I think the initial answers can be found in ' small print ' wording at the end of the Quarterly Activities report. From there you can review Managements Strategies as outlined in the Annual Report together with recent ownership structures taking place behind the scene's in Russia .
About the Company: ( Bottom of quarterly activities report )
" The forward planwill see Jupiter gain access to a group production facility to process, store andexport oil. "
So what is this ' Forward Plan ' they speak of . Because even when you go back to the Annual Report which is the first place you would expect to find any profound details of such a plan , all you end up finding is the obvious more in depth detail of what most holders would already know about their company and it's prospects.
The only thing I can think of is that by requiring gas ' flaming ' infrastructure required in moving to full producing oil fields ....that this would also require strategic ' storage ' production capacity which if they had access through a connected affiliate or through which has arisen from ' changes ' to Government policy and direction ie increase in strategic reserves and / or the recent offloading 9.6% Rosneft , Russia's largest oil producer on March 30th.
Apparently before the deal , Russia via state holding company Rosenftegaz owned approximately 50% of the Kremlin controlled Rosneft capital .
The whole impetus of the deal it seems is to limit of the risk of ' new ' U.S sanctions on Rosneft which pumps 4.7 million barrels of oil a day at a time when the U.S and Saudi's are considering joint cuts to oil supply. And so it was asserted that they would not want Moscow ramping up output during these times. So ultimately the outcome is alleged that Rosneftegaz had reduced its stake in Rosneft as part of the Venezuela deal and passing this stake onto Rosneft as payment for its Venezuela assets. So the result being that on paper , the State does not have control over Rosneft anymore who is also owned in part by BP ( 19.75% ) , Quatar Investment Authority through it's subsidiary who also owns 18.93% .
And apparently this stake in the Venezuelan oi assets that went to Rosneft was then sold as I understand to an ' unnamed ' company owned by the Russian Government . Ducks and Drakes ..... So perhaps in the end this may open up further opportunities for Jupiter to ' fast track ' it's exporting ambition's through a ' new ' market when matters settle down - or even now as increases to ' Strategic Storage Capacities ' seems to be overriding flavor of the moment.
And nearest I can see is that the planned size of strategic reserves in Russia currently stand at circa 14,665,982 barrels with the reserves being held at commercial refineries , transneft facilities and state reserve facilities all under the auspices of Rosenftegaz .
In any event lots of interesting things happening in this space.
Background Supporting Information from the Annual Report :-
" Kazakhstan continues to be a difficult jurisdiction in which to operate. During the financial year the company hadcontinued discussions with the Kazakh authorities to seek clarity over a range of operational issues and workprograms. The primary focus for the Company at the time of this report is to seek an extension for a further threeyears to its Exploration Licence, which currently runs through to 29 December 2019. "
The introduction during the year of a new code governing Sub Surface Users has meant that the licence extensionprocess has changed and getting clarity from the authorities on the definitive outcome of the application for anextension is proving difficult. The Company will continue to work with the relevant authorities and is preparing allthe requisite paperwork required under the new law to get the process completed by year end but at the time ofwriting this letter, the Company cannot be certain that the matter will be resolved by the 29 December 2019deadline
Details on potential next steps in the event of the Exploration Licence extension not having been received by 29December 2019 are contained in the Operations Report.
That said, the Board remains confident in the prospectivity of the Block 31 permit area and hopes to concludenegotiations with the authorities in the coming months.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year included:
> Exploration for oil and gas in Kazakhstan: and
> Appraisal, development and production of oil and gas properties in Kazakhstan
Status of Exploration Licence:
An approved Final Reserves Report is a key requirement before the Company can move the Akkar East field tocommercial production and be permitted to sell oil from the oilfield into the export market. Currently all oilproduced from the Akkar East field is sold into the Kazakh domestic oil market
The issue facing the Company is that in order to move Akkar East into Commercial Production, the oilfield musthave access to infrastructure that enables it to achieve 100% gas utilization – ie the flaring of excess gas producedduring oil production, that is allowed during Trial Production, is not allowed when producing under CommercialProduction.
The Company is looking at various alternatives to enable it to meet this mandatory requirement but it is almostcertain that this will not be achieved by 29 December 2019 and therefore the wells of Akkar East will be shut infrom 29 December 2019 until such time that access to infrastructure that provides for 100% gas utilization is inplace.
The other two fields will continue to operate under an extended Exploration Licence and produce oil in a TrialProduction environment.
It is hoped that the Company will complete all the various paperwork and associated approvals over the comingmonths to achieve the above scenarios. Three local institutes have been engaged to assist in the preparation ofthe various documents required and the Ministry of Energy has given in principle support for the extensions asoutlined above
That said, there are several regulatory bodies that need to review and sign off on the documents and each of thesegroups take time. In the event that all the sign offs have not been received by 29 December 2019, it is possiblethat the Company would have to shut in all operations until such time that the various Addendums have beensigned and fall back plans have been drawn up to ensure the business can sustain such a shutdown.
It is important to note that the Company currently has a 25 year Commercial Production Licence so in theory couldcontinue operations under this licence from 30 December 2019, but there are a number of key requirements thatare needed before commercial production can commence, the most critical of which is providing infrastructure toallow all three oilfields to produce oil with 100% gas utilization As already discussed above, this infrastructure isnot currently in place and will not be by 29 December 2019.
As such, the best way forward will be an extension to the Exploration Licence for at least another 2 years, allowingthe Company time to complete exploration and appraisal drilling on the Akkar North (East Block) and West Zhetybaifields whilst producing under Trial Production. At the same time, the Company will need to focus on getting accessto the necessary infrastructure to enable 100% gas utilization and thus commence commercial production on theAkkar East field
There is also the matter of a favorable settlement being achieved on appeal re: the 2015 work program under performance and resulting fine of US$900,000 which was paid in full and announced last September.
So take your pick folk's as to any of the above reason's why the SP has spiked so much. Most likely a combination of all of them plus the fact that these sorts of ' Pops ' in the markets usually overshoot ' fair value ' in the corresponding traded share price.
Will be interesting as to how they may spend their additional $5 million draw down capacity - will it be on ' infrastructure , and if so will this mean they have a favorable ' extension ' outcome for ' FULL production in the future. Nice moves and Best of Success to all holders...
JPR Price at posting:
15.0¢ Sentiment: None Disclosure: Not Held
So perhaps in the end this may open up further opportunities for Jupiter to ' fast track ' it's exporting ambition's through a ' new ' market when matters settle down - or even now as increases to ' Strategic Storage Capacities ' seems to be overriding flavor of the moment.
And nearest I can see is that the planned size of strategic reserves in Russia currently stand at circa 14,665,982 barrels with the reserves being held at commercial refineries , transneft facilities and state reserve facilities all under the auspices of Rosenftegaz .In any event lots of interesting things happening in this space.Background Supporting Information from the Annual Report :-" Kazakhstan continues to be a difficult jurisdiction in which to operate. During the financial year the company hadcontinued discussions with the Kazakh authorities to seek clarity over a range of operational issues and workprograms. The primary focus for the Company at the time of this report is to seek an extension for a further threeyears to its Exploration Licence, which currently runs through to 29 December 2019. "The introduction during the year of a new code governing Sub Surface Users has meant that the licence extensionprocess has changed and getting clarity from the authorities on the definitive outcome of the application for anextension is proving difficult. The Company will continue to work with the relevant authorities and is preparing allthe requisite paperwork required under the new law to get the process completed by year end but at the time ofwriting this letter, the Company cannot be certain that the matter will be resolved by the 29 December 2019deadlineDetails on potential next steps in the event of the Exploration Licence extension not having been received by 29December 2019 are contained in the Operations Report.That said, the Board remains confident in the prospectivity of the Block 31 permit area and hopes to concludenegotiations with the authorities in the coming months.PRINCIPAL ACTIVITIESThe principal activities of the consolidated entity during the course of the financial year included:> Exploration for oil and gas in Kazakhstan: and> Appraisal, development and production of oil and gas properties in KazakhstanStatus of Exploration Licence:An approved Final Reserves Report is a key requirement before the Company can move the Akkar East field tocommercial production and be permitted to sell oil from the oilfield into the export market. Currently all oilproduced from the Akkar East field is sold into the Kazakh domestic oil marketThe issue facing the Company is that in order to move Akkar East into Commercial Production, the oilfield musthave access to infrastructure that enables it to achieve 100% gas utilization – ie the flaring of excess gas producedduring oil production, that is allowed during Trial Production, is not allowed when producing under CommercialProduction.The Company is looking at various alternatives to enable it to meet this mandatory requirement but it is almostcertain that this will not be achieved by 29 December 2019 and therefore the wells of Akkar East will be shut infrom 29 December 2019 until such time that access to infrastructure that provides for 100% gas utilization is inplace.The other two fields will continue to operate under an extended Exploration Licence and produce oil in a TrialProduction environment.It is hoped that the Company will complete all the various paperwork and associated approvals over the comingmonths to achieve the above scenarios. Three local institutes have been engaged to assist in the preparation ofthe various documents required and the Ministry of Energy has given in principle support for the extensions asoutlined aboveThat said, there are several regulatory bodies that need to review and sign off on the documents and each of thesegroups take time. In the event that all the sign offs have not been received by 29 December 2019, it is possiblethat the Company would have to shut in all operations until such time that the various Addendums have beensigned and fall back plans have been drawn up to ensure the business can sustain such a shutdown.It is important to note that the Company currently has a 25 year Commercial Production Licence so in theory couldcontinue operations under this licence from 30 December 2019, but there are a number of key requirements thatare needed before commercial production can commence, the most critical of which is providing infrastructure toallow all three oilfields to produce oil with 100% gas utilization As already discussed above, this infrastructure isnot currently in place and will not be by 29 December 2019.As such, the best way forward will be an extension to the Exploration Licence for at least another 2 years, allowingthe Company time to complete exploration and appraisal drilling on the Akkar North (East Block) and West Zhetybaifields whilst producing under Trial Production. At the same time, the Company will need to focus on getting accessto the necessary infrastructure to enable 100% gas utilization and thus commence commercial production on theAkkar East fieldThere is also the matter of a favorable settlement being achieved on appeal re: the 2015 work program under performance and resulting fine of US$900,000 which was paid in full and announced last September.So take your pick folk's as to any of the above reason's why the SP has spiked so much. Most likely a combination of all of them plus the fact that these sorts of ' Pops ' in the markets usually overshoot ' fair value ' in the corresponding traded share price.Will be interesting as to how they may spend their additional $5 million draw down capacity - will it be on ' infrastructure , and if so will this mean they have a favorable ' extension ' outcome for ' FULL production in the future. Nice moves and Best of Success to all holders...
(20min delay)