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Time
02 May 2024, 12:00 BST
Starts tomorrow
Duration
1 hour
Meeting Type
CDM
Presenters
Majid Shafiq - CEO
Ryan Heath - President of i3 Energy Canada
Jason Dranchuk - CFO
Should be an interesting presentation.
Key takeaways:
1) A strong presentation and highlighted how prudently i3e is being managed - imo
2) Potential for a further sale of non core assets - I would not be expecting i3e to generate anything like they did with the royalty production because I think they maybe none producing - but cash is cash !
3) i3e sitting at a 45% discount to peers on a PDP basis per Majid - this should narrow significantly imo as gas prices improve
4) Capex program promising a very strong end to the year and an even better 2025
5) Line fill complete on the coastal link pipeline. They would not have done this if the LNG plant was not expected to take gas very shortly - they would have left the line under purge otherwise. So we can expect commissioning of LNG Canada shortly i.e. line fill within the plant, start up of the cooling facillity and tank fill in preparation for LNG shipments.
Presentation now on youtube also
https://www.youtube.com/watch?v=OsZGHmHhCtk
2) nonetheless material if closed period remains
2) agreed but i'm not sure they confirmed they were in a closed period now. I think their response to why they were not buying on the market was a more general comment that their buying windows are restricted. But why buy anyway when you get stock / option awards ?
RH said learn more in Q update by May 15th unless I mis heard
I thought he was just talking generally about closed periods for director buying. They obviously had one recently with Royalties deal and may or may not have another one. Same with any busy company.
Https://www.youtube.com/watch?v=OsZGHmHhCtk&t=3991s all revealed at 1:20:51 - you did not mishear VL
I3e has the potential to be one of the sector performers of 2024/25 ,the update due in just over a weeks time should be a very good read and put plenty of meat on the bones of what we already know.Fair value on this right now should be in the 15p to 18p ranges. Great buying opportunity at moment,and a decent candidate for SIPP investment.
From the Proactive Investor Website:
i3 Energy attractively geared to higher gas prices, says Stifel
i3 Energy PLC has received a forecast update from broker Stifel following the confirmation of the 2024 capital budget.
“Specifically, we have reduced and deferred drilling activity into H2/24, which results in 2024 production within the 18-19,000 [barrels of oil per day] guidance range, albeit towards the top end.
“We incorporate higher capex per well, reflecting the increased complexity of the 2024 programme of wells.
“Assuming some continuation of this results in our NAV falling to 28p (from 30p).
“Overall we remain positive. The shares trade at a considerable discount to both peers and NAV.
“Whilst the prevailing low gas price means that growth is on hold, the business remains funded, and we believe is poised to strongly re-rate on better prices.”
Shares today were up 2.5% at 11p
These recent comments by Shafiq should be noted,even in a difficult enviroment i3e still managed to achieve record production of 20,711 boepd. In my view the huge discount to NAV is now a huge buying opportunity that rarely comes around these days and i think the SP will build steadily throughout rest of this year and into next.
"“We proceeded to focus on low-risk wells in our core production assets and appraisal wells in the Clearwater and are very pleased with the results, which were delivered on budget even in an inflationary cost environment.
“Despite these challenges and due to our ability to adapt our portfolio and investment and drilling strategy quickly, i3 achieved record annual average production of 20,711 boepd."
Tony, fully agree. My takeaway notes from that excellent presentation too. Have to hand it to management, we are seeing a step up in investor and IR engagement both in terms of frequency and quality.
That was my question to management regarding the N.E. Alberta land which they indicated is Hangingstone. No one knew that they had a land position there so this is another freebie. Hangingstone is heavy thermal oil (oil sands) which needs SAGD for extraction. I3 Energy is not a heavy thermal oil producer so completely non-core and, by management comments that they cannot talk much on it, an asset sale is very likely underway on this. Hangingstone is a core area of Athabasca and Greenfire so these are two candidates likely in the process of buying i3’ acreage there. Value is unknown as it’s non-producing however heavy oil pricing has flipped and very very valuable now so fingers crossed there could be some good cash coming to the balance sheet soon with this non-core sale!
Athabasca's 'steam-to-oil' ratio on its own Hanginstone is improving every month. It can now compete for capital with its other assets (it used to be a bottom of the pile asset). I3, being the land speculator that is, knows this fully well, and will extract a proper pound of flesh.
Coincidentally, National Bank is the banker for both Athabasca and I3. Don't be surprised they put the transaction together, and 'reward' I3 with some much needed Canadian "analyst" coverage (that is not Cannacord)
Wow, what happened to Canuck?! He provided some good info and opinion that didn’t include a factually incorrect rant about Polus!
Regarding i3 Energy being land speculators, my take is that Majid sat on this thermal oil Hangingstone land waiting for the perfect moment to bring it to market to extract maximum value. That moment is now with Transmountain Pipeline opened since May 1st with Canadian heavy oil discount narrowing and signs of US shale oil declines becoming more evident which makes Canadian thermal oil with its ultra low declines very valuable going forward. Investment is ramping up in the oil sands and i3 management know this. Will be very interesting to see what they get for this.
Found another Easter egg regarding Hangingstone. i3 board chair, John Festival, is also on the board of Hangingstone producer, Athabasca Oil. Would you look at that
IBB_INVEST, the Hangingstone land was part of the Toscana assets, a minor asset
Retry!
IBB_INVEST, the Hangingstone land was part of the Toscana assets, a minor asset
Final attempt
IBB_INVEST, the Hangingstone land was part of the Toscana assets, a minor asset less than 5% of the NPV, and was a 26% share of a large licensed area operated by Canadian Natural Resources producing gas.
HTH
Thanks Joe. Do you know if CNRL ever developed their Hangingstone asset?
Meeting was positive and helps those on board keep sanity. Still surprised at market reaction to budget. Company with £130m mcap spending £40m on drilling this year, into a rising price environment, seems decent.
This company is such a difficult hold. Another disposal of non-core assets would certainly help. GLA
Just noticed a 134k buy @ 11.32p early doors here today - director buy ??