Nice finds chaps. Not surprised to see some major Insto's...

Nice finds chaps. Not surprised to see some major Insto's running the books for PBR.

The likes of Citi, BofA, Merrils, MStanley & crikey 'Santander' (think they recently ran off a banker for inside trading in the BHP's $40bil Potash bid, 10 days ago in Spain for making a quik million on the oppies).

PBR's plan is to issue 2.174 bil common shares @ BR$ 31.25/sh + 1.585b preffered shares @ BR$ 27.03/sh.

Their prospectus makes an interesting reading.

Here's the link to PBR's latest Prospectus.

They seem serious abt drilling more wells & increasing their reserves which as of Dec 2009 were 12.143 BBOE as per SEC guidelines or 14.865 BBOE as per their own ANP guidelines.

Back to KAR.

IMO, we should see newsflow frm the first well Quasi which is currently being drilled by PBR. This one is a smaller target, 44 mmboe & is testing a shallow target (sub 3000m).

The next well Maruja is the big one with 138 mmboe in 2 stacked sands..

Still, with 20% interest, KAR gets their hands on the sub-surface data for these 2 wells in the SouthWest + they've already shown on the slideshows & website info abt Piracuca to the NorthEast thus establishing the trend frm NE to SW thro' their blocks !! Looks like Insto's r still to realise this strategy.

Drilling shouldn't b too capital intensive, 20% of say US$60mil is US$12mil.

Current cash on hand is A$87.122 mil, so this should b apprx $70mil by Dec end, by my estimate.

Their 12 month cashflow till June end was A$159 mil for drilling KT + production testing at P#2 & Kr#1 & 3D seismics in Sth America & Browse Basin.

Hope they can announce their farmout partners & the BOVESPA listing soon.

IMO, KAR's current Brazil drilling program should have regular newsflow trickle thro' for the next couple of months. IMO, its not about the production frm these 2 wells unless PBR gets another FPSO here. PBR already have the FPSO Avare at Tiro Oilfield, since May for 12 months.

For KAR its abt the partnership & more imp. abt the sub-surface data. Have they dropped us a hint abt their farmin partner, hmm dont know yet. They should b right, b4 they kick off drilling in the Browse nxt year.