RusPetro shares soar on growth plan

Shares in Siberia oil producer RusPetro jumped as high as 17 per cent Friday after announcing it would strengthen its finances and begin an upgraded processing unit next month.

Shares in Siberia oil producer RusPetro jumped as high as 17 per cent Friday after announcing it would strengthen its finances and begin an upgraded processing unit next month.

The company said it expects its first credit rating from Standard and Poor's and was selling secured notes to repay Sberbank loans and fund field development, with the state bank to provide a $50m credit line.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Plans to convert a $62.8m loan from investor Limolines Transport into shares at an initial public offering price of 135p each were also outlined by the company but would be subject to results from a shareholder meeting next month.

The promising outlook comes after RusPetro missed targets last year. Debts to Sberbank came to a total of $289m as of June 30th, according to the website, and shares fell as low as 44% after saying earlier this month it missed a year-end output target of 10,400 barrels a day. It blamed a lack of capacity to process high condensate volumes.

Advertisement
Advertisement - Article continues below

A heat-exchange system to increase condensate processing is expected to begin next month to meet increased demand. RusPetro expects total production will rise from 6,500 barrels of oil per day (bopd) to 9,000 bopd post commissioning.

Average crude and condensate output is planned to rise to 13,000 bopd by December and average 10,000 in 2013.

"We are delighted to announce our plans for strengthening of our balance sheet through a range of actions today, including the notes offering, Limolines loan conversion and the new Sberbank facility.

"These will simplify our capital structure and raise new funds that can be deployed in to the field. Our business is now operating cash flow positive and we believe that our strategic development plan will put the business on a firm trajectory for growth in 2013 and beyond."

The oil producer projected an exit rate of 20,000 bopd in 2014 and 31,000 in 2015.

By 10:45 on Friday, shares were up 8.80% at 51.00p.

Advertisement
Advertisement - Article continues below
Advertisement

Recommended

Visit/investments/investment-strategy/600861/how-demographics-affects-stock-valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Visit/investments/stocks-and-shares/600863/sirius-minerals-anglo-american-takeover
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Visit/investments/stockmarkets/600634/why-investors-should-be-cautiously-bullish-for-2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020
Visit/investments/stocks-and-shares/share-tips/600636/class-acts-going-cheap-buy-into-europes-best
Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020

Most Popular

Visit/investments/commodities/gold/600998/extraordinary-times-buy-gold-buy-silver
Gold

Extraordinary times create extraordinary opportunities – these assets look cheap

With the stage set for some monumental fiscal stimulus, this is most definitely a time to own some gold. And if you’re bold enough, says Dominic Frisb…
18 Mar 2020
Visit/investments/bonds/government-bonds/601026/corona-crisis-will-end-bond-bull-market
Government bonds

The corona crisis will mark the end of the longest-running trend in markets

With politicians and central bankers enthusiastically embracing money printing and a recession almost certainly not too far off, the slide in bond yie…
20 Mar 2020
Visit/currencies/601015/the-us-dollar-standard-is-now-suffocating-the-global-economy
Currencies

How the US dollar standard is now suffocating the global economy

In times of crisis, everyone wants cash. But not just any cash – they want the US dollar. John Stepek explains why the rush for dollars is putting a b…
19 Mar 2020
Visit/investments/stockmarkets/european-stockmarkets/600725/is-2020-the-year-for-european-small-cap
Sponsored

Is 2020 the year for European small-cap stocks?

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, on why he believes European small-cap stocks are performing well.
12 Feb 2019