London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
CaneToad,
Your probably a little bit irritated with me for “trashing BP”. In not trashing it and It should be noted that I didn’t bring it up - you did inviting comment. It’s an interesting mini case study to put BP side by Side with i3e and see where your money is better invested.
The 1st thing I look at whenever someone tips a stock is the charts - short term , long term and see what that tells me. Pull up BP and that tells me it’s been In long term decline for 25 years. With I3E - interesting blip in the beginning with Liberator, collapse and then what appears to be a sustainable uptrend as they execute their Canadian Strategy.
Then I ask myself can the Company reverse the trend in the case of BP or maintain the trend in the case of I3E. I think big oil has its work cut out - I don’t see BP turning it around - in 25 years they’ve struggled what’s going to change. I can see a path forward with I3E growing production in Canada without the protests that you see with big oil projects like Cambo.
I look at debt - I3E wins hands down - net cash whereas BP Billions of Dollars of Debt.
I look at the dividend - I think in recent years this has been the attraction of Companies like BP. However, I3E’s dividend is larger and arguably safer. I3e can grow the dividend through production growth - BP I think can only do it via oil prices.
I looks at stability and predictability of earnings, arguably I3E wins on this score also - 400 hundred plus low decline wells in a stable regulatory environment. I3e spoke about it in a recent podcast - ie that I3E exhibited some blue chip traits.
Personally I cannot think of a reason why you would hold BP over I3E - but perhaps my rose tinted glasses are too rose tinted. Interested to hear your thoughts.
I still don’t see the relevance of the BP comment because you’ve already previously mentioned the timing of your investment in BP which is the same for any stock - Enron was a terrific investment at one time if you got in and out at the right time same with Northern Rock.
Anyway I don’t think you quoted my last comment on BP correctly which was if you look at a chart - it’s been terrible over 20yr, 10yr, 5yr and not too great over 2 years also.
I’m a little unsure on your I3E comment - are you in or have you made a short term trade and back out again.
Trading is ok - but very few people make money CONSISTENTLY at it - it’s quite a skill. I’m happy to try find the right stocks and stick with them. I’m in a handsome profit now with I3E and it looks well set to be more of the same.
What’s the relevance of the BP comment - you sold out and switched into I3E?
I must say i'm with olderandwiser and spike on this one - they've already set out their dividend policy and its hard to make it progressive if you keep bumping it up. They're also laid out what they plan to do with any excess cash - special distributions , buybacks , addition capex etc which they can determine as and when they have the excess cash. The dividends they've paid out to date have already gone beyond the 30% of free cash flow in anticipation of strong future FCF.
One thing on my mind especially as the SP is showing signs of coming back to life is buy backs and whether they should be done sooner rather than later - if they believe the SP has a good chance of doubling in the near future then a buyback now would be much cheaper than one 6 months from now. It all depends on their plans which they have not fully shared yet. They seem to have made all the right moves so far - I fully expect them to continue to make the right moves - I think we all need to have a little patience.
Good reply, G_G_G. Can't fault your logic, either!
Let's leave it to the dynamic duo to figure out. A nice problem to have, anyway.
Older, can't say I agree with your reasoning. The very modest dividend increase I'm suggesting will be covered +15x over by the huge amount of unencumbered cash at year-end if they don't make another acquisition or go it alone on the f/o. Then you need to consider this doesn't take into account the significant exploration / development budget committed to Canada that will generate an incremental 10% boepd production (oil heavy). So you'll still get your progressive divi from production alone. I just hate seeing cash pile up rather than being put to use to drive up the sp. I'm invested here to make money. By adding a measly £2.25m to the divi it will boost the sp by 3p plus give me extra income. It's so cheap and simple, and an option they should def. pursue. My overall preference for spare cash would be an acquisition on similar metrics to recent ones, but I fear those times are gone and growth will need to come from the drill bit. Boosting the divi and doubling the Canadian exploration / production budget would be next. Going it alone on the f/o is my next preferred option, as it's the only thing that will get us to +30p in the next 12 months. Glad we've all got differing opinions on how to spend all our spare cash - means the business is in great health and there's lots of good sp accretive options. AIMHO GLA
Ok, then buy-back shares. Make the divi worth more and the shares more attractive to purchase.
Tend to agree that having outlined a detailed dividend policy for 2022 which includes the already communicated potential to increase due to commodity prices, bumping it up already isn't the right way to go. SP has momentum so no real need to intervene further at this stage and if commodity prices remain elevated then a small bump can be announced when results are released and I expect anyway the market is pricing this in.
Oil currently booooooming $87.44, and financial experts are predicting $125 to $150 dollars per barrel in a few months time
According to Zak Mir charts we are on target to hit 28p
https://twitter.com/share_talk/status/1483152169012318208?s=24
That I think is already I3E’s policy i.e. to pay out a progressive dividend. I don’t recall if it is stated on the readmission document - but it’s definitely something Majid has repeated in several interviews.
Nice to read that I fit in the category of the "right" kind of investor here.
But I would take issue with you over one detail of your last post, G_G_G. Simply bumping up the divi by another whatever, just because the cash is there right now, won't generate the sort of sustained valuation re-rating that us "right" kind of investors seek out. A solid medium-term approach would build on the indicated divi, which itself is already exceptional by UK market terms, and enable a progressive dividend policy over future reporting periods. I'm in a power plant company, Contour Global, that has a record (and policy) of paying out a 7% yield, growing at 10% p.a. from growing FCF, by way of illustration.
Agreed nomadic. I think we're starting to attract the 'right' kind of investors now we have a guaranteed divi and 7.5% yield (at current sp), coupled with strong near-term value appreciation potential. The traders are slowly being replaced by investors who are happy to wait for a guaranteed +25% value upside over the next 3 months, plus a nice big divi as well. The divi move was excellent - It's one thing that has generated a mini re-rate. So I'd like them to do it again in the next month or so. Another £2.25m will add 20% to the divi (1.26p) and give us a 7% yield at 18p, or 6% at 21p. I believe we'll settle into a sp range that's between 6-7% yield, which is why I think we'll be sitting in the 15-17.5p range come ex-divi (barring any other news). But if we have so much spare cash, and the f/o is going nowhere, then why not force a greater re-rate by giving a little more back to investors...? The modest divi increase would be easily covered by the incremental cash we're generating at current poo and gas. And it would also get the Nuttall's of the world to pay a bit more attention to us. We'd meet some of his investment criteria and at £200m Mcap we'd be big enough for him to include in his analyses moving forward. This sort of thing feeds itself, as coverage from him simply will result in greater gains. Anyway, lots of options for mgt, but it would be good to see them pulling some simple levers that have worked even harder (and sooner rather than later). Now that's enough from me today. GLA
With the dividend and free cash flow, coupled with a £160m mcap, people will need to start taking i3e seriously. I still think there's a legacy issue as every man and his dog were in i3e over the liberator saga. That's starting to pass and no one can argue with the chart over the last 1 year. The potential gains for such a low risk, should make it an easy story to buy into. Will be interesting when volume ticks up on news throughout the year, I imagine most holders are here for the long term and that is a really powerful asset.
Quite interesting the sp action over the past few weeks. Most important thing for me is modest buying pressure has put 4p on our sp. Crazy to think we were 10.3p just before Xmas. The committed divi obviously helped things, alongside the incredible strength in poo. But the fact that we haven't had a single day with volume above 5m in that time-frame and moved 40% says a lot about the price that PIs now need in order to sell. The question I'm asking myself is whether the mega-raise over-hang cleared...? I'm starting to think it may have. And, there really couldn't be a better time than now to drop something big into the market. GLA