Member Info for 1ups1de

Will a modest share buyback on an illiquid stock that’s historically under performed move the needle ?
I’m not convinced - though I fully agree with Werner & the board that GDP is significantly undervalued. However it doesn’t help when the CEO cannot hint/ guide on future prospects. At no point in his presentation did I get a clue on future volume,pricing, margins or free cashflow. How can busy investors gauge the undoubted value ? He needs to learn the corporate dark arts to complement his strong operational bias. Also the house broker need to get the finger out. The current forecast is embarrassing & Werner signalled that. WHi, get a sensible update out soon.

At some point they will need to return the stock. Are they trying to arbitrage the likely dividend vs loan fee ?

What are the implications for over 21% of cne shares being out on loan ?
With private individuals only owning 10% of share count I guess we are at the mercy of manipulation ?

In webcast :conservative operating cashflow from Egypt is $150M. (@60$ Per barrel). A more realistic outlook now ? $250-300M
Also $76M North Sea this year.

Then there is Senegal @100m in 23/24
Further North Sea payments on books @ $200m more like $300m + if current prices hold .
Not shabby Ups1des.

Please let’s have some balance vs ‘my friend say’ ..Are we really to ‘ write off ‘ more than £2 a share cash pre tender/ buybacks ,another likely £0.30 +cash coming from recent deals , £150m operating cash per year from Egyptian assets lasting 12years,(>£3 a share ),a surging oil price further improving returns. Even a set of village idiots ( debatable) running this surely makes CNE easily worth £3+ a share ,

Beware all the doom sayers. Follow the cash & webcast detail. There is a battle going in here. Those who have borrowed shares will do all their dark arts to keep the share price down so they generate some gains from capital return exercise. They cannot afford to let the share price run up .. and frankly in short term it’s in management interest to buy back shares at the lowest price. Not shareholder friendly in short term but sensible . Unless we keep reminding Mr market that there is over £2 cash , more coming in soon from North Sea deal & Egypt generating good returns from an oil price that double the rate they cautiously predicted when forecasting 2022.

There are a few companies shorting CNE. They must be swearing over current oil price & the possibility of a share price surge. With a very small private investor float they can ‘ influence ‘ day to day movements. However in the longer term the inherent value we are all calculating will win out.

The webcast contained a few nuggets but given the fact that no- one mentioned what the current share value is it makes one wonder on motive ?
Nuggets :
12 years of reserves
Unhedged so enjoying current oil prices
Operating cashflow from Egypt assets is projected at $150 m per annum … at budgeted $60/brl ( todays price ?)
Contingent payment from North Sea was estimated at $200m. If todays oil prices were to hold ‘ it would be well in excess of $300m’, according to CFO

So apart from current cash of ~ £2 a share we just heard we might benefit from easily $200m Ups1de from Egypt extra pricing + Higher North Sea exit payment .Conservatively ,that’s another 30p a share.
That’s without projecting current core operating assets cashflow.
We know they plan $500m tender, $200m buyback & gross capex of $200m but pots of cash left
Clearly some are trying to hold the price down but let’s all shine light on the true value. How can it not be £3+

Let’s ignore the improving oil price, strengthening $ & rising Egypt production . Let’s have a stab at end March 2022 cash
Net cash at end Dec : 133$m
India :$1045( lost $ 15m converting to $)
North Sea due :76m
Egypt 4th quarter : min 30m( not in ye cashflow according to CNE results presentation
Egypt 1st Qtr : min 45m say
That’s :1329$m
@1.31 $:£ =£1014/495 m shares =£2.05
On top we have rising cashflow from Production,strong contingent payments from North Sea & Senegal … and quite a lot of assets !

It’s such a pity for shareholders. It just has a dreadful Porters 5 market outlook: when they left airport concessions they lost their modest competitor moat. Now they face more direct competition ;still a fear of unhelpful regulation/legislation; digital customers with more to spend their money on post COVID; fear of innovative new entrants /substitutes.I recall the stockopedia stock slam folks quite recently suggesting it was a ‘ darling’. Sadly not any more. Eg No way could I attempt a dcf on this as I could never estimate a terminal value. Will this business model even be around in 5-7 years with the pace of technological change. ?With their cash , increased marketing & management expertise there will be some value here but it’s days of being seen as a safe, growth bet seem long gone.