as requested ..., page-54

the vitol group & more ...
Early morning greetings to all ...
: )
I certainly didn't think that I would be the one refuting my own post but it appears that I made certain erroneous statements relating to The Vitol Group.
Anyone that has tried to research Vitol over the week-end will be able to understand where my error(s) lay, sincere apologies for this & the correction is as follows.

The Vitol Group had a 2004 turnover of USD$61.1 billion, (AUD$79.609 billion), with 2005 turnover expected to be substantially greater than due to increased market share, higher trading volumes/increased demand & a higher value weighted average price(s) for oil & oil derivatives for the CY.
I have found it quite difficult to identify specifics because of the limited public disclosure requirements of private companies/groups, however, it appears that their capitilisation may be closer to USD$40 billion, (AUD$52.117 billion) than the USD$27.3 billion figure previously stated.
It is thought that their profit for 2004 was in the vicinity of USD$11 billion, (AUD$14.332 billion).
If anyone can confirm or correct these findings it would be appreciated.

What-ever the specifics are, I think we can all agree that this is as good as it gets!
Vitol is indeed an apex company, it is, one of the world's largest independants, (at least that statement remains unchanged since Friday).
: )

Because there has been some query, I will quickly verbalise a few thoughts starting with how (I understand) the Galoc field ownership to be. Please note that this is an assumption until we get due confirmation from the company.

-Prior to farm-in, Galoc field ownership was;
Nido Petroleum - 22.279%.
Philippine J.V. - 77.721%.
(Philippine J.V. consists of: Oriental Petroleum and Minerals Corp., Alcorn Phils.; Alcorn Gold Resources; Linapacan Oil, Gas & Power; Altisima Energy; Basic Petroleum and Minerals; Petroenergy Resources; Phoenix Energy).
-The Galoc Production Company, (G.P.C.), by paying for the field development costs, earn 80% of the J.V. holding.
(G.P.C. consists of: Cape Energy; Team Oil; The Vitol Group).
-Nido Petroleum's field ownership remains unchanged due to bringing the farm-in together, maintaining responsibility for funding of its equity share & completing all technical work for the project at their own expense.
-Therefore, post farm-in, Galoc field ownership is;
G.P.C. - 62.1768%.
Nido Petroleum - 22.279%.
Philippine J.V. - 15.5442%.

I personally perceive it to be an extremely positive indicator that NDO satisfied & gained Vitol's confidence to the extent that there was not only no reduction in field ownership but the farm-in offered a fully underwritten debt facility to cover Nido’s debt component of the development costs.
: )

Relating to continuous disclosure requirement concerns for NDO, the 'Galoc Development Update' released 09/05/05 would cover the company up till the moment that the farm-in has been officially concluded/signed off. The fact that the market didn't understand the true significance of the 'major investment grade, European based oil company' at that time & that some elements of the Phillippine press has revealed the details prior to official conclusion is beyond D.W.'s control & is highly fortuitous to those individuals that have understanding of this.

Regarding the possibility of a speeding ticket by the ASX, these guys just announced that their investment in Cool Energy just received the biggest nod of approval possible on the global stage from the subsidiary of another apex company, one of the largest E & P players in the world ... The Royal Dutch Shell Group of Companies.
A strategic agreement involving the intellectual property licensing with Shell Global Solutions International BV covering the cooperation with Shell in technology development, the sharing of intellectual property developed by either party & the business areas in which Cool Energy and Shell may commercialise the technology.
I don't think anything more needs to be said there, I'll leave that to the industry competents.
: )

This company has the full validity to sell itself from this point on but I will try to contain & emphasize once more.
Galoc is not, the company ... simply the golden key to, the company.
It will generate the cash-flows necessary to facillitate the exploitation of their current & future asset base.
We have invested in NDO primarily due to all that the Palawan Basin & the Pagasa Turbadites may reveal, that is, multiple hundred million barrel exploration targets with maybe a couple of billion barrel structures included.
The road to that exploration lies with the exploitation of the Galocs, the Tara's, the Libro's, the Linapacan's, the Nido's & the Matinloc's, & without a doubt ... strategic regional relationships formed with companies such as The Vitol Group.

Page 25 from the AGM presentation, “Evaluate & high-grade at least 6 structures & mature to prospect status by end-2005 with the intention of drilling by late-2006/early-2007” ...
I believe The Vitol Group & Nido Petroleum will be involved with much more than Galoc, time will tell.
I believe that the Galoc field will turn Nido Petroleum into a AUD$400M producer within two years & from that point, it is simply the beginning.
Whilst other assumption reward tables relating to Galoc earnings that I have produced before have allowed variables for the individual to select what they personally deem valid, I will include one final table down the bottom that, until such time the company releases projections to the contrary, best represents my own opinion.

Paralels between WPL, HDR & Mauritania should be kept at base comparisons due to many obvious differences/variables though should still be aknowledged.
Potential impact to capitilisation growth from the Vitol, NDO & Pagasa Turbadites could turn out to be remarkably similiar.

Would also agree with Fixer in the view that those paying for full service should utilise the house analyst & request a committed opinion.
Also, anyone with access to the D.J. Carmichael report from Late February/early March should see if maybe they are allowed to reproduce it here, their guy deserves some credit, as far as I am aware, he was the first analyst to commit in a report the impact of Galoc.
Would be interested to hear also if anyone has the views from the Southern Cross analyst, they have been by far the largest net buyers this year, & no ... I have no affiliations with either mentioned, when I plug my broker, I'll make it obvious (& make sure I get a reduction in brokerage for doing so!).
: )

Finally, as far as trading this 'spike' goes, I would thoroughly agree with what The Analyser said about the company having 'too many irons in the fire' ...
We now know about the recent Cool Energy development & the obviously impending 'Vitol-G.P.C./Galoc development go ahead announcement' but to consider also;
- the fact that three further permit applications in the U.K. has been submitted.
- A current U.K. block(s) status update may be due.
- The Rapid Oil Development field strategy is yet to be explained to the market, (third core key area of interest?).
- The stated ambition to acquire further Palawan Basin acerage.
- A left-field agreement of some kind with The Vitol Group.
- Left field development of any kind.
- A full roadshow/broker presentation outlining the impact to the company derived via Galoc.
- Surprising field certification results.
- Galoc development time-frame brought forward.
etc.
Yes, profits certainly to be made from trading what may occur over the next 'two weeks' but much, much more to be left on the table if you're caught with your pants down under-estimating this collective management team.
: )
I generally trade anything that may offer a profit but invest in very few companies.
Nido is by far our largest position, we are investors all the way, we won't be trading any spikes at this early stage of company development & would encourage others to be long as well until/if the point comes that fundamentals dictate otherwise.

Why? ... Because the ducks really are lined up!
: )

Anyway, tis late/early, have to go.
Good to see some new NDO share-holders/interested parties over the week-end, you especially there Stolwyk, welcome all & good luck.
Analyser, good work & interesting perspective with those figures, thanks mate.

Many thanks to all other thread contributors as always.
Warm regards to all & good luck in any & all positions.
: )




*Assumption Reward Table #8.

Each horizontal development well flows at 7,500bls per day.
7,500bls X 2 = 15,000bls.
15,000bls X 0.22279 = 3,341.85 bopd net NDO.

i) 3,341.85 X AUD$50. = AUD$167,092.5. per day X 91 = AUD$15,205,417. per quarter X 4 = AUD$60,821,668. per annum.
a) Price earning ratio application of 7x = market capitilisation of AUD$425,751,670.
AUD$425.75m divided by 750m fpo = 56.7cents per fpo valuation.


The table above assumes the following;
- NDO field interest remains unchanged @ 22.279%.
- The market applies p/e ratio of 7X.
- Calculations are net values not revenues or EBITDA.
- The price of oil is @ USD$50bl by the time production from Galoc begins, (www.ino.com).
- Total daily production of 15,000bls, (the company has stated a projected plateau flow from two horizontal wells at 10,000bpd per well, this conservatively allows for production <).
- Although NDO is fully underwritten for it's development costs via the G.P.C./Vitol farm-in, it is assumed that prior to Galoc development, NDO issues a further 100m shares to fund Nth Sea development costs combined with post June options expiry resulting in an approximate capital structure of 750m shares, #.
- Net profit per barrel produced after production costs, transportation costs, taxes, royalties & government levies allowing for P.S.C. benefit is AUD$50, (USD$37.96).
- No other company asset value is included in these speculative assumptions.

#This factors in dilution for Nth Sea asset development costs but not the value creation generated by.
These assets have the realisable potential to produce between 5,000 - 7,000 boe daily production to be achieved within a six month time frame of Galoc producing.



One final simple valuation for those interested for post announcement applications.
i)Recoverable reserves @ 20mbls.
20mbls x 0.22279 = 4,455,800bls.
4,455,800bls x AUD$20 = AUD$89.116m.
AUD$89.116m divided by 650m fpo = 13.71c per fpo valuation.
ii)Recoverable reserves @ 25mbls.
25mbls x 0.22279 = 5,569,750bls.
5,569,750bls x AUD$20 = AUD$111.395m.
AUD$111.395m divided by 650m fpo = 17.13c per fpo valuation.
iii)Recoverable reserves @ 30mbls
30mbls x 0.22279 = 6,683,700bls.
6,683,700bls x AUD$20 = AUD$133.674m.
AUD$133.674m divided by 650m fpo = 20.56c per fpo valuation.



n.b. - Disclosure & sentiment covered in the above.
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