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Delays continue, the guys at the helm not good at keeping to timeframes
Oil sank tonight
If McDade were to significantly veer from following a strategy other than identifying and buying attractively priced, high quality second phase O&G assets with material reinvestment and efficiency improvement potential to maximise reserves recovery, I would look to sell down my 7 figure holding bought at an average of 25.8p.
However, McDade clearly believes Afentra has an opportunity to replicate the success of Tullow, Talisman and Apache in the North Sea 20 years ago, not least because fortuitously Afentra has the tail wind of the recovery stage of a new oil market cycle, a strong post pandemic recovery in demand, and a major programme of disinvestment of high quality assets that are no longer material to oil majors and NOC's in a number of mature O&G basins around the world.
The holy grail is to find a lowly valued second phase O&G company with low producing costs, strong cash flow generating assets and highly material organic and inorganic development potential, run by an experienced management in a high growth, high energy price mature market, thinly contested for high quality assets being vacated by oil majors and NOC's, due to owners and Governments willing only to consider companies with management able to demonstrate a previous history of managing O&G assets to the highest operational and safety standards.
Should the company also benefit from a regional Government keen to offer highly material fiscal benefits and long license extensions to attract new investment to maximise recovery from large mature fields, and a drilling/oil service sector still largely beaten down by the ravages of a long recession, and a location in a region with mostly benign sea and weather conditions enabling shallow water offshore field production development and maintenance work to be carried out year round, that would be the icing on the cake.
On the balance of probabilities, over a 2-3 year view, I consider the risk/reward of an investment in Afentra as good as any O&G company in my portfolio.
AIMHO/DYOR
My money would be on a further shallow water Angolan acquisition.....NOC Sonangol have a large number of O&G assets potentially available as part of their huge privatisation programme.
In Jan 2024, the AET management stated they had been working through further regional M&A opportunities for 18 months.
So, relatively soon after completion of the Azure deal, the likelihood of AET announcing another attractively priced acquisition of high quality, long life, mature assets with excellent reinvestment potential and a very significantly backdated effective date, is probably quite high.
Would not be surprised if the next acquisition was similar to Block 3/05 - ie; a non-operated, significant working interest in a large oil asset being vacated by an oil major or NOC.
'Afentra’s entry into Angola in May 2023 saw the Company establish a foothold in a key target geography with a wealth of future growth opportunities. Afentra is acquiring interests in quality assets with scope to enhance and extend production alongside improving environmental performance, while positioning itself as a key stakeholder to support state-owned Sonangol with its transition strategy.'
'Afentra’s strategy is to build a material diverse portfolio of mid-life producing assets that no longer fit the portfolio of major companies. We seek to optimise, redevelop and extend their lives in a safe, responsible manner whilst reducing harmful emissions. These production assets underpin the business with low-risk cash flow. Over time, Afentra aims to build a portfolio of operated positions, levering the extensive technical operating experience possessed by the team. We will also acquire non-operated positions alongside quality operators and credible JV partners with a shared alignment to operational excellence and environmental stewardship.'
AIMHO/DYOR
Both Belle-ende & Bawbagzz posting carp today? They must be hurting & really feeling the heat - as their shorts burn bright and hot :)
This slight pullback is a BUYERS gift before the main event!
I'm STILL buying & so should everyone else, make them shorters feel the pain :)
Thanks for the chance to buy in the 42's lads :-)
Not looking so good now and who knows, Azule could already be priced in.
Desmond
'undervalued provided Azule completes as expected'
Nail on the head there, Desmond. Uncertainty doesn't help.
Completely agree. Its a shame the recent momentum has fallen.
But its not the first time a deal has been approved later than expected.
Is frustrating this cant move faster.
Any further deal announcement will be reliant on Azule closure first. They’ll need to know what finance is available from their existing facilities and obviously future cash flows from Angola operations. However, I wouldn’t be surprised to see a backdated additional deal announced upon completion of Azule given the boards stellar track record. At $89 oil especially this company remains grossly undervalued provided Azule completes as expected.
The other point of course is that AET should have moved quicker to buy production assets. They will be fleeced now at $90, good luck getting value now
JWBelle-ende trying his worst to convince us all to sell, he must be sweating buckets now. LOL!
Azule WILL be signed off soon & tens of millions of dollars will flow into our bank :)
Then we can all breathe in Belle-ends smoke as his shorts burst into flames and our sp shoots ever skyward, lol!!
I'm STILL buying :)
And another day where management have no managed to expectations currently
Imagine if this doesn’t complete, shares would plummet
I'm shocked I tell ya, shocked! Who knew the oil price went up and down? You learn something new every day.
I'm still buying though :)
Its almost like AET are in the oil business?!! Nooo, surely not, christ, why did no one tell us
….nearly 5% down. Up when oil goes up and down when oil goes down. Still there is always the next RNS! Chuckle
Oops, nearly forgot! We also have a 34% carried interest with Genel for offshore Odewayne in Somaliland. It just gets better & better...! :)
1.26 !!
We cashed cica $26.5m last August & another $38.2m in Feb. Assuming we do another $38.2 in the summer, that gives us a P/E of 1.26. We have at least 16 years of production ahead, plus Azule, plus possible the 2 new onshore blocks. We should be on a P/E of at least 5 or 6 I would think. That would give a share price in the region of £1.80-£2.25 going forward.
I'm still buying :)
As JWBelle-ende loses all his money on his short, we gain lots of money by buying!
A transfer of wealth from a loser to us - the winners! :)
By way of Executive Decree 79/24, of 11 April 2024, the Ministry of Natural Resources, Petroleum and Gas (MIREMPET) has approved the Declaration of Marginal Discovery of the Punja Development Area in Block 3/05-A.
The Punja DA will enjoy the following tax incentives:
➡ Depreciation of Development Costs – 3 years
➡ Cost Oil Cap – 80% during the first 4 years and 65% from year 5
➡ Petroleum Income Tax – 25%
➡ Investment Premium (uplift) – 1,20
Block 3/05-A is located in the Lower Congo shallow waters and is operated by Sonangol P&P with partners Maurel & Prom, Afentra and Etu Energias.
They said “weeks” and once again it’s not happening, clearly delayed
Can you explain further Rift. What relevance this has?
Yeah, the good thing is tho that the sell price is consistent, so not many sells, just the buy price moving down to make the spread smaller.
We need news now. Would love an update regardless.