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Apologies, current post year end gas sales run rate is 12m cubic feet per day not 15m. Getting ahead of myself! Should be able to make 14m by this time next year. Same argument applies though, much better cashdflow is coming if they achieve this. Debt pardon and restarting drilling programme.
Back in profit. Debt falling and Outlook still good. Whilst demand locally for gas has been sluggish, and with geec having to hold back gas for SAIL which hasn't been taken it has meant that flaring of gas has been up to 30% of production. However the new pipeline to kolkata will be complete by the end of 2019 meaning that all surplus gas can be sold into this demand from further afield. We might just finally be on the t hreshhold of exciting times. Current (post year end) gas sales run rate at around 15m cubic feet per day now so suspect that next year full year sales gas will be around 16m cubic feet per day. Debt begins to get paid down quite uickly at this level of sales assuming prices hold. On that, sales prices up over the year by high single digits. Significant appreciation in the share price over next 18 to 24 months at current rate of improvements.
No the update that was expected. Unclear whether these sales will now return. Still a sales growth story for geec but maybe given the nature of this growth it might be more prudent to use a higher discount rate. Question now is can the management deliver production and sales growth and reduce the required cost of capital for investors. It's been many years of not achieving this.
More record production volumes being tweeted but sail durgapur. Looking increasingly likely that production reliability issuses are being resolved there. Could result in an extra 3 to 5 mmcfd of sales gas to geec. Be good to hear from the company ahead of the year end March 31st.
Reporting on Twitter that record steel production achieved in Feb. This has to mean increased gas volumes used and should result in GEEC reporting increased sales gas volumes. Confidence building in 20 mmcfd run rate at next update. Existing 150 Wells drilled and producing/dewatering will deliver peak production of around 35 to 40 mmcfd. Once this sales gas level achieved just these wells are worth around 250p at current gas prices. Cash flows can then fund the other 150 Wells and begin to pay a dividend. If executed without problems we are looking at a share price between 400m and 500p in 3 to 4 years time as this expansion is delivered and cashflows are derisked. Not as cheap as it was given the recent share price run but still good value.
Another £100k or so worth. My mistake before as this and previous purchase are the unlisted ordinary stock not the gdr we can trade here. Again trade done at 36p implied per gdr according to the statement which is an incredible price. I don't know who owns ordinary stock and who wants out but management very happy to oblige at that level. Just want to know how I can get my hands on some!
It's only a small amount of around 90k quid but still good to see. Only possible downside is that much of the recent buying may well have been them and not new investors. Still, price has been on a great run and small purchases are pushing it up higher so still a tight market. Still cheap in my view! Anyone else on this board?
Good move over the last month in the share price, up over 20%. Not sure that there is any specific reason other than company is now selling over 15 mmcfd of gas and that will generate decent earnings and cash at current $10 price for the gas. If the company just run the business for cash now for the next couple of years without investing further in drilling new Wells then I think the debt will be virtually all paid back. Equity then massively derisked. Still on £50m market cap so loads of upside if the compay continue to execute.
H1 update. Very little new detail. Production still growing well and big jump in sales gas to nearly 15 mmcfd. Having to hold back some gas for SAIL I guess even though they won't take it. Management not confident enough to give any guidance though still. Disappointed with the profit performance. Another long wait for the next update!
Someone's just unloaded a block worth over 3% of the issued share capital. Either crossed or lse has entered it twice. More overhang removed. All that's needed now is a confirmation in the November results statement of 20 mmcfd sales gas run rate.
*retweet even
My mistake. Was a retreat from SAIL durgapur of an update from different steel plant. As you were.
SAILTwitter from Sept 4th claiming record steel production for Apr to Sept period. Will almost certainly mean that taking more gas from geec. Wonder if Ceo will provide any kind of an update at agm to confirm improved outlook. 26th September is the date for agm
Haven't been on this board for a while and don't know why I bother as no one else seems to follow this stock. Recent news of securing a large new customer agreement which has significant scale ability to it got a c 1p uplift from the market maker. With this customer iñ the bag and SAIL gradually sorting it's problems out I am confident that sales gas in the coming year will be materially higher than the 8 mmcfd last reported. Geec may even be selling all their available gas. This is really significant and has barely moved an already depressed share price and cheap stock. I'm bemused! If there is anyone who is prepared to have a look and offer some insights that would be great.
The July 5th date for this years results is brought forward by 20 days from last years July 25th date. Could be that they are keen to bring good news to the market!
Due in a week. July 5th. Hopefully grounds for optimism and a big jump up in sales gas volumes. I bought a few more here today as the shares will move when the strongly upward sales gas trajectory returns. Looking for an update on haldia gas pipeline construction progress and what implications are for pricing. But recent legislative changes are positive for pricing astructure they try to incentivise more gas development.
yep. looks like another block of stock found a new home. big reshuffle of the shareholder register going on at the moment
a couple of trades there.
reflects confidence in the trend of trading hopefully. looks like a new large shareholder on the register as well.
Looks like LGIM have now ditched the old Aerion holding. One other larger holder is out as well. However, these trades were crossed at 27p so it looks like 4 large sells. I think this paves the way for a re-rate now. All the management team need to do is keep reporting growth in gas production (which they have been and should continue to do as when the well is fracced and dewatered it tends to produce gas) and sell it. they have mous for much more gas than they can produce so this doesn't seem to be an issue either. Hopefully the next few months will be fruitful.
hard to sell stock here and easy to buy in size so suspect that there is a large institutional seller keeping the share price down. Looking at the shareholder register Aerion Fund Management owns over 1m shares and they were recently taken over by LGIM. I wonder if LGIM have decided that these shares are to be sold. Probably needs, therefore, good news on sales gas and production to bring some new buyers in to soak up the overhang in stock. When that's done, theses shares have a good chance in rerating strongly in my opinion. Important to do your own research though! Next trading update in July so could be as early as then.
With the appointment of Mr. Sushil Kumar Roongta, ex executive chairman of SAIL, as a non executive director of Great Eastern Energy i am hopeful that the gas being held back for SAIL whilst they sort out operational issues will be negotiated to be able to be sold in the open market. This will free up another 4 - 5 mcf/d to be sold (currently being flared i think) which would add a 50% uplift to last reported sales gas volume figure for GEEC. My guess is that if pricing holds up and we get this news then the shares are above 100p again.
of 3 seems too low to me. Even with a lower price assumption for gas pricing in future years, i could see this trading on 10x and 2 to 3 times upside with production and sales volume increases forecast for the next few years.
https://www.iea.org/publications/freepublications/publication/IndiaEnergyOutlook_WEO2015.pdf iea provides a useful backdrop to the outlook for indian gas demand. Near term outlook for gas pricing looks to be strong as higher prices are needed to incentivise new gas resources to be brought to market. GEEC currently achieves around $10/btu. iea estimate that national gas prices tend upwards to $9/btu by 2040. GEEC has c50mmcfd under MOU which we have to assume is around the $10/btu level, so they are clearly able to achieve a higher price than the national average. Landed LNG costs are around $8/btu so with some additional overland transport costs, it does not look like LNG is going to disrupt the price realised by GEEC to any great degree. However, its probably prudent to assume a lower gas price going forward especially if the rupee continues to weaken against the US$. This is the key forecast risk to me as the field reserves and production profiles have been largely derisked now.
GAIL to deliver project to link national pipeline to Durgapur where GEEC dedicated pipeline ends. This national pipeline will therefore connect GEEC to Kolkata and millions of residential gas consumers as well as hundreds of potential industrial customers. Pipeline to be delivered by Dec 2018.