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This share rarely trades and even more rarely in a block of £20k. As it has been virtually impossible to sell anything even at the bid i'm assuming this is actually a buy order as recorded here on LSE. So why are the shares down 2.35%?
GEEC management might take the company private at these levels. They can fund expansion from free cashflow and debt (assuming that sales gas rises to near production levels - which it should when the pipeline to Kolkata is in place) so there is no need for access to London's capital. Would also remove an administrative burden. And lets face it no-one seems in the least bit interested in the company or the stock over here. Hardly any shares trade as the Modi family own 2/3rds of the issued shares. So it suits the Modi family for the shares to drift downwards so they can buy outstanding shares at a pittance.
Just an idea as this incessant share price slide continues. All will be revealed soon though I suspect. 1) operational issues deteriorating and flow rates worsening faster than expected. 2) Large shareholder trying to sell their holding - Modi family will buy eventually but only at a knock down price 3) Modi family taking the company private and share price being massaged down to facilitate this.
Let's see which one it is!
There seems to be still a large seller somewhere in the background. Its possible to quite easily buy 100,000 shares which for this share would easily have moved the share price up in the past. Not sure what's going on. It could be that a larger shareholder wants out and the market makers are shifting slowly down to find the clearing price. Alternatively there could be negative operational developments at GEEC. We could do with an update! Company usually doesn't now report until November so things could drift a bit further until then. These guys could definitely improve their game regarding marketing and communicating!
Will probably not start until 2020. Essar have stated that they will drill then and I would guess that the same rigs will be used for both companies and other acreage owners in the raniganj area. Bit of a wait
A buy order for 20000 shares filled today. Hopefully the discerning buyer will be tempted to buy a few mod over the coming days. Still looks to be plenty of stock around so jump in while stocks last.
continues. Completely wrong predictions. initial shale gas test holes will not be drilled until later this year.....no date given. This is a shame but maybe it really does take many months to get the final approvals to begin drilling. Also on the negative is that forecasts for gas production with the new pumps (that will be fully installed by end of June this year) will be the same as 2018 production, ie around 19.6mcf/d. This needs some clarification. The wells may perform better throughout the year to march 2020 in which case production will rise above 19.6mcf/d but we need more details on well performance.
On the positive side, new pumps will increase production in the FY 2020, sales gas is rising, debt is falling (maybe all paid down in 3 to 4 years time if no investment in further wells occurs) and the company trades on around 9x p&l earnings or around 5x cash earnings.
Undoubtedly things are moving much slower than previous expectations however the fact remains that there is a large pipeline about to be linking raniganj to Kolkata providing a huge market into which to sell their gas. There is also potentially very large quantities of gas to sell if the shale drill holes prove commercially viable extraction. The company has low gearing, is cash generative and is rated as a low growth company. India is on track to meet its 2 degree Celsius plan with gas planned to be a key transition solution as the economy weans itself off coal. ANd the government is highly supportive of domestic gas production. GEEC are also working in cooperation with Essar (who own the other large block on raniganj, which will make it easier to deal with GAIL and could potentially save some operational costs.
I guess we just have to wait. Things will move slowly but the shares still have the potential to be many times the level they are today without becoming more expensive. Clearly there are still risks. Shale may not be commercial and there may be some worrying variability in field flow rates that we are about to find out about, but I suspect these are largely priced in. As long as production and sales continue at the current rate then the debt has gone in 4 years time max and then cash can be distributed if there are no expansion plans. That would mean around maybe £10m £15m dividends a year to shareholders. With a market cap of £60. that would be a 17% to 25% dividend yield as long as current wells continue to produce gas at current rates.
The fact that a seller of size appeared at the year end balance sheet date and is clearly still there in the background raises the possibility that they are aware of some disappointing news and want out.
Not put off by my big miss on predictions for sales gas with the interims, I'm going to stick my neck out again. Finals brought forward to may 14th. That's very early so there must be an important message. It's either really not so good or actually really very good. I'm going for the latter. Sign off with GAIL and good commercial test results for shale drill.
The price is down 5% after steep recent falls. If there was a seller I should be able to buy in size but I can't. Can't buy or sell any stock without going to negotiated trade. Companies contact email address is crocked as well. Next results are due in July so it's a bit of a wait to find out how the shale test drill holes went and if there is any update on GAIL off take agreement. Maybe we get a trading update b4 then but probably not. 9trn cubic feet of gas in place going for £60m of equity and £60m odd of debt with c10p of cash eps and growing. Unless something operationally has gone badly wrong the shares surely can not remain at these levels for long.
Looks like there is plenty of stock around at the moment. Maybe a largish seller or two who'll be driving the share price down until the market clears withe some buying interest. Although having this happen around year end is always a bit unnerving. Someone know somethig......let's see.
Anyone reading this board have a few on why there are 1 sell and 1 buy order 10 days apart for exactly thee same number of shares....127. The amount of money is tiny and there are hardly any trades in this stock so the chances of these being unrelated are very small. Why would someone be testing the spread with these very small trades? Be great to hear a view and great to hear from someine on this board.
Looking for current sales gas run rate of around 14mcf per day with maybe an average over the half year of around 12mcf. Also be good to hear a timeline for the drilling out of test Wells on the shale gas prospect. Let's see but I'm optimistic of further good progress . Probably not enough news to move the share price much though at this stage
If we only take the 1U discounted revenue number for the shale gas, roughly £500m then the additional value of the share price move on the day of this announcement of £3.5m is virtually irrelevant. Obviously we need to look at the profits or cash flows on a discounted basis to put the share price move in context, so let's assume that these are worth £200m. This equates to a probability of commercial success of less than 2% on the most probable volumes of the shale gas opportunity implied by the share price move on the news. Combine this with the fact that we have current market cap of £95m and debt of c £70m , so an enterprise value of £165m for 1p reserves worth at least £200m at 10%;discount. All looks well underpinned to me valuation wide. Just need to buyers.
Laughable share price reaction. Best estimate for new shale gas over doubles the 2.62 tcf of gas in the coal bed. Use existing footprint and land access to extract gas from shale and huge centres of demand like the city of kolkata being linked by a pipeline that will be complete in a years time. I guess there is uncertainty over exploration findings, amounts and ease of extraction etc but still a good entry point in my view. India committed to gas as the transition fossil fuel to a low carbon future. Coal has to be getting phased out to meet Paris climate agreements. Indian economy is forecast to grow above global average. Roll on 1 years time when we have pipeline complete and exploration findings!
470k odd shares showing as sales but no downward price move. Either a large buyer working in the background all of a sudden or one of those trades was a buy and the stock was crossed at 70p. Still, it's good to see something happening here. Retirement is 15 odd years away and I'm wondering if geec will have meaningfully increased sales gas by then.
Hope you're right on the gas prices outlook. Will obviously help drive cash flow as sales gas slowly rises. Not sure how many potential buyers of this stock are out there at the moment though. Suspect it will need strong cash generation and a high free cash flow yield to attract interest. Unfortunately that is probably more like 18 months away when they can sell all their gas into the new pipeline to kolkata. I've been here for quite a while already though so happy to wait a little bit longer!
If it happens then ‘soaring’ coal prices will help create demand for gas as when coal is too expensive those that can will switch to gas. Gas prices should at least have support if not also begin to rise. Looking forward to 6 months time as this share will be higher by then (IMHO) question is how much higher
Agreed. Energy demand outlook is strong. Don't agree with coal as the solution though even as a short term solution. Gas is a great interim fossil fuel solution though until renewable sources are scaled. Geec region is also slated as a key region for industrial development and the new pipeline will link in huge demand from kolkata. Only issue for me is long term pricing of the gas. All looks god though for now.
Saying that India is struggling with Coal supplies and they need it as it’s essential for both its electricity network and steel production. They anticipate coal prices soaring. The realities of increased demand against a backdrop of the continued global economic expansion are evident with strong demand in India and South east Asia.
Many thanks for that. Will have a look.
I have $10m profit pencilled for ye Mar-19, then $14.1m profit ye Mar-20. I think they’ll beat this. I use 4-traders.com
Agree with you on that although it's been a long wait so far. Can I ask which forecasts you are using?
Yeah quiet board. I am hoping this company now gets some coverage in places like Investors Chronicle who have covered it previously years ago. I do think this stock can provide a really good return by Q1 next year, even with the big spread! The forecast profits compared to market cap show this as very cheap. Confidence will build as they beat the first set of forecast profits in these results.
Great to see that someone else is following the company Gracius. Been a lonely board this one!
Really good results. They beat forecast expectations and the forecast for next year makes this look too cheap. I suspect this is about to scale up now. The share price should follow.