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Total over reaction to this morning’s rns. Market cap now under £140m. Wash out the weak holders and thepatient will see the rewards.
Stas - those NOI projections for 2023 were issued in December 2022 when gas was trading at nearly CAD 5.00 / GJ. Gas is closer to 1/4 of that number now and 2023 NOI actually closed out at around $93m.
On top of the lower than expected pricing - they have only drilled 3 wells in the last 12 months - so average production has also fallen.
Lower pricing, lower production, lower NOI.
Look at Q4 RNS in late February. I was pleasantly surprised by the below numbers at the time. Still doesn't make today's numbers look any good though. Are they planning to drill a lot of gassy wells with this $50m? I know development is back weighted but the numbers 2024 don't look great. Having said that, value is looking much better after taking a 10% knee to the nuts.
· Full year 2023 net operating income ("NOI")1 (unaudited) is approximated at USD 93 million, in line with guidance, with year-end 2023 Net Debt2 expected to be approximately USD 23 million (unaudited).
Also the RNS states
“This programme will be fully funded from existing Company resources and is designed to balance growth, financial discipline, and a sustainable long term-dividend through a predictable development-focused programme, all while positioning the Company to commence its Simonette Montney pad development drilling in Q1 2025.”
If fully funded from existing company resources how does net debt rise so much? I have to admit to being confused where am I mistaken?
GGG my numbers were taken from this https://www.investegate.co.uk/announcement/rns/i3-energy--i3e/2023-budget-guidance-dividend-and-presentation/7224211
Stas, I think your 2023 numbers are out to begin with, but today's figures are undoubtedly not numbers the market was expecting. We've just been sucker punched 10%, which is probably fair given what they've just quoted. Basically a wait and see job. They provided December NOI / EBITDA numbers to indicate how much end of year will be contributing to this year's numbers, and next.
No wonder the SP is tanking.
Majid at his finest I’m afraid, lots of noises in the first quarter about M&A possibilities etc.
Gas is on its a rse and he drills for it instead of oil.
10p coming and just when I thought things were going in the right direction.
Every year i3e manages to have a black swan event 🙄
Can we have an RNS about a blockbusting M&A this afternoon please, one that could have taken us to 15p but will just get us back to 13p
You need the patience of a saint with this company
2023
Net Operating Income (5) USD 159.6 million - 166.7 million
EBITDA (6) USD 144.0 million - 150.5 million
Net Debt USD 8.8 million - 3.0 million
2024
Net Operating Income USD 70.0 million - USD 75.0 million
EBITDA USD 55.0 million - USD 60.0 million
Net Debt USD 23.0 million - USD 26.0 million
Tony what do you make of this, how has this changed so dramatically?
No, he is saying that he expects the share price to rise as the output rises. End of year sp (he says) will be 3 to 5% higher than 12.66p. Add that to 8.1% dividend which is what he plans, ie definitely not increasing as you suggest, makes up the total shareholder return.
My mistake
Or a 50% dividend hike in 3/4 and 4th quarter
Subject to Board approval, the 2024 forecasted dividend, representing 0.2565 pence per share per quarter or 1.026 pence per share for the year, translates to a forward yield of 8.1% based on the closing price of i3's ordinary shares of 12.66 pence on 23 April 2024. Based on projected year-over-year production growth and anticipated dividend yield, the Company expects to deliver a total Shareholder return of 11% - 13% in 2024.
💰💰😊👏👏
Reading this I assume we may receive a special dividend of upto 1/2p by year end
2024 Capital Budget of $50.9m, 15 wells in Central Alberta, Simonette, and its northern Clearwater acreage.
Forecast exit 2024 production of 20,250 - 21,250 boepd
$70 - 75 million of 2024 Net Operating Income and $55 - 60 million of EBITDA
I think the only way we'll get back to the 20's is with gas strengthening to an average CAD$3.00 or above. Many posters are certain gas prices are going to strengthen at year end, and into 2025. So not that long to wait.
Good thing is they can now safely throw USD$50m at oil development over the next 12 months so even if gas remains subdued there's a decent chance we'll be in the high teens based on greater oil production. Plus we can pick up a guaranteed 8% yield whilst we wait for production and gas prices to increase. This will be a slow build, but certainly looks good for 30-50% (inc. dividends) over the next year. Looking forward to the development plan. GLA
I3 is one of the best value oil and gas producers on the market
Low market cap to free cash flow here
Good dividend %
Let's see. It's the Lse Aim but if the asset transactions and growth programme is significant then the market revaluation will happen over time with a very healthy dividend along the way
With whats to come here shares will be trading in the 20's soon.
Whether the purcheser will be happy with this buy - it is not that important. More important to me: When we spend the received money in new wells, we will generate much higher EBITDA than the Royalities would do. Thus very value accreditive. The ability to derisk our promising play further is a big (nofinancial) advantage and it's for free.
Again: Great Deal!
Oil price 83.5
Let's get after the Simonette Majid.
I posted elsewhere that I got a response from IR and this was an entirely non-core asset sale with no revision to working interest average or marked drilling locations. Excellent stuff.
Agree 100% Tony. Win win deal.
IBB,
I agree - probably a good deal for the purchaser but clearly a good deal for I3E. Just another example of good execution by the team.
Let’s see what the Capex Update looks like.
I messaged IR about this deal and got the following response from management today (IR turn around has picked up recently):
Q1 - With this disposition, what are the acreage revisions for i3' Central Alberta, Clearwater, Wapiti and Simonette plays?
A1 - There are no acreage revisions for the Company’s working interest positions and no revisions for reserves. Royalty barrels are not included in reserves.
Q2 - Furthermore, does this disposition reduce the booked locations of 391 (254.4 net) across the Company's four core areas per the March 25th 2024 Reserves Report?
A2 - No there are no changes in booked locations at all, booked or not booked in the Company’s reserves.
I don’t think the buyer overpaid at all. I also don’t think the i3 sold it for dirt cheap either. I think it was just a deal that works for both sides. It’s royalty land, the net income could be $5M or even $10M in a few years in the buyers hands and if that is the case, they got it for very cheap. Time will tell how it works out for them. Still a good deal today for i3 for this non-core disposition as it allows them many option going forward.
@Panamapete: My guess on the timing of that sale is: We sold to a "newly minted private Canadian royalty company". They had money and needed deals to show their investors activity. Thus they overpaid (and will name it "strategic" to their investors :-)
From Sedar:
Annual General Meeting
June 27, 2024.