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I find it hard to believe i3e would pay over $300,000pd for a 1977 2nd/5th gen semisub, hurricane energy have just paid a day rate of $160,000 to $205,000 for the paul b loyd.
Sugesting a day rate of above $300,000 would make the Borgland Dolphin one of the most expensive semisubs operating anywere in the world.
I am not sure that I agree with you conclusion on costs over run or that they were "wasteful" on the drill sites or that they have not been "tight on the purse strings".
The best information that we have to go on is the 2019 Drilling Summary in November, when they claim to have been within budget:
"i3 Energy plc, an independent oil and gas company with assets and operations in the UK, announces the conclusion of its 2019 drilling programme with three wells drilled, safely, with no environmental, health or safety issues and all within budget".
That same RNS does give some indication of the potential size of the prize for RRE:
"The Company will now prepare for a multi-well appraisal of Serenity and the Liberator West area in Summer 2020, which will aim to de-risk a considerable portion of the aggregate 600 MMbbl potential STOIIP identified in these structures. Development options for Liberator and Serenity will be progressed focusing initially on utilisation of existing infrastructure."
serenity is a "must have" for rre, its all about the price, rre would like to take advantage of i3e's sp situation and get serenity for free- a carry of i3e's drilling costs doesn't even pay back past investments.
if rre was the only one interested to farm in they would get it for free, but it looks like it is not the only one and that makes it a waiting game.
the time frame is set, rre reported fid for tain mid 2020, so as we get closer to mid 2020 the cards shift to our favour as rre wouldn't like to be dependent on the OGA ruling about tain being an extension of serenity or not.
Thankyou Juxtapose and Alexios. We had £45m, and likely to have spent more than £32m on the 3 drill program. I would hazard a guess we have circa £7/8m given the additional days drilling, the current site survey, and the additional costs for a secondary listing. We also need to factor in our inept bod to the equation, who thought they would prove up endless barrels of oil in their communicated 80% cos drills. Given how wasteful they were on the drill sites, I would think they haven't been too tight on the purse strings. And nether does the market given the current sp. So its pretty easy to see there isn't much cash remaining and the f/o is key to us ever seeing double digits again. I'm relying on Graham and Majid to get one thing right and get he f@cking f/o done on reasonable terms. If not they should recognize they are **** at running a company and take a buy-out offer. Hell I'd take 20p right now. Best to keep in mind the remaining money available is required to satisfy repayments on our junior loan note facility. F/O is the only way forward ad they need to get their bloody skates on before the sp drops to a point where an unreasonable t/o is tabled.
From RRE's 2020 presentation:
Bleo Holm (RRE 30.8%, operator Repsol Sinopec)
? The Blake and Ross oil fields produce into the Bleo Holm FPSO.
? The partners are investing over £200m to extend Blake field life by 5 years to 2029.
? This will also facilitate the development of the 11 MMbblTain oil field (RRE 50.0%).
? FID for Tain is targeted for mid-2020 with first oil in 2022 at a rate of ~3,500 boed (net)
Bulk of capital expenditure (CAPEX) in 2020 is for the Arran development and Blake infill wells. CAPEX in 2021 is
expected to be similar to 2020 as spending on the Tain development ramps up.
RRE has achieved its "four years of rapid growth" by acquisitions "built through a series of acquisitions".
It is interesting to look back at RRE's aggressive acquisition strategy in 2019 and see how it transformed the company. Looking at the expectations for Tain, one of the two developments going forward for RRE, it is difficult to see why they would not see Serenity as a "must have" and they were certainly not shy in commenting when the Serenity discovery was announced.
The question has to be "how much" for "how much": whether they go for low risk and a part stake or the higher risk and make a complete acquisition, given the synergies with the existing Tain development.
I make gross funds raised £45 million
£16 m placing
£2 m placing
£22 m junior loan note facility
£5 m December raise at 35p (with the benefit of hindsight, a really smart move)
That ignores all other deals for non cash payment along the way, which probably outweigh costs of raising finance.
The company did well in financing the 2019 campaign and the success at Serenity should make this next 2020 round easier. There must be a degree of pressure on RRE and Repsol in any negotiations, particularly if any other parties are also showing interest.
Last year's 3well programme was estimated at £32M
They kept rig longer than the original programme plus they drilled sidetrack at Serenity.
So total cost is unknown until we get full year results.
A little patience, before the second listing a presentation is due.
$200,000 a day is a good estimate for our 95 day campaign.
Raised £45m in H2 last year
I have drilling cost of $200,000 pd and £10m mobilizing fee so around £25m is a good estimate.
I can't see G&A being £25m more inline with £3 -£5m
£10 - £15m is a fair guess.
So where do you think this £45m went?
Oiler & Regie37,
I think your cash estimates are way out and you have not done "DYOR":
Proactive Investor Video dated 28th Nov 2019 - go to about 21m 30 S and Graham Heath states that they have enough cash to "get them to the back end of 2020" i.e. out of cash some where near the end of this year.
You know what the loan note is (24m I think at 8%), you can see the G&A from the June preliminary results and make a projection going forward and that does not indicate a cash balance of 15m.
You also know the budgeted drilling costs, forecast v actual drilling schedule, funds raised (42m I think and not the 45 you mentioned), finance costs and G&A mentioned above and you can run another calculation which by my maths is consistent with what Graham Heath statement above,
The only thing we dont have much visibility of is the deferred payments - however, if they have not been paid, they are an additional liability above and beyond the loan notes.
Alex, I believe they've been fairly consistent in how they intend to fund any drilling campaign this year, which is through a farm-out agreement. Given Graham has a considerable amount of shares I don't believe he will be interested in a £20m placing. If these guys could be trusted I'd say it's best to stick with what they've said. Regarding estimates of cash remaining, no-one knows, but the market certainly doesn't think it's in the order of £10-15m and I'm more inclined to agree with the market than billboard guesstimates. That's my take on things.
On another point, if they're not close to a farm-out agreement at the moment I would like to see our m@r@n CEO, Majid, drop £100k of his own money into the company. Maybe if he had some real skin in the game he wouldn't be so keen to drill at edges. The market has little trust in our bod, which is fair enough. It also views the bod as needing time to get their **** together, which is also fair enough. I'd truly love them to surprise the lot of us, although I think there's a better chance we'll see 7.5p before that happens. They've made a mess of the simplest of things, especially their silence when the insider trading was taking place. This last point makes my blood boil.
they have said they wont raise at these levels and are looking to secure a farmout which is on the cards, 10-15m cash is my guess too so more than covered. dyor
Alex, that is correct in regard to the 11m bboe at A1, the serenity reserves are still potential reserves for a rbl if farm out goes bad, but not clear how many bboe can be taken in to account as the company still needs to prove the majoraty of the stoiip.
Oiler87. Please do some research.
Oiler re RBL secured against their asset base, there is zero chance i3E will get RBL.
All assets are secured against the cln's already.
Chunky placing for £20M or more than 50% stake farm out
Oiler, for god's sake get your facts straight. Firstly we have no idea how much money they have, but if I were to guesstimate it wouldn't be near the £10-15m cash you are talking about. If it was the market would be valuing the company at more than £9m, so there's a thought to consider. As for the second listing, this will not raise money, it will simply mean more demand for shares (in theory) as there will be two exchanges buying / selling. In theory this should mean a higher share price. And, it will also mean they can raise cash more easily in future (in theory) being on two exchanges. This isn't always the case though - Just take a look at company's like TLOU energy.
As for the 11mmbl of 2P, yes this is something that people tend to forget about with regard to i3e - A not too insignificant amount of oil to be exploited that is very close to existing infrastructure that needs more oil to fulfill capacity. My hope is that any farm-out agreement includes the entire acreage and therefore they can move at pace on appraising Serenity, and the Minos High structures. And to exploit the 2P reserves. I also hope it's with RRE / Repsol and they take charge of the whole shebang as i3e are a bunch of f@cking chancers who got greedy and rolled the dice with other people's money only to come up short. Thankfully they had some luck on Serenity. The bod have been careless and incompetent in their decision making, and cannot be trusted. On the plus side they have some valuable assets, in the right area, at the right time, and they have skin in the game. These are the reasons why I haven't sold out completely and still maintain hope of getting back my £100k @ 22p average.
Tonynorstrom1, i3e raised £45m in the second half of last year and spent around £15m for 94 days drilling and around £10m for mobilization, not sure on what G&A for a year is but would think under £5m so i can see i3e having £10m-£15m cash.
I3e are still in a position of securing a reserve based loan against the 11mmbbl of 2P reserves 2km away from the bloe holm or renegotiation the warrents so there is other options available.
Also the second listing will help secure funds and a farmout will be looking very attractive.
they do not have a very decent cash pile. As per the operational update (RNS) at the end of last year - they had sufficient cash to "get to the back end of 2020" . This would be covering G&A and finance charges only and not much else. I note that they are undertaking a survey so presumably the cash covers this also.
The current oil price is what could hold us back.
Raising funds or getting a farm in partner with low oil price has always been difficult.
they have confirmed there will be no placing as farmout is on the cards, also they have a very decent cash pile already.
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