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Apologies- those two question marks at the end of my post replaced my smiley face emoji!! A quirk of using an iPad I guess.
IOG: undervalued, underplayed and seemingly unknown to the masses……..just the kind of share I’m interested in ??
Bacton gas continues to gain, closing yesterday at 104.97p / therm.
IOG vastly undervalued.
Peak- agreed. Very interesting article- it certainly makes for interesting times in the gas sector and hopefully the media will start focusing on ( undervalued )natural fuel investment plays.
I mean, out of all the companies of this scale in the gas sector, IOG must be one of the most undervalued. Backed by a Berkshire Hathaway company, first gas in 3 months and gas riding prices not seen in 16 years.
Whilst gas prices remain at the present level - and with Russia putting the squeeze on supplies to Europe, that looks set to continue right through the winter and beyond - it would take a strongish bid to meet the real valuation of IOG. You may well be right that CalE are poised to do just that - if it happens I have always made them favourites for the initiative. Very good point about the "vilification" of fossil fuels by media and the eco warriors regiment having an adverse effect on substantial new investment. However green or blue the product is claimed to be by IOG, its the fashion and its woke to knock it, with perception rather than hard scientific and economic fact winning the day. Good link from GG on a very focused article in the FT. GLA!
Market makers…. as you say the price dropped 10% before trading opened the day of the RNS.
Not unusual to see buys outstrip sells yet the share price remains static.
As for LOG, I wouldn’t say desperate to sell but they are certainly not in IOG for the long term. As an administrator, they act in the interests of their clientele to maximise returns from the original loans but not act as an investment broker. I would be surprised if they weren’t keen to cash in with the right offer as part of their exit strategy. It’s either that or wait until the rest of the reserves start delivering. That will take a good couple of years at the least, and be reliant on gas prices, accurate interpretation of gas reserves ( and we know how reliable that’s been over the years!), operational success and no hitches along the way. Also, regardless of how ‘green’ IOG’s operation is, I think gas along with every other fossil fuel will be vilified and given a hard time by the media and the usual brigade- are these risks an administrator would take over the long term? Overall…..a bird in the hand is definitely worth two in the bush from LOG’s perspective.
How do they actually suppress a share price Monkeys? And LOG admin can't be that desperate or they would have sold by now?
It wouldn’t surprise me if Cal buys us out before Elgood and Blythe come on line.
The suppression of the share price is a classic symptom prior to take over.
I’ll be disappointed as an offer of between 32- 36p is what would be expected. Whether this happens or not depends on how desperate LOG admin want their cash back.
Peakview, Toro, Mole,
I echo the sentiments within your recent posts and at present we are at the mercy of Market Makers and relatively low volume of trades.
We now have proven gas from Elgood and about to commence drilling on Blythe, Gas Sales Agreement in place with Gazprom and forward pricing predictions almost double the expected.
As previously mentioned Winter 2021 prices are 96% ahead of expected and Summer 2022 prices are 49% above expected at this time which will bode very well for us.
The Bacton Gas price at close yesterday was 100.87p / therm and we are still in summer.
First gas will be here in Q4 and with that a much higher than expected revenue stream.
Although I am disappointed with the current share price it will have to catch up to reflect a more realistic value at some point, maybe not until first gas and revenue stream commences
I would expect the next box to be ticked on Monday/Tuesday with the RNS for Blythe drill commencing.
Good luck to all
"at the mercy of the market makers" is about right. You will have noticed that on the day of the RNS on Elgood results being released, the MMs dropped the sp some 10% before trading even began, thus putting a negative spin on the news. We all evaluated the botttom line to include much increased gas prices as nothing like bad news! Had they done the reverse on the release of yesterday's game-changing content we should have been marked back up to around the recent highs of around 23p? The mystery remains for me as to why there are so many sellers after a real blockbusting RNS - certainly not for short termers with so little or no profit to be made from trading. Unlike gator, I have no qualms whatsoever about engaging Gazprom as a major customer. They are the dominant supplier of gas to world and European markets and would naturally wish to consolidate their supply service to the UK market also, and I regard the deal as a feather in IOG's cap. Putin may well play political games in the Euro zone, but his policy with regard to Gazprom eminence will surely stay unchanged. Brokers in terms of speed of movement are about as swift as the Galapagos tortoises, so their re-rating may be a while coming. Meanwhile toro I think your reading is sound, and we will now await further well development news and the great event of first gas to see some real advance in sp and a new era of income at a better rate than originally forecasted. Putting the sums and the realistic prospects together I think 30p is a rather miserable target - and possibly below the figure that the LOG administrators have in mind?
Until first gas (implying the start of cash generation and payment of debt) and the placement of the LOG share overhang, we are pretty much at the mercy of the market makers who need to drum up interest to move shares and thus make money.
As risk is mitigated with every positive step towards first gas, the shares should become more and more attractive to small and institutional investors, with out-of-date valuations (in need of being revised upwards) with the current price being under half of the brokers´ estimates.
toro - all logical deduction and fully agree with your estimates. as you say, reality must kick in at near future stage.
6 month winter price of 101 pence per therm ( 96% up on the central planning case -cps) and summe 2022 price of 59p. (up 49% on cps; this would indicate planning prices of 51.5p (winter) and 39.6p (summer 2022). Finncapp used a price of 45p for calculations. This would add many millions of pounds to the company value and has not been reflected in my opinion.
Further, the big move down in share price after Elgood RNS seems very unmerited; it would be interesting to get a proper revaluation of the Elgood resevoir: from what i can find Elgood has been valued at 13 million dollars; what has been the downgrade in reserve estimates ? If this it is proportional (??) to the excess depth drilled to find the resevoir -39 feet of a reservoir of 1080 feet, this gives a downgrade figure of less than 4% - that is around half a million pounds )!! The increase in value of the gas looks it will revalue the field by over 50% (10 times the downgrade). The company value went down around 15 million pounds!!
Hopefully, time and an update in vluations, will put things right!!
toro - yes the increase in prices is fortuitious and merits a rerate given the closeness to gas and he high volumes early phase 1 envisaged anyway in 2022. To me once the ambiguity caused by the Elgood RNS is out of the way or priced in over time it should move.
But volume remains low in terms of trades - so it remains undervalued. To me the last 2 RNS have been 2 steps forward (price and completion of well and 1 back (volume) in terms of progress and the niggle of the slight delay.
Aligator - Gasprom would not be my chosen partner must say! But it must have been approved by CalE - so if they are not concerned then I'd go with it as they must be at a bit of arms length to any sanctions target. Besides why would you cut off your own domestic produced gas in any sanction dispute.
Shipping update: Tugs no longer seem to be in the vicinity of the rig; which would indicate it is in position with the legs down. Last time (Elgood) it took 5 days to spud. So we should see drilling by beginning of August. First gas should be at beginning of November.
The supply ship VOS Paradice has now come out again and is nearby the rig.
It all seems to be coming together as planned, with today´s RNS confirming the signing of the gas sales agreement (another tick in the planning list). I note from the RNS that the 6 month winter prices are 101 pence per therm ( 96% up on the central planning case -cps) and summer prices are up 49% on cps; this would indicate planning prices of 51.5p (winter) and 39.6p (summer 2022). Further looking back at Finncap´s company note back in april (valuing the company at 47p per share), they have used price per therm of 45p.
Further, in the reports, overall peak procuction rates seem to be estimated at around 70 Bcfe/d ; just Elgood alone has come in at around 58 and one has to add Blythe (and then Southwark etc.) to production.
All this would imply to me that there should be a considerable revaluation due to value of the company (inmediately of at least 35 - 40% - on the 47p valuation . A faster flow rate will imply aomproved incomcome generation and to be able to take advantage of the higher short term prices.
Surely we are due for updates from the company and brokers!!
thanks for info on movements toro & GG. Busier trading day today, and to clear up further confusion on this board, there were 703k shares traded with 480k definite Buys, 162k Sells, with 60k difficult to define. We should be getting a re-rating in the vnf!
Agreed that the Hans Duel is in position with the 3 support tugs.
There will be quite a bit of setting up prior to spud including tying into the Blythe safety systems, emergency shut downs etc.
I am thinking it may be more like the weekend before any drilling commences and drilling (spud) commences. Monday RNS is my thoughts now.
Meanwhile Bacton Gas continues to trade at very strong prices and today is 93p / Therm.
I would imagine that when forward gas sales contracts are put in place we will negotiate deals that even a few months ago would not have seemed possible regarding winter prices.
All bodes well for production revenue.
The rig NOBLE HANS DEUL is now at Blythe and is stationary. It should be jacking the legs down now and we should be seeing confirmation RNS this week.
Last stage before that long awaited first gas!
looks like the NOBLE HANS DEUL now on the way to Blythe.
denis - the display of trades on this board is thoroughly misleading - as usual. Actual totals for today are 63.4k Sells and 194.5k Buys. It can be very off-putting for potential new investors, as it is nearly always a negative interpretation.
I wouldn't worry about how the london stock exchange reports trades as buys, sells, or unknown but simply just look at the price differences in trades, which will usually indicate whether it was a buy or sell. ADVFN/LSE uses a very crude algorithm to colour in the trades, and often gets it wrong.
I can confirm my buy at 19.75 showing as "Unknown"
Plenty of activity around the Hans Duel today.
The tow / support vessels Bugsier10, BB Octopus and Multratug 4 all on location and the construction vessel Grand Canyon III at Blythe NUI a few Km away.
Thanks GG - nice to see things moving on quickly. Narrow spread returns this morning, with Buys at 19.74 Sells at 19.50 - all reported as Sells of course!!
Two tugs due to arrive at Noble Hans Duel around midnight tonight.
Bugsier10 and BB Octopus look like the anchor handlers to move the Hans Duel the short distance to Blythe NUI.
The Blythe well should therefore commence later this week and with it being estimated as a less than 90 day well it wont be long before the long awaited first gas.