Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Everyday is a schoolday.
Today we learnt that back in July 2019, the BHGE RNS announcement also contained additional clauses and "one of which prevented the Company from taking steps to reduce its share capital in order to make dividend distributions to its shareholders while the Warrants remained outstanding, and another that required repayment of the DPIB upon consideration at or above £3 million being received as part of a farm-down of i3's UK assets."
Is this the first disclosure of those terms?
Odd that they did not appear in the Re-admission Document, where detail of the handicaps to delivery of a Dividend was discussed in several clauses. Previously I had commented that there was "no sharing of detail as to the reasons for the hold up, but it is fair to believe it will have come with a bigger invoice!" We now have some of the cost detail...
Clause 5.8 Changes in capital, does not mention any impediments, and there is nothing re the BHGE Warrants terms.
With these obstacles now dealt with, and the others consents received, " The Company will be imminently disseminating a Notice of Extraordinary General Meeting to its shareholders to approve said reduction and to proceed with a submission to the UK Courts to effect the same."
So they were still not ready and in a position to do it coincidentally.
Have they used the third party Tennyson to clarify the imminent divident status? Tennyson refer to it as the maiden dividend [as i3E today], and then initial dividend and the Special Dividend, with further info that H1's dividend will be announced and paid in H2, and that it will be biannual.
Some here had expected quarterly dividends iirc.
So we now have an imminent 0.16p [ok, a tad less after todays warrant conversion, lol] or 1.8% return (that's 3.2% for the 5p funders) and an anticipated 16% rise to break into double figures.
GL
Natbrat300,
Dividend - Tennyson Report forecasts payout early next month. I don't think they will be too far out. Process is :
1)Issue Circular to SH
2) Shareholder Meeting / Vote
3) Court Application / Approval
4) Payout.
I think the circular will be issued this week, followed by a vote within a couple of weeks and then application/court and approval a couple of weeks after that. So possibly middle to end of next month.
Thanks.
Thanks Tony, appreciate your work and opinion. Let's hope that PR does finally kick off when they start formalizing divi proceedings. I'm hoping they will provide some guidance on when then second divi will be paid in the coming weeks as well. If oil and gas hold up we should be looking at a bigger payment than the maiden dividend. Based on our strong divi yield, our low debt level, and exploration upside I'm struggling to see how we we're not worth 10-12p now. Hopefully when the divi gets sorted and the PR begins we'll start to see the re-rate.
Unfortunately I don't see Clearwater as providing an immediate re-rate. Definitely a slow-burn, but this does require consistent drilling success. So long as we're drilling and adding 100-300bopd per drill then I can see us edging up by 0.5-1p with each strike. But the issue is we don't have many drills planned for the near future, and those we do are 50% owned and likely to deliver around the 150-200bopd mark (75-100boped net to i3e). So although Clearwater will add significant value over time with consistent success, I see it as a slow burn. If we can deliver 10 successful wells over the next 12 months then I can see an easy 5p added to our sp. This in my books should take us to 15-17p providing poo stays around $60 (and excluding any Nth Sea f/o ro drilling success). But this climb will be weighted to early next year, which is perhaps why people are still f@rting about on their entry. Divi should start to see a mini-movement back to double digits at least. Nth Sea f/o is where we'll get a good jump, especially if the drills are turning this year.
Tony,
When do you estimate that divi would be paid and in your opinion what do you realistic think the share price could be by the end of the year, if things progress as you have stated?
Thanks
GGG,
That's what I'm saying. A couple of things in our favour:
1) i3e's debt is very low compared to the Canadian peers I've looked at and I believe to Canadian peers in general from what I've read.
2) We have two transformational catalysts for a Company of our size (North Sea & Clearwater) which as you allude too should demand i3e a better rating. I think we will get this re-rating once the market gets more confidence and visibility into the potential of clearwater. Serenity will speak for itself if and when it happens.
3) Dividends I'm not sure about yet - many of our peers cancelled the dividend during the downturn and im pretty sure will be conservative with both resuming a dividend and the level until debt is brought down. I3e I think should compare very favourably on this front. We will probably hear more on this from in the coming months as i3e's PR is able to kick off.
Clearwater again is virtually all Oil. Graham mentioned it briefly in the last podcast - i3e only produce about 1400 bopd Oil out of a total of a 8800 boepd yet Oil produces over 40% of the revenue / FCF. These 9 wells that should start spuding from this months will significantly increase FCF and therefore SP. The additional drilling program that they referenced for later in the year I think could be transformational - they have about $19m in cash to kick start something meaningful.
Onwards and upwards !
So you're saying we're valued in line with Canadian peers at current share price based on company NOI numbers provided? That goes some way to explaining the share price then. In the nine points peer report I'd be interested to understand the debt and dividend levels of the companies listed. Surely we'd be rated near the top of the pile and would deserve a better multiple as a consequence. Looks like the ex-dividend and f/o are the things that will get the share price moving again. Perhaps a few more weeks to wait until double digits. Bloody good divi at this level though. It must be around 7.5% at current sp.
GGG,
Based on the market Cap and SP at time of report - see page 1, top right hand corner
8.3p and $83.3M
Did you see my explanation on NOI / EBITDA. As a further note and probably what causes confusion - if you look an income statement of a UK Oiler - Pharos Energy Being an example:
Gross Profit = Revenue - Cost of Sales
Operating Profit = Gross Profit - SG&A
Therefore at first sight - you might expect Net Operation Income to be net of G&A, but it is not. I understand that this is typical of many Canadian Oilers - they use some non-GAAP accounting terms and therefore have to define what they mean in a report.
gla
Oh probably should have said that it's good to understand what the hold-up has been. Easy to forget how many side deals i3e have made over the years. At least this is now out of the way. Great thing is we never have to go through this process again in order to be paid our divi. Onwards and upwards. GLA
Hey Tony, just wondering if you saw my message from yesterday?
Hi Tony, thanks for your workings. Regarding the below comment from an earlier post, are you saying our fcf yield is 16.6% at current market cap, or at Tennyson's fair value market cap @ 16p? If the former then it would suggest that we're fairly valued, assuming of course that Tennyson's numbers are correct. This in itself may explain the value disconnect we believe is here i.e. there is no value disconnect. I'm too lazy to crunch the numbers myself so appreciate your workings and thoughts.
"Assuming now that the latest Tennyson report paints a more accurate picture than their previous efforts (and I think it does as theirs numbers match more closely with NOI reported by i3e) then I believe that their producing assets (production) is valued more in line with peers. Tennyson report 2021 FCF yield at 16.6% which appears very slightly above the mean on some graphs from Nine Point Capital of Canadian Producers that I have shared here".
Final thoughts:
The Annual Report due end of May /Early June is going to fill in some gaps like cash on hand, but its not going to tell us everything as it cut off is end of December and so will only gives us 6 or so months view of the Canadian Assets. In addition post period notes are restricted to what has already been reported via RNS - so dont expect anything new.
Cost are something to look at going forward particularly Opex and G&A - i3e has merged 3 Companies and has retained employees from each one including Senior employes who a costed under G&A- do they have an optimum mix for a combined Company? I would encourage shareholder to compare with similar Companies and see how they stack up - these numbers are easy to find on any Companies Income Statement. Higher costs mean less profits / cash flow, lower dividends and lower SP.
Looking at these numbers and seeing how the forecast has changed from the original Mirabaud report in September to Now
.................Sept........Nov.......May
OPEX.......$36.3m..$36.7m...$44.9
G&A.........$7.1m....$7.1m.....$8.5
GLA