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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?
GGG my numbers were taken from this https://www.investegate.co.uk/announcement/rns/i3-energy--i3e/2023-budget-guidance-dividend-and-presentation/7224211
Stas, I think your 2023 numbers are out to begin with, but today's figures are undoubtedly not numbers the market was expecting. We've just been sucker punched 10%, which is probably fair given what they've just quoted. Basically a wait and see job. They provided December NOI / EBITDA numbers to indicate how much end of year will be contributing to this year's numbers, and next.
No wonder the SP is tanking.
Majid at his finest I’m afraid, lots of noises in the first quarter about M&A possibilities etc.
Gas is on its a rse and he drills for it instead of oil.
10p coming and just when I thought things were going in the right direction.
Every year i3e manages to have a black swan event 🙄
Can we have an RNS about a blockbusting M&A this afternoon please, one that could have taken us to 15p but will just get us back to 13p
You need the patience of a saint with this company
2023
Net Operating Income (5) USD 159.6 million - 166.7 million
EBITDA (6) USD 144.0 million - 150.5 million
Net Debt USD 8.8 million - 3.0 million
2024
Net Operating Income USD 70.0 million - USD 75.0 million
EBITDA USD 55.0 million - USD 60.0 million
Net Debt USD 23.0 million - USD 26.0 million
Tony what do you make of this, how has this changed so dramatically?
No, he is saying that he expects the share price to rise as the output rises. End of year sp (he says) will be 3 to 5% higher than 12.66p. Add that to 8.1% dividend which is what he plans, ie definitely not increasing as you suggest, makes up the total shareholder return.
My mistake
Or a 50% dividend hike in 3/4 and 4th quarter
Subject to Board approval, the 2024 forecasted dividend, representing 0.2565 pence per share per quarter or 1.026 pence per share for the year, translates to a forward yield of 8.1% based on the closing price of i3's ordinary shares of 12.66 pence on 23 April 2024. Based on projected year-over-year production growth and anticipated dividend yield, the Company expects to deliver a total Shareholder return of 11% - 13% in 2024.
💰💰😊👏👏
Reading this I assume we may receive a special dividend of upto 1/2p by year end
2024 Capital Budget of $50.9m, 15 wells in Central Alberta, Simonette, and its northern Clearwater acreage.
Forecast exit 2024 production of 20,250 - 21,250 boepd
$70 - 75 million of 2024 Net Operating Income and $55 - 60 million of EBITDA
I think the only way we'll get back to the 20's is with gas strengthening to an average CAD$3.00 or above. Many posters are certain gas prices are going to strengthen at year end, and into 2025. So not that long to wait.
Good thing is they can now safely throw USD$50m at oil development over the next 12 months so even if gas remains subdued there's a decent chance we'll be in the high teens based on greater oil production. Plus we can pick up a guaranteed 8% yield whilst we wait for production and gas prices to increase. This will be a slow build, but certainly looks good for 30-50% (inc. dividends) over the next year. Looking forward to the development plan. GLA
I3 is one of the best value oil and gas producers on the market
Low market cap to free cash flow here
Good dividend %
Let's see. It's the Lse Aim but if the asset transactions and growth programme is significant then the market revaluation will happen over time with a very healthy dividend along the way