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"Gas futures in alberta are below $2 for the remainder of 2024, I don't know how they project it to be $2.5 for the whole year. The guidance doesn't make any sense and it looks like it will be lowered/worsened already in Q2"
For anyone that runs the numbers - the guidance makes sense and if anything is on the conservative side - of course it all depends on oil & gas prices. WHI seem to think the same.
I see production towards the top end of guidance and NOI being in excess of $80m. They have already confirmed their intention to maintain the diviend at current levels and ye production of around 21,000 boepd with them set to ramp up Montney development in 2025.
Market reaction is overdone imo and on the back of this RNS - WHI have actually increased their valuation because they have run and understand the numbers,
...and yet the brokers based on the exact same figures see additional value and have raised the sp target to 21p from 16p....panic selling stated panic selling and the market is always quick to dive, slower to recover, however, all the reasons for investing in i3e have actually improved not got worse. Our brokers both agree with a raised target and both expecting an upward re rating going forward.
Rehauer, however the numbers are portrayed, people will simply look at the narrative, this being, the other day we are told of this fantastic deal that has made us debt free, today we have an RNS that shows we are likely to just end the year on the same production as last year (3% change) but with greater debt than last year, with whi showing us having a net debt figure figure rising into 2025e of £40.7m
Net debt - GBP (£m) 29.6 23.8 29.0 40.7
Majid is going to have to do some pretty major explaining, particularly as even to get to these numbers he has used a gas price double that of today.
However we look at this the market is seeing this as disappointing, seems a kick in the goolies for WHI to then up their target to 21p when actually all they have done is base that on changes in the way they have conducted their analysis by increasing the commodity price by 63%!
Well Tony - you know and I know and every financal educated knows that:
- RBL is part of the "Ressorces available"
- you do investment plans based on the forward curve and not on current pricing ("thats why we drill the gassy part!)
- you can't Invest more than your cash flow + pay taxes + pay dividend and keep debt flat
- drill and complete close to yearend and reap the profits/cash flow before oil/gas flows
But the wording (again) has confuses the private investors - who sell today. They mix up "ressources available" and "cash on hand". Wording could have been more precise here.
To be frank: If someone compares 2024 projection wir 2023 projection (and not real data) - there is nothing what i3 could do about that.
Last remark: Obviously nobody values the Q1 2025 plan to take the incoming cash to do pad-Development in Simonette! We can reap economies of scale there and the 2024 investment programm ist the perfect foundation. That's stategic, that's a clever way to do business!
WH ireland broker raises target to 21p from 16p on release of i3e capital budget and forecast rns
(have been asked to provide part view of report released today on the back of today's rns so here is part view)
https://twitter.com/surprised_trade/status/1783428334380048768
The gas export markets from Canada will be transformed by the new LNG hubs coming onstream starting in the next few months with LNG Canada in British Columbia - there are also another 7 LNG export hubs coming onstream in the next few years. Forecast gas prices look low to me in today's rns.
https://natural-resources.canada.ca/energy/energy-sources-distribution/natural-gas/canadian-liquified-natural-gas-projects/5683
I’m not impressed with this RNS and am angry. It’s unclear and illogical.
We see scope for i3 Energy to trade above peers as it switches from consolidation mode into growth mode. We also see scope for the peer group as a whole to experience EV/DACF multiple expansion over the course of 2024 and 2025 – these valuations are too low, in our opinion, relative to historical norms. We believe that growing interest in the sector, the increased perception of energy scarcity and reduced production growth from US shale oil all play in favour of better valuations for oil & gas companies and we see i3 Energy in a prime position to participate in that rerating.
Target raised to 21p from 16p
What's exit EBITDA and why is it so low? Is there a 50 Mn hedging loss in the mix?
https://i3.energy/investors/regulatory-news-alerts/
Broker target up to 21p from current 16p
Broker raises target to 21p from 16p
https://twitter.com/surprised_trade/status/1783421882500251726
We see the company’s 2024 drilling efforts culminating in strong production growth into winter 2024/2025, just in time to capture the robust natural gas prices expected for that period. Critically, the futures market for North
American natural gas has found its floor and, based on the futures market, gas prices can be expected to increase significantly in the mid-term. We are adjusting the basis of our fair value estimate to i) use our 2025 (vs. 2024) debt adjusted cashflow (“DACF”) estimate as the denominator for our 5x EV/DACF valuation and ii) align our gas price
forecasts to the futures market (vs. our prior use of EIA estimates). As a result, we are switching from a benchmark US gas price estimate for the purposes of our valuation from $US 2.15/mmbtu, to $US 3.50/mmbtu (a 63% uplift). We also highlight that the value accretive disposition of non-core royalty interests for $US 24.8m announced on
17 April 2024 had built upward backpressure into our fair value estimate, which we
flagged at the time.
As a result of these changes, we are increasing our fair value estimate for i3 Energy to 21.2p from 16.2p.
We are valued at x 2 earnings
"or the numbers"
I expect GGG has offloaded a load today, all those 150k sells I expect.
And we know where forecasts go, current price of gas is just above $1 and they are forecasting their NOI on AECO Natural Gas ($/GJ) CAD 2.25/GJ - it makes me angry that they should expend any money on gas drilling, it is the gas that has been the cause of these issues
9:21
Agree with the post except for "communication error". The RBL is part of resources available to the company - dont confuse communication error with not understanding the RNS of the numbers.
Gas futures in alberta are below $2 for the remainder of 2024, I don't know how they project it to be $2.5 for the whole year. The guidance doesn't make any sense and it looks like it will be lowered/worsened already in Q2
There isn't any black swan, it is just bad management
G.G.G
Let us know when you have stopped selling then I can buy some more.
Guys, calm down - anything fine:
2 Simonette Wells (is roughly 40% of the budget)
2 Clearwater wells (guess it is the earn in with Rubellite
thats almost half budget on pure oil
+ should gas prices stay depressed (which we will see at the time drilling starts) there is optionality to shift to more oil wells.
Seems prudend and well thaught. The modest net debt doesn't bother me. You should compare it to *real* year End 2023 figures.
But as always: "Communication error" - "fully funded from existing company ressources" is misleading - we're drawing on RBL thus "fully funded via available liquidity" would be right.
Right on track - arrested decline, future is bright.
Gas prices are currently forecast to rise into winter as oil reduces....
May be but still do not understand how we are supposedly debt free now but will close the year in roughly the same debt as last year
"
· Full year 2023 net operating income ("NOI")1 (unaudited) is approximated at USD 93 million, in line with guidance, with year-end 2023 Net Debt2 expected to be approximately USD 23 million (unaudited)."
and from todays RNS
Net Debt (Dec. 2024) (6) USD 23.0 million - USD 26.0 million
where is the "“This programme will be fully funded from existing Company resources"
“Should it be the case that the forward strip forecast for gas prices deteriorates, the Company is well positioned to both reallocate its drilling locations to more oil weighted development opportunities“
I don’t understand this statement - why are they allocating any development budget to gas, when gas prices are already on the floor? One of the weaknesses of I3E is the low oil production, so why not focus only on oil.
I can see where SP and market cap is where it is - they are spending around $50million to more or less maintain production so true free cashflow is somewhere around $20million per year.
No problem as far as I see, production expected to increase, all funded, divi all in place and secure and if planned drills go well all figures could increase substantially, as they have learned under promise and over deliver.
'Following very successful initiatives in the first half of the year to increase our balance sheet strength and liquidity, i3 is extremely pleased to announce a substantial USD 51 million capital programme for the remainder of the year, which will drill a diverse group of oil and gas wells across our portfolio in Canada. The majority of wells will be drilled in the second half of the year, with the high-volume Central Alberta gas wells producing into a forecast strong winter pricing environment and pad drilling of our exciting Montney acreage expected to commence early in Q1 2025. The programme is designed to deliver production growth and support our dividend programme, whilst maintaining liquidity and a conservative leverage position to maximise flexibility to deal with volatile market conditions and opportunities as they arise."