Owns a significant stake in Petrobank....................the hopes are very high.  Everyone wants to see the first deal struck..  "after 6 years of testing, now was the right time to unlock the value in THAI"  Ink a Deal!

Petrobank, meanwhile, provides us with a free option on some potentially transformative technology for heavy oil production. On 1 January 2013, Petrobank (an existing holding) spun out its remaining holding in its oil-producing subsidiary Petrobakken so the Fund now owns shares in both of these companies directly. We think that this spin will reduce complexity in the previous corporate structure and finally allow investors to properly appraise both companies. Petrobakken is an on-shore oil producer that should be able to grow production and cashflows at around 10% per annum. With a current dividend yield of 10%, the market is clearly sceptical about the company's plans and the sustainability of the current capital structure. We think the market is underestimating the quality of the company's drilling inventory. The remaining Petrobank 'stub' consists of net cash, some heavy oil assets and Petrobank's technology interests. The main technology is called Toe to Heel Air Injection (THAI) which, if commercially viable, will significantly improve the economics of heavy oil production.