Toronto Meeting - Colour Report.
1. The Albany Club of Toronto must have some 150 members. Last Tuesday, their club room was about three-quarters full, including a half dozen or so members of the media sitting at the back by the entrance, just in case.
2. On a small podium stood the richest man at the microphone, keen on showing us how he got there.
3. All the insiders were able to afford the front row seats. Not too surprisingly, the three Canadian directors huddled together on the left side of the room, fortified by the balding vice-president of investor relations. On the contrary, the European officers with proper accents sat on the right side of the room and appeared taller, although this could have been caused merely by sitting on their wallets full of fresh stock options. Their legal counsel, doubling also as a corporate secretary, sat on the podium with the richest man.
4.His directors heeled nicely and with the speed of galloping pneumonia the formal part of the meeting was motioned and seconded away in 11 minutes and 23 seconds.
5.There was no sign of my favourite actress. For all I know, that profiled moustache might be a fake.
6.I have never seen a Kazakh in my life. I hoped to correct this lack of cosmopolitan awareness at the meeting, so I strained my long neck like a Dulepka crane, but in vain. Well, next time, maybe.
7.After the formalities were closed, things started to get hotter. The richest man presented a slide show, revealing how he is planning to make us join him. There were slides numbered 1-37, but number 9 and 10 were deleted from the package. Presumably, these were the reserve evaluation tables sent back to McDaniels&Associates for an update, which he promised to make known by a press release shortly.
8.The South Turgai Basin grabens were christened Aryskum Graben, Akshabulak Graben and Bozingen Graben. From the plotted cross-sections I am convinced they could easily hold a billion barrels of oil each. The potential is real and far more advanced than I have thought. In geology at least, faults can be very profitable.
9. Only the briefest moment was dedicated to a giant step ahead. Yes, the Mandarin Package is now reality, about 15,500 bpd, at a better price than previously mentioned during a CC (better than Brent minus $5.50) and shipping started in May. Correspondingly, production was hiked up to 99,000 bpd. Bye-bye inventories.
10. The gradual introduction of higher production and lower export discounts would need a small econometric model to forecast its impact on earnings. The forecasting model would need data on export/domestic splits of sales, transportation savings on export and domestic routes, royalty implications on higher production, tax implications on higher EBITDA and all necessary time lags. I cannot undertake such a project for lack data. However, the impact will be fascinating.
11. My personal feeling from the surprise dividend is that the richest man wanted us shareholders to have additional C$4/share up front in case someone did succeed with a relatively low take-over offer. To basically add four bucks to the take. A thoughtful gesture.
12. By the time Hurricane sandwiches were served, I felt strangely hungry and ate seven dark-bread ones, the precise colour of oil. The richest man came back to the club room sometime later to have lunch with us and I desperately wanted to thank him for this lifetime opportunity. However, he was understandably mobbed and I had a plane to catch. Perhaps, somebody will tell him about what I wrote here.
Forecaster |
