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I think you are quoting Metalmonkey correct ? The money set aside for Q1 indicates that the dividend is not 11% but nearer 6.5%. I think what he is saying is that with the workovers, price increases etc the dividend in the coming quarters could quite easily move to 11% based on todays SP.
I can see this happening or equally the dividend staying at 6.5% and the SP increasing to 15p !
One thing not mentioned is i3e's yearly report. As they are clearly following AIM rules and not TSX - it should be due before the end of May. This should fill in a lot of blanks and hopefully more good news !
This poster on CEO is suggesting the maiden dividend will actually be around 11%...any comments?
Following field optimizations and workovers, ITE should be chugging out around 4100 bpd of liquids and 35 MMSCFD of dry gas. Local prices have taken quite a jump... AECO gas is up nearly 5% to 2.89 CAD / GJ and MSW is sitting at $61/bbl... at these prices the FCF should be running north of 50MM CAD/year for the liquids and 15MM CAD/year for the gas... so $65 MM FCF total. Consider that in addition to the additional unutilized assets and you have yourself one helluva deal... quarterly update or not. Buying at 0.165 today will yield you an approx. 11% dividend on your original investment.
After this week's news I was half expecting us to peak around 10p by friday to close from a good RNS, however today I am hoping we stay above 9.2. Reading Tony's outputs and a few others I guess in my opinion we'll be looking at back-end of Q2 for Divi and importantly figures to see long term picture.
Good spot - I3e should have read $18.4m (cut and paste error). I will correct and also use EV instead MC in the calculations along with looking at the hedging again. Should result in a truer comparison and indicate i3e as even cheaper relatively.
The numbers below indicate that i3e are earning lower net operating income (NOI) as a percentage of revenue than Gain. Not completely sure why this is - Gear are just about the lowest cost producer in Canada, but i3e's NOI was also lower than predicted by the Mirabaud Model. I can only assume that realized Oil prices are lower than expected or OPEX is higher than expected. This means that FCF is also lower than would be predicted by the Mirabaud Report / Model after adjustments for strip pricing.
Good news is that the same calculations below indicate that if i3e was priced on the same NOI x R multiple - I3e should be trading on about 12.5p ( this ignores the Gain Hedging losses )
Numbers are rough and ready but I believe do indicate lower profitability than may have been predicted earlier - we will only know when we get a proper set of Company results.
Gear Energy Market Cap (MC) = $160M 5600 boepd (88% liquids) Revenue (R) = $17.8m (quarter 1 see attached report) NOI = $10.2m (quarter 1 - see notes below) NOI/R = 57% MC= 3.9 x NOI
i3E Market Cap (MC) = $93M 8856 boepd (40.5% liquids) Revenue (R) = $17.8m (quarter 1 see notes below) NOI = $7.5m (quarter 1 ) NOI/R = 42% MC= 3 x NOI
Notes 1) All values converted to USD 2) Revenue = Sales - Royalties (This is how Gear have reported) 3) Hedging loses ignored in Gears results to calculate NOI and for a like for like comparison. 4 ) I3E revenue calculated on WTI $58 (strip pricing) and divided by 4.
Austin14 "its very late and the "we are working in the background" fluff can only last so long."
One of our Director's said at a monthly KPI meeting after promising a presentation for several months " I haven't got anything to present again this month but there's a lot going on in the background and we'll get there '
J, well if you draw a £600K a year salary from an AIM listed company and are continually late delivering news, you should expect criticism. Without those people you very weighty salary doesn't exist. So its give and take. Sadly the BOD have done alot of the latter, especially with the leaking of poor results as witnessed previously. Now they have a chance to repay PI's faith who did standby and believe they were capable of turning things around, they should be doing all they can - but as yet they aren't - some people will not want to invest money if they believe the BOD classes them as an irrelevance.
I said ROOT cause was the UPDATE not the PI's (IMO). If the update was a blow out - there would be more buyers than sellers surely ? The volume is not that heavy so not too much should be read into it either way but the largest trades are sells - so its probably a fair assumption that someone selling 800,000 shares has got their calculator out before selling.
Austin, yes I agree with your post in relation to the Directors attitude, however it is unlikely imo to change, unfortunately yes they do hold PI's in contempt, however those PI's need to hold themselves up as much to blame, if they continually and publicly call the directors out in the ways they do with often nothing other than personal attack and insult what really do they then expect in return.
Tony, yes I am disappointed at the share price reaction, of course I am, however I consider it is fully down to PI's trading, quite simply and not wishing to be patronising, if there are more sales than buys then the SP will decline and there are pretty much ONLY sells today and looking at the size they are all PI's. To be frank, I hold more shares than the whole of todays trading thus far! so yes it is PI's selling that has pulled the price down.
Next we have to ask why, as regards NOI yes I think this is fine and indeed on my calculation it was slightly higher than I expected due to the increased oil percentage reported. On top of this the hugely increased oil price has not gone amiss. And to be very blatant and thus apologies to some, there are a number of PI's who haven't got a clue what the calculations should be anyway, they are here for SP appreciation and will chop and slice on the fly, just look at the trades today 37 thus far and 29 of them under £5k. If people cannot hold for 5 minutes this is what you get. I am sure WHI with their 24.3p assessment and the comments that they may revise upwards, is not showing a disappointment in any way.
"Valuation: For now we retain our 24.3p fair value estimate. We see scope to materially increase our fair estimate in light of i3 Energy’s announced operational focus and activity in the Clearwater play. We will formalise our thoughts in respect of this opportunity after gaining of a better understanding of the Clearwater play."
There appears to be nothing from the company in terms of ramping up media duties, interviews etc. Now considering Graham and Majid, were both quoted as acknowledging that they felt shareholders previous pain and that they had learnt lessons - there appears to be very little coming from that department. When the dirty has been done (and insider leaks would suggest it was very dirty) then you need to go the extra mile to prove things, to enhance reputations, to rebuild trust. They now have provided detail (which lacks in some areas as Tony and others have pointed out) now surely is the time to fill in some of those gaps and speak directly to their shareholders. Especially where the dividend is concerned, its very late and the "we are working in the background" fluff can only last so long.
Most here (including you I bet) are disappointed with the SP reaction. I'm not sure I agree with you that the root cause of the SP is down to PI's buying and selling - its down to the update imo. I've already highlighted where I thought the update matched or exceeded expectation and where I thought it was luke warm. One area that I didnt mention this time and it bugged me before and is still bugging me is the Net Operating Income / FCF. Is it where it should be ? I think it is worth checking since we're currently being valued largely as a multiple of FCF imo.
For starters - I think it might be worth comparing NOI as a percentage of revenue versus Gear Energy. This helps eliminate some unknowns. Gear Energy along with other Companies was identified by twitter followers as a peer company and appears on several Nine Point Capital presentations / graphs.
I will take a look at the numbers and post shortly.