Friday, September 25, 2009

global investor network across 4 continents in 4 languages

Invitation to the Proactive Investors: Proactive Investors facilitate the largest global investor network across 4 continents in 4 languages. With a team of analysts journalists, & professional investors Proactive produce independent coverage on 1000’s of companies across every sector for private investors, private client brokers, fund managers and international investor communities.

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Thursday 1st October

Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB Starting at 6pm

Norseman Gold operates Australia’s longest continuously running gold mining operation, which has produced over 5.5 million ounces of gold over a period of more than 65 years from the Norseman field in Western Australia. They also have a portfolio of highly perspective, advanced exploration targets to support continued future production.

NioGold Mining is a junior exploration company primarily focused on gold whose main properties are in the Abitibi region of Quebec, Canada. Their portfolio shows potential for gold, diamonds, niobium, and other earth elements, as well as nickel, copper, cobalt and phosphorus.

Landore is engaged in mineral exploration and development, with the present focus of its operations being mineral exploration in Ontario, Quebec and New Brunswick, Canada. They are also the owner of other properties in Canada and Nevada in the US containing gold and base metal drill intersections.

Lonrho has a diverse portfolio of investments focusing on Africa, ranging from primary infrastructure to transportation, support services, hotels and natural resources. They are re-establishing a significant presence on the African Continent through strategic investments across emerging sectors in fast-growing African economies.

Souerce: W:

Friday, April 3, 2009

Negotiate with China on funds, or local banks?

PLN should negotiate with China on funds, or local banks. PT PLN is still facing financing problems with its first 10,000 megawatt (MW) crash program because of the “unsmooth” partnership with the Chinese government as one of its biggest investors, according to President Susilo Bambang Yudhoyono. 

Yudhoyono said Monday he had instructed several Cabinet ministers and PLN executives to discuss and find solutions on this matter, including continuing negotiations with China and finding alternative sources of loans from domestic lenders. 

“Physical construction of the first steps of the 10,000 megawatt crash program has actually run fast, but there are some hindrances here and there due to financing problems,” Yudhoyono told the press after a meeting with PLN executives at the company’s headquarters. 

“I’ve asked related ministries and PLN executives to continue negotiations with China so as to ensure smooth disbursement of the funding. In the event they fail to generate solutions, (I’ve asked them to) use domestic sources more,” he added. 

Yudhoyono said using funds from the local banking sector was the best option, adding he had no plan to suggest PLN seek loans from other foreign sources.  

The 10,000 MW power program was launched in 2006 to meet the increasing demand for electricity nationwide, especially for the Java-Bali system. 

The program included 35 power plants, 10 of them in Java and Bali, while the remaining 25 were off the two main islands. So far contracts for 32 power plants have been signed, and mostof these have now reached the construction phase. 

PLN says the program requires US$8 billion in total, 85 percent of which is expected to come from local and foreign investors and 15 percent of which to be covered by PLN from its own resources. 

PLN’s head of team for the acceleration of the first 10,000 megawatt program, Yogo Pratomo, said PLN had managed to secure Rp 17 trillion ( US$1.45 billion) of investment from local banks and $2 billion in foreign currency, most of which came from the Chinese government. 

Yogo said problems with China regarding financing issues were threatening among others, the planned power plant at Indramayu, West Java, originally scheduled to start operation this year.
PLN said earlier about 1,000 me-gawatts made up of three new plants, including Indramayu, should have commenced commercial operation in 2009, but were now delayed. 

About 7,000 megawatts are scheduled to start operating in 2010, while the remaining 2,000 megawatts are delayed until 2011 and 2012. 

To anticipate increasing electricity demand in the future, the government has been also preparing a second 10,000 megawatt accelerated program, part of which will be directly PLN’s responsibility while the rest will comprise independent power producers (IPPs). 

PLN has said that the tenders for some of the projects in the second program would start to be issued at the beginning of the second half of the year. 

Unlike the first program, which is entirely designated for coal-fired power plants, the second program includes 12 percent of total power generated by hydro plant, 48 percent by geothermal plant, and 14 percent by gas , plus 26 percent by coal. 

The second program is scheduled for completion by 2012.
Souerce: Erwida Maulia , THE JAKARTA POST , JAKARTA | Tue, 02/10/2009 12:51 PM | Business 

Sunday, March 29, 2009

jet plane for election campaign

With tight campaign schedules, chartered aircraft is the most effective mode of transportation for political party leaders, at least those that can afford it.

Despite the plunging value of the rupiah, several parties dare to spend extra money to rent private airplanes for campaigning. 

Yahya Sacawiria, head of President Susilo Bambang Yudhoyono’s Democratic Party election team, said the party rented two private planes during the open campaign period between March 6 and April 5.

“One of them is for President SBY and another is for the campaign team. Chartered aircraft is more effective as we have high mobility during the open campaign,” Yahya said. 

Yahya gave no details of the aircraft type or cost. “The party will cover all of the expenses,” he said.

Choel Mallarangeng, Chief Executive Director of Fox Indonesia, a political consultancy firm which is administering the Democratic Party’s campaign, said the campaign team only chartered a private airplane when regular flights were fully booked.

“We don’t choose a specific airline company. It’s just like taxi; we order it only when we need it. Using chartered aircraft is cheaper actually,” Choel said. 

Practicality is also the reason the Greater Indonesia Movement Party (Gerindra) cites for opting for air transport.

The party’s deputy chairman Fadli Zon said Gerindra rented two private jets during the open campaign; one for party’s chief patron, Prabowo Subianto, and the other for advisory board member Hasjim Djojohadikusumo, who is also Prabowo’s brother.

“We rent the private aircraft for 20 days,” Fadli said.

Prabowo took his own private aircraft when he took part in the Golkar Party’s convention to select the party’s presidential candidate in 2004. At that time, Prabowo reportedly rented a Fokker 50 from charter flight company Transwisata Prima Aviation.

Fadli said a Fokker 100 was rented by Prabowo from corporate aircraft operator Premiair. 

The Fokker 100 is a large cabin corporate jet in which the standard 102 seat cabin has been converted in to a VIP and business class cabin with a total of 35 seats. 

Fadli refused to provide details of Gerindra’s aircraft rental, but Fokker 100 operators normally charge its users at least US$4,000 for a Jakarta-Bali one day return flight. Landing fees are excluded in the price.

Golkar has chartered a Boeing 737-300 plane from Sriwijaya Air.

“Actually we rent our aircraft to NAC (Nusantara Air Charter), but the aircraft is likely to be used by Golkar,” Sriwijaya’s public relations manager Ruth Hanna Simatupang said. 

NAC is a chartered aircraft company owned by Solihin Kalla, son of Vice President and Golkar Party Chairman Jusuf Kalla.

According to Ruth, Golkar will rent the aircraft for two weeks and Sriwijaya will provide complete flight services. 

Ruth said this was the first time Sriwijaya had rented one of its aircraft. The campaign season, however, does not impact the chartered flight industry significantly, Pelita Air’s President Director Hariadi Soepangkat said.

“I haven’t seen any significant increase in demand,” he said, adding that Pelita would rely on oil and gas companies to rent aircraft over the long term.
Source: Alfian , The Jakarta Post , JAKARTA | Wed, 03/25/2009 10:10 AM | Election 2009 

Monday, February 16, 2009

Oil, gas firms to invest $14b in 2009

Oil and gas firms have proposed to invest US$14 billion this year, about 15 percent higher than the $13.15 billion calculated last month. 

Last month’s figure was based on submitted Work Program and Budget (WP & B) proposals from the majority of 203 contract holders. More contractors have submitted their business proposals since, says upstream oil and gas regulator BPMigas.

“WP & B consists of the contractors’ projected work programs and their budgets. BPMigas must approve the proposals prior to their execution,” said Achmad Luthfy, BPMigas deputy chair for planning, Sunday, as reported by Antara news agency.

Last year, oil and gas contractors spent $11.5 billion in the sector from January to October. 
He said that approved work programs would be called “Petroleum Operation” and the expenses spent for them called “Operating Cost”.

Luthfy said the higher investment levels would help the country achieve its 2009 oil production target of 960,000 barrels of oil per day (bopd).

The production target is lower than the country’s average last year of 978,000 bopd.

BPMigas Chair Priyono said last month declining oil production by PT Chevron Pacific Indonesia, a local subsidiary of the US’ second largest oil company, was among the reasons for the potentially lower output in 2009. 

Chevron’s oil production makes up around 40 percent of the country’s oil output. 

“Their production is declining because of aging fields. As the company output is very big, about 400,000 bopd, their decline is difficult to set off against finding new fields,” Priyono said.

Chevron recently said its Duri and Minas concessions in Sumatra might only show production of 405,000 bopd last year, lower than the government-targeted 408,000 bopd and far from the 425,000 bopd pumped in 2007.

Priyono said most investment would focus more on production rather than exploration. 

“Exploration activities gave very good results last year. So we expect to see more drilling and other exploratory activities this year,” he said when asked to judge this year’s business prospects as compared to those in 2008.

BPMigas external division head Amir Hamzah said there was a slight difference in how the contractors’ WP & B were arranged compared to previous years.

“Previously we held separate discussions for the Authorization for Expenditure (AFE) and for the WP & B. But starting this year we will discuss both subjects simultaneously in the beginning of the year. This will make for faster approvals on proposals,” Hamzah said.

Hamzah also said that WP & B could function as a pre-auditing tool for the government because its principles cover cost recovery, profit sharing and tax components.

Cost recovery is an incentive mechanism under which the government recovers oil block operators’ spending during exploration only after the block starts producing to bolster investment in the sector.
Source: The Jakarta Post , JAKARTA | Mon, 02/16/2009 11:21 AM | Business 

Saturday, February 7, 2009

Low cost Eastern Dragon resource - third gold mine for Sino Gold

Sino Gold Mining Limited (Sino) is an Australia-based company. The principal activities of the Company are mining and processing of gold ore, and sale of recovered gold, and exploration and development of mining properties. The Company mined 692,000 tons of ore through open-cut mining during the year ended December 31, 2007. At December 31, 2007, Sino had acquired a 94% interest in Golden China Resources Corporation. The operation in Jinfeng Mine achieved commercial production on September 1, 2007. A total of 449,000 tons of ore were treated during 2007, with an overall recovery of 71.9% producing 56,981 ounces of recovered gold. In 2007, 43,483 ounces of gold were sold. As of December 31, 2007 the 230 meter of underground development was achieved in White Mountain. Compulsory acquisition of Gold China Resource Corporation was completed on January 16, 2008.
Sino Gold (ASX:SGX/SEHK Code:1862) has released an initial Eastern Dragon Ore Reserve of 2.0 million tonnes at 8.4g/t gold and 70g/t silver, containing 0.5 million ounces gold and 4.4 million ounces silver.

Highlights of recent work:

- Approximately 90% of Measured and Indicated Resources convert to Ore Reserves.
- Initial Eastern Dragon Mineral Resource totals 3.4 million tonnes at 7.1g/t gold and 66g/t silver, containing 0.8 million ounces gold and 7.2 million ounces silver.
- Potential to increase the resource through further drilling, especially of the recently discovered second mineralised vein (Lode 5-1).
- Initial 25% interest acquired in the surrounding 53 km2 Exploration Licence.
- Sino Gold aims to bring Eastern Dragon into production as quickly as possible to become Sino Gold’s third operating mine.

Sino Gold Chief Executive Officer, Jake Klein said, "our work during 2008 has confirmed that Eastern Dragon is a very valuable gold deposit that is both high grade and straight forward to develop into a very low-cost mining operation.

“The quality of the deposit is demonstrated by 90% of Measured and Indicated Resources converting to Ore Reserves. Further drilling will be undertaken during 2009 with the aim of both upgrading and extending the resource, with the mineralisation primarily remaining open to the north.

“The very attractive project economics have been detailed in the recently completed Chinese Feasibility Study (“CFS”). The high silver grade of the orebody provides significant revenue to supplement the gold revenue. Including these silver credits, Eastern Dragon cash operating costs are estimated to be only US$100 per ounce.

“Our team is continuing to progress the required permitting and further studies that are aimed at enabling the Sino Gold Board to commit to develop the Eastern Dragon Project during 2009 to become Sino Gold’s third operating mine as rapidly as possible.” Sino Gold was trading at $4.95.

by Proactive Investors

Wednesday, February 4, 2009

Gold Resource Corp

Gold Resource Corporation (GRC) (OTC BB: GORO) has been engineered to maximize shareholder value by emerging in the elite class of low-cost gold producers and focusing on cash flow and potential dividends. GRC targets gold production at the low cash cost of $100 per ounce by mid-2009. Cash flow from near term gold production coupled with tremendous exploration potential position Gold Resource Corporation as a premier investment for exposure to the gold space.

Company Statement:
Focusing on financial performance, Gold Resource Corporation has been engineered from day one to maximize shareholder value with:
• Tight capital structure resulting in only 36 million shares outstanding
• High-grade, low cost mining projects that must be able to repay the capital invested in 
  those projects in one year or less (100% IRR)
• Establishing production at the earliest point in time so the Company can be built with 
  cash flow and not continued equity sales
• Increasing resources, increasing production and increasing cash flow

Production funding for the Company’s flagship El Aguila Project, in southern state of Oaxaca, Mexico, include well known gold funds like Tocqueville Gold Fund (U.S. based) as well as Hochschild Mining Plc (premier precious metals producer). Other institutional investors include Heemskirk Consolidated (an Australian global mining house), Range Capital and Golden Prospect (both London based resource funds), as well as many other resource focused institutions. 

It is also important to note that GRC’s management team is not only a large shareholder of Gold Resource Corporation but they have also put 6 mines into production with their previous company. GRC’s El Aguila Project will be management’s 7th producing mine.

Gold Resource's Objective

Gold Resource Corporation's objective is to create shareholder value by establishing production and generating superior financial performance through the development of gold and silver projects that feature low operating costs and produce high returns on capital. Management's commitment to shareholder value is reflected in the disciplined approach it has taken to the Company's capital structure, its focus on rapid project execution and its goal of meaningful dividend distributions.

GRC's initial exploration efforts have been focused on the El Aguila project, a property featuring high-grade gold and silver mineralization located in Oaxaca, Mexico. Recent discoveries indicate the project is well suited for GRC's performance targets. An independent scoping study indicated cash production costs of approximately $100 per ounce of gold, and an annual return-on-capital of greater than 100%, indicating a capital payback of less than one year.

Management has established an aggressive schedule for the El Aguila project and targets production the second half of 2008.

Three additional project opportunities have been established in relatively close proximity to El Aguila: the Las Margaritas silver property, the El Rey gold property, and the Solaga silver property. Collectively, they provide the Company with a pipeline of potential projects that would expand and diversify the Company's precious metal production profile. The Company plans to have four high-grade properties feeding one mill.

GRC's project opportunities are enhanced by the very favorable price environment for gold and silver. The Company's high-grade projects also offer the opportunity to maintain profitability when the metal-price cycle turns downward.

Why Mexico? : Mexico is one of the world's leading venues for mineral potential and has a 500 year history of mining. The Fraser Institute's 2004/2005 Mining Survey ranked Mexico fifth out of 64 worldwide venues in current mineral potential. Additionally, Mexico ranked eighth in the same survey for composite policy and mineral potential.

Current Operations:

El Aguila Project: Exploration: The El Aguila Project, located 120 kilometers southeast of the capital city of Oaxaca, Mexico, is a significant, newly discovered high-grade gold and silver system. The property has yielded several exceptional gold and silver surface samples, including a 36 grams-per-ton (g/t) gold sample and a 3,100 g/t silver sample. (Read More)

Las Margaritas Project: Las Margaritas is a high-grade silver property in which GRC holds a 100% interest. It comprises the four northwest kilometers of the important N 70 W structural corridor, which is an extension of the El Aguila system. In addition, Las Margaritas occupies ground within an inferred caldera (collapsed volcanic center). (Read More..

El Rey Project: El Rey is a high-grade gold property in which GRC has a 100% interest. While the site has been mined previously, very little information is known about the property. GRC has taken two selective grab samples from the dump material around the original shaft. The two samples assayed 80 and 85 g/t of gold, indicating that the samples are of potential vein material. (Read More..

Solaga Project: Solaga is a high-grade silver property in which GRC holds a 100% interest. The 400 hectare property was previously mined in the 1980's. Initial high-grade selective sampling ran 15 kilo's (15,000 grams / tonne or 488 oz/ton or 1.5%) silver per tonne. (Read More..

William (Bill) Reid - President, CEO and Director
David Reid - Vice President of Exploration and Director 
Jose (Pepe) Perez Reynoso - Manager of Mexican Operations
Jason Reid - Vice President of Corporate Development 
Monty Jennings - CFO
Bill M. Conrad - Director
Gold Resource Corporation
Jason Reid, Vice President / Corporate Development
222 Milwaukee Street, Suite 301
Denver, Colorado 80206
303-320-7708 Office
303-320-7835 Fax
719-330-0258 Cell

Source: and

Thursday, January 29, 2009

The global leader in the resources industry

Formed from a merger between BHP and Billiton, the company is a leader in the extraction and sales of most natural resources, and is particularily strong in Iron Ore, Coking and Thermal Coal, Copper, Zinc, Oil & Gas, Diamonds and most materials key to the production of steel.

BHP Billiton is master of its own destiny
by Fat Prophets

Whilst it is inevitable that the flow of negative economic and corporate news that underpinned the volatility will continue this year, we believe that much of this bad news has already been factored into share price of mining giant BHP Billiton (LSE, BLT). 

As many get distracted by the short term noise, we are always looking at the bigger picture. With this in mind we remain strong supporters of the ongoing secular bull market in commodities and whilst BHP remains the best-placed of all the resource sector heavyweights, it too is facing its near-term challenges.
One of these challenges will be this year’s iron ore contract price negotiations. The Chinese are looking for a 40 percent cut in contract prices, which would take prices back to 2007/08 levels. 
Nevertheless, BHP will still continue to generate attractive returns even at these levels. Moreover, we do not believe the fall from last year’s peak prices in the commodity sector is indicative of a sustained change in trend over the longer-term.
There are already tentative signs that demand for steel (and therefore iron ore) is lifting. The various infrastructure spending based stimulus packages will provide further support to this. We therefore view 2009 as likely to be a consolidation period for commodity prices, rather than a continuation of downward momentum.
That’s not to say of course that there is substantial pain being felt in the resources sector. Indeed, many projects are uneconomic at current prices, leading to production development cutbacks. The current commodity price weakness is sowing the seeds of future price strength.

The companies best placed to capitalise on this will be those that are able to maintain their development in the interim and expand their industry footprint. Companies that fall into this category will broadly speaking not be weighed down by excessive debt and enjoy the flexibility of a diversified production base.

Indeed, with a comfortable net debt to equity ratio of 21.6 percent at June 30 2008, BHP is master of its own destiny rather than having to dance to the tune of lenders. The company is therefore able to expand their future production profile by taking advantage of distressed asset sales which could even prove a more attractive option than pursuing existing development projects.

Thursday, January 22, 2009

Regal Petroleum – The Dawn of a New Era

Regal Petroleum's primary assets are two large gas and condensate fields in Ukraine - the Mekhediviska-Golotvschinska (MEX-GOL) field and the Svyrydivske (SV) field located in the prolific Dneipner-Donets basin in the north east of Ukraine. Regal is the operator of the assets and there are currently 5 production wells on the assets. Secondary to this, but still significant, are two large exploration blocks in Romania, the Barlad and Suceava Blocks, where Regal holds a 100% and 50% interest respectively. Regal Petroleum also has a 25% non-operated joint venture in Egypt with Apache Khalda Corporation LDC, where an exploration well tested positively for oil in September 2007 and was tied in as a producing well in June 2008.

Being a shareholder in Regal Petroleum certainly keeps you on your toes. The company which has recently been rebranded, refinanced and well resourced appears to be leaving its colourful past behind though and the next twelve months should see production increase rapidly from its key assets in the Ukraine. So far the development is proceeding to plan but the market value of the company has sunk to less than the value of its cash reserves.

Regal floated on AIM back in 2002 when it was led by Frank Timis. Massive hype regarding a potential billion-barrel find in Greece saw its shares soar to over 500p. The well turned out to be non-commercial and the shares slumped. Then the company was involved in an ownership dispute regarding its Ukrainian licences. The shares fell again but the dispute was eventually resolved in Regal’s favour at the end of 2006.

Timis resigned from the company in the middle of 2005. He’s still the company’s largest shareholder however, owning a 12.5% stake. Since Timis departed there have been a number of management teams at Regal. The previous incumbents were keen to attract an experienced partner as an operator for Ukraine. Two memoranda of understandings were signed, the second one with Shell in November 2007.

Shell was due to pay $50m for a 51% stake in Regal’s Mekhediviska-Golotvschinska ('MEX-GOL') and Svyrydivske ('SV') gas and condensate fields plus the first $360m of capital expenditure. But some shareholders felt this was undervaluing their potential and wanted Regal to operate the fields itself. So a new management team was installed, led by David Greer, who had himself spent 28 years at Shell working all around the world in challenging assignments as well as being Shell’s Global Director of E&P Projects. 

Within days, Shell had withdrawn and Greer set about transforming the Company and raising the funds required to make a start on its own development plans. Regal raised £80m in January of this year and a further £20m in July to secure two brand new rigs for 5 years. These will be able to drill deeper and more quickly than the rigs traditionally used in the Ukraine.

External interest in Regal’s assets has continued. In April the company said it was early-stage discussions with potential partners but nothing was finalised. Meanwhile the share price soared to 300p. Then in October the company denied rumours that Shell had approached the company regarding a takeover. Press stories mentioned 300p as the take-out price but investors appeared doubtful. The shares only touched 125p before the rumour was quashed.

So what’s in the Ukraine that has caused some much corporate commotion? The MEX-GOL and SV licences lie about 200km east of Kiev and gas was initially discovered there in the 1960s. The fields were partially appraised over the next couple of decades before Regal took an interest in 1999 and then a 100% 20-year production licence in July 2004.

Since the fields were first discovered over 20 wells have been drilled. A handful of these have been in production for a while and in 2007 their output averaged around 1,000 barrels a day of oil equivalent. This year production has declined steadily to around 500, according to a recent Regal presentation. Following an extensive 3D seismic programme, one new well (MEX 103) and two work overs (MEX 102 and GOL 2) have recently been completed. 

MEX 102 exceeded expectations and is producing nearly 1,200 barrels of oil equivalent a day. This should mean Regal will hit its year-end production target of 2,000 barrels per day. Two more new wells (MEX 106 and SV 58) will spud soon and an additional work over (GOL 1) should also be completed in the near future. 

The initial development plan includes 15 new wells, split equally between the two new rigs and a third that is close to being secured. In total, around 70 wells could be drilled and peak production is estimated at 50,000 barrels plus in 2015-18. 

The wells will take several months to drill, even with the new rigs, and could cost in the region of $20m each according to some analysts. A new gas processing plant with ten times the current capacity is being planned and could cost a further $100m, taking the total development cost to around $1.5bn. The current plant’s capacity is 25 million cubic feet and 1,250 barrels of condensate per day. The gas is taken via a 13km pipeline to the main Kursk/Kiev Majestral pipeline. 

A reserve report was produced by Ryder Scott in 2005 and estimated proven and probable reserves for MEX-GOL and SV at 169 million barrels of oil equivalent. An updated report is expected around the middle of next year. The gas lies between 4,800m and 6,000m below the surface and the 2005 report only examined the shallower ‘B’ sands. Including the deeper ‘T’ sands could increase the reserve figures considerably, with some analysts reckoning both reserves and estimated peak production could double.

Following Regal’s July placing the company had net cash of $174m. At the time of writing this is greater than its market capitalisation but it looks like all this cash and more could be spent bringing the Ukrainian portfolio into full production. A farm out to share some of the development costs looks like the most likely way forward. 

Although the focus is very much on the Ukraine, Regal also has interests in Romania and Egypt and these should also be included in the updated reserve report scheduled for next year.  

In Romania Regal has a 100% interest in the Barlad licence and 50% in Suceava. At Barlad, a shallow well was successfully flow tested at 3.7 million cubic feet of gas per day in December 2007 over a 5m interval. A second larger interval of 13m did not flow and a follow up appraisal well was plugged and abandoned last month. Regal had been planning two further wells if the follow up proved successful but is now likely to be reassessing its plans. 

At Suceava, where Regal is partnering with Aurelian Oil and Gas, a gas discovery of 0.9 million cubic feet per day was made last year which was to be tied into production during 2008. However, no further plans for this licence have been announced since.

In Egypt Regal has a 25% interest in the East Ras Budran concession. The ERB-A-1X well was tied into production in June of this year and was initially producing around 1,100 barrels of oil a day. Two subsequent wells found no hydrocarbons however and were plugged and abandoned. 

While not for the faint of heart, Regal’s prospects look far more favourable than the share price is currently suggesting. The new management team has delivered to date and if a suitably deep-pocketed partner can be secured and initial production targets are hit, the market may soon reconsider its valuation of the company.
By : by Stuart Watson;

Friday, January 16, 2009

Exxon Mobil’s Natuna claim ends here: Minister

The government has officially turned down a plan of development (POD) for gas-rich Natuna block filed by U.S. Energy giant Exxon Mobil Corp. 

Concern, however, is raised whether the government’s decision will result in another tedious 
battle with ExxonMobil, such as in the dispute over Cepu block, the nation’s largest oil reserve ever found. 

After three years of reciting his decision to end ExxonMobil’s right in managing the Natuna D-Alpha block, Energy and Mineral Resources Minister Purnomo Yusgiantoro ended Friday once and for all speculations and debate over the block

"Upstream oil and gas regulator BPMigas has sent a formal letter of rejection of ExxonMobil in POD January 14," said Purnomo.

“Every year ExxonMobil’s submitted its working budget and program for Natuna, but we never processed them as the company’s contract (for the block) has been expired since 2005.” 

In a cabinet meeting last year, the government had appointed state oil and gas company PT Pertamina to take over the block and seek bigger partner to develop it. 

According to Purnomo, ExxonMobil’s contract was automatically terminated as it failed to submit a feasibility study document before the deadline on Jan 6. 2005. 

“As stipulated in the contract, the contractors are required to submit feasibility study to evaluate whether the block development are economically feasible,” Purnomo said. 

As reported earlier, the government’s decision not to extend the 2005 contract is also due to ExxonMobil’s failure to seriously develop the block -- an accusation strongly denied by ExxonMobil which claimed of already investing US$400 million for the block. 

The government seems to have already gearing up to face possibility that ExxonMobil would bring the case before the international arbitration court to claim damages. 

“Of course anybody can file arbitration, but in this case ExxonMobil has no legal basis to do so. The deadline was not fulfilled so the contract was terminated automatically,” BPMigas’s head of legal division Alan Frederik said. 

ExxonMobil’s spokesman Maman Budiman said the company was “respectfully disagree with the government”. 

“We remain interested in a resolution which allows development of this resource to proceed with the support from the government,” he said. 

“ExxonMobil is uniquely positioned to develop this project efficiently in partnership with Pertamina.” Despite an assurance from Purnomo, Pertamina has repeatedly complained it faced difficulties to access the block’s exploration data. 

Purnomo, however, insisted the government had the data, and it was a state document. 

“All contractors must give the data to the government otherwise they can be criminalized with maximum punishment of one year jail term and maximum fine Rp 10 billion,” he said. 

BPMigas chairman Raden Priyono blamed Pertamina’s lack of data management for not having the Natuna data. 

“As a partner, Pertamina is suppossed to have the data. I think the problem is with Pertamina’s data management” 

Located in Riau Islands, the Natuna D-Alpha block is estimated to contain 46 trillion cubic feet of gas, making it the bigest reserve in Asia. However, the block has a high-degree of CO2, making it difficult for exploration unless it is handled by energy companies with advance technology. 

Purnomo insisted Pertamina, having 40 percent interest in Natuna, to proceed with selecting partners to develop the block
Source: Alfian , THE JAKARTA POST , JAKARTA | Sat, 01/17/2009 11:51 AM | Business 

Friday, January 2, 2009

Bapepam to revise IPO rules to protect companies

The Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) plans revision of the regulations on its initial public offering (IPO) scheme to ensure that firms wanting to go public are better protected from negative impacts of the global economic downturn. 

The revised regulation is expected to be issued in the first quarter of 2009, Bapepam chairman Fuad Rachmany said recently. 

Under the proposed regulation, companies planning to offer their shares to the public for the first time will be given a period of three months after securing Bapepam's approval to implement their plan. 

This is aimed at providing more time for reviewing the feasibility of their IPO, and to give time for reassurance that market conditions would be favorable for generating the expected proceeds despite the uncertainties in the global equity market. 

"We don't want that the market fails to absorb the shares due to unfavorable market conditions once the companies execute their plan for the IPO," Fuad said. 

Under the existing regulation, companies holding Bappepam's IPO approval are required to offer their shares to the public as soon as possible. 

The proposed regulation is a response to the October stock market collapse, in which several companies had to unexpectedly drop their IPO plans over concerns that the sales of their shares could not be fully absorbed by investors. 

While targeting some 25 companies to go public last year, the Indonesia Stock Exchange (IDX) only completed IPO procedures for 19 of them by the end of 2008. 

IDX president director Erry Firmansyah said earlier that 15 companies were planning to launch an IPO during 2009, with 11 of them already in the pipeline, including integrated oil and gas service provider PT Prime Petroservices and telecommunication network service provider PT Power Telecom. 

The stock market has yet to become a fully alternative financing option for the corporate sector in Indonesia, as the role of the banking sector is still considered predominant. 

Around 70 percent of funding for the corporate sector is still therefore being supplied by the banks, with the rest coming from the stock market and bonds. 

The revised IPO regulation will also require firms to get approval from the Bapepam before issuing a full public disclosure on their IPO plan, known also as the prospectus. 

The watchdog will examine the prospectus for any legal and future problems which may potentially cause losses to investors. 

Under the existing regulation, companies can distribute their prospectus to Bapepam and the public at the same time. 

"We don't want a case like PT Adaro Energy to reoccur, in which the public (has) already read the prospectus while Bapepam is still checking it, creating pressures on us later to grant the IPO approval," Fuad said. 

Bapepam drew criticism from analysts over its decision to give approval for the Adaro IPO, which was made in July last year. 

Although the IPO was a success for Adaro, gaining proceeds of Rp 12.3 trillion (US$1.08 billion), some investors thought the company did not merit the permit as it was still involved in a number of unresolved legal disputes. Bapepam will also shorten the selling period from a minimum of five days to only one day to make the IPO process more effective and efficient.

Source:Ika Krismantari, , The Jakarta Post, , Jakarta | Sat, 01/03/2009 10:33 AM | Business