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The story with RosPrirodNadzor activity is getting even more interesting and looks like a farce already. This Russian article is published today under the ironic title “Mitvol has soiled the image of Russia”. It’s a long story (use babelfish if interested). Short version: guards didn’t let Mitvol enter the meeting of “license revocation group” despite the fact that he is a newly appointed member. His methods are called too harsh, he talks to press too much, and he can lose his job in future. Everything depends on whose interests Mitvol represents. Important licenses (including Klyon deposit) and billions of dollars in market caps are in hands of fighting groups in Russian government.
http://www.gazeta.ru/2006/12/08/oa_226021.shtml
It’s a “wrong” Saratovneftegeofizika - pure "geophysical" service company w/o oil reserves, as far as I can see. Russian names are very confusing. “Our” NK Saratovneftegeofizika is this:
http://www.e-disclosure.ru/portal/company.aspx?id=2894
NK = "Neftyanaya Kompania" = "Oil Company" (educated guess :)
Portfolios update:
P1: $9,526.32 down 4.74%
P2: $11,031.68 down 11.75%
Could be much worse, if you ask me… we had major NWOG price collapse and SPRL, CKYS pull backs this week. But this is a long term portfolio, and I am confident in NWOG – SPRL and, in less degree, in CKYS (just because I am not that familiar with fundamentals).
Looking at this again at home... well, it's an old article (events before October, 2005 when NWOG applied for Saratovneftegaz). So, Saratovneftegaz is not for sale - we lost the bid to Russneft. But all Putin-related stuff is still important, I've never seen it before.
thanks, euddoggwyn. I will look at this more carefully later, but first reaction: it's different VolgaNeft (not Star's):
http://www.investorshub.com/boards/read_msg.asp?message_id=14016118
http://www.investorshub.com/boards/read_msg.asp?message_id=14016448
Very interesting article, thanks.
Direct proof of NWOG connections with Russian Government & Putin – subject of my endless speculations. :) Just think about this: president of small unknown pink company NWOG writes in Russian press an open letter to TNK-BP management… BTW, don’t confuse Saratovneftegaz with NK SaratovneftegazGeofizika, which we are supposedly buying now. Saratovneftegaz is more valuable asset, leader of the region. NWOG tried to buy it a couple of years ago but lost to Russneft (?). Now Mr. Malyshev wants it back. With Saratovneftegaz NWOG would dominate this part of Russia (Volga region).
Nice find, Svein.
First, congratulations with today’s AURC performance! My tiny position doesn’t let me get too excited. Honestly, I don’t like AURC management and don’t trust them - not “Russian” team (Dovgan, Feldbush, etc.) but it’s Canadian part (Parkin & Co). I watch them long enough (first NWOG, now AURC) to develop very negative opinion. Parkin leaving NWOG is the best news I’ve heard for a long time. They are professionals with sophisticated methods of sucking money from shareholders. IMO: Aurus’ dividend = Nord Oil buyout. The problem now – many people were already burned with NWOG. Tricks, that automatically produced “home runs” before, barely work now. Great PRs – zero result. Even asking about cash dividend you assume that it could be a scam.
Look how they test the water: first PR “Aurus Corp. Announces That Major Revenues Shall Generate Immediate Dividends for Shareholders” http://biz.yahoo.com/iw/061130/0189918.html The world “dividends” was used in general sense – “benefits”. Who knows, maybe it will work… No. Instead, the price dropped below $0.1. OK, next step: “We certainly can afford to pay dividends to the investors. The Board of Directors will be announcing within 3 days the dividend which shall be granted to its shareholders." http://biz.yahoo.com/iw/061207/0192265.html They “can afford” – doesn’t mean “they will”. Cash? Shares? Business spin off? Two latest options are usually non-event – instead of one paper shareholders will get two or three (maybe different) papers. Cash dividend is "something", especially for penny stock. So, two important words, that are missed: “regular” and “cash”. If they announce practice of paying regular (quarterly) cash dividends – price will go “thru the roof”. One time dividend – one time event, mostly for traders. I think management will watch market reaction and correspondingly select further dividend “details”. Next event to watch – sometime before one of major announcements they will start trading in Frankfurt. Frankfurt -> big news -> SELL SIGNAL!
Other events that may interfere with their plans – RosPrirodNadzor activities (withdrawal of licenses). Although, today’s articles indicate that Russian authorities went too far, and are retreating now… who knows - additional uncertainty.
Conclusion: They may pay dividend. Maybe even in cash, if they forced to. They have a plan – push PPS as high as possible, and start “a-la NDOL” activity. If they have to pay dividend to reach this goal – they will do it. It’s nothing comparing to “dividends” one would get shorting AURC from $1.5 to $0.05. :) We may find AURC price much higher than current $0.2 Everybody should return initial investment by that time and ride only “free” shares (if any). That’s what I am going to do.
IMO (and I like Aurus fundamentals, especially, production from “gold sludge” – reminds me SPRL :)
Yes, it is. Actually, last night euddoggwyn suggested such a nice explanation/theory about NWOG-CJSC / NWOG and their possible relations, that I am taking this (or something like this) as “working hypothesis” for now, and stop worrying about two NWOGs. :)
http://www.investorshub.com/boards/read_msg.asp?message_id=15343993
Thanks Wendel.
euddoggwyn, any time when you tired from noise and crowd feel free to come here for quiet conversation. We probably "overanalyze" situation sometimes, but... we need to do something while waiting for $2.17. :)
<<my purchase is marginable >>
Since when and which brokerage made option trading marginable? I trade options and they need 100% cash just like pinkies.
They listed 3-4 other candidates. So, maybe it's something different. But I wouldn't be surprised to see the same trick again: JV NWOG-MOL buys SaratovNefteGeofizika, then (in a year) NWOG sells it's part to MOL. It's hard for foreign companies to buy anything in Russia w/o "local" help.
At least, this confirms that SaratovNefteGeofizika is for sale.
BTW, the article mentions estimates for possible price of those 60 mln barrels of oil reserves. That’s exactly our area of interests with similar infrastructure and some production. The price range is: from $1.7/brl (min) to $4.15/brl (max). Oil is really cheap in Russia. :)
This week Hungarian MOL (old partner-competitor of NWOG) announced intention to buy unnamed Russian oil asset:
http://en.rian.ru/russia/20061204/56411864.html
I didn’t see anything interesting in this fact until found SaratovNefteGeofizika in the list of possible targets of acquisition (Russian):
http://www.vedomosti.ru/newspaper/article.shtml?2006/12/05/117093
It’s a small World…
This is a beautiful theory! And, if this is true, they don’t need to talk about plans until some real deals come to completion. Then we will, probably, see either 3-side agreement: Carlyle - NWOG/CJSC – NWOG/NDOL, or two different contracts: Carlyle - NWOG/CJSC, NWOG/CJSC – NWOG/NDOL. Anyway, they would have to expose the existence of 2 different companies with different interests. I never thought about this scenario, and now it sounds so “natural” and in spirit of “Russian style” of business… If Mr. Malyshev missed this he needs to borrow your idea. :) Actually, this plan sounds like legitimate and “normal” way to do business (unless I am missing something). They just need to give us “formal” explanation.
Thanks, euddoggwyn.
leebret,
first of all, I also think (or hope) that everything went to NWOG/NDOL, and this is nothing more than confusion and inaccurate reporting. Even the item of news, which I replied about, in Russian version sounds: “Applying for participation…” – w/o any mentioning of the company name (CJSC or not). What was that? Were those words lost during translation? Why? I am pretty good in Russian (better than in English), and sometimes I get an impression that those “Russian” news is actually a bad translation from English, not otherwise. They probably write PRs in English (no need to have a Russian version) and then translate them into Russian.
As to value of “other” divisions. I have already posted my opinion on this subject. After selling NWOG-MOL “other” means NWOG-Management and NWOG-Geneva. They had no assets before the merger, so we didn’t lose anything in current value. But all future international projects will probably go through these two branches. All previous communication with Carlyle (like Slovakia-Transpetrol deal), Syria, Yemen, Latvia, etc. – all these deals look like subject for these two divisions, definitely not Saratov. I stopped paying attention to this stuff when they posted most of these deals under NWOG (“former NDOL”) title, assuming that we quietly merged “by default” with entire NWOG. Now, with those inaccuracies in reporting my doubts are back.
IMO: Exact information about ownership of NWOG/NDOL (public) and any related interests of 59% owner (if any) is a mandatory requirement. Nice subject for the next PR…
Welcome, euddoggwyn! Nice to see you here! I thought I was talking to myself. :)
That's exactly my question to Mr. Malyshev. I mean, they are totally different entities for sure. But... does NWOG-CSJC own anything else except those 59%? Do they have any other interests that are different from ours? I don't know.
tiger, it's none of my business, but I would move the deadline to May, 15 or June, 15. You know why. :)
It would be nice to hear also why the applicant is CJSC «North-West Oil Group» but not public traded NWOG.
06/12/2006
17:49 Rosprirodnadzor prescribes Priargunskoye PMCA to produce plans on development terms of fluorite deposit by the end of 2006.
--------------------------------------------------------------------------------
The Federal Service for Supervision of Natural Resources Usage (Rosprirodnadzor) has prescribed the Priargunskoye Production Mining and Chemical Association OJSC Krasnokamensk, Chita Region) to produce plans on development terms of the fluorite deposit by the end of 2006 and to submit an application to enter the corresponding alterations in the license agreement or to surrender the fluorite license, TVEL corporation says. (The PPMCA is a subsidiary of TVEL.)
Rosprirodnadzor also prescribed the PPMCA to reregister the fluorite license in view of changes in the enterprise' registration documents. The PMCA is currently under estimation in terms of cost-efficiency of the fluorite production under present prices and in terms of investment appeal of the object.
The Priargunskoye Production Mining and Chemical Association is Russia's largest uranium-mining enterprise. It produces 3,000 tons of uranium per year.
http://www.akm.ru/eng/news/2006/december/06/ns1827334.htm
Well, the latest news: today they created a new post for Oleg Mitvol – “special representative for early withdrawal of licenses”
Babelfish:
“The last result of the nature-conservation activity of Mitvol’ became the direction of petition about the withdrawal of licenses in company Peter Humbro Mining to the development of the largest layer of gold, find on Yamal. Let us note the fact that the session of the commission of RosNedra in this matter takes place in a week , and theoretically Mitvol' will be able to participate in it.”
http://uralpolit.ru/news/power/05-12-2006/page_47088.html
I am unable to find any particular information concerning Klyon deposit. Probably, too small to mention. For now I would assume that all “gold candidates” from the black list will be discussed next week.
Example of bad timing on my part. Following your example I told my wife about our NWOG position yesterday. Of course, I tried to protect her, watched my language and used only carefully selected words (“disaster!”, “catastrophe!”, “we are broke!”) but it wasn’t easy.
Today would be a better day… or next June. :)
Yes, we are scarred for life. :)
OAO "NK Saratovneftegeofizika"
http://www.e-disclosure.ru/portal/company.aspx?id=2894
http://actinfo.ru/miningind/company.php?companycode=9358918
(profitable company, and profits grow >10% every quarter).
One of the biggest companies of Saratov region. Reserves, production, exploration. Export to many countries (Iran is one of the biggest customers – Iranian ambassador visited them this Summer).
This would be a big news and great acquisition… when it’s actually done.
Some educational material about the practice of Rospriradnadzor and how this could affect the companies whose licenses are called.
Peter Hambro Mining - British mining company with 100% Russian actives. More than 50 gold licenses.
In its statement of last week, the agency said "according to Rosprirodnadzor, Peter Hambro Mining does not satisfy the condition of license agreements for carrying out of prospecting works; or carries them out with a significant backlog in relation to the terms and the volumes established in the [project] design documentation."
…
The statement goes on: "In particular, under the license for extraction of gold for one their largest deposits Novogodnee-Monto (the Yamalo-Nenets autonomous region) 21 items in the [licence] agreement have not been executed by the company. The resource user [PHM] has not developed, and has not given by the target dates, the base documentation on the particular licence site: the project of development of the deposit, the project of mining works, [and] documents confirming implementation of starting payments." The inspection reports suggest withholding of information requested from PHM affiliates, as well as violation of provisions of the water protection law securing mining from the surrounding water table, rivers and lakes.
…
"One of the problems with life is that agencies such as this don't realize the knock-on effects of what they're doing," Hambro is quoted by the Moscow Times. "When they say something like this, thinking it will make the Moscow evening news ... they don't realize it will knock half a billion dollars off the value of the company." The Moscow Times reported Hambro as saying he had learned of the accusations from the press and has received no word from Mitvol's agency.
After the Rospriradnadzor announcement had started a wave of share-selling that cut PHM's share price by 24%, the company posted a statement on its website claiming it is "not aware of any material or environmental or health and safety regulation infractions." The statement went on: "The company did not receive any prior notification whatsoever on this matter and its representatives are in discussion with the Ministry...seeking clarification on these comments."
http://www.mineweb.net/int_beat/506589.htm
Foreign investors can’t understand how any company could be threatened and punished w/o any explanation and reasons. Explanation of Russian press (babelfish translation):
In Rosprirodnadzor their position explained simple - department fulfills the order of Vladimir Putin.
…
Rosprirodnadzore decided to switch to gold (from oil). Moreover they insist precisely on withdrawal of licenses… but not on the payment of penalties. Oleg Mitvol' already expressed dissatisfaction by the colleagues of his department for Yamalonenetskiy autonomous area, which, having serious reasons for the withdrawal of licenses, just imposed a penalty 10K rubles.
http://news.finance.ua/ru/~/2/0/all/2006/12/01/89129
<<Well at least Parkin won't make the same mistake with AURC.>>
You may want to think about this again. Starting with the assumption that it was not a mistake...
<<North West oil group are a joke, they can't even get a proper PR together.>>
Parkin and Empire that he hired were responsible for those PRs. Both are leaving, and somehow I feel a relief. :)
Brent, thanks again for your efforts. I was at work today and got that notification too late. Although, not sure I would be able to participate from the office... Next time I may take some time off. What is your general impression? Did they sound concerned? As the call was interrupted, did they at least hear all the questions in advance?
Call Parkin, he will find you a shell for reverse merger. :)
It was posted earlier on the board (I didn't save the link) that restriction on ~180 mln shares from BioTracking merger expired last Summer. I suspected/posted that they could be sold above $1. But maybe Parkin & Co. are still holding some? And possible 300 mln dilution is not out of question (IMO). So, the worst case scenario float is almost half of OS.
IMO.
We don't know. My optimistic guess was that those shares would be placed among government/military supporters of Middle East projects (that was the hint from NWOG). Maybe I was wrong...
Although, some posters deny any even indirect connection between two companies (NWOG and AURC), I think NWOG action is very damaging for AURC as well. Investors get concerned about future, traders are ready to switch stocks when NWOG hits the bottom (that happened before in both directions).
All just IMO... and I am bleeding here... :)
Mrs Sozina was interviewed by Russian press and mentioned 300 mln of new shares to be issued in connection with Middle East deals (Yemen).
Thank you, Brent.
They are alive and looks like they still care... Good to know.
Thank you for all your efforts!
Please read the merger documents, then we will continue this interesting discussion. :) The only unknown is future deals, and even they are likely to belong to the "public" NWOG (according to company's PRs). We just need some "hard" confirmation here.
(pumping mode on)
Believe it or not, $0.25-0.3 is a price range we will see in 6 months… just trying to be consistent – 5-bagger from here. Even higher if just something of what was reported is confirmed. I could be patient sometimes… especially when there is no choice. :) The real challenge is not to sell too low after all this pain and frustration. People will start jumping out at “break even” points, and leave all the money on the table to somebody else… That has always been my biggest problem – selling too soon. Now, take calculator and multiply your number of shares by 0.3… looks good? Then turn off computer and start dreaming. If not – it’s time to average down.
(pumping mode off)
IMO
Great job, wishmd! I think Syria deal was PRed though... If I was allowed to ask just one question it would be: “What is the NWOG current structure? How do they handle accounting for NWOG and NWOG-CJSC? Which assets and projects belong to the “public” NWOG? What exactly do we own?”
Joe,
I used babelfish and it works. Northern Ore Technologies is mentioned as a license holder and it sounds from the tone of the article (IMO) that they are likely to lose it by the year end. Now, the question is: how did Aurus buy Klyon? Because Northern Ore Technologies is mentioned on their website I think they bought Northern Ore, that owned the license. Aurus is just "portfolio holder". Do you think that license could be actually taken from it's subsidiary and given to them? I don't know... I am bleeding with my NWOG position, and AURC troubles is the last thing I need at the moment. :)
Yesterday I had an exchange with designerportfolio on AURC board and decided to refresh some of my Russian Aurus links. Haven’t looked at this stock for awhile. Well, that’s what I found.
Oleg Mitvol, deputy head of state environmental watchdog, the Federal Service for the Oversight of Natural Resources (Rosprirodnadzor) compiled a list of licenses that could be taken from owners in 2006 (mostly Oil&NG fields but some gold deposits as well). In this list I see:
- "Klyon" (ore gold and silver) (ZAO "Northern Ore Technologies")
http://www.samotlor-express.ru/news.shtml?oid=698937
http://news.finance.ua/ru/~/2/2006/11/24/88694
Yes, it’s ours “Northern Ore Technologies”, and Maple/Klyon deposit:
http://www.auruscorp.com/about_structure.asp?sec=about
I have no comments or recommendations, just reporting:
1. Maybe I see this wrong. If you don’t read Russian use Babelfish tool: http://babelfish.altavista.com/translate.dyn
2. This is just plans – may never happen and the license won’t be revoked.
3. Klyon is not going to produce gold until at least 2008 anyway.
4. Aurus has Krong and other places that are producing gold right now and are very profitable (according to company’s PRs).
P.S. Regardless of importance (or not) of this information… I am scared to post it on AURC board. I used to talk there about Russian practice to withdraw licenses under “environmental” or “inactivity” excuses, but was not met with flowers :) and posts were deleted.
FWIW.