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Steve..
SP Angel is the company broker advisory so take their recommendations with a pinch of salt!
But look into it in more details at Morningstar and Market screeners site and others ,and you will find a lot of useful information..
I bought today after studying it in details ..
Dyor and decide what’s best for you..
GL
Have just come across this little company as it has a brokers target price of 252p (SP ANGEL) is this even possible? will obvisly do my own research but thought I would see what everyone here was saying, thinking of a long term hold here.
Apart from yesterday is there due to be any news or announcements that could effect this?
Thanks everyone and good luck
Hi Troy..
Well I have bought in as I feel this share is good to have now and leave it in lower drawer for later..
It will come to it’s worth but with patience..
At current sp ..seems so cheap.
Similar to JOG in a way!
GL
Good to have some company on this board Hasiba. Not sure many investors know about GEEC.
I agree that it looks very undervalued.....but then i've been saying that for years
Bought in 48554 shares...seems very undervalued here and left behind unfairly..
as it happens. Sales and profit down but cash stable. This is not a problem as its all about the sales growth opportunity from supplying gas into GAIL's pipeline to Kolkata and West Bengal. Pricing also looks to be holding up (somehow).
Company confirm that this pipeline with be operational by Dec 2020 so we should see sales increasing significantly in year to march 2022. Also shale environmental permit has been granted so we will have news on this in the coming months as well. Proof of commercial resource here will transform the value of the company especially with a ready market at the end of an operating pipeline.
unusual to see such a large trade in GEEC. Definitely a purchase order. With full year results due in June or July seems someone is confident. Saying that, whilst results for the year to March 2020 should be fine and not much affected by the covid 19 lock down in India, the outlook for 2021 has to be bad given the gas glut and weakness in prices as well as the hiatus in industrial activity. On the upside, government is keener than ever to expedite the transition to gas (from coal and fuel oil) for the economy and work is restarting on building out the interstate and intracity pipeline networks. GEEC may also soon get the clearance needed to test for shale gas on its acreage which could significantly increase volumes if its profitable to extract, (the application for permit has been pending for over a year now).
There is a huge disparity with GEEC between the value of the underlying resource and the current enterprise value. The resource is largely derisked as well with potential significant upside from shale gas resources beneath the coal bed methane. The management and family own nearly 70% of the available stock so there really are not many shares and the Indian government are committed to raising the share of gas to 15% (from 6% now) of energy mix by 2030 with emphasis on both domestic supply and LNG imports.
Only problems are 1) Its India and they seem unable to move anything forward quickly even if they know they want to do it.
2) Company seriously needs to find a new CEO and not keep sticking with the incumbent who is a Modi family member. With hundreds of millions of potential value at pay with the Modi family 70% stake you would think that they would sacrifice their own in order to realise this value
£18m market cap. Roughly half forecast sales for 2021 and just over 1x forecast operating profit for 2021 and less than 1x 2021 EBITDA. Gas evacuation on go slow and will rise when agreement in place to supply GAIL pipeline to Kolkata, which has more or less been built and is nearing commissioning. Shale exploration kicker to significantly increase gas volumes in the medium term. India on track to meet Paris Climate Agreement based NDC with 15% gas in national energy mix by 2030.
Strategic asset, climate aligned, profitable, cash generative and extremely low valuation. Market pricing in a lot of grim news here. Looks like a good risk reward maybe.
A bit more light on the discussions around shale exploration and the barriers to moving this forward.
https://economictimes.indiatimes.com/industry/energy/oil-gas/private-firms-keen-on-shale-gas-exploration-demand-concessions/articleshow/74183509.cms
The gas pipeline that will connect Durgapur to Kolkata should, given recent updates, be more or less at Durgapur by now. Significant development as every extra few kilometres now brings in new potential gas customers. On the flip side, shale gas volumes are still some wway away as GEEC are on go slow re permissions given pricing uncertainty. Not sure what these are exactly, but hope for news in Q1 2020. Could be a big year for this stock especially given the current valuation.
More buying from directors signalling confidence!
Blocks of 100k shares coming in. Very unusual. Could be management buying more. Unlikely to be a private investor (unless they have very deep pockets!). So maybe and institutional buyer. There were over 1m shares sitting somewhere looking for a home so this goes a long way to soaking up that overhang. Hopefully shares back to 50p level soon!
More purchases from the directors and majority owners of GEEC. Very good to see. If I were them I would keep buying
There it is. Right on cue but not a huge amount of stock! Still why would they buy any if they felt the outlook was bad. Intended as a signal to the market but for me should have been a bigger purchase like 500,000 to really have impact.
The pipeline to Kolkata, agreement with GAIL to sell gas into the pipeline and getting drilling again in Raniganj (with or without shale) all necessary developments to get a meaningful re-rate here
A divi seems a way off I think 60p given that they have stated that they plan to spend at least 100s of millions in expanding production. I’d love to receive a divi though just that there is a large gas reserve to monetise as the priority.
On debt reduction though.
Debt continues to fall and they have taken 11m off inthe last 12 months.
Earnings per share of nearly 3p per share !!
Debt to Equity ratio now less than 1.
I can see a dividend being paid here in the future.
No negative surprises in the interims. But have to say that I really don’t like the way these guys report. They are not trying very hard to convince of the potential of the company other than the laughable $4bn discounted value of the company.
They still haven’t secured shale drilling permissions. Essar have theirs though so there is another delay here. They also could be drilling out further wells in the raniganj block so as to feed the pipeline when operational to Kolkata by dec 2020. But no mention of this.
Average production rates of gas data provided also for a very specific and short timeframe. Why? Just leaves questions on underlying longer term production rates.
It trades on a massive discount to peers but while Prashant Modi runs things it will continue to. Very frustrating!!
Fly tomorrow.
When the results are out. They want to move this up.
The mm's raised the SP first thing this morning by 3% with no trades at all !
I forecast a close tomorrow back above 20p. DYOR
All the best
60p
I am expecting to see a good set of results.
Troy,
Not long now for 7th.
Hopefully Thursday will cause a re-rate back up again.
The market always overshoots on falls and rises.
The recent big fall seems to have been caused by a large 1m+ share sell . Maybe a fund/institution off loading. Not prepared to wait any longer . They set target prices and timescales. Looking at the sells recently they could still be offloading. It should rise again fast when they finish.
All the best
60p
Totally agree 60p. I don't for a minute think that GEEC would sell, or even get approached given the controlling family interest. Hopefully though they are exploring opportunities for synergies with Essar on exploration and field development. And also agree that the London listing is much more about kudos.
Best of luck with the position. I have been here for a long time and have collected a reasonable sized stake already - which is now underwater with the recent share price plummet. I will be topping up if I get the chance after the results this week, (but the bid offer may have moved nicely up by then if there is some positive 'new' news - -lets hope so).
Troy,
Thank you for the information and your thoughts.
I took a very small investment here of 13,000 shares as I thought that the current market cap was good value when measured against the balance sheet NAV.
I will add when funds become available.
I don't see this going private though. The directors here already hold so many shares. It's as good as private anyway. They have total control with their combined holdings. Yes They may top up a few more after the results are out. I think they are pretty rich anyway and the UK stock market listing is about more than money. Prestige for them. Kudos etc etc. That's why I think they will keep the UK stock market listing.
All the best
Party
Once results are out and close period over I would expect management to be buying stock with it trading at these levels. Lets see! If I was a board level director at Essar I would also be having a conversation with GEEC about buying the company. Never going to happen with Modi family majority shareholding but synergies are up for grabs by integrating field development plans and Essar could offer a heafty premium with the shares down here and still make a very significant return. Hopefully more to be revealed on Nov 7th or shortly after.
60p. Good to have company on this board! Long since given up thinking GEEC was attracting any attention from anywhere.
I wont be dipping back into the market for GEEC stock until after Nov 7th. Would be very happy to see it rise on these results but something tells me it'll be disappointing. Need to see 3 things happen before forecast profits start rising. 1) gas pipeline to Kolkata is completed. 2) GEEC announces agreement to sell gas into GAIl network pipe without too much of a discount to current available price. 3) gas production rates get back on expectations for the field and any concerns around deteriorating flow rates are dispelled, (which to be fair i'm not sure there are - but lets see what they report. Interims showed a fall in production for first time in a long while - pumps blamed but sounds a bit lame). If we get all three in the next year then I think we see 100p per share.
Just to add.
It's worth going on to the companies website and check out their financials. See last year 2019 results. Then you can see why I think this is cheap !
Valued by share price almost the same as 1 year profit before tax.
Crazy cheap in my opinion.
Half year results out on 7th November should lift the SP if profit just maintained or possibly could it be greater ?
Took 13,000 yesterday will top up as my cash becomes available.