The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
So if the figures today were "underlifted" then the next quarter will look awesome instead, right ?
The cash position is down due to this "being paid later" which takes the position lower than the Exxon Deal requirements.
So are we looking at another 3 months waiting to get cash back up or they will just use debt facilities.
IMO no worries either way, a lower SP is good for DRIPs and possible trading to get averages lower.
Down 6% on the day, which still takes us above the recent support of early 149.
... and there is clearly a buyer in the background as they will offer above bid (they were all day friday on dummy sells and happy to take any number of shares) and for those selling today it appears the same. typically as stated below on a drop of 5 per cent plus this would go NT, not today, they will take any number of shares on a dummy sell, that is typically a sign of background buyers eager to secure .
I understand some folks confusion looking at the rns and the initial figures, however, as stated below and explained very well SEPL just gets paid laterand importantly production at current oil prices is at the upper end of guidance, MPNU awaits etc...every reason to add to holdings not sell imo ;-)
From Brave AI…
“ Overlift oil and gas refers to a situation where the amount of oil or gas produced and lifted (removed from the well or field) exceeds the amount that is entitled to a particular party or entity, such as a joint venture partner or a government agency. This can occur due to various reasons, including:
Efficient lifting arrangements: In some cases, it may be more practical for a party to lift a full tanker or a certain quantity of oil or gas, rather than a proportionate share of the total production.
Imbalances in production: When the production of oil or gas is not evenly distributed among the parties involved, overlift can occur.
In the context of oil and gas production, overlift can have financial implications, such as:
Creating a receivable for the party that is entitled to a larger share of the production
Requiring the party that is entitled to a larger share of the production to pay for the excess production
Affecting the revenue and profitability of the parties involved
For example, in a joint venture, overlift can occur when one party lifts more oil or gas than its entitlement, resulting in a receivable for the other party. Similarly, in a government’s share of profit hydrocarbons, overlift can occur when the government’s share of production exceeds its entitlement, resulting in a receivable for the joint venture parties.”
Main thing was guidance is towards upper end. We just get paid later!
‘ Production averaged 49,258 boepd, down 4.8% on prior period (3M 2023: 51,720 boepd), but 5.7% above Q4 2023 production, and towards the upper end of 2024 guidance (44,000 boepd - 52,000 boepd)“
All said I took 20% off this morning after they had had a good run. I intend to buy them back just hoping for cheaper.
Should have done Friday really as results day often disappoints but I thought just maybe after all the media news we would have had something more concrete on the divestment.
Anyways I was offered a price for 50k. It’s previously been NT to sell this time of day. So there is likely a background buyer still which should put a floor under the SP.
Usual caveats
Trek
It's because of Underlift/Overlift accounting - adjusted for this the revenues was almost unchanged:
"after adjusting for underlift and overlift oil volumes, 3M 2024 adjusted revenues of $236.3 million, against $255.6 million in 3M 2023"
Why is revenue down so much when oil price / production has broadly been maintained ?
What am I missing here..
SeaTank, thank you for the clarification, wrong choice of a word on my part. Should have read "some" and not "most". I guess, what's important is that the company has managed its naira risks very well, however small. Look forward to the update tomorrow and hopefully have a different conversation tomorrow.
Hi SeaTanks, my mistake, I shall carryout my own DD - rather than ask.
Thank you for your input.
Best policy do not assume ….. CHECK through your own DD.
Please, no. The vast majority, around 80% or is it 90%, of SEPL's revenues are from oil sales which are exported. The remainder is gas which is USD priced, paid in NGN. The naira moves are not very important to SEPL, in either direction. Please don't make statements unless you are quite certain of the mechanics. The point of this board is to share useful and well-researched information, not confuse folks.
Hi Tyler,
Happy to learn, OK understood
Thanks
MEM
MEM, Seplat's Naira income closely matches its Naira expenditure, so small risk on that front. The main risk to the company is that it sells most of its products within Nigeria and therefore, there is a receivables and credit linkage risk. A falling currency can result in the downgrade of a country’s credit rating which can then affect the credit rating of a company that receives income from the country, be it in dollars. This actually happened in February 2023! Luckily, it has reversed since then.
Tyler I think that means local work, services etc paid for in Naira is more expensive to SEPL.
However the majority of services are USD related, so a strong Naira has a small/marginal downside.
A strong Naira will improve the long term stability of the countries economy, which is a positive for everyone.
MEM
The Nigerian Naira has become the world’s best performing currency in recent weeks and may explain the recent price spike. Another tick in the box. Anticipate further analyst upgrades on the back of this and rising oil price.
https://abokifx.com/news/nigeria-s-naira-rebounds-sharply-after-bumper-interest-rate-rises-ft?type=market
Not expecting any significant news on MPNU on Monday but any update would be a bonus. GLA!