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HHR - Hartshead Resources

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PVD in trading halt.
Announcement to be made by Wednesday regarding acquisition of oil and gas acreage off Africa.
 
New research report issued by Argonaut titled: Gabon Entry - Another Hot Address.
http://www.puravidaenergy.com.au/news_pdf/130115_-_Argonaut_-_Gabon_Entry_-_Another_Hot_Address.pdf

Main points from PVD acquisition announcement today.
http://www.asx.com.au/asxpdf/20130115/pdf/42cf97xh1jkc07.pdf

PURA VIDA AWARDED NKEMBE BLOCK OFFSHORE GABON, WEST AFRICA
Highlights
● Pura Vida has acquired an 80% interest and has been appointed Operator of the Nkembe block, offshore Gabon
● Establishes Pura Vida in a proven oil producing basin proximate to several oil fields
● Oil encountered in previous wells in the block
● Shallow water extension of the prolific pre-salt play fairway
● Exposes Pura Vida to a wide variety of exploration plays associated with salt basins
● Pura Vida will use modern seismic technology to unlock new potential in a proven basin

The Nkembe block is surrounded by producing oil fields and discoveries. The companies operating around Pura Vida’s Nkembe block include:
● Mitsubishi: Recent discovery in the Batanga formation in the adjacent block to the north;
● Total: Production from the Batanga formation in the nearby fields adjacent to the Nkembe block to the north-east;
● Perenco: Production from the Batanga formation reservoirs to the east of the Nkembe block;
● Ophir: Exploration in the acreage to the north-west for similar reservoirs; and
● Petrobras, Shell and Total: Exploration for pre-salt targets in nearby acreage.
As part of the terms of the acquisition, Pura Vida has acquired existing well and seismic data on the Nkembe block. Pura Vida will also purchase 845 km² of previously acquired 3D seismic data from seismic contractor, WesternGeco.

Acquisition terms
The term of the exploration period is for seven years, with a minimum work program divided into two phases described below. Upon a commercial oil discovery, an exploitation licence is granted for a period of 10 years (25 years for a gas development) with two extension options, each for a period of five years.
An upfront acquisition cost of US$9 million was paid to the State upon signature of the Nkembe PSC. The acquisition cost reflects the value of this acreage and maturity of the Gabon Basin as an oil province, as well as the cost of acquiring existing well and seismic data over the Nkembe block. Pura Vida believes the proposed work program (described below) will prove the potential of the multiple play types in the Nkembe block leading to the identification of multiple drilling targets.
First Phase
Pura Vida has committed to a first phase of four years with the following minimum work program:
● a 550 km² Multi Azimuth (MAZ) 3D seismic survey; and
● an exploration well to a depth of 2,000 metres sub-sea.
Second Phase
Following completion of the first phase, Pura Vida has the option to elect to enter the second phase with the following minimum work program:
● a further 550 km² Multi Azimuth (MAZ) 3D seismic survey; and
● two exploration wells to a depth of 3,000 metres sub-sea.

Funding
In connection with meeting the acquisition costs for the Nkembe PSC, Pura Vida has executed a short-term funding facility for $5 million. The lenders under the facility are unrelated parties. Hartleys Limited is Corporate Advisor to Pura Vida and arranged the facility.
The facility is unsecured, bears interest at the rate of 20% and contains representations and warranties usually found in an agreement of this kind.
Following payment of the Nkembe PSC upfront acquisition cost, PVD retains net cash of approximately $4.5 million, which includes $2 million in the form of a bank guarantee (expected to be released shortly). In addition, Pura Vida will receive a cash payment of US$15 million upon completion of the farmout agreement recently announced in respect of the Mazagan permit. Completion of the farmout is expected to occur in the first quarter of 2013.
The forward expenditure for the performance of the work program on the Nkembe PSC will be incurred as that work is undertaken over the four year period of the first phase, allowing Pura Vida flexibility in choosing the method to fund those operations.
 

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Just whacked $5m on the credit card huh?

Is it a slight concern that they see the need to diversify? I thought they had a fantastic spot and would concentrate their exploration spend on developing that area quickly... not that I'm against diversifying, but that's a pretty serious interest rate to put up with (even if just for a month or two) given they supposedly already had a big exploration program coming up.
 

No doubt the interest rate is high (usually round 12%?) but leads me to think it is short term debt rather than the full 12 months.

I dont have a problem with the diversity.

With the $15m due from PXP and them covering $200m+ spend on exploration for PVD, why not?

If memory serves me correctly, PVD have stated their intention is to amass a portfolio of projects that they aim to JV.
Keeping equity in the project but spending other companies money and avoiding massive share dilution.

With the companies listed around them in Gabon, the area looks prospective and no reason another farm out couldnt be attained.

Each to their own but being a one trick pony diesnt leave you exposed.
 
Hartley is the principal adviser.
So it through own and Agronaut's media machine kept on ramping PVD .
Market has learnt enough BS of Hartleys (see uranium shares) so did not get excited aligning with Hartley's continuous buy rating.
I am waiting with patience
 

Hi Miner, I am a little confused, you think PVD is being ramped yet you are waiting with patience... to buy presumably? Can you please elaborate on the comment above.

Do you consider Hartleys and Argonauts latest 12 month price target of $2.12 unreasonable and if so what figure do you have in mind? Do you not consider PVD to be rated as a buy?

I have not seen anything from either firm saying PVD is undervalued in the current market. You seem to think it is over valued, in your opinion what is fair value for PVD at the moment?

After PVD announced the Gabon acquisition, Hartley and Argonaut attributed only 4c in extra value to their revised 12 month target. Hardly the stuff of ramping.

There are 2 other firms, N+1 and Fosters that have a 12 month target of $2.15 for PVD and they have not released updated notes on Gabon. So in comparison it could be said Hartleys and Argonaut are slightly conservative.
 
Slight correction to previous post, N+1 latest target price $2.25, Fosters is $2.15.
 

Hi ST

Sorry for the delay as I was not checking ASF regularly and did not subscribe PVD until now.
Simple answer to your message :
I felt PVD as ramped up because Hartley is a big player and they need to support the price with strong recommendations etc. WIth alliance there will be some similar so called investment analysts to join club. It is the trick of their business.
Why I am waiting with patience because PVD is not a bad scrip. It has its own strength but over priced. So normally with hyped broker firm announcement prices shot up and drop down. I am waiting for the opportunity to see a reasonable low price to minimise the risks from any down turn. I put a buy order and Commsec automatically executed the order. So I do not have any complaint as price lowered down marginally since then.
I hope that answers your two questions.
BTW I do follow your postings with PCL with great interest because PCL was not sold by me when the prices shot up in a day . I do read the postings and tend to hold comments unless they are essential to do so.

Best of luck
 

Thank you for the reply mate.

All you have said is completely valid. Although, an area we don't agree in is if PVD is over priced or not.

Not the less that is the beauty of ASF and being able to express different opinions.

Have you typed the correct code with PCL, Miner? I have never posted in PCL, maybe confusing me with smalltimer?

All the best to you too.
 

Dear Spring Hill (SH)
thanks .
Apology for my senior moment - to start the email for SH with ST . Yes, I wanted to write to you and mixed up with Small Timer. If you are not brothers my apology is doubled . Sorry for the mixed up
 

Pura Vida still on the hunt for acquisition opportunities

http://www.miningweekly.com/article...hunt-for-acquisition-opportunities-2013-02-01
 
20.0 MMBO CONTINGENT RESOURCE AT LOBA M 1 DISCOVERY OFFSHORE GABON, WEST AFRICA

Highlights
● Petrophysical analysis by Pura Vida has highlighted 46 metres of interpreted oil pay in the existing discovery made by the Loba M 1 well in 1976 on Pura Vida’s 80% owned Nkembe block, offshore Gabon
● The interpreted oil pay in the Loba M 1 discovery is in the Batanga sandstones. These sandstones produce in nearby fields offshore Gabon, the closest being the Barbier field 6 km to the north of the Loba M 1 discovery
● The Loba M 1 discovery offers a potential appraisal target for early drilling, coupled with deeper exploration potential in the underlying sub-salt reservoirs
● Petrophysical analysis indicates good quality reservoir being 18% porosity with oil saturation of 66% in sandstones deposited in a turbidite environment
● Interpretation of the existing 3D seismic and the Loba M 1 well log has defined the contingent resource of the structure drilled by the Loba M 1 well to be in the range (p10, p50 and p90) of 11.2, 20.0 and 28.7 mmbo
● Significant potential value for a tie-back development to nearby producing fields with an existing pipeline export network
 
Who would have thought that from the farm out news, the SP would drop to less than half the price it was. PVD clearly got the best deal of all the farm outs made in the area and yet the SP has taken a beating ever since the farm out news was released. Seems the entire small cap energy sector has taken a beating and even PVD couldn't escape it.
 

I agree. PVD remains closely watched though. As soon as the drill date nears ,there is going to be a decent run up with the ground that they have to explore. Just a matter of not missing the boat. Keep watching and waiting.
 
I cannot understand the signifcant drop in PVD share price, as though there is no confidence in the potential being portrayed by the company and the stock brokers.

The information provided to date has the Morroco lease with a potential 1.5 billion barrels reserve (lets assume, only c500 million barrels is determined) at NPV oil price per barrel of USD20 (lets say oil price per barrel drops to USD10). Then 500 million barrels multiplied by USD10 (assume AUD/USD at parity) = USD5.0 billion. Then shares on issue is 100 million, this gives a share price of USD50 per share compared with current price of $0.40.

Does not make sense??? Any thoughts?
 

Your valuation is wrong.
The fall is to be expected as there is not much happening with PVD at the moment. Come drilling time, things should heat up - the coming well offshore Morocco is very interesting and would be a company maker if all goes well.
It might be an opportunity to get in on the lows and sit on it for a little while...
 
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