MHL - Monitor Energy

[nyo]

rapture,

its unfortunate when a co's potential is not matched by its willingness to keep s/h's and potential s/h's regularly informed of significant steps forward in its growth

agree with your point re mhl prospects [read potential]

whether medina is indeed tinpot, it is disappointing that mhl has not chosen to 'pierce the veil', in an informative sense (to the market)

ie who are medina

the most info that mhl has released re medina is that it is



ok so the kyrgyz bit relates to the currently loveless mhl/medina tryst

as to the aust exploitation, has medina lodged the security payments ... anyone?

ie as medina has been presented, are they more than bluff and bluster

or are they canny private equity investors who are not about to formalise agreements or cough up the readies in the current global environ

if the mhl/medina jv fell apart what would it mean

mhl retains the leases [potential - described in some quarters as elephantine]

and retains the opportunity to improve on the 15% free-carried hoa

as the papuan delegate said to the us delegate at the recent bali global warming (not necessarily appropriate here, but what the) get-together - sign on the dotted line or 'get out of the way'

if there really is potential with the leases, surely a more legit jv partner can be found

like santos or woodside, or how about a us oil major

cheers

happytown I just saw something on another site about HoA's. What are your views on the definition below. Does this mean that MHL need a formal J/V before Medina starts to fund the operation? Confused


# MOU's and Heads of Agreement's

# Examples of agreements generally intended to be "non-binding" include 'Memoranda of Understanding' (MOU's) and 'Heads of Agreement' (HOA's).

# MOU's are generally entered into to formally signify a strategic alliance.

# Heads of Agreement are sometimes used during the process of negotiating a contract where some specific items have been discussed and agreed, subject to the agreement of further terms in the future.

# Neither an MOU nor an HOA is binding on either party, and is therefore not enforceable as a contract by one party against the other.

 

[rapture2002ca]

Another dumping for MHL today. Panic is really setting in for this stock unfortunately.

I'm sure alot of people are sitting on huge paper losses, I know I am.

The sp will continue to drop until some news come our way regarding the JV and uranium drilling with Leopard. I don't have anymore cash so I can't average down.

What do other holders think of MHL at the moment?

 

[nioka]

What do other holders think of MHL at the moment?

Nothing has changed. It is a big speccie and will be for some time yet. You have three options;
1. Sell out and take a loss.
2. Sell and hope to buy in again cheaper and with the same money buy more than you had before.
3. Put them in the bottom drawer and maybe, just maybe, they could be worth a lot in the future.
That is what speccie penny stocks are all about. Every now and then one comes good. Most don't and that is why they are priced accordingly.
I have a few, definitely in the bottom drawer at this stage.

 

[happytown]

...

Does this mean that MHL need a formal J/V before Medina starts to fund the operation?

...

nyo,

the definition (re hoa) does not differ from the general language used to date by mhl

that is that a farm-in hoa has been signed, with the formalisation of the jv to follow

eg from the 31/01/08 qtrly act rep ann

...

The company signed and announced a heads of agreement (hoa) with the hong kong based medina group that outlines the terms and conditions for a comprehensive joint venture and joint venture operating agreement going forward. The significant legal documentation relating to the joint venture has been completed by the company and is currently with the jv partner for their independent revue. [sic]

...

The hoa envisages the [sic] medina will cover monitor's forward exploration and possible development expenditures on the kygyrz republic oil and gas licenses with monitor essentially free carried to the commencement of commercial production.

...

its the 'formalisation', in this instance, agreed to and signed by all parties, that is the binding contract, outlining explicitly all parties' (at this stage it appears to be only mhl and medina) obligations and rights legally

recognising that mhl has completed the necessary documentation for the 'formalisation' and is awaiting medina to do so and, in fact from last friday's half yearly rep ann is seeking to hasten medina's completion of the documentation

... continuing its efforts to expedite the joint venture ...

has led to the question whether medina will formalise the jv, at least, under the terms previously announced

if this is the case (medina for whatever reason not potentially proceeding to the formal jv) and the current hoa being of a non-binding nature, arguably it would not make good commercial sense for medina to be funding any of the terms of the hoa at present

as the jv is not currently binding on the hoa parties, medina is under no obligation to meet any of the funding terms

i am not party to the discussions and can only go on mhl's anns and speculate as to the delay

the jv could become legally binding tomorrow, next week, next month ...

what is apparent is that mhl wants it and medina wanted it (and have not said they don't want it)

nonetheless i agree with the view that the kygryz leases have potential, which, should they be proven, lead to a significant re-rating of mhl

cheers

 

[YOUNG_TRADER]

Well this is just unbelievable, almost makes me wish I could take the company over at these levels,

Its just so ridiculously cheap given the upside offered, shows the mkt has really no appetite for these stocks atm,

Company is partly to blame given its lack of news flow,

However this greatly antcipated JV formalisation should really firm things up for the company

Still waiting

 

[nioka]

Well this is just unbelievable, almost makes me wish I could take the company over at these levels,

Its just so ridiculously cheap given the upside offered, shows the mkt has really no appetite for these stocks atm,

Company is partly to blame given its lack of news flow,

However this greatly antcipated JV formalisation should really firm things up for the company

Still waiting

Looks like you have started something. Up over 35% so far today. What is the news, I can't find anything new.

 

[YOUNG_TRADER]

Looks like you have started something. Up over 35% so far today. What is the news, I can't find anything new.

LOL, what timing I had yesterday, maybe the Directors heard my frustration?

Well I spotted something very interesting in the Appendix 3B, it turns out those options were given to Consulting Geologists for the acquisition in SOuth East Asia, so I think thats whats caused all of this, insiders buying up on a pending new oil and gas project

see link http://imagesignal.comsec.com.au/asxdata/20080326/pdf/00825985.pdf

 

[Pimping]

YT, do you think that this sp rise is factoring in the impending announcement and therefore it is too late to get on board?

 

[YOUNG_TRADER]

Pimping, its hard to say,

When I first found MHL it was a bit higher around 2c-2.5c,

Alot has changed since then,

On the negative, the mkt is going through a really difficult time and is very bearish, additionally MHL's secondary Uranium project may now be somewhat out of flavour given the U price rout, however there are also positives

Firstly, Oil is above $100/bl which makes all of MHL's oil and gas projects look very appealing, secondly MHL are on the verge (although well and truly over-due) to formalise a free carry type farmout with MHL's costs to be paid out of profits for its very prolific Oil and Gas leases in Kyrgyz

The final positive is that now MHL are also looking at near term oil and gas producing leases in South East Asia,

Given the current mkt cap is $10m who knows what value the new projects will add

MHL​

Mkt Structure

Shares
635m


Mkt Cap @3c = $19m Current
Mkt Cap @4c = $25m
Mkt Cap @5c = $32m Target 1 if CIG hit Oil on adjacent lease
Mkt Cap @6c = $38m
Mkt Cap @7c = $45m Target 2 if a major like Santos or Chineses National Oil farm in



Cash $2m

Ascent Capital
To begin with MHL is an Ascent Capital re-cap, however I always viewed it as the one that never made it,

When you consider their other re-caps, EXT 2c -15c, DYL 2c-65c, BLR 2c-25c, WMT 2c-30c, even MKY 2c-9c, thus MHL's 2c- 4c seems an anomoly, I would think its the last decent Ascent Capital re cap left to run.

So given their track record and the fact that you see the Steinpris name (Ascent Capital) still on the share registry suggests that more is still to come, in addition to this Ascent Capital control 50% of the Uranium projects and so this all makes for a very interesting mix.

Management
Oil and Gas The 2 main men are Scott Spencer and Ted Ellyard, both are the ex creators/architects of Hardman Resources, they took HDR from "a market cap of less than $5m in 1994 to eventually over $1.5 BILLION"

Thus these two oil boys know what they're doing and as such MHL has been viewed by some such as Peter Strachan of Sotck Analysis as Ted Ellyards next oil and gas venture.

Uranium
The Uranium project is being managed by Leopard

Leopard is an unlisted private company thats owned and controlled by Ascent Capital, its technical guys are James Pratt who is the Managing Director of Deep Yellow Ltd (DYL) and Dr Joe Drake-Brockman who is in charge of technical explorationa and development for DYL.

So effictively Leopard is a mini DYL, created by the creators of DYL and managed and run by the current DYL top boys who have taken DYL from $5m to over $500m.




Projects

Kyrgyz Oil Oil and Gas, 100%, Kyrgyzstan
Surrounded by many prolific oil and gas producing basins which have produced probably a few BILLION BARRELS OF OIL and a few Trillion Feet of Gas, reserves are still a few Billion Barrels of Oil and a couple of Trillion feet of Gas.

The obvious comparison is as Warrick Grigor has done, to that of Caspian Oil and Gas (CIG),
"Three years ago we spent a week in the Kyrgyz Republic, coming to grips with a junior oil stock named Afminex (it subsequently changed its name to
Caspian Oil and Gas). Back then, the shares were less than 1.8 ¢, the company had precious little cash, the market capitalisation was $8m and the oil price was only US$30-35/bbl.

Since then it has raised more than $20m, it has signed a joint venture with Santos and, independent of that JV, it is preparing to drill a number of shallow targets. CIG’s market capitalisation is approximately $170m
with the share price at 16.5 ¢. Our clients have done very well out of CIG, irrespective of whether or not they hit big oil in the forthcoming program."

So CIG's Mkt Cap has gone from $8m to $170m yielding a return of 2125% over 3 yrs, however over the last 5 months the stock has yielded over 300% (5.5c - 16.5c)

Given CIG's current Mkt Cap of $170m I would expect MHL to move up to 5c =$32m if CIG hit oil, moreover if MHL, which is in the final stages of negotiating a farm out, gets someone like Santos, or even the Chinese National Oil Corp I would expect a re-rating towards 7c = $45m.

There is not too much info on target size or potential of MHL's Oil and Gas licences however the company is in the final stages of interpreting and reprocessing data to determine drill targets, priority survey area's etc etc in addition to this further survey results are due back,

So to summarise there are 3 potential catalysts fora re-rating of MHL because of its oil and gas leases

1. CIG striking oil
2. A farm in partner such as Santos or Chinese National Oil Corp
3. Siesmic/survey updates with target/potential size of oil targets



Kyrgyz Uranium Uranium, 50%, Kyrgyzstan,

Intial target 600k-700kt's@0.1% U = 1.5Mlb's U

This is just an intial target, base don historic work/drilling by the soviets, mineralisation is reported at surface and up to depths of 150m's over a strike of 800m's, they "mineralised seam widths" vary form 4.2m's to 6.6m's and avg 0.03% - 0.4% U

Its early days here but given the current mkt cap of other companies operating in Kyrgyz such as MRO mkt cap $50m and NMR mkt cap $100m there is plenty of upside value for MHL once a JORC is released I would expect $20m of attributable value = 3c

As stated the Uranium project is being managed by Leopard

Leopard is an unlisted private company thats owned and controlled by Ascent Capital, its technical guys are James Pratt who is the Managing Director of Deep Yellow Ltd (DYL) and Dr Joe Drake-Brockman who is in charge of technical explorationa and development for DYL.

So effictively Leopard is a mini DYL, created by the creators of DYL and managed and run by the current DYL top boys who have taken DYL from $5m to over $500m.




Summary

- Chart wise support seems to be 3.2c and then 2.6c, however I doubt we will see it fall below 3c

- Its is a direct comparison to CIG, even Grigor is getting his clients who he got on to CIG very early days on to this, moreover any drilling success for CIG will boost MHL's prospectivity and thus SP

- A farm in deal for MHL's oil and gas licences is in the final stages, if its Santos or Chinese Oil watch out!

- The Oil managment is excellent being ex HDR architects who took the company from $5m to over $1.5Billion

- The Uranium management via Leopard is also excellent as its all the DYL boys who took DYL from $5m to $500m

- So given it is being run by the people he created so much value for HDR and DYL, as well as the fact that it can be compared to CIG for oil and MRO/NMR for the Uranium MHL seems cheap!

 

[sydneysider]

Young Trader, your well researched commentaries are a pleasure to read. I agree with u that current market conditions are very difficult for traders. MHL may be be one of the small number of exceptions to the thinly traded spec stocks that are falling knives. I got into this one earlier this morning and found it somewhat difficult to get set without "paying up" for quantity.

This mornings news appears to be very positive (possibel SE Asia oil deal telegraphed in the new issue to consultants announcement) and that includes the discovery of oil on CIG's leases nearby?. The chart pattern on a daily basis is your typical "falling knife" but to-day's minute by minute counts look extremely interesting. Over 24 million shares already traded and an assault on the hi of the day at 2.1 cents underway after a 50% rise has already been recorded. Pretty powerful stuff. I will post this chart at the end of the day. IMHO this one may have some legs and run much further.

 

[ba229]

Ok a few questions to an uneducated person in regards to options.

2.5 mil shares @ 2.5c = $62,500. But they can't get that money till Mar 2011. ie 3 years

So can you take it that after inflation of 3 years, that the services paid for today have a lesser value than the value of the options?

Ie they did $45,000 of work today (just for example) but will be paid $62,500 in 3 years.

Is that the way it works?

I also take it that if the share price is 10.0c in 3 years time then they will get $250,000 for their services.

So my base question from all of this is how much consultancy do you get for 2.5 mil shares ay 2.5c payable in 3 years time?

A google search of Jackson Geophysical Consulting hasn't revealed much.

Volume and sp are reminicent of 7th Jan 08 which was on the anouncement of a new Company Secretary only for the price to fade away in the weeks to follow.

 

[sydneysider]

Ok a few questions to an uneducated person in regards to options.

2.5 mil shares @ 2.5c = $62,500. But they can't get that money till Mar 2011. ie 3 years

So can you take it that after inflation of 3 years, that the services paid for today have a lesser value than the value of the options?

Ie they did $45,000 of work today (just for example) but will be paid $62,500 in 3 years.

Is that the way it works?

I also take it that if the share price is 10.0c in 3 years time then they will get $250,000 for their services.

So my base question from all of this is how much consultancy do you get for 2.5 mil shares ay 2.5c payable in 3 years time?

A google search of Jackson Geophysical Consulting hasn't revealed much.

Volume and sp are reminicent of 7th Jan 08 which was on the anouncement of a new Company Secretary only for the price to fade away in the weeks to follow.

ba229, u are right about the bearish trading activity in MHL over the last six months. However this has been fairly typical of bearish market conditions thru nearly all of the specs. Over the last few months there has been a basing pattern taking place in the DOW and S&P, if we take these two indicators as being reasonably representative of the tone in international markets then it is time to hunt thru the the Aussie spec "fallen knives" to find tradable situations. On fundamentals MHL is undervalued (see Young Trader comments) AND yesterday we had signs that some of those fundamentals may be on the cusp of some positive deal making activity. Yesterdays turnover of 32 million shares was the second highest turnover in 4 months. Althou activity for one day does not establish a bullish reversal pattern yesterdays trading activity was pretty fast and furious and took the SP back to a very weak resistance level at 2.0-2.2. I have posted a chart of trading activity over the last five days at 15 minute intervals and it is readily apparent that a "breakway" from a twelve month low of 43% took place. This may over time build into a significant reversal pattern. At present we are looking for a break above the current resistance level of 2.1-2.2 which may give us a target of 2.8 in the very short term, assuming that trading levels stay active.

 

[happytown]

...

2.5 mil shares @ 2.5c = $62,500. But they can't get that money till Mar 2011. ie 3 years

...

my understanding, not quite so,

they (jackson's) have been issued 2.5 m options (at no cost) to acquire shares in the future

they must 'acquire those shares' (if they so choose) by converting the options into shares before march 11, 2011, by paying 2.5c per option (in total $62,500) to mhl

if they converted them when the s/p was 10c, they would pay $62,500 to acquire $250,000 of shares

they can convert them anytime prior to expiry (they were issued on march 11, 2008)

the 'consultancy they get' is in effect a very small percentage of the co (and its potential into the future)

very roughly, based on current shares (only) and if all unlisted options (such as jacksons) were converted, approx .37% of the co

from mhl's perspective (including their current cashflow) it makes good commercial sense to 'pay' for consultancy in this way

as for jackson geophysical consulting, they could be

'Jackson Geophysical Consulting Pty Ltd, Nedlands, WA, Australia'

brent jackson has many years experience in oil and gas as a siesmic interpreter, in canada, north sea, australia, vietnam, china, malaysia, and indonesia

indonesia, in particular, in the north makassar straits betwen borneo and sulawesi has been an area of interest to him

from one of his papers (circa approx 2005)

...

In summary, the east side of the North Makassar Strait is a significant, new gas hydrate province containing considerable volumes of methane. The area exhibits several hydrate related phenomena such as mud volcanoes, palaeo-BSRs and submarine slides which, although not new, are rarely seen together. Furthermore, the gas hydrates overlie what may prove to be a prospective conventional hydrocarbon exploration area in the West Sulawesi Fold Belt. The information provided in this paper may provide an impetus to oil companies to investigate further gas hydrates whilst exploring for conventional hydrocarbons.

...

gekko referred to jon (mhl?) being in indonesia recently (in a prior post)

cheers

 

[ba229]

Thanks Happytown. Thats a great explanation of options to "as I said" the uneducated.

So really if this consultancy firm wants to be paid they are looking for a sp over 2.5c.

ie 2.6c means they would make $2500.

So now I figure the guess is how much consultancy did they do and therefore how much do they think their options will be worth at any time in the next 3 years.

Hmmmm too many questions for this young girl to ponder. Lets keep it simple and hope for a recovery in the future

 

[AussiePaul72]

To me it appears that plenty of investors are sitting in the wings waiting for a glimpse of a good news announcement to jump on MHL. With a market cap of $11.5M it would appear to have a lot of potential upside for both uranium and oil & gas.
Market depth has nearly 8 million volume sitting on the buy side between 1.5-1.7c. Sellers are at less than 1 million volume between 1.8-2.0c. I wouldn't think it would take much to see another run up to 2c and potentially higher on the back of some positive news.
I'm holding at a significant loss but haven't given up on MHL as i think it still has plenty of potential

 

[rapture2002ca]

I'm also holding at a significant loss with an average of 3.8c, I will try to average down further with these rock bottom prices.

The fundamentals are still good but I'm less than impressed with MHL's management communications and transparency in advising the market of the delay.

It makes you wonder whether they are having trouble with Medina signing the dotted line and coughing up the 13mill.

 

[YOUNG_TRADER]

The fundamentals are still good but I'm less than impressed with MHL's management communications and transparency in advising the market of the delay.

Your not alone with your frustrations rapture,

I'd say alot here (including myself) share your thoughts, great fundamentals and very cheap mkt cap, but lack of communication

I have no doubt that these delays and more importantly the lack of communication has led to the share price collapse (combined with investment market meltdown over the last few months) however once everything is signed off MHL will still hold a nice 15% almost free carried interest in potential Elephant Sized Oil and Gas fields next door to the enrgy hungry China and this combined with their Uranium projects and potential Oil and Gas projects in South East Asia make MHL my spec potential multi bagger energy stock BUT THATS JUST MY THOUGHTS

 

[mickqld]

Your not alone with your frustrations rapture,

I'd say alot here (including myself) share your thoughts, great fundamentals and very cheap mkt cap, but lack of communication

I have no doubt that these delays and more importantly the lack of communication has led to the share price collapse (combined with investment market meltdown over the last few months) however once everything is signed off MHL will still hold a nice 15% almost free carried interest in potential Elephant Sized Oil and Gas fields next door to the enrgy hungry China and this combined with their Uranium projects and potential Oil and Gas projects in South East Asia make MHL my spec potential multi bagger energy stock BUT THATS JUST MY THOUGHTS

Your thoughts and those of many others YT. Do you or indeed anyone know if Russian giant LUKOIL hold any leases in or around the area of Kryg where MHL are ?

 

[nyo]

Your thoughts and those of many others YT. Do you or indeed anyone know if Russian giant LUKOIL hold any leases in or around the area of Kryg where MHL are ?

Russia's Gazprom is active in Kyrgyzstan. Article below.

Lukoil is merging with Gazprom. Article below.


http://www.reuters.com/article/rbssEnergyNews/idUSL2046013920080220

Russia's Gazprom gets Kyrgyz gas field licenses

Wed Feb 20, 2008 5:34am EST

BISHKEK, Feb 20 (Reuters) - Kyrgyzstan awarded Gazprom (GAZP.MM: Quote, Profile, Research) exploration licenses on Wednesday for two oil and natural gas fields and invited the Russian gas monopoly to buy stakes in its state-owned companies.

Gazprom said it would invest up to $300 million to develop the Central Asian nation's fields within the next four years.

"We were given exploration licenses today," Gazprom Chief Executive Alexei Miller told reporters after meeting Kyrgyz Prime Miniester Igor Chudinov in the capital Bishkek.

"During the second stage Gazprom will invest about $300 million into Kyrgyzstan."

Chudinov said the government had also invited Gazprom to take part in the planned privatisation of two state-owned oil and gas companies -- Kyrgyzgaz and Kyrgyzneftegaz.

Kyrgyzstan, an impoverished ex-Soviet nation, depends on gas supplies from neighboring Uzbekistan. Miller said the country might be able to meet domestic demand with its own output in several years with Gazprom's help.

Kyrgyzstan, more known for its metals reserves, remains a small player on the Central Asian energy market dominated by oil-rich Kazakhstan and major gas exporter Turkmenistan.

It produces about 70,000 tonnes of oil and 30 to 40 million cubic metres of gas a year, but the government says there are sizeable unexplored hydrocarbon reserves. (Reporting by Olga Dzyubenko; writing by Olzhas Auyezov; editing by James Jukwey)




LUKOIL AT THE CROSSROADS

By Vladimir Socor

The destruction of Yukos by the Russian state left Lukoil as Russia’s largest oil company not controlled by the Kremlin, though of necessity loyal to it and often in its graces. Lukoil’s nominal independence from the state is about to end, however. This privately owned company is about to undergo a merger with the Kremlin-controlled Gazprom’s subsidiary, GazpromNeft, on terms apparently defined by the latter.

In a wide-ranging March 6 press conference (Interfax, RN Wire [Moscow], Upstreamonline.com, March 6), Lukoil president Vagit Alekperov outlined the company’s investment policies and prospects, particularly outside Russia, in the emerging situation as part of a Gazprom-dominated entity.

GazpromNeft is taking a 51% stake in the merged company and seeks exclusive operating rights. Lukoil had initially sought 51% and the operating rights for itself. Now reconciled to the 49% status, Lukoil hopes for shared operating rights. GazpromNeft and Lukoil are now finalizing arrangements on their respective geographic areas of responsibility -- a matter of some importance particularly to foreign countries where Lukoil has acquired assets or intends to do so.

ConocoPhillips holds a 20% stake in Lukoil (the Texas-based company increased its stake to that level from 2004 to 2006). The merger with GazpromNeft should inevitably dilute ConocoPhillips’ influence within the new entity, making it more dependent on Gazprom decisions on the merged company as well as on other projects.

According to Alekperov, a Lukoil expert group is planning a working visit for late March-early April to Iraq, with a view to reactivating Lukoil’s project at the giant West-Qurna-2 oilfield. With proven reserves of 6 billion barrels (some 850 million tons) of oil, the West-Qurna-2 project was awarded in 1997 by Saddam Hussein to a consortium in which Lukoil held a 68.5% interest, with two smaller Russian companies holding 6.5% between them, and Iraq’s oil and gas ministry 25%. However, international sanctions against Iraq stopped this project, and Saddam himself canceled Lukoil’s production sharing agreement in frustration in 2002. In the run-up to the 2003 war and thereafter, the United States ruled out Russia’s wish to reinstate the West-Qurna-2 agreement.

To elicit U.S. consent, Moscow now offers a 17.5% stake in West-Qurna-2 to ConocoPhillips. Alekperov also announced at his press conference that Lukoil is negotiating “with the authorities of a southern province of Iraq” about re-launching this project. His announcement comes in the wake of Russian Minister of Foreign Affairs Sergei Lavrov’s assertions that the United States is asking the Russian government and Russian companies to participate in economic reconstruction within Iraq (Rossiiskaya gazeta, February 21, 28; Russian MFA website, March 2).

According to Alekperov, Lukoil is renouncing a major, long-planned investment project in Turkey. It envisaged building an oil refinery with a processing capacity of 8 to 10 million tons of crude annually at Samsun or Zonguldak, on Turkey’s Black Sea coast, along with a network of 500 gasoline service stations to sell that refinery’s products in Turkey. The project’s most ambitious version included an oil transit pipeline overland across Anatolia to the export terminal Ceyhan on the Mediterranean. That proposed pipeline was also one of the options for oil traffic to reach the Mediterranean from the Black Sea, bypassing the overcrowded Bosporus Strait.

This Lukoil project fully depended on Russian and Kazakh oil supplies reaching Turkey’s coast by tankers from Novorossiysk and Odessa/Pyvdenny, a short distance in the Black Sea. However, the Russian government recently chose a rival Bosporus-bypass option, the Burgas (Bulgaria)-Alexandropolis (Greece) overland pipeline route from the Black Sea to the Aegean. GazpromNeft participates, along with Transneft and Rosneft, in the Burgas-Alexandropolis project (see EDM, March 2). This development has evidently precipitated Lukoil’s decision to give up the Samsun project. Alekperov now proposes to increase the capacity of Lukoil’s Burgas refinery, from 7.5 to 10 million tons of oil annually.

Apart from earlier acquisitions in Bulgaria and Romania, Lukoil is not achieving its goal of acquiring oil refineries on European Union territory in full- or part-ownership. According to Alekperov at his press conference, Lukoil seeks to buy the stake that ConocoPhillips is willing to give up in the Czech Republic’s oil-refining and petrochemical holding, Ceska Rafinerska. This includes the Kralupy and Litvinov refineries, which process some 7 million tons of crude annually. The holding’s owners are ConocoPhillips, Royal Dutch Shell, and Italy’s ENI-Agip with stakes of 16.33% each, alongside the dominant shareholder Unipetrol with 51%, within which Poland’s PKN Orlen is the majority shareholder, with first-right to buy any shares sold by the other shareholders. Thus, Lukoil’s chances look scant. Prior to this, Kuwait Petroleum pulled out of a nearly completed deal to sell its Europoort refinery in Rotterdam to Lukoil.

When PKN Orlen acquired Lithuania’s Mazeikiai refinery last July, Russia’s Transneft promptly shut off the pipeline that carried Russian oil to Lithuania. Lukoil had done the same in 1999-2001, when it was coordinator of Russian oil supplies to the Baltic states. It tried to force out a U.S. company and take over Mazeikiai through such coercion until Yukos came to the rescue in 2002. Following the destruction of Yukos three years later, Lukoil sought to take over Mazeikiai through a bidding process in the shadow of Russia’s monopoly on supplies by pipeline Lithuania, however, chose the Polish company, anticipating that Lukoil and other privately owned Russian energy companies would soon be brought directly or indirectly under state control. Latest developments in Russia, including Lukoil’s merger with the Gazprom subsidiary, vindicate Lithuania’s decision. Meanwhile, Lukoil owns networks of gasoline service stations in the Baltic states and in the United States (acquired from ConocoPhillips and from Getty Oil) and seems to be looking farther afield in North America (Globe and Mail, March 6).

In his new role as Gazprom’s partner, Alekperov is recommending a restrictive policy regarding Western oil companies in Russia. In his news conference he urged that prospecting and exploration of oil and gas deposits be conducted solely by Russian companies, individually or in all-Russian consortiums, without foreign capital. Only in the development phase should foreign companies be allowed to participate. This is in line with the Kremlin’s recently adopted policy, which restricts Western participation in Russian energy projects to minority stakes or to subcontracting for services.

(Interfax, RN Wire [Moscow], Upstreamonline.com, March 6)

 

[sydneysider]

ba229, u are right about the bearish trading activity in MHL over the last six months. However this has been fairly typical of bearish market conditions thru nearly all of the specs. Over the last few months there has been a basing pattern taking place in the DOW and S&P, if we take these two indicators as being reasonably representative of the tone in international markets then it is time to hunt thru the the Aussie spec "fallen knives" to find tradable situations. On fundamentals MHL is undervalued (see Young Trader comments) AND yesterday we had signs that some of those fundamentals may be on the cusp of some positive deal making activity. Yesterdays turnover of 32 million shares was the second highest turnover in 4 months. Althou activity for one day does not establish a bullish reversal pattern yesterdays trading activity was pretty fast and furious and took the SP back to a very weak resistance level at 2.0-2.2. I have posted a chart of trading activity over the last five days at 15 minute intervals and it is readily apparent that a "breakway" from a twelve month low of 43% took place. This may over time build into a significant reversal pattern. At present we are looking for a break above the current resistance level of 2.1-2.2 which may give us a target of 2.8 in the very short term, assuming that trading levels stay active.[/QUOte

AND then she went KERPLUNK. Sadly a lot of these issues are getting illiquid and subject to the whims of daytraders. Still looks interesting but i pulled out of MHL, she still looks interesting and very cheaply priced. Might need to "brew" a little longer at these levels.