PetroNeft, which is prospecting for oil and gas in Russia, describes 2010 as its transformational year. The half-year results show nil turnover, and large losses, pushed up by a $1.4m (£0.9m) currency hit, although this is about to change.
With a pipeline built, and oil processing facilities now in place, production began at the Lineynoye field near Tomsk last month. It's now reached 1,500 barrels of oil a day (bd) from eight wells; the plan is to have 11 wells on stream by the end of next month, with a production target of 4000 bd by the end of the year.
There are also plans to restart exploration at three other potential prospects on the Licence 61 acreage, near Lineynoye, which has been estimated to contain up to 30m bd of oil with the aim of drilling three appraisal wells this winter. And work is well under way evaluating the potential of the Licence 67 prospect, which was acquired at the end of last year, of which Petroneft will own a half share, and the results so far are encouraging.
As a result, broker Cannacord has a target price of 49p for Petroneft, based on estimates of the value of the Phase 1 programme at Lineynoye, assuming an oil price of $70 a barrel.
PETRONEFT RESOURCES (PTR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 47p | MARKET VALUE: | £164m | |
| TOUCH: | 46-48p | 12-MONTH HIGH: | 51.5p | LOW: 14.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 11p | NET DEBT: | 13% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 0.52 | -2.26 | 1.04 | nil |
| 2010 | nil | -4.97 | 1.51 | nil |
| % change | - | +120 | +45 | - |
Ex-div: na Payment: na £=$1.55 | ||||
