Fondul Proprietatea to pay a 2012 DPS of RON 0.0408
Fondul Proprietatea (FP) has published its 2012 results, with a net profit of RON 567 mn, similar with the preliminary one announced with its December NAV. The manager said that it would propose the payment of a 2012 DPS of RON 0.0408 which implies a current dividend yield of 7.1% and a pay-out ratio of 97%. The dividend will be paid starting with June 2013. We view this piece of news as neutral as this dividend is only 2% below our expectations and also very close to market expectations. The fund also announced that its NAV per share as of January 2013 stood at RON 1.1507, up 1.2% mom, due to a higher value of listed shares.
ExxonMobil and Petrom signed option agreement for Romgaz to participate in Midia Block
ExxonMobil Exploration and Production Romania Limited (Exxon) and OMV Petrom announced that they signed an agreement with Romgaz to grant the latter the option to participate in petroleum operations in the deeper water portion of the Midia Block, in the Black Sea offshore Romania, adjacent to Neptun block. Exxon and Petrom signed a Transfer Agreement in October 2012 with Sterling Resources Ltd. and Petro Ventures Europe B.V. for the purchase of an 85% interest in the hydrocarbon exploration and production rights to a portion of the XV Midia Block in the Romanian Black Sea. The Transfer Agreement is not yet effective and is subject to several conditions which are in the process of being fulfilled, including approvals from relevant authorities. When the transfer becomes effective, the participating interests will be Exxon 42.5%, Petrom 42.5% and Gas Plus International B.V. (an existing co-title holder) with 15%.
Based on the agreed terms, Romgaz has the option to purchase 10% of the participating interest in Midia Deep. Romgaz’s option to enter is triggered by the Transfer Agreement becoming effective and an announcement of a commercial discovery.
The news actually confirms the communiqué from Sterling dated October 2012, that it has signed a sale and purchase agreement with Exxon and OMV Petrom for the sale of its 65% in a portion of the Block 15 Midia in the Romanian Black Sea. The sale portion is on the south-eastern margin of the block, in deeper waters and covers 125,000 gross acres, or 11 percent of the total area of the Midia and Pelican Concession. The consideration for the transaction payable to Sterling is USD 29.25 mn upon completion, a contingent payment of USD 29.25 mn upon satisfaction of certain conditions relating to a hydrocarbon discovery made on the Sale Portion, and a further contingent payment of USD 19.5 mn upon first commercial production from the Sale Portion.
In order to conclude the reserves are commercially developable, Exxon and Petrom will need to undertake 2/3D studies followed by exploratory drilling. Based on the results, further seismic studies are concluded on selected areas followed by appraisal drilling to determine the most appropriate exploitation methods. Going forward, the parties must take into account the estimated costs for exploitation and the gas price context at the time to determine the commercial feasibility. Sterling has already started the exploration of Midia but the decision of commercial feasibility we expect to take an additional two or even more than two years. So we see the news as neutral for OMV Petrom.
