VOG 2005 New Thread

I read Zengas, Kiwis and Hectorps valuations quite regularly, and they all produce some pretty convincing reading. Thank you guys for your factual analyses.

I get the impression that the company's current assets are worth a sp of about £2.50-£3.00. This is factoring in all uncertainties. If and when removed, will take the sp through the proverbial stratosphere.
One thing I have noticed is that ramping and deramping has only short term fluctuations on the sp movement, but real value can never be denied in the mid and long term.

What must also be underlined, is that most of the hype so far concerns one well in West Med.
There is not going to be a shortage of news over the next month or two.
More results from other wells in West Med and Kermerkol to name a couple.

There are a few factors that make VOG such an exciting prospect:

(1) They own 100% of the West Med field (Equivalent of 13% of North Sea production).
(2) The company are very ambitious. Foo openly states that he wishes to become a Mid Cap company, and those are claims that wouldn't be openly aired unless he believed that they could come true.
(3) Gas is the new gold. It's turning from something that we all take for granted, to a commodity that we treasure.
(4) The ex Yukos boys know the territory. They know how to deal with the locals and how to make things work.
(5) The directors are investing their own money in buying VOG shares. This is close to insider knowledge as the normal PI can get. Nobody would invest in their own business if they couldn't perceive growth in returns.
(6) VOG are actively seeking new licenses in the former Soviet Union.
(7) I see Russia and Kazakhstan as being the next generation of the oil and gas sector. The region is rapidly becoming as important as the Middle East, and will no doubt become even more important as it is a relatively new focus area.
Despite there being talk of it being an unstable area, I consider it to be much more stable in the long term than the Middle East. No sizeable war or fundamentalist religion in the area.

As far as the current spat with Ukraine is concerned, I believe this will have an upward effect on the SP in the short term. It will highlight the importance of the gas commodity, and will give all PIs the need to be invested in this area.
It will also raise the price of gas and mean that it is bought at full cost.
The dispute will have no negative effect on VOG for a number of reasons:

(1) Gazprom and Russia do not want to been seen as an unreliable source, as no country will want to rely on an unreliable source for gas.
(2) Gazprom will do its part in making Russia a much wealthier country. They know that they have to participate in a capitalist manner.
(3) Although West Med is an enormous find, it is a drop in the ocean to Gazprom's overall picture. Even 2.3trillion cubic metres of gas does not make an enormous impact on a company that produces 500 trillion, and they certainly aren't going to fall out with the West over it.
(4) Gas isn't to come out of West Med for over a year. By that time, the argument with Ukraine will be a distant memory.
(5) The flows WILL come to Europe regardless. Money talks at the end of the day.


Just a few of my thoughts anyway. Best off in than out for a good while I reckon.