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Very cheap ... between $1-$2 per recoverable.
Update for the qtr tomorrow. Should be good figures given higher production and oil price.
Seems cheap.
Valuation here is pretty nuts. We're getting a +10% dividend yield, easily able to produce +17k bopd, opening new delivery routes (major obstacle to growth), and have 20% of our mcap in cash. Not sure what else can be done to realise value other than more meaningful BBs. They're mopping up less than 2% of shares per year. I generally hate BBs as they can often be put to better use and value isn't always seen from them. But when you have this much cash, are constrained in your production / delivery for the near term, already paying a crazy dividend, and relatively illiquid, then it's a no-brainer.
Imo they should set a minimum BB level of 4-5% of shares in issue. This will deliver value for the reasons mentioned above. And the annual £20m cost is something that can be easily absorbed given the cash we're generating and we'd still have a silly cash pile at the end of next year. If mgt are concerned about this in any way they should hedge 50% of our production in the high 70's to cover the dividend, BBs, and enough to maintain production at current levels. Bonkers to have this much cash with the sp sitting at these levels and do nothing.
Q1 Earning reports tomorrow I guess. Thursday morning at the latest.
Should give us dividend information and update on the latest well (should be close now).
18h well news next week..
Charlie156, even with the excisting field and no extra CAPEX (assuming they just maintain the field, which is 25 mio USD/year), Bretana would produce for decades and be a veritable cash monster.
We can hope to see some growth from Bretana, the next years, but the truth is that we don't need growth to justify the present SP.
Solid production in the year to date, but with more wells operating than before, barge capacity well in excess of 20k bpd, no major operational issues besides a 3 day field shut down in March, perhaps a tad disappointing. The most productive wells appear to have been tapped, and the most recent ones whilst delivering a decent return when added to the rapid decline rate of existing wells gives the impression production over 20k bpd is a challenge.
18h is 10 days away...
New agreement signed with Petroecuador today to open new transport route via Ecuador.
https://www.eppetroecuador.ec/?p=22040
Came across this article on twitter confirming agreements are in place to transport 100k barrels for two month period (though no mention on actual start date by them- should be in Q3 during dry season is my guess)
https://www.eppetroecuador.ec/?p=22040
for those not able to access above:
For two months, PetroTal will transport (transfer) an estimated 100,000 barrels of Peruvian crude oil through the facilities of Block 16, located in the province of Orellana.
These activities will be possible thanks to the agreement signed this May 1, 2024 between the Peruvian company PetroTal and EP Petroecuador. This joint work reinforces the cooperation agreements between Ecuador and Peru in hydrocarbon matters.
The project consists of transporting oil from Field 95 Brittany located in eastern Peru, through barges, to the Pompeya North Port of Block 16, for subsequent transfer in tank trucks to the Amazonas Station, belonging to the private company OCP Ecuador. SA, and culminate with its shipment through the Punta Gorda Maritime Terminal in Esmeraldas. For this service, EP Petroecuador will receive a fee.
The conversations to achieve this objective began at the end of 2023 and were finalized once the technical and legal feasibility for its implementation was available. To this end, on-site inspections were carried out and work meetings were held in order to analyze the agreement and its annexes, to finalize its signing for mutual benefit.
The signing of this agreement took place in Quito and was attended by the Manager of the Assets in Transition Business Unit, Igor Gallardo; PetroTal's representative in Ecuador, Sebastián Saá, the company's representative in Ecuador, Gonzalo Maldonado and the team of both companies.
Https://www.perupetro.com.pe/wps/wcm/connect/corporativo/7318e1ef-aaa2-4c91-8313-7d2090cba5fa/Producci%C3%B3n+l%C3%ADquidos.pdf?MOD=AJPERES&liquidos
Steady . . . but no record
Unlike AIM calamity elsewhere PTAL is bucking the trend
Certainly a lot better than the last month. Maybe they stepped up their buys when the share price was lower, leaving lower funds for the rest of the buy back period?
Oil price fallen back a bit, but healthy at $84 ish. Looking forward to update next week.
Looks like buyback volume in today’s RNS is closer to usual amounts we’ve seen pre April. Good to see
Predators alwayz come when feel free feast :)
Small fish realise to late whats going on.
Some more seriously chunky trades today. Does anyone know of anything happening at the moment that could be behind this sort of volume?
Looks like some profit taking to me. Bid moved up almost 2% today. Also looks like a large buyer too. Still low volume though.
Also a lot of selling. Something a bit odd going on...
Thats a lot of buying... 18h must have hit oil already
Agree on retaining a contingency fund, but one needs to keep in mind we'll have +$100m in the bank at the end of Q2. That's one hell of a contingency fund when the sp is below 50p. My shares are in an ISA so nothing other than 15% tax for me, which is why I don't mind the increased dividend option. But if they increase BBs to the maximum allowable amount and retain the base dividend I'd be happy. They have the money to do it, and you should only do it when there's a disconnect like what we're seeing now. Either way they need to do something. The sp is a joke given production and cash in bank. Brent also doesn't look like it's going to do anything silly. Having said that I'd hedge a decent chunk of production (about 1/3rd) in the mid 80's right now. Doing so at a good historical level will protect the dividend, BBs, and the contingency fund. Would be silly not to do it. AIMHO GLA
I'd be happy if any top ups over the Base dividend were diverted into buy backs. As long as they don't simply buy back regardless of share price.
There are times when buy backs are very good value, and times when they are poor value.
I do get the 45% tax issue. However, as mine are in SIPP and ISAs I only lose the 15% tax against the buy back option to return capital.
Buy backs are not my real issue, I like them. I also like the company retaining cash in this volatile financial environment as they face a few risks that could need short term contingency funds. Suggesting they should reduce their contingency funds is not sensible IMO.
Rylidan, let's say you have 91.500 shares. And then the company reduces the number of shares through buybacks from 915 million to 800 million, while paying you 5% in dividend. You could then reduce your share count to 80.000 and maintain the same ownership of PTAL and the same dividend (in £, it will increase per share). YOU now get to decide when to sell and pay taxes.
I'm paying 42% on dividend & share income. So delaying taxes in very welcome. That's most efficiently done through share buy backs. I'm disappointed that they're allowed to buy back 44 million and fall so far below the target - getting extra dividend on top of the 1.5 US cent is nice, but paying tax prematurely is not. And as G_G_G mentions; when the cash flow is so strong and P/E so low, it's simply stupid not to do buy backs if you want to build LT shareholder value.
I'd like to increase my ownership; but I prefer to do so via share buybacks. Buying more shares isn't attractive for me, with the 42% dividend tax. So ATM my dividend is going elsewhere; if they were serious about buy backs and really did go for 5% per year (or at least 40 million) I'd use the normal dividend (1.5c less tax) to increase my position.
18h comes on stream in 2 weeks.
I tend to disagree with you GGG. This would be around 4p ps capital return. Far better to have contingency against the risks that exist, and to underwrite the 1.5c base dividend regardless.
I use this as part of my pension and a stable return of 10% minimum is important.
If they could get an RCF at less than 3% I may see your view. In the current financial climate that is unlikely.
The new Finance Director may of course not be as conservative as the current one.
We'll see.
Either was looking I'm very happy holding here. It's an easy hold and build for me.
G_G_G - they've got permission to buy back 44 million shares. And people think they're aiming for that limit - but they're not; they're only using 1 million/month. I've asked #PTAL IR about this, but they've yet to answer. They answer most questions, but are not always fast. I'd encourage you to ask them as well.
Anyways, the current program runs out May 17th so I'm sure we'll get an updated program soon.
Last year, they stated: "The Company believes that, at times, the prevailing share price does not reflect the underlying value of the common shares and the repurchase of its common shares for cancellation represents an attractive opportunity to improve PetroTal's per share metrics and thereby increase the value of the common shares." The price is not much higher now (though we got a load of dividend, don't forget - but production is much! and brent is a bit stronger). So it's even more true now than it was last year.
From the latest update re. erosion: "Erosion Control Update: The Company is progressing its preventive erosion control program aimed at protecting the Bretana oilfield and nearby community. PetroTal expects to commence project construction in mid to late Q3 2024; while permitting is ongoing, detailed engineering is being finalized, and long lead items are being procured" - so that's not what's limiting the production now.