We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
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."
The new debt facility is part of "existing Company resources". When they paid off the trafigura loan from the proceeds of the recent asset sale - remaining cash was maybe around $4m. So if their going to be able to fund a $50m capex program - then obviously they need to tap into the debt facility.
I'll have to take another look at the numbers and compare to my spread sheet - but my initial reaction is that i3e's numbers are pretty conservative. This appears to be a contrast to the previous CFO - who's numbers were often found to be too optimistic.
The reaction to the RNS is overdone in opinion but the numbers (production, NOI & net debt) were clearly not what many were expecting. On top of this, there was an expectation that there might be a significant acquisition or other transaction which was not announced today.
From my reading it looks like a number of folk are misjudging the projected (guessed) figures made in 2022/23 with the ACTUAL production results achieved and cash flow, divi etc, markets always throw up the odd moment.
What about the comments on net debt increasing so much when the company states
“This programme will be fully funded from existing Company resources and is designed to balance growth, financial discipline, and a sustainable long term-dividend through a predictable development-focused programme, all while positioning the Company to commence its Simonette Montney pad development drilling in Q1 2025.”
Looks like the biggest discrepancy is in the assumptions
2023 $80 oil and $4.50/GJ gas
2024 $82 oil and 2.25/GJ gas
Absolutely dropping like a stone. Clearly quite a shock for most. Imagine some value buyers will be jumping in around now. Yield is about 9% now.
Total over reaction to this morning’s rns. Market cap now under £140m. Wash out the weak holders and thepatient will see the rewards.
Stas - those NOI projections for 2023 were issued in December 2022 when gas was trading at nearly CAD 5.00 / GJ. Gas is closer to 1/4 of that number now and 2023 NOI actually closed out at around $93m.
On top of the lower than expected pricing - they have only drilled 3 wells in the last 12 months - so average production has also fallen.
Lower pricing, lower production, lower NOI.
Look at Q4 RNS in late February. I was pleasantly surprised by the below numbers at the time. Still doesn't make today's numbers look any good though. Are they planning to drill a lot of gassy wells with this $50m? I know development is back weighted but the numbers 2024 don't look great. Having said that, value is looking much better after taking a 10% knee to the nuts.
· 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).
Also the RNS states
“This programme will be fully funded from existing Company resources and is designed to balance growth, financial discipline, and a sustainable long term-dividend through a predictable development-focused programme, all while positioning the Company to commence its Simonette Montney pad development drilling in Q1 2025.”
If fully funded from existing company resources how does net debt rise so much? I have to admit to being confused where am I mistaken?