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IPM - Incremental Petroleum

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noirua said:
Information on Incremental Petroleum can be found at the companies website: http://www.incrementalpetroleum.com

Report on the maiden reserves for the Selma Oil Field: http://www.asx.com.au/asxpdf/20060717/pdf/3xky5wrp7kgnn.pdf


Boardroom Radio Report on Wednesday 19th July 2006 at about 2-30p.m: http://www.brr.com.au/event/pm/1806/12487
Click to expand...

The report was certainly upbeat on the Selmo Oilfield, Turkey and the year end December should see an announcement of a 50% " free cash " capital return and dividend. The company is concentrating on the Selmo Oil Field and any future acquisition would be in the same region.
 
An update on IPM,
Today about 9.5 million shares were traded in this stock, and in the past few months trading averages around the 100,000 mark!! with the largest ever daily volume being 3 million at the ipo. :confused:

Does anyone know what this could mean, as the price did not move today and there were no new announcements?

I dont know how to interpret todays high volume, any ideas would be greatly appreciated. :)

cheers
doc
 
DOC said:
An update on IPM,
Today about 9.5 million shares were traded in this stock, and in the past few months trading averages around the 100,000 mark!! with the largest ever daily volume being 3 million at the ipo. :confused:

Does anyone know what this could mean, as the price did not move today and there were no new announcements?

I dont know how to interpret todays high volume, any ideas would be greatly appreciated. :)

cheers
doc
Click to expand...


USR drilling results are awaited - stock has a strong NZ following. Interim results 10 days ago were inconclusive, due to drill pipe failures, and the follow on " Emerging Producers Presentation " failed to give any lift.
 
Hi,
thanks for that.
I have just been told by my advisor that the 9 million shares traded were a transfer of shares between related entities, (an off market transfer) not a real sale of shares.

but keep us updated with any info on this one please!!
I was told earlier this year by ........ ......... that this one is worth 2.50 and a div of 12c will be paid at year end.

i purchased a lot of these in the IPO, and i'm still hanging in there. fingers crossed as this is my biggest share investment.

anyway, thanks for replying to my post.
cheers

doc
 
DOC said:
Hi,
thanks for that.
I have just been told by my advisor that the 9 million shares traded were a transfer of shares between related entities, (an off market transfer) not a real sale of shares.

but keep us updated with any info on this one please!!
I was told earlier this year by ........ ......... that this one is worth 2.50 and a div of 12c will be paid at year end.

i purchased a lot of these in the IPO, and i'm still hanging in there. fingers crossed as this is my biggest share investment.

anyway, thanks for replying to my post.
cheers

doc
Click to expand...


The following shows the announcement of the start of seismic surveying: http://www.oilvoice.com/Otto_Energy_Starts_Seismic_Survey_in_Turkey/7404.htm
 
thanks for that news.
some positive reports are what we need.
I'll also post anything that i hear about as well.


cheers
doc
 
....read research material available , broker reports; asx presentations of late . There is going to be a broker brief very soon and new news for the punters . Share price activity last week or so indicates something is on ....


This is a very sound stock ; paying 8c dividend FY06 and anticipate an 11c dividend FY07 . Current production is approx 530,000 bbloe per annum . Cash flow is good ; field development expected to take daily production from 1500 to 2600bopd in near future . PER is very low compared to other similar oilers.

dyor
 
Bonk said:
....read research material available , broker reports; asx presentations of late . There is going to be a broker brief very soon and new news for the punters . Share price activity last week or so indicates something is on ....


This is a very sound stock ; paying 8c dividend FY06 and anticipate an 11c dividend FY07 . Current production is approx 530,000 bbloe per annum . Cash flow is good ; field development expected to take daily production from 1500 to 2600bopd in near future . PER is very low compared to other similar oilers.

dyor
Click to expand...

I hold this stock, bought in late June and they now stand at the same price as then. Euroz are the latest analysts to report and see IPM as a buy at $1.50, they reported on 1st Nov 06. Forecasts out to 2009 are less good than the 2007 outlook.

What has sent this one sideways, rather than up, has been thoughts on the cost of the 12.5% royalties at the Selmo oilfield and oils weak performance of late. Royalties may reduce to 5% but that is by no means certain.

Anyway, an analyst thinks they are a buy and certainly more knowledgable than I, and Euroz put a target at $2.25, so let's hope they're right.
 
IPM are attracting a little more interest following the Corporate Presentation at the start of the Month.
 
Hi,
i am just watching this stock hovering around 1.30, which is way off the highs and valuations i have been receiving over the last 6 months. A little dissapionted as i hold this stock and bought in the original IPO for a dollar.

A 9-11 cent dividend will be paid for holdings at 31.12.06, and a major sydney broking firm has released a conservative valuation of $2.25 in late november.(dont know if i'm alowed to mention the firms name? sorry).
so i'm hanging in there!

As the previous posts have said, this company is cashflow positive, paying dividends, no debt, no hedging as yet, middle-east petrol prices good, and sound management team. Its definately looks like good stock , with few negatives.

My main concern is , when and how long will it take to see its full potential.
and can i wait while other oppertunities go by.

cheers,
Doc
 
DOC said:
Hi,
i am just watching this stock hovering around 1.30, which is way off the highs and valuations i have been receiving over the last 6 months. A little dissapionted as i hold this stock and bought in the original IPO for a dollar.

A 9-11 cent dividend will be paid for holdings at 31.12.06, and a major sydney broking firm has released a conservative valuation of $2.25 in late november.(dont know if i'm alowed to mention the firms name? sorry).
so i'm hanging in there!

As the previous posts have said, this company is cashflow positive, paying dividends, no debt, no hedging as yet, middle-east petrol prices good, and sound management team. Its definately looks like good stock , with few negatives.

My main concern is , when and how long will it take to see its full potential.
and can i wait while other oppertunities go by.

cheers,
Doc
Click to expand...

The horizontal Drilling at Selmo has yet to provide results that will massively increase the reserves. Also the field needs to have a lot of water pumped at great expense. There could be a long wait as this drilling seems to be taking quite a long time.
 
Hi,
apparently it looks like another dividend will not be paid until feb/march 2007, and not at 31/12/06 as we previously thought.
A major shareholder has just left this one (MMC sold 5 million) and so far there is no evidence of any institutional buying in at this stage. tightly held stock as can be seen by the volume.

i'm still holding on at the edge of my seat, waiting for some positive sentiment. Although the short term doesnt look so rosy, i'm still hearing that its the cheapest oil stock around based on fundamentals. :confused:

cheers,
doc
 
some latest news we have been waiting for:

22/1/2007
"EARNINGS LIFT FOR IPM FROM NEW PETROL TAX LAWS"
New petroleum laws in Turkey have been passed on 18 January 2007, the new law had been the subject of considerable consultation between industry and govermnent for 5 years, and was submitted to parliament 12 months ago.
effectively reducing the royalty paid by petrol companies from 12.5% to 1.7% and 5% depending on bopd output. The net effective royalty paid by IPM on Selmo oilfield is thus reduced to about 3.2%.

ASX announcement by Gerard McGann, managing director, on 22/1/2007.

also,

Tricom is expected to increase its current valuation from $2.20, as a result of this earnings lift.
 
DOC said:
some latest news we have been waiting for:

22/1/2007
"EARNINGS LIFT FOR IPM FROM NEW PETROL TAX LAWS"
New petroleum laws in Turkey have been passed on 18 January 2007, the new law had been the subject of considerable consultation between industry and govermnent for 5 years, and was submitted to parliament 12 months ago.
effectively reducing the royalty paid by petrol companies from 12.5% to 1.7% and 5% depending on bopd output. The net effective royalty paid by IPM on Selmo oilfield is thus reduced to about 3.2%.

ASX announcement by Gerard McGann, managing director, on 22/1/2007.

also,

Tricom is expected to increase its current valuation from $2.20, as a result of this earnings lift.
Click to expand...
Hi, We do seem to have a small lift off at $1.32. I will keep holding on to this one and quite content to do so.
 
This is the analysts report from "Fat Profits" dated 17 Jan 2007, that can be accessed via the IPM website: www.incrementalpetroleum.com
(sorry i didnt know how to link this one) :eek:

Incremental Petroleum Buy IPM around $1.22
Fat Mining 60, 17 Jan, 2007
Bargain priced oil producer Market cap$82 million
With the shake out in oil markets that has occurred over recent weeks, we thought it appropriate to remind
Members about one of our favourite emerging oil plays, Incremental Petroleum. The company's share price has
been hammered by circumstances entirely out of its control, relating to underlying adverse oil price movements
and bad weather conditions in Turkey that affected production in recent weeks. Nevertheless, the fundamental
story remains outstanding and Members wanting exposure to a dynamic oil company at a bargain price, should
take note.
"With all that Incremental has achieved over the past year since listing, it has
never represented better value than it does now."
Fat Prophets initially recommended buying Incremental at 98 cents in December (Fat Mining 5). Our last review of
this stock was in October (Fat Mining 45).
IPM has experienced a disappointing six months with the shares experiencing considerable volatility. While
definitive signs of a recovery are yet to emerge, recent price action has nonetheless given cause for optimism.
After reaching a 10-month low of 1.15 cents last month, IPM has stabilised. The recent stability in the shares is
encouraging and indicates selling pressure is abating. While further near term weakness remains possible, we
believe IPM is becoming resistant to lower levels.
A break above $1.30 would be the first indication of upward momentum returning. Although the past six months
have been disappointing, we believe that a sustained recovery is probably in time.
Like most oil stocks over recent times, Incremental Petroleum has been battered from pillar to post by
circumstances totally beyond its control. In the first instance, it has suffered as the underlying price of crude oil fell
sharply to a 19-month low on the back of the warmer-than-expected North American winter.
But in the second instance and in a cruel twist of fate, record low temperatures in the region of the company's
Selmo oil field in Turkey have dramatically impacted production by disrupting power supplies. We believe such a
turn of events represents a real buying opportunity for those Members looking to gain exposure to a quality
emerging oil company, or those existing members who might be thinking of adding to their position at bargain
prices.
Members might consider us foolhardy to be analyzing investment opportunities in the oil sector at a time when it is
receiving such universally bad press. True, it is difficult to find favourable coverage of the sector at the moment, as
every story seems filled with doom and gloom for 'black gold.' Markets are apparently overflowing with the stuff,
with OPEC seemingly powerless to do anything about it.
While we accept that conditions in the oil market have conspired to soften the immediate oil price outlook, we
believe that the essential longer-term fundamental picture remains unchanged. Whatever might happen in the
short-term, Chinese consumption is going to continue to grow robustly over the next several decades, as will
demand from that other emerging giant, India. Meanwhile, the US is not going to lose its love affair with the motor
car.
At the same time, contrary to what the short-term supply data may say, oil is steadily getting more difficult and
more expensive to find and produce. Irrespective of the billions of barrels that no doubt remain to be found, these
untapped reserves will be more expensive to produce and more costly to refine. This means that we must become
accustomed to a high oil price environment.
This brings us to Incremental Petroleum. As a reminder to members, its owns 100% of the Selmo onshore oilfield,
situated in eastern Turkey. Selmo ranks as the second-largest oilfield in Turkey in historical production terms.
Mobil discovered the field in 1964 and operated the field until 1996; however, the field was not large enough in
Mobil terms to warrant the appropriate field work-over techniques to improve productivity.
Incremental saw an opportunity at Selmo because of the field's relatively low oil recovery rate of 16%, whereas the
average recovery rate for most oilfields is around 25%. Plainly speaking, if Incremental can enhance recovery
rates at Selmo to that approximating typical field averages, then it could potentially have access to an additional 45
million barrels of recoverable oil.
Incremental is utilizing modern oilfield technology to improve oil production from the field, including techniques
such acid jobs, plug-backs and pump changes.
The company estimates average cash production costs to remain at around US$18 a barrel over the next three
years, inclusive of all royalties. Assuming an Arabian Medium Oil price of US$63 a barrel over the next three
years, this means a robust operating margin of US$45 a barrel.
Using a base-case production scenario of 500,000 barrels of oil for each of calendar 2007 and 2008, we anticipate
generation of Net Profits After Tax (NPAT) of around A$15 million annually, which should enable the payment of
dividends of around 8 cents a share in each year.
Incremental has a policy of returning at least 50% of its free cashflow to shareholders via dividends and/or capital
returns. This puts the company on a solid yield of around 6.5% based on its current share price.
Incremental remains entirely debt free, with cash of $10 million and has no oil hedging in place. We therefore
retain our view that Incremental represents a cheap producing oil exposure for those investors with an appetite for
risk.
The Selmo oilfield last year received its first ever-independent estimate of its reserves. Independent experts, RPS
Energy, estimated 2P (proven and probable) reserves within the field of 12.04 million barrels. Now let us assume a
conservative net present value (NPV) of US$20 a barrel and this is worth $320 million to Incremental - or around
$4.70 a share. The company represents outstanding value at these levels.
Incremental has also enjoyed immediate exploration success with a farm-in joint venture late last year with fellow
Australia-based Turkish oil explorer, Otto Energy. Incremental is contributing $3 million towards expenses to earn
a 15% stake in Otto's Edirne licence in Turkey's Thrace Basin.
The first two wells, Koyustu-1 and Bati Umur-1, were both successful in encountering gas during drilling, with flow
testing of each well now underway to help ascertain likely reserves. The Koyustu-1 well has flowed gas at a rate of
2 million cubic feet a day from just one of the three prospective gas zones, while Bati Umur-1 awaits testing. The
partners are keen to commercialise these gas reserves as quickly as possible.
Despite all of this good news, we acknowledge that the market is applying an enormous discount to the company's
share price due to sovereign risk concerns. This helps to at least partly explains the discrepancy between the
company's share price and underlying value. We are of the view that with ongoing success both on the exploration
and development fronts, this gap will disappear rapidly over time.
Incremental Petroleum will remain Held in the Fat Prophets Mining & Resources portfolio, but for Members
with no current exposure we recommend the stock as a Buy around $1.22.
Fat Prophets Mining & Resources Pty Ltd (ABN 68 102 986 327) is an authorised representative (no. 277996) of Mint Financial Group Pty Ltd.
 
DOC said:
some latest news we have been waiting for:

22/1/2007
"EARNINGS LIFT FOR IPM FROM NEW PETROL TAX LAWS"
New petroleum laws in Turkey have been passed on 18 January 2007, the new law had been the subject of considerable consultation between industry and govermnent for 5 years, and was submitted to parliament 12 months ago.
effectively reducing the royalty paid by petrol companies from 12.5% to 1.7% and 5% depending on bopd output. The net effective royalty paid by IPM on Selmo oilfield is thus reduced to about 3.2%.

ASX announcement by Gerard McGann, managing director, on 22/1/2007.

also,

Tricom is expected to increase its current valuation from $2.20, as a result of this earnings lift.
Click to expand...

Full Link to report:http://www.asx.com.au/asxpdf/20070122/pdf/310lhz8rcrwcqh.pdf
 
Thanks Noirua,

Some good news today too, with all wells back in operation after that freak cold snap they had. Back to about 1,500 bopd.

I will keep you informed of anything new, once i have permission to post any more valuations on this one.


cheers
doc
 
DOC said:
Thanks Noirua,

Some good news today too, with all wells back in operation after that freak cold snap they had. Back to about 1,500 bopd.

I will keep you informed of anything new, once i have permission to post any more valuations on this one.


cheers
doc
Click to expand...

Hi DOC, You'r certainly following this one closely. Deserves to be a lot higher. No doubt others will arrive when we have lift off.
 
Further good news about the Selmo Oil Field as production come back to 100%. Net production was 1,478 net barrels in the last 7 days.
 
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