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https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/021723-interview-india-to-surpass-2030-natural-gas-share-target-amid-firm-demand-says-geecl-ceo
Prashant Modi (CEO) has recently only gone to media to talk about the enormous opportunity for GEEC just before issuing an RNS to update on progress. The interview with S&P Global on 17th Feb not only sets out a very strong backdrop for gas in India, which we know already, but he also re-iterates the very large roll-out programme for GEEC in terms of wells to be drilled on the Raniganj site. Nothing new but wondering if we are about to get an update on the shale test well drilling programme. With an upper estimate of over 8trn cubic feet of gas in place within the shale these test wells could be highly significant for the company and its valuation.
Cautious investors wont invest on a big IF like this but for those prepared to take on more risk a positive outcome on these test wells will most likely make the teens share price a thing of the past. Just the view of a long-term holder whose patience is being tested so DYOR.
Hi TroytoTiber
I appreciate your updates on a generally neglected share. I bought back in early 2021 and the lack of news-flow has tested my patience at times. However the fundamentals and promise still look as good now as when I first bought. Fair to say my other oil/gas shares have generally performed better over the past year but I'm holding out for the pipeline and the clear articulation of the expansion plans.
Thanks for your message Jonhas. Good to hear and I still remain confident that patience will be rewarded with geec. When management own 2/3rds of the company, communication by the company with the remaining 1/3rd unfortunately is low priority. I’m sure all investors here find this frustrating and it can test patience. As you say though things look well set up for geec now for 2023 and I’m hopeful for news on shale drilling plans soon. No point in extracting the gas though until they can sell it all so pipeline completion to Kolkata is critical.
Thanks for your input Troy
Shame the CEO's ambitions plans have done little to lift the SP thus far. As you say, a lot of patience is required
The plans are very ambitions indeed for a company of £20M market cap, I do hope they can pull it off -
"GEECL is also carrying out a shale gas exploration program at Raniganj, Modi said, adding that the initial plan envisaged drilling core wells to map out the geology.
"We'll do a few of those tests with 10 odd million dollars or so of spending to get an idea of what kind of prospects are out there," Modi said.
"After that, we will do a pilot well, drilling and then get into development. If that happens, as much as $2 billion go into it," he said."
Agreed Bismarck - big financing required and will take a lot of skill to not leak to much value to new investors. I think it’s very likely that the finance can be found over the course of the next few years. The cashflow from production will fund capex after a few years. It’s really just the first $300m or maybe a bit more needed over the next year or two for new wells. My money is on farm in with Essar or ONGC and a slab of debt. Little geec negotiating with those mega companies though for good farm in terms is a big question mark as you highlight. Only £18m mkt cap though so I’d assume that even in a very bad deal geec hangs on to many multiples of that.
Even without shale this still looks incredibly undervalued to me.
According to Stocko -
Price to book value 0.26
2019 net profit $8.4M USD
2020 net profit $8.95M USD
Obviously we know what happened to gas demand in India after that.
Forecast NP of $8.2M for 2023 and $12.3M for 2024, although they don't publish forecast revenue or operating profit against those so I'm not sure how those numbers are derived and take them with a pinch of salt.
If they can get to $11-$12M USD NP within a couple of years that's a P/E of 2 at our present MCap!