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Better days ahead..it seems after consistent rise lately with today’s in particular..
someone has recently bought over 17m shares but there has been no rns to notify on subsequent % holding in GEEC.
same coalfield i meant to say not coal seam.
https://energy.economictimes.indiatimes.com/news/oil-and-gas/pipeline-commissioning-helps-essar-deliver-coal-gas-to-fertiliser-plant/80741651
Essar operate in the Raniganj coal bed as neighbours to GEEC., both extracting methane from the same coal seam. Essar are communicating well about how the new GAIL owned pipeline is transforming the market in terms of demand for gas in the region and this is kickstarting plans to expand production. GEEC also have gas production, they now have a rapidly scaling local market and a route to that market so why are the company not communicating in the same way as Essar on this? Time for management to step up their game and secure an offtake agreement with GAIL, fully open the taps and get drilling more wells. This surely is bread and butter to a gas exploration company so it is very frustrating that management arent saying more about what they are paid to do as part of their standard every day job!
About time to see this re rate..well overdue..
Holding strong here
GL
M&G Investment Management now finally out having sold all their shares now. This has been weighing on the share price for a long time and such an enormous overhang of stock has suppressed the shares down to extremely low levels. I expect a significant re-rate here now to maybe 30p to 40p range. Interested to know who the buyer is as well. Could well be the Modi family but hope that we have a new institutional owner here. Next few months are set to be full of news with the new pipeline to Kolkata operational at Durgapur and due to be operational to Kolkata within a year from now as well as possible main market listing. Looking good!
Foundation stone laid at Haldia for commencement of the final leg of the pipeline from Durgapur through Kolkata and to the coast. Also Dhobi - Durgapur stretch of pipeline completed. This should open up new demand for gas in the immediate region, which will benefit GEEC. Essar operate the neighbouring CBM field in Raniganj (Durgapur) to GEEC. They had this to say:
"Essar had last year reached a peak production capacity of 438 million cubic meters per year in the Raniganj asset and will ramp up production now that the pipeline has been commissioned and expand its customer base from current industries in the nearby areas to far and beyond districts in the eastern region.
It plans to start the balance drilling and associated development task of around 250 additional wells as part of an expansion plan to achieve the sales volume of 1 billion cubic metres.
India is one of leading gas consuming nations in the world and Shri Modi’s vision of having a one nation- one gas grid is an important step in making India a gas-based economy.
The government is therefore focussing on creating a robust gas-pipeline infrastructure network.
The Dobhi-Durgapur stretch of the Urja Ganga pipeline project will directly benefit not only West Bengal but also 10 districts of Bihar and Jharkhand. It will also provide gas as feedstock to fertiliser plants, CNG to vehicles and piped gas to the homes of the region. Next to be completed in this stretch is the Durgapur-Haldia stretch of Jagdishpur-Hadlia and Bokaro-Dhamra pipeline."
Interesting comments here from the Chairman of GAIL (delivering the gas pipeline infrastructure for GEEC to sell into). Indicating that 2021 is the year for commissioning for most of the Jagdishpur to Haldia pipeline.
https://www.youtube.com/watch?v=wvy_6E2YisY
Manoj Jain also made comments recently (in other footage) on growth in gas volumes and impact on GAIL financials. He is bullish on rising volumes through the pipeline network and speaks of the large fertiliser plants coming on stream in 2021 and 2022 taking gas from the Jagdishpur to Haldia pipeline. Also highlights Kolkata city gas growth as a medium term significant driver.
No idea why GEEC arent communicating more on this as 2021 and 2022 will be transformation years for GEEC in terms of sales volumes and resumption of well development (CBM and shale).
Not under any illusions as to how long it will take to get vaccination extensively rolled out in India but the process is now under way so we can maybe also now look to 2022 full year results being somewhere near normal. Taking 2020 full year results as normal then GEEC is currently trading on 0.5x revenues, 1x operating profit and 2x net income for 2022. 2022 forecast revenues are actually currently higher at £26m so shares on less than 0.5x 1 year forward revenues. Factor in sales into the new gas pipeline to Kolkata and there is significant upside here. Company claiming that this pipeline will be operational by end of Feb 2021 and then we will see a gradual post covid vaccination return to normal over the course of 2021 and into 2022. Key short-term consideration is net debt and liabilities payable within 1 year. £43m net debt and £10m of debt repayable needs some managing but if refinancing can be arranged at similar rates to existing debt then suspect that this removes the last real hurdle to a very significant re-rate. Critical few weeks of newsflow ahead on this and the pipeline. Also look out for Main market listing and shale gas exploration commencing both of which could give another kicker to the share price.
Have tried to get responses from IR at GEEC with very mixed success over the last few years. Recently sent email to ask for more information on the statement from the company about 'market reports' of GAIL pipeline to Kolkata going live in Feb got no reply. Would appreciate if any others on this board are able to get any response from IR on this issue.....or have any views on this. Thanks
Only one shareholder (other the than Modi family) with a holding large enough to be selling in this quantity and that is M&G. Maybe forced seller but i think they have been properly played by Modi family here. Modi's know that there is no buyer for such a large block of stock so let shares drift down to mid single digits when they step in an buy the lot. They are probably the only buyer around of that size and so i wouldnt be surprised to see an RNS for their increased % holding and M&G's RNS for their decreased % holding. Pure speculation on my part though. Great to get this weight of selling out the way.
market maker willing to take over 100,000 shares at 8p so a reasonable buyer in the background which is good. Not sure there are many willing to sell at the price though. I'm definitely not!
57% spread mm's playing games holding back buyers
Mm's taking the fcuk here how can they give a 57% spread will detere buyers
agreed Hasiba. Although it only takes 1 seller looking to offload a few 10s of thousands and the share price collapses. Buyers can afford to hold off for now and let sellers implode the share price. Not sure though what is going on with the 50% bid/offer spread. market makers seem to be killing off any chance of anyone wanting to place a trade.
Time for management to step in and buy a lot of stock here to send a clear signal of confidence in the outlook!
Ridiculous sp that has been depressed for a very long time and I agree due to lack of trading but things will change for the patient investors...
Sp should be well above 30p with the current RNS and its solid assets and strong balance sheet in a depressed demands with the current pandemic....
Well..I will keep holding as I am now confident that we are at the lowest sp floor and the only way from here is up!
GL holders
This was a tough half with severe lockdown restrictions curtailing business activity and demand. Company still managed to generate positive cashflow and keep shrinking net debt position. In reality there will most likely be no widely available vaccine in India through 2021 so things will continue to be tough but if they are still generating cash as it looks they will be then i'm happy.
Company allude to 'market reports' of GAIL pipleline to Kolkata being operational in Feb 2021. If accurate then this is really great news. Huge market there and GEEC can look forward to selling everything it produces soon
Investors generally seem to have swung into recovery mode and looking for value in equity markets. This is a deep value opportunity. Unfortunately too illiquid for many institutional investors.
Nothing about shale gas permissions or timetable for test wells and nothing about a timeframe for main market listing in London, both of which would be good to hear about. All in though this is a good update. Looking forward to 2021!
A quick read of RNS and figures, need to look at the balance sheet further but $89m net assets with a cap of £12m is appealing. Might have trades into double figures today.
Looks like a few buyers nibbling again. not surprised at near £10m mkt cap. If we can keep the seller away for a while this might drift up nearer to £20 valuation. Hopefully the interim results will throw a bit of light on current trading and underlying profit in the new covid environment, pipeline to Kolkata issues, shale permits, and main london listing plans. Patience needed, but looks like a very good time to get in for the patient investor
At last...starting with big bang today..let’s hope it continues...
GL holders
Good luck Ritchie and let us know if/when you get in. I suspect there is no rush but we could see i little rise on anticipation when GEEC start drilling through shale. The main london listing could also bring a few more investors in as the shares are ISA allowed with all brokers then.
Hi all, another newbie watching this share. This has been on my radar for a couple of months now mainly because it appears in a couple of the screens I have set up on stockopedia. This continually comes up as a value share.
Not much news out of the company so it was good to read some of articles linked here.
Interested to see how the dispute over the land pans out. If that does get sorted out then I don’t see anything to stop this breaking out big style.
Not dipped my toe yet but finger hovering over the buy button as soon as it looks like opening up.
Interesting update here: https://www.downtoearth.org.in/news/governance/little-chance-of-kolkata-getting-cng-soon-land-acquisition-hiccups-halt-supply-72618 .
Article indicates that land acquisition around Kolkata has not been completed to allow the planned gas pipeline to proceed. Article is dated Aug 3rd 2020 so nothing will have changed.
This is frustrating as GEEC will wait with further investment to develop the raniganj field and open the taps on existing wells fully again until they have a good market to sell in to in Kolkata. It seems that powerful landowners around the city want to extract maximum value for land access rights with the project tantalisingly close to completion and maybe also supported by oil companies supplying diesel into the city.
Huge market there for gas in kolkata and this could easily take every last mmbtu from both Essar and GEEC in Raniganj but seems we have to wait some more months until these issues get resolved. Who knows, being India it may even be years. You would have thought a compulsory land acquisition order could be slapped on landowners around Kolkata to stop this kind of profiteering happening.
Still, whilst we wait a main market listing in the UK and successful shale gas test should provide a bit of a boost to the share price. Real potential here wont be recognised though until the Kolkata issue resolved or the company can prove up significant demand outside of kolkata.
A £1bn resource trading at £15m tells us that the market thinks there is virtually no chance of ever selling gas in any quantity in this part of India. I still think this is a huge inefficiency in pricing this asset but that's the game....find assets that are fundmentally mispriced and buy them. Either your research is good and you make money or the market was right, your research is wrong and you lose the lot.
Link here from June has a few positives. Essar operating right next door to GEEC and development of CBM field is kind of parallel tracking with GEEC. Good to see comment that sales volumes expected to be back to normal in july, demand expected to pick up from here and possibly most significantly that the pipeline to Kolkata to be operational in September. I think im right in saying that Essar already have an agreement with GAIL to supply into the network. GEEC dont have this yet though.
https://www.business-standard.com/article/companies/essar-oil-gas-eyes-new-consumers-for-its-cng-business-in-unlock-1-0-120060700377_1.html
Hi both. agree very much with Hasiba there Steve, brokers price targets are worthless really. What i would say though is that on traditional valuation metrics either GEEC looks very cheap or the market is pricing in a significant deterioration in revenues and earnings. The Indian government is clearly committed to increasing the share of gas in the national energy mix to 15% by 2030 (from c6% now) so the macro picture is supportive. GEEC have significantly derisked their gas resource, as in there is gas and it flows well enough to be commercially extracted. Finally the new pipeline to Kolkata and new markets to sell the gas to is still on track to be commissioned in 6 months. GEEC will also be testing the shale prospects on their acreage in the coming months. Success here is not needed for upside to the share price so if commercially viable shale gas can be proved up then this could be a very exciting share to be invested in. BUT shale is highly uncertain at the moment.
Got to keep in mind whilst this looks to be setting up nicely at the moment for GEEC, it is India (anything can happen) and the management team in my view are not that strong and terrible communicators. The Modi family who own around 2/3rds of the shares have been buying in though as recently as Nov last year.
One thing to be aware of is the production rates of gas from the existing wells. I need to do more work on this but is has been reducing. They've definitely choked back production deliberately lately to keep the gas available for sale rather than flaring it so its difficult to assess whether there is some underlying reason for reduced flows or whether its just the deliberate actions of the management to slow production rates down. They currently cant sell all they produce as local markets never really opened up for them, despite years of promises that there were many customers desperate to get their gas!
so please DYOR, lots of it. The eventual value of the reserves is in the hundreds of millions if gas pricing stays where it is and they can keep costs under control and the market opens up. And you can get that opportunity for <£20m market cap and around £40m debt. Dont expect transformation over night but could be an excellent entry point for a longer-term play.
GL