Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
I think you mean this one Tony
https://www.youtube.com/watch?v=dXDiKBhQSAo
Cheers Thornback, I'm more than happy to chuck in a 'UOG, what a company' at the right time :-)
At this point in the companies life, I'm interested in UOG's cash - how it generates it, how it chooses to spend it and how its going to grow with it - and its P reserves. My investment decisions are based largely on that, so its the stuff I like to read peoples views about. Sadly there aren't many on here as most lth's with an inquisitive, challenging eye have given up or possibly sold, so I tend just to canter through a few days posts at a time for anything of interest.
ATB, enjoy the rest of the weekend
2 of 2
As for the next few months, they need to be very clear on the recovery plans for ASH and what it means both in terms of production and reserves and a clear plan for 2022 and beyond for the rest of the licence. Production guidance notes need to be more granular to give investors confidence and to stop using selective averages in RNS’… back on my transparency pedestal again which I’ve talked about before. If numbers are going up, tell me why, if numbers are going down, tell me why. No fudging or ‘look over there..’ presentations. Investors both current and potential see right through it.
1 of 2
Am I detecting an outbreak of actual conversation and discussion returning to this board? .. thank fudge for that, I might check in more as hopefully will others who’ve largely given up.
If one good thing is to come out of recent events then, just perhaps, the nauseating sycophancy, cbeebies level ramping and cheerleading can finally be consigned to the bin. Investing needs an open mind not cultist chest thumping and badge kissing.
On to UOG…
When you look at small O&G producers with decent levels of production that only have low market caps, there are generally recurring themes as to why the the mcap is low. This is often because they have small 2P reserves, with a relatively low forward NPV and/or they struggle to generate free cash to grow the business because you need to recommit a lot of your generated cash each year to drilling & workovers, as each well is small. That’s simply to just maintain reserves, let alone grow them. Throw in a loan (which isn’t cheap) and a tough fiscal regime in Egypt on top and you have UOG. The interims should show a nice little profit, less so the cash which we know already and is of more importance.
If you look at the annual net cashflows and resulting equity IRR for UOG Egypt post the effective date (Jan’19), they are very low once you’ve deducted the loan and ongoing capex. There is very little left to grow the wider business after corporate G&A, let alone pay dividends etc at this stage and obviously problems in the ASH field with the wells that provided a large chunk of production at the best flow rates, isn’t going to help with that company growth. Once free of the loan life gets easier, but that’s a year away.
None of the one-off divestments to Quattro, Prospex and Hibiscus are banked as yet, so talk of ‘war chests’ is too soon. Quattro needs to fund raise, Prospex needs a fund raise and if they are partially debt funding the lender will need the magic production licence to finally be issued in Italy before that closes. From the last Hibiscus update in August, which I linked on here, there appears to be a long delay, unless there is an end stop date in the agreement past which Hibiscus have to either pay the ~$3m or hand back the Crown licence. DQ promised an update in the Interims which will hopefully give some clarity. As for Prospex, despite its ongoing internal power struggles, I don’t get the impression that the proposed new board dislike the acquisition from UOG, more the choice of funding route. As for the PVE ‘pre-emption rights’, I’d like to think that issue goes away quickly before things get too lawyery (if that’s a word).
Well the Kuwait Energy website hasn't been updated since they were bought out by UEG in 2019 and an Egyptian Fiscal & Reg guide is obviously an irrelevance.
Much easier to say that you saw the v old slide on GP's twitter page than trying to waste my time on wild goose chases.
.. and people wonder why the LSE board is dying
Still cat herding... Hibiscus working up one solution, Ithaca another.. Concept decision 2022, FDP a long way off
Page 5 of the 1/4ly report
https://ir2.chartnexus.com/hibiscuspetroleum/docs/business/HPB-CBU-Q4-FY2021.pdf
Slide 26 in the analyst briefing
https://www.hibiscuspetroleum.com/wp-content/uploads/2021/08/QR-4Q-2021-Analyst-Briefing-Final.pdf
Does anyone know if there's a longstop date on FDP achievement in the deal ie. if FDP hasn't been achieved by x date then either pay c.$3m or return to UOG? The only pay/return clause i'm aware of is for if the FDP agreed excludes Crown, nothing around timelines.
Well its a year earlier than i was expecting with a good chunk of the cash not conditional on future milestones, which is good. They'd spent c.$200k on these at Dec'20, so a very high return on the flip.
Surprised Hibiscus didn't take them, but given the Marigold project is already morphing into something far bigger than originally planned they've probably got enough on their plate. Quattro, who i'd never heard of till an hour ago, seem to have a strong I3E vibe looking at the management team and their connections.
Its tedious to once again see the board turning into a football forum 30 minutes after the final whistle.
Not sure how many times I'm going to have to say it for it to sink in but, the board is for everyone and is for sharing knowledge, info, research, discussion and opinions. The moment the board becomes a shoutfest it dies and is of little value. Very few people (including me) are bothering to exchange research and their thoughts currently.
If you want a managed, private, cheerleading board where only ultra positive posts and posters are 'acceptable' and that 'everything's amazing, all of the time' with the Company, there are plenty of forums to meet like minded souls. Similarly, if you think the worlds ending and the company is about to implode. I won't be joining you in either.
As for UOG, my views are unchanged. Its a growth company, with a really good cash building first acquisition and that cash they can then redeploy organically or via M&A/farm-in to move the company up the ladder. The majority of the other assets I personally have filed under divestible / trading chips to add to the Egypt cash.
Others will have a different view and I like to hear it.
Lords - the email address for sending any questions for next weeks Investor Call is near the bottom of the last RNS. Based on history, they'll RNS a dial -in number Monday am and upload a presentation to the website an hour or so before the call, which they'll refer to on the call. The Investor Call usually take place around lunchtime.
Finally, if levi is a multi avatar poster, leading a group of derampers then I'm getting a tall hat and going to live in the Vatican. Give it up.
Cheers levi thanks. PVE have Selva and another development project both awaiting production licences and pretty much nil cash to progress them once they get a green light - they've been running on loans from directors and major s/holders for a long time. If the raise is only for small amount we'll know its just some interim cash for G&A. We should know by 1st thing Monday per the ASX notice.
(Their share of capex for Selva is c.$1.5m-$1.75m)
(Continued)
As for the SP, trading activity etc. I try as far as is humanly possible to ignore it and focus on where I view the company is going to be in 6-12-24 month’s time, by way of cash, profit and proven reserves and work on the logic that the ‘value will come out’ on these fundamentals. There will always be a lag and we only get financials twice a year for the market to judge progress and see how the management effort has turned into $’s. (I won’t get into my views on the last accounts and warrants stuff again as I’ve covered it before and they haven’t changed).
Lastly, take paid for broker’s notes with plenty of pinches of salt when it comes to valuations and don’t get hung up on them. Breakdown their valuations into its component parts and challenge it on an ongoing basis… and I mean really challenge, as if you are investing the last of your £’s.
Enjoy the bank hols
Lots of interesting posts on this thread and it’s very good to see people articulating their thoughts. Keep it coming, this BB needs more of it.
Thornback – you’ll notice you’ve not been ostracized for your views. You know why? It’s because the majority of investors on this board understand the assets we have and where we are in turning each of those into $’s either via production or sale and the associated risks attached. Yes, we are a small, growing company with a quality Board and assets in Egypt that’ll generate a good level of profit and cash pa to then help feed further growth.
As I’ve said multiple times before though, Egypt is tough. To generate significant returns – both profit and cash - you need a lot of time, volume (to minimise your costs per barrel), plenty of ongoing capital and a friendly oil price to partially offset the ball & chain of the PSC. That’s not just a UOG’ism, research their in-country peers, big and small and you’ll find the same tale.
I agree with GingerHippo’s earlier post re the P&L. We should be looking at a profit c. $9m-$10m and a closing cash position at y/end of c.$8m. Possibly higher if KE revise up their forecast for H2.
Is it a ‘wall of cash’ I read on the ramping bingo card?, no but it starts to give BL options and starts to open more doors for future growth (M&A, farm-in etc) funding that’ll minimise s/holder dilution as the balance sheet improves. What and where those growth plans are, I have no idea currently. As for when, I can’t see anything happening that involves any upfront $’s until well into next year and after we know what we have in Jamaica via way of a deal.
As you say, Jamaica is potentially exciting, however it could also lead to some pretty difficult decisions for the BoD over the next 8 months, something which investors, current or potential, will be weighing up.
As for the rest of the assets, I view them all as assets that will be marketed and sold, at the right time, to build cash.
Italy – once all approvals are finally in place and the exploration moratorium lifted and any ramifications understood
NSea – Maria / Zeta – once tech work, CPRs completed. Hibiscus/Ithaca being the obvious fit, especially for Maria. Zeta is explor, but wouldn’t be surprised if they packaged the lot for sale.
Waddock X (PL090) – slowly creeping up Egdon’s to-do list (from their last interims) should hopefully make our stake more attractive to a buyer. As for the exploration on-shore follow on stuff, hmm.. good luck to Egdon getting approvals and drilling in my home county.
TBC
Just timing levi imo. Hoping they still plan to tie in the smaller discoveries - Crown, Kildrummy - as Hibiscus are the obvious exit route for the Maria block and its neighbour once UOG have completed their tech work.
Their presentation today still includes Crown, which is encouraging - Marigold development from c.13mins to 17mins if you want a listen. Key dates look unchanged from the previous quarter.
https://www.youtube.com/watch?v=Wtnp31wwnD4
Thornback - as normal I'm a bit late replying.
The payment is linked to Hibiscus receiving its full FDP approval from the OGA for its Marigold development. After they submitted their original plan last year, the OGA came back to them in Jan/Feb and asked them to work with Ithaca, who hold the adjacent Yeoman block and were compiling their own separate FDP and arrive at a joint development solution if feasible. Regarding progress since, both parties had been pretty silent till today.
Hibiscus' quarterly update released today makes interesting reading:
' Ithaca and AHUK have agreed to jointly develop the Marigold resources in Block
15/13a and Block 15/18b which includes the resources in Yeoman (now renamed Marigold East). The
parties are currently negotiating a Joint development Agreement and are revisiting the development
concept to determine whether the Voyageur Spirit FPSO is the optimum production facility for the
enlarged resources base being developed. The tieback of the combined resources to RepsolSinopec’s
Piper B platform is also being reconsidered as a development option by Ithaca. A decision is expected
to be made at the end of August 2021 as to which concept will be taken forward for execution.'
Page 4 of the link below:
http://ir.irchartnexus.com:70/hibiscuspetroleum/docs/business/HPB%20-%20CBU%20Q3%20FY2021%20Final.pdf
.. from the look of that, we are a good few months away from FDP approval for the new, larger development and to see how Crown fits into the new picture.
Most kind levi and thanks fbrj.
For interest was driving across Dorset yesterday and due to a police diversion had to take the backroads. Got completely lost and ended up in Waddock Cross. No sign of BL with a '% Stake in an old oilfield for sale' board.
levistubbs -"Perception is everything. The perception at the moment is that Larkin has taken the wee wee"
........................................................
Levi - I couldn't have put it better. Yes, we knew about the warrants, yes, they've done nothing wrong but the timing is very strange and leaves a sour taste after the Annual Report which was at best average.
Booking a loss in H2, announcing that you had to suspend loan repayments for three months but you had cash to restructure your salaries and introduce an undetailed and backdated bonus scheme isn’t a good look. Perception again, both for existing & potential investors.
They still have issues around transparency. I don’t want presentations just showing selective +ve news and stats, I want to understand why costs per boe in H2 were nearer $7 rather than sub $4.50 in H1 – a much bigger impact on the P&L than the salary change, and whether it will repeat in 2021. I don’t want to have to work out for myself why they had to defer the loan repayments and the knock on impact into 2021-22 when it comes to our cash balance and the effect that may have on growth plans. I also want to understand the costs for the loan and hedges which are dreadfully explained in the AR and also how they spent $800k on Jamaica in H2 and who received it. They need to put themselves in the shoes of the investor / potential investor more. It’s no different from when they announced the Egypt deal, focussed on the $6/boe opex but barely mentioned the PSC. Perception yet again.
Do I expect everything to be a smooth ride with a small, growing company? No, but they have to learn and get better in certain areas. They’ve built a good team and the Egypt assets have given them a good foundation and will generate cash to build the business at a sensible pace. We can see the plan but don’t investors for granted.
Finally.. don’t try the ‘if you don’t like it, sell’ line. It’s a discussion board for people to share knowledge, thoughts, opinions and research. The day it fails to be that and people feel uncomfortable saying something either +ve or –ve for fear of being labelled, the day it dies and is of no interest. If you only want to read the posts from a selective audience, use the filters. If you want a private, select, happy clappy cheerleading (or doom mongering)board there are others places to go to meet like-minded souls.
Supporting and critiquing a Company you are invested in aren’t mutually exclusive.