Member Info for aligator

The performance of this share price is simply a mystery. The rise last week appeared to be on the back of nothing as is the fall since. At $4m per month, the company does have the funds to undertake infill Cascadura drilling, which itself will bring in further cashflow, as well as development wells on other discoveries, again with the prospect of additional cashflow.

There is just no rationale for the sp to be at this level, which values the company at less than 3 year's Cascadura production, all of which is sold under long term contracts to T&T, that is virtually risk free. Except that, as has been said before, the market is waiting to see a sustained period of production and cashflow and the drilling of rather wells.

What the company could do is consider a share buy-back or even pay a dividend. However, with Cascadura only producing since early September, the sustained period mentioned above is perhaps 6-12 months. Only then, hopefully, will the the sp begin to represent the value of the company. For the time being however, I would say that this is a fabulous buy opportunity, particularly if the sp slips below 50p again.

RJ, Are you seriously asking me to believe that the history of a company has no bearing on a decision to invest in it? That is simply mind-blowing.

RJ, Your allegiance to this company and, it would appear, the BoD is, and I mean this seriously, commendable. Like you, I am holding a modest amount of shares which are underwater but these have been consigned to the bottom drawer for the time being. If you feel that you would invest in a further capital raise that is your decision. All I have set out are the facts of the company's performance over the past 2-3 years which, from whatever perspective you look at TXP, suggests that one puts their money elsewhere.

Let me ask the question "If you were an analyst reading about this company's historical problems, recent problems and the lack of confirmation about gas in the ground, would you put money into an equity raise?" I think we all know the answer, which suggests that this is now a completely binary situation - HE1 is either able to raise funding or it slips into administration.

Sturm, The company's announcement about Cascadura back in 2020 included the following:

"Estimated before tax 3P 10% discounted net present value of future net revenues ("NPV10") of $802.9 million, 2P NPV10 of $519.2 million, and 1P NPV10 of $287.7 million."

This, I believe, is what PB based his "wall of cash" on.

Given the company's current market cap of C$253m, which is ca $187, you can gauge the potential upside for the sp from 60p. For example, the 3p figure of $800m, would result in an sp approaching £2.60, while the 2P figure of $519m, would result in an sp of £1.65.

Not quite sure what relevance a farm-in agreement signed by Orcadian Energy has to do with this company....

... and really not much else to say except to add that this is what happens when you put inexperienced, incompetent people in charge. Let's be honest, this company has bounced from one problem to another and is now effectively saying "Ok, we screwed up but let's have more of your money please."

Lorna and others need to go asap.

So why the equity raise?

Sturm, excellent prognosis but, based on past and current experience, the sp could be substantially below such estimates, just as it is now.

Looked at another way, the current market cap of $146m is just 3 years' gas production from Cascadura, let alone the contribution of other oil and condensate sales.

Can anyone on this board come up with a viable explanation as to why this company is valued way below its worth? It has both oil and gas production and is generating some $4m per month in revenues, it has the necessary cash flow to fund additional production wells on Cascadura and to drill development wells on other fields, it has a portfolio of known reservoir formations, it does not need to raise capital, it is operating in a fixed price gas market and it is servicing debt.

Yet, its market cap is only about 40% of Cascadura NPV, let alone the additional value of its other field assets. Unless there is anything untoward in either the Cascadura reservoir or production or the company has another major problem, I am at a total loss as to why this is trading around 48p.

Hm, I think you are right. However, the problem is that such reports get published in yahoo!finance. Ok, that is not the be all and end all of investor websites but it does get read by millions.

You have to think that something is going on though; the sp is simply not reflective of the npv of Cascadura or the other assets on the company's books.

Sturm, Thanks. That does present a credible explanation for such an unprofessional review. However, it is slightly worrying that companies like TXP can be seriously undermined, technically and financially, by the publication of such ridiculous reports.

Turbot, Spot on old boy. Always welcome insults and the mutterings of those who feel they know everything. Reminds me of woke lefties who always report to foul language and insults when they realise they are losing the argument.

I have just seen an editorial by Simply Wall Street (published in yahoo!finance) which comments quite negatively about TXP's ROCE. I am assuming many posters had seen this at the time of publication but thought it worth reflecting on what was stated.

On that date, it calculated TXP's ROCE at .0035, which it states is not only low but under-performs the industry average of 13%. Further, it states that TXP's ROCE reduced by 98% over the past 5 years, while the business employed 98% more capital (albeit acknowledging the capital raising).

While TXP's share price decline commenced in early August, the publication of this editorial will certainly not helped matters. That said, I find it somewhat alarming that a professional organisation like Simply Wall Street would use such an broad-based analytical approach to value a company that was in the process of developing a gas field, requiring considerable up-front capital expenditure in return for long term earnings. Indeed, I would suggest that it is quite an idiotic approach to evaluation of such a company (which had only just commenced production from Cascadura early in September) without giving it a grace period of, say, 6-9 months production, before producing its calculations. In addition, I would argue strongly that a much fairer method of valuation of TXP should be the NPV of the Cascadura field set against the outstanding debt and equity utilised to get it to production.

Whether, this editorial is one of the reasons for the puzzling decline in TXP's sp is unproven but, sometimes, I do wonder how firms like Simply Wall Street get away with such nonsense.

It will be interesting to see year end production and cashflow data from Cascadura

RJ, In the history of man, pessimism has always been the scourge of those who think everything will be better tomorrow. You are a classic example of this blind optimism. For the record, I remain a (loss making) shareholder but have consigned these to the bottom drawer of the filing cabinet and will continue to reign pessimism upon this hapless company and those who chase hapless causes.

So far today there are 51 posts on this board. You have to read them all (a labour in itself) to realise how disparate they are, which is a surefire indicator that nobody knows what is going on with this company, except that the share price is gradually sliding south.

I just get the impression that many shareholders post optimistically in the hope that it will all be right on the night. The reality I suspect is probably going to be considerably more pessimistic. Not even the confirmation of helium has been able to arrest the downward trend.

Photo, Agreed. What has come back to bite the sp in the rear end is the history of announcements by PB and the company, promising a lot but not really delivering. That said, there is no logic to the market cap which does develop questions in one's mind that perhaps there is something else afoot, and not necessarily positive.

Photo, As always, a takeover can never be ruled out but the facts would suggest this is unlikely until the company has successfully proven up other Cascadura wells or other fields. That said, I actually think that, should anyone consider making an offer, the price would have to include a substantial premium for the following reasons:

- The company is producing significant gas plus oil

- The company is cash flow positive which will fund ongoing development drilling

- The NPV of Cascadura alone ranges from C$290m (1P) to C$ 520m (2P) and C$800m (3P) against a current market cap of C$210, suggesting that just the Cascadura field by itself will ultimately result in a sizeable increase in the sp (ca £2 by one analyst/commentator, presumably based on 3P recovery).

- The company is sitting on several other discovered fields which will significantly increase its market cap over time.

- Gas production will be sold to T&T under long term contracts, thus, while limiting huge upside from international gas prices, will nonetheless lock in a long term profit margin (with no downside) on all gas produced.

I have to take issue with the legions of rampers and eternal optimists on this board. Over the past 2 plus years, you have tried to talk up this company, without any hint of positive evidence and despite the never ending list of problems encountered along the way.

Currently, we have gas shows only (yet to be fully tested and analysed), a defective rig, dubious equipment and a management team and BoD who simply come across as totally out of depth. Not surprisingly, the sp is now heading south at a rate of knots and, frankly, there is little on the horizon (aside from drilling new wells with said defective rig and equipment) to suggest a turnaround in fortunes. Yet, we continue to have "investors" (goodness knows what level of market experience they have), who should be commenting on this situation but are nonetheless trying desperately to find positives in a sea of negatives.

I am now losing money on this company and, frankly, will put these shares in the bottom draw to see if something really constructive occurs in the medium/long term. Meanwhile, it would be so nice if there was reason and rationale for posts, rather than a never ending wish list.