Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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@King "A few considerations:"
nice post, well considered. You're right that one field can't be viewed as a sustainable future. It's very a welcome cash cow hopefully but more like a proof of concept that the company can pick winners and realise asset potential. To sustain anything like mid-cap that needs to be repeatable for other assets, and really that's the business model, drawing on the BoD's high level of experience and expertise to make the right strategic calls and then being able to execute them efficiently. Until that's established longer term as a pattern then it's likely to be a bumpy road for a while longer with anticipation rising up to each new acquisition or spud and then dipping back on profit selling. One success will be great, two in a row would add confidence, three would be preferable to prove the point. That's not easy in a risk business but having a clear strategy to minimise that risk is part of the USP here, I think.
Mid cap anywhere between 1 and 7 billion pounds.
I’ll settle for a 30 bagger anytime.
20000 x 340 days (maintenance, holiday shutdowns etc) = 6,800,000 x $75 = $510 million converted at say 1.35 = £380 million pounds income less costs and taxes etc.
Still a tidy sum cash flow wise.
Imo def mid cap status if 20,000 barrels a day can be achieved.
20000 barrels a day.
Seems like mid cap status could be achieved in a short timeframe.
A few considerations:
1) JSE will be exiting 2021 with c20k bopd production and also have significant net cash around $100m with zero debt on the books - they also have other assets to be developed, such as significant gas assets in Indonesia. They are, however, as much of the sector, significantly undervalued (I am a holder there and here). JSE assets are more mature fields, with steadier decline rates.
2) Yes, year one flow is forecast at 20k bopd for ADV, but I believe the rate will decline quickly from this initial peak?
3) ADV still have to raise debt and equity financing to extract the oil
4) The reserve at East Timor is estimated to be around 34mb, with 50% net to ADV. As you point out 20k bopd production is going to be 7.3mb per annum, so at that rate all ADV share would be extracted in the first 2 years - hence the decline rate. Presentation has suggested around 60% of the oil will be extracted in the first couple of years, but total field will be 5 or 6 years, I think from memory, indicative of the production rate declining quick after the first couple of years.
5) This is good, in the sense ADV will gather a ton of cash quickly, but will not command a high p/e ratio due to low reserve life, UNLESS this appraisal drill proves up a bigger resource (fingers crossed)?
That said, ADV definitely has multi-bagger potential. I think certainly £200m+ market cap could be achievable if oil price stays high, the appraisal goes well, and inital flow is proved in the 40k bopd (20k net to ADV) rate as advertised.
@ Blissful- maybe a little strong ( E Timor will take 35% in taxes ) BUT Jadestone who operate in same area are currently valued at £360m market cap with production at about 12000 bopd
If we were to be producing 20 k bopd then a £500m market cap is not out of the question at all - 16x where we are now (50p)
GLA
Can someone please help me out with this maths as my calculator says 20,000 barrels a day at $50 a barrel is worth $1m a day or $365m (£267m)a year. The current mkt cap is £34m. That's about an 8 bagger for one year's worth of oil.
And, 20,0000 X 365 is only 7300000 barrels and there are about 4 times that amount of oil, hopefully. So, are we seriously talking about a 32 bagger from here - that is over £1 a share?
Or, has my calculator or my brain developed a fault and I have this completely wrong?
I am constantly amazed that so few people seem to know about Advance. I suppose some are waiting for the last minute rush but they will be paying a premium if they don't get in soon. Nothing is cast in stone but this one is not far off.
Thanks ST for your valuable input here
Been researching for a couple of weeks and bought 250k shares about 10 days ago
Reading through your posts this weekend has convinced me to invest further this next week
I’m sure Buffalo will be a beast of a well with netbacks of $52 at Brent $70
The quality of oil expected should also command a premium to Brent
Seems to me that the business model is not too dissimilar to Rockrose Energy -North Sea -which Andrew Austin took from 50 p to £18.50 over just a few years before being bought out last year - I was in from £5 - Great to be in at the start of the Advance Energy journey
Same philosophy
GLA - -exciting time begins next month