctions has, as you noted, and piarovskoye value. But only partly. We, first of all, try to acquire promising oil-producing active memberships. We buy already finished companies with the small capitalization, thus increasing capitalization its own. In Russia this process only collects motion, but, I think, within the next few years a similar practice will receive larger propagation. We were originally tuned precisely to the active purchase of the active memberships interesting us, including of foreign. Thus, soon, most likely, they will advance on the auction "To orenburgneft'", we will also participate. Active membership is good. If we more advantageous buy company, why then all actively do attempt to penetrate on IPO? This is independent output to the exchange, but the way, in our opinion, long and labor-consuming. We prefer to go "from the official entrance", i.e., increasing our own capitalization by more dynamic methods. Why you did not succeed herself in to acquire JOINT STOCK COMPANY "magma", "Udmurtneft'?" To the "magma" was bulging the price, it as much did not cost, as for it they requested. The situation is more complex with "udmurtneft'yu". Active membership actually attractive, but singly his cost we did not stretch (3,5 billion dollars), but competitors are many, and in essence the aurochs of petroleum business. They found partner, and not bad - the state Indian company Oil India Limited (OIL), but nevertheless maximum, that we could propose, this 2,5 billion dollars. It is known that SZNG forewent further development of layer, selling rights to oil production in the section Surgut -7 of the Hungarian company MOL. For us more advantageous it proved to be to sell this object than to pack into its further development. With the Hungarians on this project we originally worked in the pair, for us as for the beginning company this collaboration undoubtedly it was prestige. MOL state company with appropriate status. But gradually they began to artificially fan manning table on the object, wage fund, i.e., the additional expenditures, which special problem did not compose for them, but for us they became burdensome. They here and parted in mutual agreement. Today basic our layers are concentrated in Saratov region. The presence in the acquired companies of its geological survey structures does have for you a value? Certainly. Especially under the conditions of the future mastery of East Siberia and other regions. State in 2007 separate about 300 million dollars. for the geological survey needs. After the number of the years of stagnation in this most important component of "gasoline engine" at long last begins the reanimation. By the way, what plans does connect the management of company with the future mastery of East Siberia? Prior to the end of the year is expected the auction on the east Siberian objects, in which we also plan to participate. All layers with the confirmed reserves the minimum of 10 million tons, so that fight for them is expected serious. How you do think, the foreign capital will be there represented? If only in the union with the domestic companies. East Siberia - too tasty morsel in order to immediately release there foreigners. But what direction of business to you does seem most promising? In the present moment we took course on the development of international communication service, larger publicity. We are attempted to leave for the American petroleum exchange, for this purpose we carry out Audit. Now we have special interest in three Near Eastern countries - Syria, Jordan and Libya, where we attempt ourselves to obtain into the development several contracts, in essence in the region of building NPZ, joint output of hydrocarbon raw material recently, on 21 September, SZNG acquired 63% of actions in OOO Of "kreditlayn", operator of the project of building NPZ and petrochemical complex in Syria. Project is calculated for 5 years and is evaluated at 3,5 billion dollars. Its strategic aspect is obvious; therefore we hope for the support Of mIDa and Ministry of Defense. Competition on the petroleum market now is most severe. It does not seem you that the lot of small companies is under such conditions unenviable? A question is actually urgent - protection of the rights of small and average petroleum active memberships. It is insufficiently studied, neglected, 4 he would say. We, from our side, is applied effort for activating the debate on this question, including through the reanimation of organization "To assoNeft'", which is occupied by the problems of small and average oil-producing enterprises. Recently we met with the present leader of association Helen korzun, they outlined some ways of the correction of situation. We have its ideas on the making more active of entire process. If particular small companies are do not protected, they are simply withered, and indeed no one, besides them, will begin to develop layers, let us say, into 500 thousand tons, which in the country set. In contrast to many our businessmen you fight for the public charity. Why? But why it must be hidden? Charitable activities, for example, played large role in the formation SZNG, when we together with other well-known companies subsidized the process of the restoration Of konstantinovskogo palace in Saint Petersburg. Moreover, public and systematic charity - unique ideology of our company. Is certain, this private affair of each, but, in my view, "intimate" charity often does not reach the addressee. Yes, a similar activity in our strategy is isolated with separate line, and I think that it does not be worthwhile to be troubled good behavior.
"we try to acquire promising oil-producing active memberships. We buy already finished companies with the small capitalization, thus increasing capitalization its own ".
http://www.readnews.ru/news/277993
Yes, thanks, just found it. I don’t want to spoil boards’ negative mood… but it’s very positive (IMO). Even the worst case scenario includes some compromise offer from Syrian government. Why would they look for compromises with some “scam” company from Russia? Maybe they feel pressure from “scam” Department of Defense? :) Maybe they feel that NWOG represents “scam” Russian Government? For those who keep calling NWOG a scam: I’d like to hear your definition of this term (and “96% retracement” has nothing to do with this). To be consistent you may want to include in this “scam scheme” Russian Government and Press, Syria, Carlyle, etc.
Very interesting article, cmzio. Thank you.
“RussNeft could be bought out by big Russian or foreign company”
http://www.au92.ru/msg/20061226_6122613.html (Russian)
Just to remind you: RussNeft is a private integrated company which is often mentioned together with NWOG (although bigger and more successful than NWOG so far).
BabelFish translation (very bad btw):
Company "To russNeft'" can become the object of absorption by important Russian or offshore company. This opinion voice the analysts OF IR "troika dialogue" in the survey of the market for debt papers, which contains forecast for following yr. Furthermore, the authors of forecast consider that if on the market appears the information about the preparation of a similar transaction, spred of bonds "To russNefti" will be reduced. Experts assume that the absorption is possible, but they doubt that this will occur already in the following year. The authors of forecast call central failure "To russNefti" the large debt load, because of which the company is very sensitive to price changes of the oil. According to the data OF IR the "troika dialogue", leverage ratio in capital of the vertically integrated petroleum company "To russNeft'" "is very great". As the saying goes in the survey, in 2004 it obtained 10 million t of oil, 2006- m output, as it is expected, will exceed 25 million t, and long-range plan - 100 million t per year. The authors of survey consider that the company will be able to increase the volumes of output both in the existing enterprises and via the purchase of new. For the acquisitions "To russNefti" will be necessary additional zaimst¬vovaniya, "and it means, debt load will remain high". The authors of survey recall that the Attorney General's Office brought criminal case to the "daughters" of the company Of "aganneftegazgeologiya", "Naphtha- Ul'yanovsk" and "To ul'yanovskneft'" on the suspicion of exceeding of the quota to the output, determined by license. They propose, however, that the probability of the opinion of licenses is small. With these factors the analysts connect the high credit risk of company. The analysts of other banks and investkompaniy do not exclude, that "To russNeft'" completely they can absorb. "this is relatively small company in comparison with" Rosneft'yu "," Gazpromom "and By lUKOYLom, by which under the force it to acquire", says the chief of the analytical division OF IR "Veles capital" Mikhail Zak. The analysts OF IR "troika dialogue" expect that in 2007 of the quotation of the debt tools of company they will be very unstable. "the signs of a reduction in the debt load, if they appear, will be well perceived by investors", it is said in the survey. However, the analyst of MDM- bank Andrey gromadin considers that this absorption will hardly occur already in the following year. "it in principle is possible, but it is possible that first Gutseriyev will try to derive company on the market and to raise her cost, he says. - thus far company does not deal, active memberships are not consolidated; therefore a similar absorption - matter of the distant future ".
I am back from mini vacation. Have not read all posts yet, but regarding this “NWOG email is blocked” exchange: I had no problem communicating with Mrs. Romanova, she has my 4-page list of questions on her desk and is willing to answer them as soon as possible (it’s a holiday time). Last e-mail is dated 12/21/06. Maybe something has changed these last days… I’ll try again tomorrow. General comments to attempts to contact any company (and I am pretty active in this): 1. Be polite, respectful and constructive. 2. First tell about yourself (at least real name and # of shares held). 3. Use your “real” email address, not shmack_investor@yahoo.com. It’s my experience that most of companies don’t want to answer any even simple questions by email and suggest to call them instead. NWOG was actually pretty friendly so far… I suspect some of posters don’t see any difference between anonymous offensive posts on iHub and e-mails to the company.
IMO.
I am leaving till the middle of the next week.
Happy holidays everyone!
I was the first who couldn’t believe this number (check the record). Now, after all those controversial signals, I am the first who believes that this is our current (not future) production. We are dealing with the team that has little experience running public company, talking to pinky investors, etc. After the conference call and aggressive reaction that followed (“are you sure?”, “are you sure that you are sure?”, “change PRs!”) they probably talked to somebody more familiar with “pinky jungle” rules. As a result, because these numbers are not audited, they decided to put them under “future performance” disclosure.
Just my opinion (“naiveness” as you call it in Brooklyn :)
Well, we can relax – MOL is not buying “our” NK SaratovNefteGazGeofizika. It was announced today that they targeted “Baytex” - company with oil fields in Orenburg region. Estimated price $200 mln.
http://daily.rbc.ru/2006/12/22/tek/260423 (Russian)
Kondaneftegaz deal is done:
http://biz.yahoo.com/e/061221/sibn.ob8-k.html
Adding $2500 worth CKYS at 0.0205 to my model portfolio 2. I did buy at this price today (also added to SPRL @ 0.015). Hopefully, it's just end of the year bargains.
Not even talking about politeness and good manners (meaning lack of them)… what is the rational purpose of slapping the management, who is trying to be shareholders-friendly and improve situation? I am as unhappy with PPS as everybody else, but my current approach: “Bad guys are gone. Let new guys prove that they are good.”
Happy Holidays, Mr.Malyshev! We are watching you! :)
Today’s news: Rosneft is buying 4 gas stations in North-West region. They plan to use them for car-wash, small shops, etc. Where did I hear something like this?... NWOG – Rosneft 10:4 :)
http://www.ngv.ru/lenta/lenta_sign.hsql?id=91188 (Russian)
Abramovich wants to leave Chukotka:
http://en.rian.ru/russia/20061220/57382597.html
(his governance is already mentioned as "golden years")
Just remember it's a Hanukkah time. Sam must be busy celebrating. :)
Actually, we have precedents of CEOs posting on iHub: jchristiang from NNYG:
http://www.investorshub.com/boards/read_msg.asp?message_id=15267350
(I used to own this stock).
No, I sent her an email with the same question – “preventive move”. Yesterday some “experienced” guys advised me to ask one question at a time, or “you won’t get any answers at all”. We will see. I am, actually, satisfied by Maria’s readiness to read my list… and she reacts to all emails. I asked her to read iHub boards (if she doesn’t yet) because they influence individual investors not less than companies PRs, told about my NWOG position and iHub alias. All communications were/are mostly by e-mail as my calls weren’t that successful at all, and reminded me my past attempts to reach the company.
I don’t know… added at 0.08 today.
jazfunk,
I can't send PMs here. Do you have any "public" e-mail that I could contact you?
"Dear eik,
No, I will do it before 2 of January.
Best Regards,
Maria."
Well, now that NWOG hired new IR firm… I hope they are not going to use this as excuse and re-direct me with all my questions to MCS Global Strategies… who knows nothing.
Thanks, stevieberliner.
Deloitte information is new and important. I had a suspicion for some time now, and one of my questions to NWOG in a long list: “Why hiring Deloitte is not on the company’s news page, although other less important events are?” Anyway, we knew already that Deloitte was hired for “preliminary” audit and was not going to be a nomad. That’s how it worked for many businesses in Oil/Gas sector. But… I am not sure they have done even this work, probably not. My another note from the message to NWOG: “Be aware of Deloitte!” :) Deloitte tends to underestimate companies’ assets. Rossneft used DT for the same purposes before their London IPO and Deloitte’s appraisal of Rosneft branches was below all reasonable numbers. Rosneft had to hire someone else later for independent estimates.
So, Deloitte is out of picture… Good or bad… still nice to know.
I almost bought yesterday. At one point ask was 0.42. Then I decided that "they" may want to bring this to 30s... I like the chart too (the same reason).
Brent, I thought messages of “subscribed” posters are spellchecked by iHub? I am not married to teacher so planed to get iHub subscription instead. Now I am confused. :)
You have done outstanding job for CKYS investors. Thank you!
I don’t expect anything extraordinary this year. Tax selling season, holidays. Next year is Do or Die. Hopefully Do. :)
Follow-up: I am in a process of communicating with NWOG (2 phone calls and 5 e-mails in exchange today). Not everything is going smoothly. It may take a few days (or more) to finish. My 4-page list of questions is on Maria’s (Julia’s?) desk now. I am being respectful and polite but asking the questions that need to be asked… So, may finish on NWOG “no-call” list. :)
Nice CKYS rally so far :( (bad joke). They missed the scheduled commercials time for whatever reason, and stock tanked 16% ! Good illustration for the investors mood - any “fundamentally sound” stock is suspected to be a scam... which it could be after all. Instead of selling I, actually, added at 0.0235.
thanks. Credits go to euddoggwyn, though. I was going just to post portfolios updates, but he raised the level of discussion. It's his fault!:)
euddoggwyn, I really appreciate your contribution here and on NWOG board!
Thank you! Very informative link (I never checked HSM boards before, and looks like burp left CFRI board now).
I may buy a starting position next week. I like the chart - positive CMF with falling price = accumulation. 92% insiders holding is also nice.
Thanks again.
antsquires, are you still in CFRI? What do you think about buying at these prices (looks very attractive)? I couldn't find info about share structure (OS, AS, float) even in iBox. Maybe I missed it though... Thanks.
Next week CKYS starts CNBC commercials, which will be positive for it’s business and, hopefully, for the share price. “Huge rally” is a common expectation. As I hold it in “managed” model portfolio I am planning my first sale (about ½ of position) somewhere in 0.04 range... using the closing price as agreed. I may buy it back later or just ride the rest of shares “to the moon”.
Nice plan… now we just need a rally. :)
I definitely agree with this. BTW, if/when this event (dollar collapse) actually happens owning foreign stocks with real non-dollar nominated assets will help, but not too much. I don’t have the link right now, but the analysis shows that if we have next “big depression” brokerages will be the first institutions to collapse – taking your AURC shares with them. You don’t hold stock certificates, right? The real solution is to own physical gold (bullions), property and cash accounts outside US in countries whose currencies don’t correlate with USD and less dependent of US economy. For example, Canada, despite of it’s huge natural recourse potential, will probably be right next to USA in these troubles.
IMO.
This is a typical example of “yellow press” material that shouldn’t be brought to a serious board. Jeff Rense is a famous conspiracy theorist (UFO reports, paranormal phenomena, conspiracy theories, reports of new diseases, and a wide variety of other topics)
http://en.wikipedia.org/wiki/Jeff_Rense
He is known for his anti-Semitic and anti-Israeli articles and comments.
http://rensewatch.blogspot.com/
So, although, this Chinese scenario sounds scary and something that could become possible in future, the way it presented (as an imminent threat) is a garbage.
IMO.
One more company to look at in connection with NWOG current and future activity: West Siberian Resources (WSBRF.PK)
http://finance.yahoo.com/q?s=WSBRF.PK
http://www.euroinvestor.co.uk/Stock/News.aspx?StockId=459674
Swedish company with properties in Russia, including Samara Region (sold Emelianovskoye field for $7 mln recently http://www.euroinvestor.co.uk/News/ShowNewsStory.aspx?StoryID=9460722 )
WSR bought PechoraNeft in 2005, and just signed big drilling contract with NK SaratovNefteGazGeofizika for 1.8 bln rubles ~ $68 mln. This is a huge contract, which will go to NWOG if we buy SaratovNefteGazGeofizika.
http://www.moneys.ru/russia-exussr/russia-news/Sovet-direktorov-Pechoranefti-odobril-sdelki-s-Sarato....
WSR currently produces 27,686 barrels/day. Comparing them to NWOG just based on production numbers (which is very rough and wrong :) will give NWOG market cap about $640 mln or ~ $1/sh undiluted and ~$0.6/sh for the total amount of AS. I used Malyshev’s 14,600 BD number. So, Malyshev’s $1/sh one year price target looks kind of possible (add to $0.6 the value of all other deals, etc).
If NWOG buys SaratovNefteGazGeofizika they will definitely have close relations with West Siberian Resourses. They probably already know them as “neighbors” in Samara. Star Energy (SERG.OB) and WSBRF.PK are two companies that may pop up as candidates for “merger of equals” before NWOG could be acquired by one of the majors.
IMO.
This is a great analysis Rick! Thanks.
Gold-plated vodka deal from Russia with love
http://www.timesonline.co.uk/article/0,,2095-2508166,00.html
The same deal but new article.
We are probably buying 89% stake (or part of it) from Austrian company. Yes, those people will be in our payroll list. But I looked at SaratovNeftegazGeofizika financials (posted a link some time ago) – they are very strong. Profitable business with revenue growing more than 10% per quarter, new oil fields joining production, etc. Very good asset if we manage to get it… I suspect MOL is also bidding. And you know Hungary and Austria are very close… :)
I even scared a little by the prices I see in recent Russian acquisitions: $1.5-4.5/brl range for producing assets in well developed areas (Saratov-Samara). Of course, it’s good to buy that cheap, but what if you want to be bought?