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Incremental Petroleum is please to advise that the new Petroleum Law in Turkey

was passed on 18th January 2007. The law had been the subject of considerable

consultation between the industry and government instrumentalities for nearly

five years, and had been submitted to the parliament over 12 months ago.

The new law modernises many aspects of the existing 1954 legislation. Of

particular interest to Incremental Petroleum is the updating of the royalty regime

for smaller fields. Under the existing legislation, Incremental paid 12.5% primary

royalty on the wellhead value of all oil produced at its Selmo Oilfield. The new law

is an encouragement to operators of older oilfields such as Selmo to re-invest to

increase production, and reduces the primary royalty on the first 1,000 bopd to

1.7%, and the royalty on the barrels between 1,001 and 5,000 bopd to 5%. The

net effective royalty on Selmo is thus reduced to about 3.2%.

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In reply to: mptrader on Monday 22/01/07 10:58am

According to a Euroz research report on IPM's website, a reduction in royalty tax from 12.5% to 5% would add 0.21/share. The ann says effective royalty rate is now 3.2%. Whatever value IPM stock was worth before this change, it is supposed to be worth at least 21c more today ... ?

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The latest royalty announcement has been good for IPM holders. IPM is in the same boat as AMU at the moment. They are bringing in a lot of cash, but they don't have any speculative assets to excite the market. These companies are better long-term assets than some of the speculative junior oilers that probably won't be around in 5 to 10 years. The only people that will make money out of some of those speculative stocks will be a few traders and the management team. Unlike IPM holders who I believe will eventually be rewarded for their patience. ALthough if you bought in the initial IPO, you would still be sitting pretty even with the share price down at the moment.
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