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On the verge of a breakout

RUSSIA KEEPS GAS SUPPLY TO EUROPE LIMITED NEXT MONTH: AUCTIONS

Meanwhile, I think Romanian gas prices are getting close to $40/mcf
Even with the huge taxes/royalties our cashflow is great.

I bought 1.6M today.

I'm sure it'll all be fine and we'll get the money before long but given we're talking about cash equal to over 80% of the current market cap I think the communication is poor.

I would really like some kind of statement from the company about the Indian government's rules for the settlement, whether they were what they expected, when they now expect things to be wrapped up etc.

They did PBT of £68.2m in FY 2019 and £65.2m in FY 2020 so they're saying the business is seriously - permanently? - impaired.

No one serious buys these for yield. The shares are way below the company's asset value so the margin of safety is good but whether they go up will depend on earnings. The Iran deal is important. If no Iran deal is struck then US shale output MUST increase rapidly otherwise there will be a huge supply gap which will eventually be increased by shale anyway. If an Iran deal is struck then a huge rally looks less likely.

I received mine from IG a couple of minutes after the open on the payment date. If what II says about other brokers paying out on good faith is true then why stay with one that doesn't?

I think the only reason the price will change is if they're short of gas..

The company's estimate on the 7th of September of receiving the money within a "few weeks" seems to have a been a bit too optimistic but this is certainly good news and I'm looking forward to Monday.

??? They've sold Catcher & Kraken and there's a working capital adjustment in favour of the purchaser.

Depends on your timescale. What you suggest would trash the share price in the short and medium term.

This article gives a longer explanation of the issue: https://www.timesnownews.com/business-economy/companies/article/retrospective-tax-case-settlement-voda-cairn-raise-concerns-over-proposed-terms/808646

"Waivers from affiliates, successors, predecessors, parents, direct and indirect subsidiaries, assignees, agents, present and future shareholders, owners, directors, officers, those providing finance and employees may be needed." - That's obviously wildly impractical and will never happen.

I don't think the rules are finalised yet. Once they are - assuming Cairn have OKed them - I think it will all happen very quickly.

More like $6M now.

Just for fun, if we say the EV is 1/3 SD, 1/3 West Gharib, 1/3 Morocco then all of SD = $6.66M

Yet rather than buying back stock or just paying a dividend they want to spend god knows how many millions drilling small prospects at a 30% chance of success. It's just painfully wrong.

Yet I'm not buying more because they're pursuing a reckless drilling policy.

They said this on the 7th:
"On India, the Indian government have indicated very strongly that they want to have this resolved within the next few weeks. And by that, they mean for everything to be documented and for the funds to be paid to us. So, we're anticipating on that timescale, we should have a receipt of funds within a matter of weeks. And then obviously, there are specific timescales attached to shareholder approvals for consolidations and buyback approvals and so on. But that should ensure that we have, let's say, four to six weeks after that, the funds being returned to shareholders. So, certainly during this year"

I'd say there's a good chance the first report of any change will come from the Indian media.

At the current share price post-dividend, a buyback of $200M would equal almost 30% of the market cap.

I'm surprised there hasn't been more talk about the debt "end point" for CNE. There's a huge difference between buying one more Egypt-sized asset or taking on significant net debt and perhaps buying three. I'm hoping they lever up but given the amount of exploration opportunities they have I think they might be fairly conservative. Analysts on the quarterly calls don't seem to care enough to ask.

Saying EV > CRP therefore the value of the CRP is currently fully reflected in the share price is the wrong way of judging things. You're describing it almost as the levels of a capital structure and working down to the profit oil being whatever is left once you've subtracted the rest. That's not how it is. There is some valuation of each component. You have no idea what those valuations are and neither do I. Imagine if GKP didn't have a significant cost pool or arrears to recoup. Try working out what the EV should be using your method. Does that number make sense to you?

I was doing a super crude (pardon the pun) calculation of cash+receivables+CRP to show much cash the company could have from those sources before the current CRP is dry. I didn't even consider the profit oil the company would make before it recoups the CRP or the opex in the interim.

You're effectively taking that future cash, subtracting it from the EV and saying: well the market clearly believes in that cash flow because it's less than the EV, but clearly doesn't have confidence in the cash flow I've put lower down my list because it's valued at the tiny slice of EV left so the only way the share price can go up is if the market gains confidence in that segment because the other segments are fully reflected in the EV. I think the reality is future profit oil, arrears, CRP, even the cash balance, they're all heavily discounted due to - primarily - where it is and who controls that territory.

On potential future FCF purely from profit oil, obviously we don't know what circumstances will be then, but: 55,000 x 365 x 50 (our oil at $70 brent) x 0.9 (net revenue) x 0.15 (absolute worst case contractor revenue) x 0.8 (our WI) = $108.4M annual revenue.

Agreed, that FCF wouldn't be colossal relative to recent numbers. I think it would be about $65M p/a. About a 12.5% FCF yield against the EV once the impending $50M is paid.

It's more likely we'd get in that position of no growth capex and 0.15 contractor revenue at a much higher production number..