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Boooom .... still ramping and looking to exit before close I see ..... btw, you need to check your figures ....lol
If I were you, just close your £500 trade and go have your milk.
Duster..post the report your working from please
Capex is in $ ..cash unrestricted is in £s..your figures are all wrong duster
Quite so, Newk - the downside protection Serica has under the terms of the BKR deal is prescient now and valuable too, to say the least, not to mention the increasing share of that production this year and next. SQZ also sells on a lower multiple than RRE and probably prospectively, too ( I calculate that they should come in with 30p eps or so for 2019 to make for a p/e of around 2.5 x currently ) and that's really cheap!
Both seem about the best stocks to hold right now for the reasons already mentioned and when sentiment generally recovers, well, - say no more... sasa.
Looks like several want in or add to their position.
Opex is being lowered and will continue to be so most likely through acquisition synergies and efficiencies. G&A would have increased due to T/O and decommissioning will be pushed out as field life are extended. In the meantime AA will acquire another well hedged GAS producer to further off-set the POO imo.
The profits in gas production will offset losses on oil production. RRE can postpone CAPEX. RRE can also buy another profitable gas asset to further offset oil production losses. Just a thought...;o))
If poo is around here for a while then it will eat up some cash for sure 455k is only a months cover so after that production is running at a loss no two ways about it am afraid.
150 mill capex this year would deplete the cash held by over half that's not good
Needs about $43 oil to cover Opex G&A & DDA and a £33m finance cost included by Whitman in their broker note months back. Will average oil stay lower than $43 for a year?. My model says $64+ was the sweet spot hence the hedge, below that the cash is used.
degsy,
"Can’t see the poo staying this low much longer, certainly won’t go lower fingers crossed of course...." it will should the Saudi's start pumping more into an already over supplied market in 6 days as they have stated.
RRE need to re-balance their production ratio gas/oil imo, just in case POO is held lower for longer. I would be amazed should AA not be addressing this atm.
aimo
Forgot to add that the market will also want proof that the last Marathon acquisition is adding value. It usually takes 8-12 months for the synergies to start to appear on the bottom line .... so it may be waiting for this too.
The time to buy is when the market ums and ahs. For sure. Update today spelt it out. Hedged much higher, cash rich, no debt and future proofed.
The problem is the market see NO VALUE in cash, in terms of it performing for the business. This is where the issue is imo. Until RRE show the money working for them (ie acquisition / merger) or POO rallies >$40, I think RRE will struggle to get anywhere near its £22 CoH ..... totally unfair, but that's the way the market thinks imo.
In the meantime, take the view as a buy one get 2 free ..... BOGTF ...lol
Not disputing that New but cash alone gives RRE a £22 ps price. That’s just cash and the resources are hedged. Can’t see the poo staying this low much longer, certainly won’t go lower fingers crossed of course.
Degsy, But SQZ has better mix 20% oil and 80% gas with more valuable hedges imo and a PSA that limits downside so no loss can occur plus large uplifts in BKR receivables and production going forward.
Also bear in mind SQZ has £100m more cap than RRE and less cash in the bank.
Hi JAdam - nice to see you on here and contemplating taking an interest when the sp suits...
RRE and SQZ are like 'two peas in the same pod', imv - both have proactive / good management (Serica's being a bit more seasoned, co's they've been around in this game for longer) and their strong, debt free, balance sheets with huge cash accruals, marks them out to be about the best situations to invest in, especially given today's difficult conditions, that I've come across, fwiw...
Serica has less cash, pro rata, their sp whereas RRE has 3 x more in the bank than their mkt cap, with the business thrown in for nothing! - quite an exceptional anomaly in my experience.
SQZ is 80% gas / 20% oil and their op. costs are around $13 boepd whereas RRE is 60% oil / 40% gas with their op. costs being around $ 29 boepd but both are striving to get these lower... Many have speculated that the two might merge, given the obvious synergies applicable, especially in this problematic environment where a cautious approach, for now, seems sensible and there is, perhaps, merit in this argument, in lieu of pursuing their own acquisition strategies, regardless...
When they get to publishing their respective 2019 F/Y end results and, hopefully, Serica joins RRE in being a dividend payer, which they will well be able to do, I'd expect both of them to re-rate significantly from here. A resolution of the SA / Russian oil 'dumping' spat and an end to this evil coronavirus pandemic will set the stage for a dramatic upturn in their sps, I have no doubt.
Meanwhile, both afford exceptional defensive qualities in this anxious climate, augmented by considerable growth potential once things get back to normal - hence being 'over weight' in them currently and am happy to be so for the duration...
Anyway, I hope that helps your deliberations in wondering whether RRE would make a good 'sidekick' for running on with SQZ looking ahead. ATB - sasa.
Really do think AA will pull off either a substantial strategic alliance or acquisition within days / weeks should the Saudi' playball.
aimo
BOOoom - you were totally incorrect you said lifting costs were $45 when they are $30 and you also said RRE would be a £1 - hilarious!
Boom, you really are an troll .... your quote was "i assume average costs are $45 per barrel."..... so your were in fact way off.
If you want to start with your rubbish please continue .... now you have gone long with your £500 you will pump this all day today no doubt.....
?Welcome back B00ooom, I see that you bought 29 shares for £7.20 this morning at 9.19.56.
Good to see that you went all in for a change.
Nice to see that you got a good entry point and are now ramping.
With your help we should see £20 per share by the close then?
this is simply a cash machine due the hedging. i was right about the opex thpugh :)
Oh no .... boom is back .... with his £500 investment ..... how did your shorts do on the banks this week ...lol
Should have gone long here like I told you to on Monday .....
The hedging rre has was always intended to cover their capital commitments. Also has hasn't fallen as much as oil, so have the business is making money, the other half is just paying for itself.
AA has said he wants more gas assets. Lots of distressed companies out there to buy. Another acquisition in the next few months I think. I don't think the low oil price will last for more than 6 months. No one is winning at this price. It will bankrupt lots of companies, and hit the pockets of those governments that rely on the oil price to meet their budgets.
Also .... "anticipated that at least $50 million of this capital expenditure will be deferred.."
So now RRE are not spending their cash hoard as much as anticipated, will we see the $50m savings reflected in the SP increase today ...... $50m, equivalent of £3.26 ...... lol , yep, don't think so. Although, I would be happy to see up put on >100p on close today.
Not sure what else AA needs to do to get our SP moving. Financials are needed to turbo boost us, but the bloody FCA who have done nothing since being created managed to screw us over the day we were due to release out EoY.
ATB
*no