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cmcc4395 - I like that idea and think it would work well (if Management really must continue with share option awards - after all they do already receive a pretty full salary!)
Luck, the shares being sold are the excess of what mgt threw into the trough for our II piggies to gorge. They're just regurgitating into the trough for another feed as we slowly make our way up. The reason we spiked to 16p before the acquisition was the IIs stopped trading in order to get more action from the bod. This comes from Graham himself by the way. SP will of course come good, but what you've described as 'bizarro' is what I've been describing would happen ever since they diluted the f@ck out of this company and handed it all to IIs. Anyone who heard me rant and rave months ago about what they did, will recognize this is what I've been saying would happen. Only Tony wants to convince himself the scenario that I described would play out, which is indeed playing out, is being caused by something else. That's because Tony and I have a history of arguing over this very thing and what would happen next from the last great dilution event. And now he's been wrong on both occasions.
Here it is. You want the sp to break 15p and stay there, wait for the f/o to happen. You want the sp to get past 20p and stay there, wait until March as we approach H2 results, divi payment, and drilling (hopefully) the Nth Sea. IIs will sell and re-buy into any spikes all the way up. Anything above 25p and staying there will require +50m recoverable oil being proven up / discovered in the Nth Sea. All of this does however require the bod not doing another massive dilution event and handing more ownership to their II mates.
Fwiw I'm quite certain of all the positives happening over the next 6 months, which is why I'm fine to wait and get a £20k divi end of Q1 for my patience. I'm just not sure about the bod not diluting us to oblivion again. I simply don't trust them to act in our interests, and neither does the market, or Doc Jones now for that matter. In the meantime I'll remind people how and why the sp is behaving in this manner at the moment, so they can at least learn something as we slowly edge our way toward that 20p mark. Easy money if you're patient, just not as easy as the money being made by the IIs, or the bod for that matter. GLA
GGG,
Theres your problem - “I’ve assumed net debt is in a zero position”. I’ve not assume that - I’ve read the interim report and run the numbers.
You’ve dismissed what Management have said - you’ve not really paid attention to my previous posts and you don’t seem to be familiar with the actual numbers - why would I think you would start paying attention now?
Let’s agree to disagree - I won’t comment on your future posts - let’s move on.
I guess the worry is that they are incentivised to grow BOEPD even if such growth comes at a dilutive price to shareholders (and they are not yet major shareholders themselves). Perhaps a BOEPD per share metric would be more useful
So please do share the reason why we're undervalued versus our Canadian peers Tony.
As for debt, I said 'net debt' where I've assumed that we're in a zero net debt position given the numbers they have reported recently and the fact they're doing f'all by way of spending all that NOI. Maybe our net debt situation is £5m. But not a lot is it. Negligible I would say. And a hell of a lot less than many of the Canadian O&G companies valued on better metrics than us.
As for debt for the acquisition, I don't believe mgt even entertained the notion of debt based on everything I have received and heard. All they have done is given reasons why they didn't do it. They've simply justified what they've done, that's all.
But do explain the riddle of why we're undervalued against so many of our peers who have greater debt than us, because I haven't seen you explain it? Quite the contrary you're still scratching your head and trying to come up with any reason other than our mass dilution events (remember to include the extra 5% for mgt doing their job). SP is on the same trajectory as previous i.e. slowly upward, which was always going to happen unless you have your head in the sand.
Pirate ,
I don’t necessarily disagree with your comments on options but there has been issues in the past with bonuses just linked to SP performance - it can encourage bad behaviors . There’s nothing wrong with production targets - if there met the SP should do ok. You can question whether the targets are sufficiently aggressive enough which is a good question but is a different question.
Tony and ArK87 - No argument from me - this will come good and we will all make decent money. Was just putting down some thoughts on why we are not higher currently. If Management plan to continue with share option awards they need to be linked to share price performance IMHO.
PiratePete - I remember getting incredibly frustrated where we where trading in the 4-6p range for what felt like forever with endless block trade selling holding us back after endless good news and strengthening oil prices. Eventually it sorted it self out and we traded as high as 16p and i think will be similar story . We all frustrated but eventually share price will sort it self out.
PiratePete,
I think you know the answer to that question - I think he may have bought once , but it wasnt very much - I think about UKP 30,000 from memory.
N o arguing about Kistos - its SP is where its at because of the confidence of shareholders in Andrew Austin including a more shareholder friendly approach to options / share awards.
The SP has done great but it does appear to be significantly more expensive than i3e. I3e have to gain shareholder confidence and deliver and the SP will follow.
Compare and contrast with Andrew Austin’s share holding in Kistos!
Has Majid bought even one share with his own money yet?
I3e down 8pct in Canada at the moment.
I think the “Options for nothing” mentality that Management have needs to change as this is eroding private investor trust and holding back the share price.
GGG,
What's wrong with you - we don't have a ZERO DEBT premium because we DONT HAVE ZERO DEBT - we have about $25m in DEBT . Not high by any means but not zero or nearly zero . This is clear isnt it!!! KELT for example have NET Cash - there's a difference - I think just about everyone on here (apart from you it seems) would agree that net cash is better than net debt all else being equal.
You are holding a position on debt that is contrary to what Management have explained in a recent earnings podcast to us all and to you again personally via email. Again most people here will agree that Management are much more qualified than anyone here to make the determination on funding not least because they are talking to the banks and other institutions directly. You are of the opinion that you know better than Management - that sounds like an EGO to me.
I have posted many times on valuation and the reasons (imo) - so im pretty clear in my own mind why we are where we are. I just dont think you have a handle on the numbers - time to move on I think.
Jezzo,
Go to the i3e website - top tab "videos" - then I think it is about 1:45:00 where the question is asked.
Not sure what you're arguing Tony. I'm pointing out the same thing I've been saying since it happened - the mega-raise will create an anchor where the trajectory of our sp will be lower, and it will take longer (much longer) to get near 'fair value'. This argument hasn't changed, however I note that yours change regularly. Tell me with all this research, why haven't you decided on the reason why we're undervalued against Canadian peers, even when we should have a 'zero net debt' premium?
As for 20p, you like going back through people's posts - go and check when I first started saying it would happen in the next 12 months only post f/o and on the run up to drilling. But you'll need to go back months Tony.
And as for nccl, really Tony, again with this childish ****? I was very clear in saying it was a binary bet, but one I felt would happen +vely for a number reasons. Turns out it went the wrong way courtesy of President Xi blindsiding his own industry, and the world for that matter. So unfortunately I was wrong, but at least I have no issues with admitting it. Don't worry I'm not going to dig around in your history for an occasion you called 'binary bet' and got it wrong, as that would be quite pathetic.
Bottom line is your ego won't allow you to acknowledge the impact of the mega-raise on the share price of this company. That's twice now you've argued the very same thing, and been wrong both times.
No Tony I didn't,
I will seek it out.
Jezzoo - can I ask - did you listed to the last company podcast and in particular the Q&A session where the responded to questions on the equity raise and the timing of it ?
My biggest fear here is the BOD awarding themselves some huge extra bonus for the increase in business that will further alienate the long suffering PI's who haven't had nearly as much a return.
I've been here since GWIK and at one time was 95% down, I'd still be 80% down if I hadn't averaged down everytime I had some spare cash, basically all the extra hours I put in went into this share. After MANY years I got down to just under 12p and therefore in profit.
While all that was going on the BOD were taking salaries that effectively, through placings, was PI's money.
And the alledged leaking of a duster ? That instilled a mistrust that was almost forgotten until the last huge placing at 7am in the morning that caught a lot of people out but somehow the II's were up and about and buying in.
I understand the logistics of I3E being listed in two different time zones and the reasons that may or may not have driven this decision but it still killed the SP and continues to do so.
That's the reason we aren't at 25-30p and it will always blight this company, if they pull another stunt like these I'm out and I suspect so will a lot of other LTH.
On the other side of the coin, the growth of the company has been impressive, such a pity the history will always follow it around.
GGG,
With all due respect - with KELT - you don't know what your talking about - you've not looked at it whereas I have spent time studying the numbers. I sometimes think that you don't bother looking at i3e's number properly. Did anything catch you eye in this mornings update for example ?
And I wont even mention NCCL if were looking at the quality of data analysis !
GGG,
This is what you actually said:
"SP reaction is muted for the very same reason I've been saying since it........" >>>>>>> I was merely pointing out that 11-12% is a pretty decent rise and not what I would call muted.
".....just over 20% higher than the raise price" >>>>>>> its actually around 25% which is a pretty decent rise and not what I would called anchored to 11p.
When the "mega raise" occurred - i'm pretty sure that you said we would need to churn though about 10% of the raise i.e. about 40 million shares, its now been several hundred million shares not with standing the fact that the shares have actually moved up 25% so not anchored at all.
I don't think I have recently put a 20p target on - I think your making this up. Secondly when the data changes - you need to revisit your thesis. A couple of things have happened in the last couple of months that for sure have had an impact on the SP and nothing to do with the raise:
1) Serenity has understandably been pushed back from Q2 to Q3 and now to year end.
2) ESG concerns have ratcheted up in recent months impacting the valuations of the whole sector - many Oil Companies have not kept pace with the price of Oil.
3) The latest earnings report was "Solid" as WHI put it but fell short of market expectations I think - It certainly fell a little short of broker estimates. If costs increase and FCF decrease - this will impact the SP - you should know this !
4) For someone that has 4 or 5 million shares - maybe $25 million of debt is next to nothing. For the rest of us its pretty significant and certainly not next to zero. Had they added another $20m as you have suggested - it would be very chunky indeed. Did you happen to pay any attention to the cash balance in the interim report ?
FFS Tony, the reason we're not valued like KELT is because of the mega-raise! How many times have I explained the impact it would have on the sp. Go back to my posts months ago when I told you what would happen. I described the sp gradient that we'd be on i.e. identical to what has been happening. You're not getting it because your ego is in the way and don't want to admit this time, like last time, you're wrong about the impact of printing hundreds of millions of shares and handing them to IIs, rather than utilizing a mix of debt.
3) No debt (GGG should take note - no debt !! )
As I've said no debt should value us at a premium. But it doesn't. Why, because of the mega anchor provided by the mega raise. We've had +30% dilution for the acquisition. And mgt is awarding themselves 5% dilution per year for simple targets on top of their massive wage. Dilution is causing the insipid share price appreciation.
'GGG - what are you talking about- the SP is up around 11-12% in a two days. It was a solid incremental update - what were you expecting - 50%.'
No I've been saying we wouldn't break 15p and stay there before Xmas unless we get the f/o. So not expecting 50%. I expected exactly what has happened. You should know this given the number of sparring sessions we've had on the matter.
'This is part of the problem - Canadian Oil Companies are trading at historic lows and i3e is trading at the bottom end with respect to its Canadian Peers i.e. were not the only Company trading at 2 x ebitda.'
Exactly, it's part of the problem Tony, but as you've pointed out many times, and again now, we're undervalued against our under-valued Canadian peers. I'm simply pointing out the other, bigger part of the problem - the anchor provided by the mega-raise, which is something you're clearly still struggling to acknowledge even in the face of reality. If we go back through your posts from the time it happened we'd read you saying the sp will re-rate in a couple of months to 20p. You'd be talking of the new value of the company, and how this time round it will be different. Well it's a couple of months now. Same thing has happened as last time. We've been here before.
The share price won't break and stay above 15p on this update. And unless we get the f/o, it won't happen this side of Xmas. This isn't me ****bagging my own investment. After all it's how I accumulated 4m shares in the mid 5's the first time. And I'm still saying we'll get to the 20's when nearing H2 results plus Nth Sea drilling i.e. April 2022. I'm also still looking to add more. But our current reality is we're still in the 13's, just over 20% higher than the raise price. Oil and gas have gone ballistic. We've added another 1000 boepd to the significant increase from the acquisition that is now online. We have next to zero debt. Throwing of tons of fcf. Nth Sea f/o expected to close soon. And we're undervalued versus our undervalued peers.
Feel free to provide another reason for the current sp if you wish. You know my reasoning.
There's a Canadian Company called KELT (operations in Canada) - it has virtually the same reserves, production including mix (oil, gas , NGL's) as i3e but trades at over three times i3e'e market cap. It has certain advantages over i3e such as lower costs, no debt (net cash in fact) and also a significant drill program in progress. I've been trying to dig into the valuation gap with the guys over at the CEO board but so far have not been able to see anything that justifies i3e sitting at only 1/3 the market cap of KELT.
A couple of reasons given by the CEO board for KELT having a premium rating include:
1) Management have a record of delivering shareholder returns
2) Management perceived as being shareholder friendly - CEO takes no salary for example, executive compensation fairer etc
3) No debt (GGG should take note - no debt !! )
So my take away is that Canadian Companies sit at valuation metrics of 1.8 to 4.2x EV/CF - KELT sits at the top of the range and there's a couple at the bottom end including i3e with the average being about 3.2x.
When i3e demonstrate to the broader market that they are producing superior shareholder returns - they will move up the valuation axis - simples. I think this is starting to happen but it doesn't happen over night.
GGG - what are you talking about- the SP is up around 11-12% in a two days. It was a solid incremental update - what were you expecting - 50%. The 6 month and 12 month charts look great and should get significantly better now that we have the cash flow to re-invest significantly into the assets.
I think your wrong on valuations - Canadian valuations are at near 20 year lows and amongst the worst in the west - certainly lower than the UK and US. This is part of the problem - Canadian Oil Companies are trading at historic lows and i3e is trading at the bottom end with respect to its Canadian Peers i.e. were not the only Company trading at 2 x ebitda.