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Gary whatever the f@ck his name is, has always been negative on i3. He's obviously been burnt. I thought Majid was a bit apprehensive when discussing Serenity, but the O/P collapse has put too many hurdles in the way of a good f/o deal. Toscana was an excellent deal and we should build on it. I now feel as tho' I will get my investment back; even hanging around for a dividend?
Following completion of the Toscana transaction, #i3e intends to leverage the TEIC platform and management team to execute an M&A driven growth strategy to build a large, low capital intensity, long-life production base in Canada #OOTT
I agree. Toscana deal gives breathing room, a start to more Canadian deals on similar terms where cost of production far less than North Sea so can withstand oil price wars better. Can expand existing Toscana fields that in any event have at least 15 years reserves. Over and above, a poss extra 100mbl asset. Finally, if you're to be listed in a mkt, TSX, you should be operational in that mkt. TSX is highly regarded commodities mkt so good for overall I3E liquidity.
Should OPEC change its tune, as it surely will, then we'll look back and ask couldn't more Toscana deals have been done.
Of course debt has increased but it's clear that the debt can serviced from cash flow.
If it is the nature of the deal there are three game changers here:
1. They have a platform.
2. One well produces 200 bbopd and cost 1m$,
So with 20m$ senior debt they can produce another 4000bbopd.
3. They "baught" a 25m$ tax asset
G_G_G - I've been in i3e since IPO and have a low average as never purchased above 25p (original shares were from GWIK), so while the fall has hit me, it hasn't been a wipeout. However, lot's of people, particularly those who are very loud on twitter, all jumped in prior to the drilling campaign. I was in the twitter group and it went from a solid 10 people to 50 within days. The sp has collapsed and there are a lot of bitter people who paid over 100p that have now sold out - these are the ones shouting loudest on twitter. Gary is one of them, he claimed to have a couple hundred thousand in i3e.
If we're all correct about the nature of this deal, why does twitter has so many self professed oil experts ****bagging it...? Share prophets and that Gary whatever the f@ck his name is had quite a negative view of the deal.
From what I can tell we've managed to buy a very low cost oil producer, which operates at cash levels close to the multi-decade low oil prices we're currently seeing. They have an ability to pull back or shut-in the oil and gas being pumped until prices increase. And they now have producing assets allowing them to raise capital to potentially go it alone on Serenity, or add a few more wells in the Canadian acreage if WTI prices rebound and hold above $30. They also have a new listing on the TSX.
If the above is indeed correct the bod need to go back and redo their interviews to spell out the deal in simple, layman terms. I really don't think most people see the deal as what I've just described.
They even discuss recycling cashflow between dividends and expansion. Graham looked as relaxed as I've ever seen him. During his time at Iona, Graham worked with the senior management team to build the company from infancy to 40MMboe of 2P reserves and production above 6,000 boe/day, listing the company on the Toronto Venture Exchange, and structuring equity, debt, and derivative financings in excess of US$670million.
Serenity could be delayed by Cavid 19 but Toscana deal is a platform to build the Canadian business. Will be a different business in 3 to 9 month.
Harel, I'm not surprised, its an incredible bargain for I3E (from a distressed seller).
From the RNS - 'and is a fraction of going market-based valuations for WCSB oil and gas transactions.'
Btw, look at toscanas bb in canada, the posters complain about being robbed..
GGG. "We became the lender" approx 225 seconds into the video, Graham doing the talking. We paid $ 3mln for $24.8 mln Senior facility.
https://www.proactiveinvestors.co.uk/companies/news/916150/i3-energy-team-discuss-acquisition-of-toscana-energy-and-new-growth-business-916150.html
Thanks nick, i hope this poster is correct, if that is the case it is a great deal.
Harel, the Toscana debt has effectively been cleared by the payment of $3.4m CAD.
I3E will own a debt free Toscana for a negligible outlay.
I think this poster from a d v f n sums it up well...
'They have just purchased Toscana's debt of c$28m from its lenders for just c$3.4m i.e paid just 12.1% of face value. After the deal is consummated, i3e will have paid effectively c$3.95m (£2.25m of which only £314k is paid for in i3e shares)) for a debt free Toscana. They should be able to secure new debt based on this income stream as well as getting their TSX listing in for free. Seems a very good and opportunistic deal to me. '
Ok, and who will pay toscanas debts?
Harel, we have paid $1.7m (CAD) already with another $1.7m (CAD) due year end. The rest is paid for by 4% dilution of shares and we are then dual listed on AIM and TSX (Torronto Stock Exchange Main Market)
We also "own" the debt, i dont understand how they are planning to pay back all those debts when they dont have money to pay their own debt or to fund the summer campaign.
They must be sure the amount of cash from the serenity f/o will be more then the drilling costs but the risk is on our expence..
We will see in the coming months if they deliver or its the lib flop all over again.
There seems to be quite a bit of confusion surrounding this deal, including from myself. My understanding is we bought the debt plus the company, so we now own a debt free Toscana with all its assets. Can someone please correct me if this is wrong.
Another thing, Canadian Geo's are supposed to be the best in the world because of their mining heritage.
Could be the fact you stated you hold >3% of the company ..... but no where are you shown on any TR-1 as legally required by FCA.
So its not the case "if you dont believe its fine by me" .... facts show otherwise I'm afraid.
GGG. An honest answer is I don't know. I said it was debatable because Toscana defaulted. That would suggest to me that the debt facility can be called in. I still believe it a good deal as we are not relying on this lot finding oil with the drill bit. If we can pick up some distressed producers at a knockdown price that's the way we should go. I'm assuming even if Serenity has less than forecast it should still be enough for a reserves based debt facility. I have no doubt the note holders will back i3; they won't walk now.
Why you care about my holdings, i was asked and answered, if you dont believe its fine by me.
No,he’s a fantasist every BB has one.
I know 3% is a notifiable interest but 100k were sold. Why would a notifiable owner sell such an amount at just over 7 pence when his average was 29p ? Was he skint.?
Hi All. Does this Toscana deal effect BOD Exercise of Shares due to First Oil ??
Graham and Majid typically bullish in their proactive interview. The CV crisis is a double edged sword. On the one hand they seem to have negotiated a much cheaper deal than originally planned as a result of the low oil price and they are clearly looking to use this deal as a platform to buy further Canadian assets in this depressed market. On the other hand starting the Serenity drill late Summer as planned will create severe logistical difficulties as well as making prospective farm in partners less willing to offer them favourable terms at such low oil prices. Interesting 6 to 12 months ahead for genuine investors