RE: RE: PFC ready to moveMea Culpa.
Gas is 7% of WTI per the AIF (page 22, note 2) - more than the $1.50mcf they used to receive. Nevertheless, I suggest they were far better off when they received $1.50 as they at least received payment...
As for being carried by PDVSA, that's not correct. PFC supposedly "owns" 40% of PetroCumerabo, which is a current producer and generates profits. Even though PFC hasn't been paid any of those profits, PetroCumerabo is able to self fund its operations and thus PFC hasn't had cash calls.
But if you "own" 40% but don't get paid any of its profits, do you really own anything in reality? Why hasn't PFC sued PDVSA for failure to pay?????????? Isn't that what normally happens when you don't get paid??? Do they really think meekly waiting for a check in the mail is the appropriate course of action? Where has "management's" fiduciary duty to shareholders gone? (probably the same place that caused management to blithely sign over 60% of the company without even asking for a shareholder vote...)
As for spending $4MM a year in G&A, why spend any at all? They don't get any money for their production (other than a few shekels for their 5% interest in Baripetrol). And if they weren't being paid by PDVSA when oil was $147 and oil money was flowing like water for Chavez, is it rational to expect to be paid when oil is $50, when Ven is running a huge deficit, isn't paying other contractors and is confiscating, err, "nationalizing" their assets? Can PetroCumerabo nationalization be far behind - as far as PFC's shareholders are concerned, it's been a defacto nationalization already.
PFC should stop hoping for miracles, shut down all operations in Ven, get out of the country and cut the cash burn immediately.
As for Lundin, management should offer to unload the rest of the PFC carcass to them for whatever they can get - something is better than the current nothing...