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Kindly leave quarrels from other online communities out of here, PLEASE! We have a good thing here, please don't ruin it.
This post was supposed to monitor information about Leverett and K2.
Hi Tornado10
Did you see Harbor's report???
https://www.energyvoice.com/oilandgas/north-sea/549544/harbour-energy-2023-earnings-tax/
"effective tax rate of 95% on its UK operations"
It's amazing to see the huge advantage of Ithaca over its competitors because of the tax shield and offset investments it has!!!
And people without understanding continue to compare Ithaca to Harbor....
Today's update in Harbour Energy's report (on p. 3): "we successfully appraised the Leverett gas discovery in 2023 with the potential development via a subsea tieback to the Britannia platform now being evaluated."
https://www.harbourenergy.com/media/szljzatx/harbour_energy_full_year_results_2023.pdf
Good!!! Now we need to see some numbers and schedule.
Good news on Pierce.
Unfortunately, last month SQZ reported a problem on Erskine, "Erskine has been shut in since 25th January 2024 due to an issue with a compressor. It is expected to restart during March." Erskine is a substantial producer for Ithaca - over 2 months production was lost from Erskine last year.
I've heard comments from Ithaca on Captain production that seem to vary with the wind - good, cautious then good again.
In a couple of weeks we'll have 2024 production forecast which should take in all the various anomalies. I suspect we'll see a relatively wide forecast taking in what I think will be unknows on Captain - when will the impact of polymer kick in and to what degree.
The detail on CapEx should be interesting.
Thanks for your swift reply (and the congratulations on my timing...lets this how this develops this week since the EPL extension has just been announced, ITH suffered a little bit today, hopefully thats it!).
I noted Pierce but dismissed it due to the small extent of ITHs share, shell´s like 93%.
I was aware of Captain Phase 2, but not of the exact timing, didn´t remember it´s so close from startup - thanks! Any indication on expected production boost? Just spent 15-20 mins on Google but didn´t find any indication on its desired effect.
However, looking very much forward to Q4 results and guidance end of this month, so we call can finetune and adjust our models.
Hi Tamovv,
Two factors, one relatively minor and the other quite significant, should work in Ithaca's favour:
Firstly, the continued shutdown of the Pierce field, which according to today's news should be resolved later this month (https://www.energyvoice.com/oilandgas/north-sea/549256/shell-pierce-restart-outage/), is a minor factor.
Secondly, and more importantly, first oil from the Captain EOR Phase II project is a major development. According to the Q3 update released in November 2023, "The Captain EOR Phase II project is approximately 80% complete with estimated first subsea polymer injection in H1 2024." This Captain EOR project should provide Ithaca with a substantial, one could even say dramatic, boost in production.
By the way, congratulations on your recent purchase of shares at 1,28 (I remember you mentioning it in one of your replies to my Q4 production estimation). With that purchase timing, you might just receive a dividend "for free" :)
Hi Tornado,
Many thanks - very useful!
I am rather disappointed how this compares against my "simple 2024 guidance" of 65 kboe/d, taken from comments made during the last conference call.
How do you interpret this January production? Given Q1 used to be a very strong quarter for ITH and scheduled maintenance still to come in Q3, this draws a cloudy picture of 2024 in my humber opinion. Of course January only represents one third of Q1, but anayways... Are there any problems known on re-ramp-ups for February/March planned, so that we can expect Q1 to finish better than the January run-rate?
NSTA just published the North Sea production numbers in January this year.
https://hub.arcgis.com/datasets/ba8b7b78d3a74edc88293011981ce2d7_0/explore?showTable=true
As per my calculation, Ithaca's numbers are 62,799 boe/d. (Oil 42588 bbl/d, gas 20211 boe/d).
This is a very conservative estimate!!
Ithaca trades at a deep discount in all parameters
Apparently Ithaca could be 26% below intrinsic value
https://finance.yahoo.com/news/ithaca-energy-plc-lon-ith-071016424.html
Always take with a good pinch of caution but a cheery thought nonetheless
It’s no coincidence that all the North Sea oil and gas stocks are “pricing a doomsday scenario”. The latter is the incoming General Election, who would hold these stocks as we approach. Labour win will see another step change downwards imho. The likes of HBR, SQZ all generating cash for HMG.
Hey linnn. For that we first need to see the exact hedging schedule. let's wait until Mar 21st.
Sha.... Sha.... :)
Peter lowan and others who i may have missed ref divi .
The current price of Ithaca Energy is pricing a doomsday scenario!!!
In my opinion, this is a classic value stock and money on the floor for those with patience!
Hi tornado10
How much do you think the net profit will be for 2024?
Tamovv this price looks great now will add just a quick two min check to see all ok
1. K2 appraisal well (50% working interest) - https://assets.publishing.service.gov.uk/media/656dc1c09462260721c56834/PETS_Output_-_DR-2373.pdf
2. Leverett appraisal well (12% working interest)
https://assets.publishing.service.gov.uk/media/65b7674bc5aacc000da6841b/DR-2321-7.pdf
Let's hope for good results :)
Let's hope for
Timing as per peterlowen´s link.
Amound per share should be 134 mUSD / 1.010 m shares = approx. 0,1325 USD per share
SORRY if stupid question will we get a divi by end of may and would it be approx 12p .KIND THANKS
I personally was positively surprised by news of latest redetermination of the Reserve Based Lending facility, resulting in available $835M (Q3 was $765M). TBH I was a bit relieved to see the bank consortium not hitting the brakes on lending or restricting divi after redetermination, given Labour's threats.
To me this was a pleasant surprise!
Londoner, many thanks for your swift and comprehensive reply, very useful to me! It also makes me feel less like an idiot seeing others stuggling with posts here suddenly got cut-off because the use of "special-characters" ;)
I adapted your EPL estimate in my model, but was surprised by your low CT estimate first. I just checked the Q3 transcript again to provide the following quote by Iain Lewis: "So again, those total corporate tax payments are around $90 million for the full year, and we expect that to reduce next year. And therefore, we're in the low single-digit percentages in terms of our corporate tax position going forward."
I understood that 2023s 90 mUSD are about to reduce and will become a low single-digit percentage of profit before tax. So given my recent 1,4 bUSD EBIDTAX FC, profit before tax should be about 0,4 bUSD, low single digit can be indeed mean 10-20 mUSD, so I support your calculation (forever whats worth, I am far from an expert in UK taxation).
However, I updated my hedging model and lowered my assumptions for 2024 UK-Gas prices. At current 60 pence/thm my model forecasts a hedging gain of 170 mUSD, but only 1,3 bUSD EBITDAX now.
Does anyone has an estimate for 2024 financing costs? At 30th Sept. last year they stood at 142 mUSD, so close to 200 mUSD annual run-rate. However, currently there is no utilization of the RBL, so just 9% interest on the 625 mUSD senior bond. Thats 56 mUSD only and seems too low to me. I am certainly missing some leasing costs, so would appreciate any comment on this.
For the moment my CFFO (after tax) FC looks like:
EBITDAX 1,3 bUSD (at 80 USD oil, 60 pence gas, 65 kboe/d, hedging as per 30th Sept. overview, 20,5 USD/boe OPEX)
Financing 130 mUSD (just doubled my 56 mUSD interest of the 625m bond)
Tax (EPL+CT) 270 USD
CFFO 0,9 bUSD (what about decom. cash expenses? Do I miss these?)
Londoner, sorry for confusing you with my Rosebank Capex question. CFFO is before Capex, this is clear to me. I was just wondering whether high Rosebank Capex in 2024 could be potentially used to cancel EPL in the very same period, but its not possible.
Tamovv, I might be having the same problem you had earlier. I'll try again after removing a special character that might be causing the problem
EBITDAX provides a good insight to the EPL charge before allowances. I’ll spare you my workings, but I estimate a current EPL charge for Q4 between $42m-$57m, making a total for the year, $330m. However, the Q1 current EPL was high at $126m, which makes me wonder if that included a $72m refund of the 2022 payment. If so the current EPL charge for 2023 is $258m. This is in keeping with numbers I posted last March (?) where I implied the 2023 EPL charge would be less than $314m. Given the lower 2023 production and prices, and the higher CapEx spending, much less than $314m.
In summary, in 2024 I’m expecting a c. $260m EPL cash payment and ‘low digits CT’, which I going to surmise is $10m, for a total cash tax payment, $270m. Cash tax paid YTD (Q3) is $163m, and I don’t expect a Q4 payment. Therefore, a c.$100m additional tax payment in 2024 compared to 2023.
(I’d be delighted if anyone can critique that analysis.)
I’m unclear about your comment on CFFO and Rosebank CapEx.
CFFO is after cash tax payments and Decom spending, but before CapEx spending and acquisitions.
To be clear, after 30% dividend payments, 70% of CFFO is available for CapEx, acquisitions and debt repayments.
I missed a section:
EBITDAX provides a good insight to the EPL charge before allowances. I’ll spare you my workings, but I estimate a current EPL charge for Q4 between $42m-$57m, making a total for the year, $330m. However, the Q1 current EPL was high at $126m, which makes me wonder if that included a $72m refund of the 2022 payment. If so the current EPL charge for 2023 is $258m. This is in keeping with numbers I posted last March (?) where I implied the 2023 EPL charge would be
Tamovv, I wrote this in response to your 14:44, but after reading it a couple of times I decided it wasn't sufficiently rigorous and pulled it.
However, after reading your follow-up I will post but please treat with caution
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I wouldn’t assume that the $97m Rosebank investment occurred in Q4.
At Q3, CapEx was $346m. In the presentation CapEx on producing assets was $293m, so I assume $53m had been spent on Rosewell, leaving a balance of $44m (97-53) spent in Q4. Total Capex spend in Q4 was (392-293+44) = $143m, which equates to an EPL allowance $65m.
I wish the EBITDAX number of $1.7 billion went to a 2nd decimal to provide a more accurate number for Q4. At $1.70 billion the Q4 EBITDAX number would be $322m. I estimated $371m, but stock movements can be noisy and I’ve no insight into them.
EBITDAX provides a good insight to the EPL charge before allowances. I’ll spare you my workings, but I estimate a current EPL charge for Q4 between $42m-$57m, making a total for the year, $330m. However, the Q1 current EPL was high at $126m, which makes me wonder if that included a $72m refund of the 2022 payment. If so the current EPL charge for 2023 is $258m. This is in keeping with numbers I posted last March (?) where I implied the 2023 EPL charge would be