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Natlata Questions Petroneft Resources Funding & Operations Update

LONDON, March 17, 2014 /PRNewswire/ --

Natlata Partners Limited ("Natlata"), the private investment company that is the largest single shareholder in Petroneft Resources PLC ("Petroneft" or "the company") (AIM: PTR) is surprised by the Funding & Operations Update that was announced this morning by Petroneft.

On 11th March 2014 Natlata delivered a requisition for an Extraordinary General Meeting ("EGM") to be convened to give shareholders the opportunity to consider the replacement of five members of the existing board and give directions to the board to: 

  • investigate why Petroneft has not performed as it should (so this can be rectified for the future); and
  • consider all possible options in relation to the refinancing of the loan due from Petroneft to Macquarie Bank Limited (the "Macquarie Facility"); and
  • require shareholder approval for the farm out of Licence No. 61.

Over the past year we have made a number of financing proposals to Petroneft, in both writing and at a number of meetings, which we believe are in the interests of all shareholders.  All have been rejected or made dependent on unrealistic conditions. Our latest proposal in January 2014 was rejected without any discussions.   In the meantime the significant underperformance of Petroneft has continued.  We consider that such measures that have been proposed by the existing management to address this will only cause further damage to Petroneft and its prospects. 

We were surprised that no mention of the EGM requisition was made in today's announcement.  We therefore ask the Board of Directors of Petroneft to clarify:

  1. Were the subscribers to the Placing made aware of the fact that Natlata had requisitioned an EGM?
  2. Was Arawak Energy made aware that Natlata had requisitioned an EGM?
  3. Has Macquarie Bank Limited been informed of the EGM requisition?
  4. Has "the large international oil and gas company" who is considering the farm out of Licence 61 been informed about the EGM requisition?
  5. Why is the EGM requisition not even mentioned in today's announcement?
  6. Why was Natlata as the largest shareholder in Petroneft, with almost three times the size of holding of any other shareholder, not consulted in relation to the proposed Placing?  Had Natlata been approached we would certainly have considered participating in the Placing, and this participation might have been at a price that was more in the interests of all shareholders.  
  7. Why is the Company paying Macquarie $2.5 million ahead of the agreed repayment schedule ($650,000 per month) when the money is needed for operations and the farmout is almost completed?
  8. "Under the Macquarie agreement, the bank will have the right from 15 April 2014 to ask for Licence 61 to be put up for sale in its entirety in a competitive process (as well as their other normal rights as lender) if the farmout of Licence 61 is not completed at that date." Why is the Company not considering other refinancing options available? Why did the Company agree to put Licence 61 up for sale in April 2014 whilst the loan is to be repaid in May 2014?
  9. We note that today's announcement describes the current production figure of 2,400 bopd as an improvement, when as recently as 30th September 2013, production of 2,500 bopd was claimed. The 100 bopd production increase from 2,300 bopd in January to current 2,400 bopd, i.e. still below September level, is attributed to successful completion of several workovers. What is the oil flow rate of well Lineynoye No.9? Why is there no impact on production figures? When does the Company expect to put the well into production?
  10. The winter season in Tomsk region will be over in a couple of weeks. Does the Company have all contracts and money in place for all of the necessary supplies and equipment to be moved into place in time? Has the drilling contractor been selected?

Commenting on the announcement, Maxim Korobov, Natlata's controlling shareholder, said, "Today's announcement by Petroneft demonstrates once again that the board is not acting in the best interests of either the company or all its shareholders.  We therefore feel that it is only right and proper that all shareholders are given the opportunity to consider an alternative direction for their company's future at an EGM, which we firmly believe will help to recreate and exceed the significant shareholder value that has been destroyed under the existing management."

About Natlata Partners Limited

Natlata Partners is a private investment company that seeks out investments with a focus on Russia and CIS countries that appear to be distressed or are at an early stage of development and which will clearly benefit from effective management and proven sector experience.  For more information about Natlata and our investments please contact [email protected]

For media enquiries please contact:
Stuart Leasor
[email protected]
Tom Blackwell
[email protected]

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