To put it in context;
PPP's share of 2007/08 Tui was over 1,400,000 barrels
PPP's share of 2008/09 Tui is projected to be 900,000 barrels.
We don't know if the call on 187,000 barrels at US$92 has been made yet.
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To put it in context;
PPP's share of 2007/08 Tui was over 1,400,000 barrels
PPP's share of 2008/09 Tui is projected to be 900,000 barrels.
We don't know if the call on 187,000 barrels at US$92 has been made yet.
To add to this I think at "worst" we are talking about USD$10million in lost revenue. That's if the call had been made at peak prices. Slightly more material than I thought. However, if entering into these arrangements was needed to get the funding, then so-be-it.Quote:
To put it in context;
PPP's share of 2007/08 Tui was over 1,400,000 barrels
PPP's share of 2008/09 Tui is projected to be 900,000 barrels.
We don't know if the call on 187,000 barrels at US$92 has been made yet.
Some informationQuote:
PPP
24/04/2006
GENERAL
REL: 0844 HRS Pan Pacific Petroleum NL
GENERAL: PPP: TUI DEVELOPMENT FUNDING IN PLACE
STOCK EXCHANGE ANNOUNCEMENT
21st April 2006
TUI DEVELOPMENT FUNDING IN PLACE
Agreement was effected today with Commonwealth Bank of Australia to finance
Pan Pacific Petroleum's investment in the Tui oil development, located in the
Taranaki Basin, New Zealand.
The facility, of up to US$32 millions, will provide the bulk of the *Pan
Pacific's share of the development capital costs and associated contractor
guarantees.
First oil from the Tui fields is scheduled for the June 2007 quarter,
initially flowing at approximately 50,000 barrels daily (PPP share 5,000
b/day). The company has acquired an initial tranche of US$50 put options over
250,000 barrels of its share of pending production, as downside price
protection.
For further information : Within Australia.
Tony Radford(Executive Chairman)
Telephone (02) 9957 2177
Mobile 0409 611 644
NZ Contact.
Allan Tattersfield ( Director)
Mobile +64 (0) 21 307 338
Website: www.panpacpetroleum.com.au
End CA:00130366 For:PPP Type:GENERAL Time:2006-04-24:08:44:17
Like a bulldog i can not leave this hedging topic as it is for several reason. Firstly no one has been able to say for sure when PPP fronts up with the call options.There is 187600 that we have agreed to receive no more than 92 US.Now the point not covered is this the first 187600 produced or at any time in the first three years. If you use the first three years as Unicorn does you get a negitable figure,however if it is the cherry pick over three years the 40 million lose i first mentioned is on the cards.
A quick play on my calculator says that oil from Tui startup to end of third year has to reach 256 Us and then PPP has lost 40 million NZ. This could happen in the next two years.
When this point of confusion is fully understood i will email PPP and get a definite answer.Did not go this way in the first instant to highlight the general uncertaintly on this matter held by more than just me.
I agree that it would be good to get this matter cleared up and probably won't know one way or the other until the 2008 Annual Report sees the light of day, if nobody asks.
So digger, send that email!
:)
we sure are in the dark any info provided by the company would be well appreciated
Digger, good on ya mate. I am as confused as you guys on the hedging. Will be good to find out the exact details and get some transparency. Looking forward to the answer.
"According to the last quarterly report, gross sales in the quarter were AU$46,794,000. PPP share of production was 410,000 barrels, so the average price of a PPP barrel of Tui oil must have been a bit over AU$110 during the third quarter. Cash held on 31/3/08 AU$69,600,000"
"PPP's share of 2007/08 Tui was over 1,400,000 barrels"
Using same price as a minimum, and expected quarterly production of approx 383,000 barrels, gives sales of another $42 million.
This should give cash of $110 million, less other expenses, but not including vastly higher sales for oil. If all the hedge has been taken up, then there is still high prices for many barrels. If not yet taken up, then even higher income this quarter.
I expect the annual or quaterly reports will give a summary of the hedging position. Not too long to wait for them.
3 general scenarios exist:
1) no hedging used - highest prices received for all sales.
2) half hedging used - high prices for 1.3 million barrels, caped prices for 100,000 (although more than what we were probably riginally expecting).
3) All hedging used - high prices for 1.2 million barrels, all future sales at maximum..
This is one money making company...
Disc: hold.