Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Sea Tank,
Nice summary of the state of play here, my research into oil markets suggests that we can't meet current demands, the US oil boom was a mirage smoke and mirrors funded by wall street never cash flow generative so now with oil at new highs fracking is still in the doldrums due banks losing a fortune and unwilling to throw good money after bad, so only the best of the best are making it pay in the US.
That boom gave the false impression of cheap oil for the foreseeable future, low prices and the net carbon zero scam has resulted in muted investment over recent years from the west so now we are where we are, in a pickle of our own making.
OPEC says it can ramp up supply yet regularly misses it's targets says it all, more investment is needed in oil exploration because oil is not a scarce commodity there is loads of it about, Venezuela is floating on it, and should now be a beacon of prosperity if the US hadn't bankrupted it with its fake boom.
https://financialpost.com/commodities/energy/oil-gas/oil-is-recession-proof-on-out-of-control-demand
Well news has it that the deal is over the line at SAVE since yesterday and results are out next week seems like we are in for a blockbuster RNS
It's not a competition re SAVE and SEPL. Both have their unique risks. SAVE has done really very well, because the market is willing to attribute forward value to their acquisition - a lot is already in the price now post the move in the shareprice, frankly. The share has almost doubled. I bought SAVE at 24p some months ago and exited a week or so ago because I made a handsome gain and that was good enough for me. It may well go further. Good luck to SAVE shareholders. SEPL on the other hand, hasn't moved at all really. Yes as per Temple's point, it fell out of bed in Oct/Nov last year due to (as it turned out) unwarranted corp gov concerns. But it traded at around 110p in July 2021, and is now barely above that level, but the factors in its favour have multiplied. In particular, neither the increase in the oil price or probability of acquisitive growth is priced in whatsoever. The stock is dead cheap, throwing off cash, paying a regular and dependable dividend, and has plenty of optionality ahead of it. The risk-reward here is asymetic in my view. Time will deliver the shareholder returns. There's no point being emotional about it. We know why the share is slow to react: thin liquidity and a closely held shareholder register. It's a standard mispricing for an esoteric stock such as this. I'm fine with that. I feel my investment is safe here. I'm in some other not dissimilar names, such as DNO ASA and Panoro Energy. I'm looking for dirt cheap but stable O&G businesses that have a solid cash flow profile and are ramping up dividends over the coming 12 months. SEPL will at least double its dividend next year if no acquisition takes place, in my view. This weird market is a rare opportunity to pick up solid yield names such as these at basement prices, in my view. The main risk is recession ahead re oil price. Good luck all.
"Yes looks as if he has missed the boat lol SAVE"
If people have missed the boat, why mention SAVE?
"Very lucky lol we believe you, what a load of nonsense"
Ha Ha Ha Ha Ha Ha Ha
:)
Very lucky lol we believe you, what a load of nonsense
TrekMadone: A bit lucky getting 113.6 only yesterday .... so 6p in 24 hours is fine for a small trade .. but I'm sure you are right that Sepl will play catch up over the Exxon uncertainty....
"Dummster" .. oh dear ... mine's a PhD in Computer Science .. so trying to call me "Dummster" wotever that is, so I'll have to guess, sems a bit like a beggar telling a multi-millionaire they are poor ....
... where the choice is between laughing or throwing the beggar a fiver.
;)
Yes looks as if he has missed the boat lol SAVE are on the brink of finalising the acquisition with Exxon in CHAD which with other news will imo propel the sp to greater heights,hows the deal with Exxon/ Mobil going here Dummster.
Temple we are out of sync for the first time. I am buying SEPL back now. I think with China lockdown easing and bullish poo we will move back to 130. Got my last lot at 119 average 117.
Good luck with your investments
Trek
A wise investor doesn’t listen to rampers on BBs …. and learns how they best make money on the markets.
For me, it means not spreading thinly around individual stocks, especially ones I do not know.
While those Seplat shares bought around 113.6-115 are now sold at 120 today ….
… so I’ll wait for a drop back to 115 before buying back taking the current average from the last month or so down to 111p dividends from which pay my fuel bill for a year, and represents a level of investment at 1/6th of profits these last two years.
When I need advice … I’ll ask myself thanks.
A good investor doesn't let prejudice get in the way of opportunity, especially risk-adjusted opportunity.
Temple, your post below exposes your weakness. Do more research before opening your mouth. Embarrassing.
I recollect Marconi going up 100% in 30 minutes after Alan Sugar bought shares and then some more 10 minutes later ..... then collapsing and going bankrupt some months later.
Facts are .... SAVE and SEPL have been highly correlated for the past 8 months save the exxonmobile dealing shaving off 20p from Sepl that I have not taken the hot from becasuse I was out .... so the question is whether one wants to bet on a jam tomorrow stock (SAVE), as a British Based Business, in South East Nigeria and/or another Nigerian based business, with a 20p overnight upside in the event of the Exxon deal getting the go ahead, and a history of paying dividends in the past and the foreseeable.
So I'll stick with that I know and wish you well with SAVE.
Just to remind you SAVE are up nearly 100% in 5 months and still climbing
"SEPL are going down and SAVE are constantly going up"
I've been in Seplat since 50p two years ago .... with wot 18 cents dividend ... happy for a correction since I bailed late 120s ....
Remind me what the dividend is for SAVE?
:)
In the meantime SEPL are going down and SAVE are constantly going up,i hold both by the way
Oh that's way, way off. NAV is nearer £1 iirc.
Regardless of NAV, I think Savannah is about the best value share I've ever come across. Worth looking into it a bit deeper. It's geuinely quite astonishing.
according to LSE .... SAVE NAV 7 cents ...
According to another site:
Net Tangible Asset Value PS * 12.86 p
So not for me thanks.
Meanwhile Seplat NAV
Net Tangible Asset Value PS * 206.87 p
Huh?
SAVE NAV 7 cents? No thanks.
Teeb, suggest you take a good long look at Save before you think about sepl. Making new highs now. Doing all the right things. No trouble with NNPC. No corporate governance issues.
A little surprised to see this drifting with the oil price we have, especially with the UK sell off in some oilies looking for a new home.
As stated even if the deal falls through we are still set fair for the future.
The oil hedges at $45 with brent at $20 was why I went for Seplat not Shell at 50p … plus the dividend.
I suspect but don’t know that these hedges are a sale to government or something like that … they seem well under market price.
About the oil hedges, two things: 1. I believe they have been rolled over each quarter, so these are not new and will either need to be digested or rolled over indefinitely, and 2. On a DCF basis they are of relatively limited impact on the NPV, arguably. When you do your target multiple, perhaps subtract the cost of dealing with these hedges ($200m?). Agree SEPL needs to rid themselves of this weight, but the company has prioritised getting debt free.
About the gas production, two things: 1. Gas is long term optionality as and when the gas market in Nigeria is deregulated and becomes a meeting place of willing buyers and willing sellers, which is hopefully in the medium term, and 2. In the meantime gas makes a meagre profit but isn't the revenue and profit driver for this company so can be largely disregarded?
It's all about oil currently, not least because the oil market is international and dollars earned can be exported (returned to investors), unlike gas, which must be converted into Naira and more of an issue to repatriate. Gas is a nice to have, long term, but in my view one buys SEPL for the oil production profile.
Acquisition activity would be nice but also a red herring to some extent - SEPL doesn't need an acquisition to go to £2+ in the short term, IMHO. And the hedges are a one-off cost when SEPL choses to take the hit.
What we need is a higher share price, more liquidity, more retail and institutional buyers in the UK...hopefully a virtuous circle. A FTSE index position would be nice too.
… I’ll be borrowing the wife’s boots also … if the exxonmobile deal gets the go-ahead ….
The wind will only be blowing in one direction …up.
I've already filled my boots and trying very hard to maintain discipline (and not buy more).
but if they salvage the MPNU thing I might just throw caution to the wind.