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Ggg
In the past they stated farmout is advanced now they say its ongoing, so its not in the short term imho.
Its the canadian assets we should concentrate on, the option/warrant holders will likely be selling down. I still believe i3e massively undervalued.
Disappointing Result on TSX.
I think people realize it could be weeks before the circular is issued, and potentially a few more weeks before ex-divi. As a consequence there isn't any urgency to get in now. I imagine once we start to approach the ex-divi date there will be people jumping in. Hopefully the bod will get back out there to trumpet the news and let us know when the 2nd quarter divi will be paid. By the end of this month I'd expect the divi to be finalised, a date for the 2nd divi to be paid, and some news on the May wells (even if it's just to say they've been spudded). The f/o is of course the news that will create the biggest jump, but who knows when that will happen. Still can't get my head around the value disconnect here. It really is astonishing.
9p equivalent on TSX now. Surely the implied dividend yield must put a floor under the SP soon??
By Definition / Hedging will Result in Winners and Losers. It is a Trade. It’s impossible to Win on both sides.
No wonder I have not been able to match i3E's projected NOI / FCF - I believe that I3e will have done the calculations with the swaps / hedges in place(obviously !). Any of us who've been trying to model i3E's CF will now need to go back and update the spread sheet.
I3e have swapped / hedged 50% of oil production at an average of CAD 69.81 ($57.69). It will be interesting to go back and calculate the reduction to NOI / FCF due to these swaps / hedges. I'll will plug them into the spread sheet and post the result a little later. I guess this is the price for protecting against falling prices - you have to sacrifice a little of the upside during rising prices.
Current WTI = $65.39 Realized price = $61.39 (loss due to hedging = $3.70)
Loss in yearly revenue = 340 x 750 x $3.70 =
Once i3 are a Dividend Paying Company / Then this is certainly a Transformational moment. I think we have taken all this for granted / However it was the BOD that were Bullish on this matter. Once First one is paid / We are on our way. Future Added Value.
I thought the interview was poor BUT in fairness with comments regarding dividend - they did explain that there was a lot of documentation and that documentation had to be absolutely sound and correct or it would risk being rejected. A rejected proposal would have been bad for pi's, therefore taking due care is the correct approach. Graham said those documents are now in place and therefore announcement imminent.
I simply thought Majid had the Flu on that Call. He seemed unwell.
Majid should have exercised some of that caution when announcing the Dividend was expected to be paid in Q1.
The Key Investment Proposition (pg 19 of the Admission Document) touted the Dividend, with all the hurdles that had to be cleared before payment could occur, and included " The Directors intend to take professional advice on the most efficient route to repatriate cash from i3 Canada to enable dividends to be paid." Therefore they had an awareness of what was necessary to achieve payment and clearly suggested to those funding the acquisition that it would be in the [then] current tax year.
It clearly has not been a straightforward piece of financial re-engineering (aka finagling) as they are still to get to the position to be able to issue the Circular, and the actuality of the 'necessary reduction of share capital' remains unknown; there is no sharing of detail as to the reasons for the hold up, but it is fair to believe it will have come with a bigger invoice!
wrt the 2021 NOIforecast, why would they not include the Noel well contribution if it is expected to deliver in June? The Clearwater wells won't come on until the very end of the year so that is understandable, but to FORECAST and not include the 'expected' seems a little odd. We assume that they are using the observed decline rate and that they expect that to continue to be valid.
We also know that the Options need 9000boed by end of July. ;-)
Circular tomorrow anybody?
Fastfood,
The operational update RNS was largely quite positive, the podcast covered pretty much the same ground and was no less positive in terms of content - just a little undersold I think due to Graham / Majid being gun shy from past events. As both you and GGG say - we now have a solid base on which to measure and grow from and now that we know where we sit with production and the status of new projects / wells - I can only see the news from this point on being almost universally positive / accretive to the SP. Obviously I3E can not control the Oil price but the rest of the cards seem to be in i3e's hands.
Upcoming catalysts / news:
1) Dividend ( not sure how much this will move the needle as the amount has already been stated)
2) Annual Report expected end of May. Hopefully no surprises in terms of cost, but another opportunity to announce positive updates.
3) Spuding of 2 wells as soon as this month.
4) Update on Serenity
5) Update on new drilling plans in Clearwater
6) Share buyback - I dont expect this but its possible especially if drilling plans are slightly behind internal forecast. A small buyback I think would send a positive message and would not need to be too expensive.
7) Additional farm-ins to Clearwater or other acreages - again not currently forecast but possible.
GLA
I was dissatisfied to hear Production below 9000 boepd / However the success of the Company I believe is in good hands because they are being Conservative and building a system that hopefully throws off a growing Dividend. For this to happen / Nothing can be left to chance and therefore any Opportunity that come along such as the Farm in / i3 will be in Strong position to continue to Grow their base. IMO.
The most likely dividend policy is to announce an initial annual dividend but paid in quarterly instalments and then have an annual review based on the past years performance. Do you see it differently?
My thoughts for what they're worth... I agree it wasn't the most stirring interview on the back of a very good update. Most important for me is they've delivered a set of results that allows us to more easily value the company. And as far as I'm concerned they've answered a lot of questions. They have forecast higher NOI. We have confirmation the divi will be paid very soon. And another can be expected to follow soon afterwards. They've executed a f/o where historical drills average 150bopd, which has cost us next to nothing. They have 9 wells to drill in the next 12 months in our new acreage (circa 650 bopd net to i3e). They have a drilling program for our 100% acreage starting in q4. The f/o is progressing and they're confident of a successful outcome. And they have a hedging program to be executed this year for 50% of production, so our fcf (and divi) are protected in case there's another Covid wave. This last point is excellent and seems to be missed by everyone. Yes it would have been nice for the divi to be wrapped up, and the f/o, and the drilling program could be more ambitious and starting earlier this year, but overall they've done very well. They were never going to give us everything we wanted, but have certainly given me the minimum I wanted to see. I'm pretty heavy in this stock but planning to add up to 1m more shares in the coming weeks providing the sp stays below 10p and I can free up some more funds from other investments. Not too many places where if poo stays at this level for the next 6-12 months you'll get a +100% capital appreciation alongside a 6-9% yield (with upside being dependant on exploration success in 2 x jurisdictions). One of these jurisdictions is a given (Canada), and the other is part appraisal (Serenity) and part exploration with more areas to be drilled like the Minos High. If the f/o is secured in the next couple of months then we're likely to have the drilling program before year-end with the mid-case success at Serenity alone taking us to 30p. And one of the best things is we won't be taking on any more debt for this upside. Canada comes from fcf. Nth Sea from a f/o.
The divi statement will be made soon so they can get back out there to tell the world of the cracking yield on offer, when to expect the first and following divi payments, and update us on the Canadian drilling. Hopefully there will be something on the Nth Sea as well. All of this (except Nth Sea) is guaranteed in the next 4 weeks. Never felt more comfortable in this stock.GLA
It's not a case of skepticism, Serenity was discovered November 2019. Its estimated we have 197 mmbbls STOIIP. People have to go into the data room, look at the seismic and agree with i3 that the sands to the west may contain the quantity stated; taken into account the directors relevant history? They have to decide is it worth farming into a well that could cost £12mln just to appraise? So where are the takers? Plenty production assets in the NS for sale from the big boys, without risk. We should approach Borgland Dolphin and offer them 40% of Serenity and see if they bite? Pleased i3 opened up about natural decline of the Canadian wells; the Canadian team look as tho' they are doing a good job and should be allowed their head. I note Gear Energy has been mentioned. A little from their Q1 results concerning drills: Gear recommenced investment in the field through the drilling of eleven successful (10.3 net) wells including ten heavy oil single lateral wells in Paradise Hill and one (0.3 net) light oil multi-stage fractured well in Wilson Creek. A total of $7.9 million was invested during the first quarter. The ten heavy oil wells continue to be optimized, producing a total of over 400 barrels per day over the last 30 days. The light oil well has been on production for 33 days producing an average of 200 barrels per day on an inclining profile with the last few days at approximately 300 barrels per day (on a gross basis).
This in one quarter.
Listened to Vox markets interview and thought it was brutal. If I was listening fresh eared then no way I’d give Majid my money.
Ffs what sort of PR exercise is that vox *******s?
Complete pants
Freshair,
I understand the skepticism but in my opinion at a certain point, if the data/ progress agrees - you have to re-access and draw a line under past events .
The failure of liberator (which can happen to the best managed companies - success with the drill bit never guaranteed) had a lot of consequences including funding and I3E's future as a going concern. Since the Toscana and Gain Deals (which saved the Company) - things have looked muck more positive including a near doubling of the SP.
We have had a pandemic and subsequent oil price crash - so not a surprise at all that Serenity has not advanced for the last 18 months. The language over the last 6 months about Serenity has been much more measured with no dates promised and progress reported. The last update particularly i thought was encouraging - "confident of a successful outcome" which based on past failures I don't think Majid would have said if he thought the FO would not proceed.
So I think Serenity is going to happen, they now have FCF producing assets to work with , so I for one am giving I3E the benefit of the doubt until they prove me wrong.
GLA
GLA
See Kane’s link below - Vox Markets daily podcast
Where is the interview posted?
Come on, let's be honest, where's Serenity making progress? Its the same old cry from i3, repeat, repeat, and lets have it one more time.
GGG,
I will just re-iterate for the benefit of others - ref attached graph posted by Eric Nuttal of Nine Point Energy on his twitter feed.
GXE is Gear Energy and is the cheapest on the EV/CF measure out of the shares he is tracking or at least showing on this graph.
My calculations show that i3e is even cheaper, has lower net debt and great exposure to Clearwater for a company of our size (Clearwater cound be transformational by itself) - and not forgetting Serenity which appears to be making progress.
https://twitter.com/eri****tall/status/1386662037175119880/photo/1
Joesoap,
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.
Tony, (R) = $17.8m for both companies?
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.