Have a listen to the 25th Feb 2019 interview regarding JV progress, then tell me it’s deadman’s they have failed. Have you considered that the reason it wouldn’t come to fruition is because I3E want to keep 100% of both assets because they can fund them themselves through a ‘robust’phase 1 development?
Add to that previous post the statement in the interims that says ;
"In regard to future funding, i3 continues to explore all options. We are preparing to fund Liberator Phase I on a 100% working interest basis through our progression of a US$100 million reserve-based lending facility."
So continuing with a robust phase 1 development through a $100m senior lending facility, having analysed the post drill analysis data, and seeing that Liberator is a material asset, and yet I am expected to sit here and be told that LIB phase 1 is dead in the water and its all or nothing on Serenity and LIB West.
But what if all of those statements delivered by oil and oil funding related professionals, with very solid reputations, are actually simply telling it like it is. No bells and whistles. No prolonged interviews around the various AIM circus media. They are simply delivering a report that says what they have found, what they believe, and how they intend moving forward.
Such that perhaps, just perhaps, the market has massively mis-read I3E because it expects to be sold the story far more strongly. What does that make Serenity and LIB West then? What does that make the 20m valuation then?
@Backwoodsman Good afternoon. I don't have much time this afternoon being that it is Sunday and family day but I just wanted to pick you up briefly on something you said earlier today ;
"my concern is that the information that BBN has based his work on is itself flawed. You already know why I think that. This isn’t fear-mongering. It’s reasoned and analytical thinking."
If it is indeed your desire to be reasoned and analytical, which I have no wish to attempt to undermine here, then with all due respect, why does yours, and a great deal many others I might add, current thinking choose to disregard what I3E are clearly telling the market and instead focus solely in on I3E's valuation being pinned against the successful drilling of Serenity and the Liberator West appraisal.
I posted the following on Friday ;
"The Company’s focus for the remainder of 2019 will be on 3 key areas:
1 The safe completion of its multi-well drilling campaign at Liberator and Serenity.
2 Continued advancement of a robust Liberator Phase I development plan while securing associated funding to bring the field to first oil.
3 On success at Serenity and Liberator West, progress development options for these assets."
In addition, the same interims contain the following quotes ;
"i3's preliminary integration and findings explain the unexpected 13/23c-9 well result and continue to support Management's view of Liberator's potential resources."
"Though we were disappointed to have missed the targeted upper Captain sands with our first well 13/23c-9, our post-drill analysis incorporating data from the well confirms our view that Liberator is a material asset and the Company remains excited about Serenity and Liberator West where the majority of our on-block resources are mapped."
"We look forward to updating our shareholders after we have completed our analysis of the 13/23c-9 well and revised mapping of Liberator and as we obtain results from our ongoing drilling campaign."
So in a nutshell, I3E has told the market not only that it will be "continuing advancement of a robust phase 1 development" but that the "post drill analysis incorporating data from the well""confirms our view that Liberator is a material asset" to the point that I3E are "looking forward to updating our shareholders after we have completed our analysis of the 13/23c-9 well and revised our mapping of Liberator."
They are looking forward to updating their shareholders on a drill that the market has effectively written off LIB phase 1 against. The assumption being that missing the target can only ever be a bad thing. They must be real sadists to be looking forward to disappointing the market mustn't they?
Even more so when a key area of focus continues to be a "robust" LIB phase 1 development plan.
That isn't interpretation of "information" that is "flawed," its simply reading what I have been told and understanding it for what it means.
In all honesty, on first glance i am actually rather surprised that given the drop in the share price, that the "outlook" section of the interims has not been included in the RNS.
Those of a negative disposition could very easily put this down to incompetence and/or a lack of sensitivity for shareholders (given they are sitting on a significant paper losses).
But i don't see it that way. My stance (which i will maintain until proven otherwise), having read all the RNSs, various reports and watch these guys in various interviews, is that they are not focused on the SP. That they are professionals focusing on the job at hand and long term shareholder value, which will protect the SP far better than soothing words or emphasis on supporting shareholders in need of it.
Now many may well challenge me on that, using the failure at L2, the current SP, and/or the lack of a CPR on Serenity, as very notable reasons to think the contrary or at the very least, make a negative conclusion on this.
What I see is a company delivering accurate reports and RNSs that continue to back the same plan, with the expectation that investors who choose to invest in this company, understand what they are investing in and are prepared to read all of what they have been given, and that it is trusted.
If one is prepared to judge the company on the merit of the words it has produced post the L2 result, then I simply cannot see how anyone can conclude that the plans are not continuing, in the manner they have been described.
From where I am sitting, I3E has been hit with a major dose of negative interpretation, based on a failed pilot drill, that itself has been interpreted very poorly. Now I do think that the company has some responsibility towards that because of the way the horizontal L2 development drill was updated to a vertical pilot well, and that process was communicated.
However, that confusion does not define the whole story, nor change the quality of the assets, and it certainly should not undermine statements made by the company since the L2 pilot well was completed.
But only a fool would fail to recognise that it clearly has. My point is that I believe I am able to see through this and judge this situation clearly, and in doing so I see a much stronger I3E than the one that the market currently wishes to see.
Of course we won't know just how strong until those 3 key focuses are allowed to play out in their entirety.
Full report for those that wish to read it.
https://i3.energy/wp-content/uploads/2019/09/i3-Energy-plc-2019-Interim-Report.pdf
Morning all,
Despite my intention to step back until Serenity the drill result is reported, I felt it prudent to share something I noted in the interim report.
For those who have only accessed the interims report through the RNS, you may have missed arguably the most important part of the report.
For some reason (i think due to page space in the front end RNS), the following section is only available in the full report on the company website ;
"The Company’s focus for the remainder of 2019 will be on 3 key areas:
1 The safe completion of its multi-well drilling campaign at Liberator and Serenity.
2 Continued advancement of a robust Liberator Phase I development plan while securing associated funding to bring the field to first oil.
3 On success at Serenity and Liberator West, progress development options for these assets.
The Company continuously evaluates opportunities to strengthen its balance sheet whilst maintaining tight control of its costs and working capital position."
The above really needs to be read in conjunction with the other statements made in the report, the associated RNS, and of course all other company information.
Right now I3E is being punished hard for failing to hit its target on the first pilot well. Everything that has been said or provided/issued by the company, prior to that drill, is effectively being disregarded. What this implies is that the phase 1 development is no longer viable, the 3rd drill on Liberator will likely not proceed, and the Serenity prospect is far more risky, with the COS and 'appraisal' tag stated a sign of over-confidence from the company.
The above statements backed up by the RNSs and interviews released since the initial well result on the pilot well on Liberator, counter that argument. Infact nowhere has the company stated anything has changed on either LIB phase 1, the Serenity prospect or indeed the 3rd and final 2019 drill on Liberator, and yet the market does not believe them, on pretty much any of it.
The above focuses were reported as being achievable as of the audited date for the interims, which was 30th September. So post L2 pilot well.
What readers of those words should perhaps be asking themselves, is why did they include the word 'robust'?
Why also do they talk separately about success on Serenity or Liberator West, leading them progress development options for these assets. Why if it is necessary do they not directly tie the 'robust' LIB phase 1 to future potential Liberator West success?
Could it be that the company has reported no change to their plans because there is no change to their plans? Or is it simply a case that we should continue to disbelieve the company because a drill with a reported high COS, failed to hit its target.
That's for the individual to conclude as they see fit.
The mind can play tricks and nowhere is that more true than in the AIM market. Question whose mind is being tricked on I3E.
That last post was just my musings and nothing else. Others have different opinions, which is just fine and I respect that.
I remain cautious on things but feel that today's announcement shows real intent and ability to get the job done.
For AMER to say the process has an anticipated end and to state it in the RNS, indicates to me that they are confident of achieving their price or at least close enough to it for them to accept.
Hence my shift in expected price, which if secured, I will be more than happy to accept.
As it stands, the information available points towards the final offer price being significantly above where it is now.
When I say that, I mean even at my original conservative 23-25p level, there is still circa 30% upside from these levels. Anybody who sniffs at that in this current market, is in my opinion pushing their investments too hard.
Today's announcement, coupled with JW's move on 2nd Oct, points in my view to a BOD that feels it has enough information at its finger tips, to support a confidence that the sale process will complete at a level they would be satisfied/comfortable with. Furthermore, the indications around the process being completed this year, also indicates that the offer they may unofficially be aware of, is at a level that would perhaps push all other potential offerors away from the table. Otherwise, why even state Q4 when nobody was forcing them too.
I would therefore think that my 23p would be absolute bottom end of that and is likely too low to push those other offerors firmly away. So I tend to lean towards this now being sufficiently higher to achieve this.
Lets also not forget that there are key precedents here already in the $93m and $19m paid by OXY for the 2 farm ins. Neither of those 2 50% license transactions secured operatorship. So at the very least we should be talking about doubling those 2 sums and then added a premium for control.
The start point on those assets would therefore be c. $224m because of the $93m that OXY are/have started to spend on the assets and the $19m received in cash.
If we then add in the remaining cash (circa $25m reported), we find ourselves at $250m before we even start to talk about CP0-5 and the OBA (incl. 3rd party oil transport authoritisation).
So there's an argument for 20p plus just on a pragmatic approach to the deals AMER have already done with the operatorship premium still to be added.
Any offer has to be signed off by an independent party that it is a reasonable offer for the company. I struggle to see how the above transactions could be ignored even when accepting that these independent checks can be a tad light at times.
My 23-25p base case considered the fact that the BOD wanted out and that only 1 party would come through and the offer would be discounted on that basis.
However, it is clear that the BOD feels more confident than that and so a premium on my minimum achieved final price is, at this juncture, warranted.
So I am going to push it up to between 26-29p. Still conservative but perhaps high enough to chase the other potential suitors away and secure AMER's chosen candidate.
One disclaimer on that would be that we do not know what OXY have found to date in their work in their Putamayo blocks, which could affect the final price for the better or for the worse.
I have double checked the Takeover Code documents and it is the 28 day Put Up to Shut Up period that falls away when a formal sale process is announced, not the 28 day period to publish the offer documents.
My previous points on the 28 days period and the fact that the offer documents can only be published within 14 days, following consent from the AMER BOD, stands.
So if they follow the contractual takeover offer route, then the 74 days (plus whatever time they need to get the offer documents out) rule must apply.
The only other speedier route would be through a scheme of arrangement, which can be employed when the offer is recommended by the BOD but I have limited knowledge of this form of takeover.
Timetables for both options are available in the document below, page 50 onwards.
https://www.slaughterandmay.com/media/39320/a-guide-to-takeovers-in-the-united-kingdom.pdf
@Pickedpeck. Yes a little further reading and I see that the formal offer document is to be issued within 28 days of the announcement but the offeror may only publish an offer document within the 14 days following the announcment if the BOD (AMER) of the target company consents.
So yes potentially the number of days could be reduced by, in theory, upto 28 days. That would make the total process 74 days.
However, that is still only 7 days less than we have in the remainder of the year. So either the offer is about to land and/or AMER have their offer(or) and so are confident that the process will move in line with the Takeover Coderules (as stated).
Unless of course another counter party steps in within the first 39 days, which would force them to announce a further change to the process, which right now is not under their control, which further supports their wording today.
As I understand it to be, according to the Takeover Code, day 0 of the process is the day when the offeror announces their offer. There should then be 28 days for the offeror to send out their offer documents to shareholders (Day 0).
There are then minimum 74 days until the "earliest date" the process can be deemed to be closed. That makes 102 days.
There are currently 81 days until the end of Q4.
So something doesn't add up. I welcome thoughts on this but if the Takeover Code rules are to be followed, then a Q4 finish is unlikely, even if a second bidder doesn't come in and disrupt the flow of the timetable. If the y do then the process would be extended. However, once that first bid is tabled formally, then we will at least be able to then see how thing are starting to pan out.
@ColonelDrake I am not fully on board with the all cash offer conclusion. Rule 2.7(d) states ;
"Where the offer is for cash, or includes an element of cash, the announcement must include confirmation by the financial adviser or by another appropriate third party that resources are available to the offeror sufficient to satisfy full acceptance of the offer."
So a cash and shares offer is still on the table although I do think that the AMER BOD want their cash and nothing else.
We must not rule out the possibility of one party buying the whole business and then immediately selling off one part (eg. CP0-5) to another interested party (eg. ONGC).
OXY have form on this with their recent takeover of Anardarko when they sold off the Mozambique assets immediately after the sale. So I would caution on ruling anyone or anything out at this time.
ColonelDrake Yes I tend to agree with your way of thinking. This RNS is designed to first and foremost confirm that the sale is, as far as AMER have witnessed to date, going to happen.
Secondly, they have received sufficient encouragement from 1 or more parties to enable them to push for a full sale.
Note - I believe that this was always the case here despite what AMER said at the beginning of this process. That was in my opinion, merely a tactical move to drive the process and the end price. Furthermore, i continue to suspect that AMER have a core buyer involved here (possibly as you say OXY), and that it is they that are driving these words.
That doesn't mean that the other bidders aren't real or interested, or indeed that they won't win out. Its more a case that their is a preferred bidder who is perhaps prepared to meet the lowest acceptable bid for the BOD. I have no evidence to support this theory, it is merely my feeling.
Thirdly, the fact that AMER are still saying that shareholders "are encouraged to take no further action with regard to their shares," indicates strongly that the anticipated final price will be higher than the 17p offer from M&P. We have all suspected that for some time but at this stage, given the confidence that a full sale will be completed, it carries far more weight.
So as it stands, we have a full sale by Q4 (as suspected given the timing of the presentations) and it will be above 17p.
It is interesting how the price was pushed higher through yesterday. It indicates a leaky ship, which is disappointing.
It
@icepick. Thank you for posting, I hadn't seen the video before.
Its a very insightful interview with the CEO that provies some good insight into how this is all going to pan out, particularly when it comes to the finance for both the Coringa payment and its construction.
On the final Coringa payment he says ;
"We have a final payment to full acquire Coringa at the end of the year. We've basically got that in the bank, which is good. So we are just basically trying to build up as much cash as we can before the end of the year."
On the Coringa construction costs ;
"We have got a great relationship with Sprott Asset Lending"
"We borrowed $8m (from Sprott) and paid back $8m out of cash flow"
"We earned a huge amount of trust with these guys and they are absolutely ready and waiting, when we are ready permitted with Coringa, to do a lot of that with debt"
With the permitting expected to be due by the end of the year, SRB potentially has all of H2 cash flows to help support that debt raise. Plus , as I have discussed here previously, construction is not expected to start until Q3 2020, and so the cash should keep rolling in to support those efforts on debt.
Plus with fairly limited debt on the books right now (circa $6m from Sprott), the company should have a substantial asset base (Palito and Corings) with which to raise the debt against.
This is supported further by the ore sorter at Palito coming on line at the start of 2020, which has the ability to bolster output by 20% and further cut the AISC for the mine.
As I have suspected for some time, SRB (supported by high gold prices of course), look to have a very good handle on the finances required for these two major events, which could assist them with avoiding further dilution completely.
I really like this story and what it can offer me as an investor over the next 2-3 years. I do not see gold dropping back significantly now. If anything I see it pushing on in 2020, which would only offer further support and interest for SRB and its valuation.
It really should not be about guessing. It is absolutely clear that I3E are stating that they believe Tain and Serenity are connected. They have also had access to the 4 drill results from Tain and the read back to the Serenity prospect is demonstrating that connectivity.
In the Serenity Prospect PROSPEX on the I3E website, they state ;
"A strong amplitude anomaly is observed at top Rodby"
"c.10km of the anomaly lies within Block 13/23c"
"The anomaly is present in the area of the 13/23b-y Tain well but no sonic was recorded"
That is the nearest sidetrack well to the Serenity prospect at circa 1km from the S1 drill site.
There is no guarantee that the two are connected. There is no guarantee they will hit oil. What is guaranteed is that I3E believe strongly that the connectivity is there, and my fact based examples this morning attempt to demonstrate why.
Risk remains here and nothing is a given but personally I very much like what I still see in both the LIB and Serenity prospects, despite what the valuation is currently saying about them, and what the market noise is also attempting to convey.
Truth is if L2 had come in then the excitement in the lead up to this drill would have been far more considerable and the technical and geological realities more readily proclaimed. That result has knocked confidence and I certainly find myself swimming against its flow right now, in what appears to be a very small pool of bullish believers.
Whatever happens, just like I3E, I will stand by the data I had at the time and if given the same circumstances again, would back this for the risk/reward it demonstrates to me personally and not what the noise is trying to convince me it is. That may well come back to haunt me or it may not but as far as I am concerned, this is a good company with a strong management team, who believe they have 2 very strong assets with potentially world class reserves in world class sands.
I believe them because my research to date confirms it, and that is all we can ever hope to achieve, a belief in a investment based on research.
I have talked enough on this stock the last few weeks. It is now time to wait for the next leg of the plan and test that research and belief once more.
I will be back here when there is something new and tangible to discuss. I trust those that decide to back this stock do so because they have researched it themselves and not because they have followed anonymous voices such as my own. This is a discussion board where hopefully useful information is shared, and in my opinion should be judged as such and nothing else.
To whoever decides to push on through this next result, I wish us all well and trust that good research wins through in the end, although unfortunately even that is never guaranteed.
planned to enter production next 'year'
Lets put it another way. As a company you have an asset, which is planned to enter production next and for which you are a long way down the road to agreeing a debt facility for.
You plan 2 wells to appraise that field. The first well fails to hit its target and reduces the level of viability of 1 of the 3 wells you intend to implement in phase 1.
Having raised money and planned for a second well in this field to help define another of the 3 potential wells that you have, what do you do next?
Do you abandon operations and therefore place your plans and your debt facility under pressure? Or do you re-check your data in double quick time to ensure that your 2nd target is correct and then push on to drill that well?
Given what the company has stated in the interims about single well contracts not being available, it is highly unlikely that a company would walk away and then try to come back next Summer.
What you do is double check all your data, gain additional data if you can, and make sure you do everything you can to get that drill completed in this window.
That's exactly what I3E have told the market they are doing and that is in my opinion what they will achieve.
So I am staring at 2 high impact drills here, either of which sends the valuation well above where it was shortly prior to the initial result on L2 on the 10th Sept.
Here it is again. It is the 31st Oct 2018 Proactive interview and can easily be found in a search.
It is the same video I analysed here last week.
It has a lot of very good information that back up just how strong these assets are.
It also very clearly states that the A3 well, at that point, was designed to confirm the LIB upside but also to position the 2nd development well (L4), which they state at the time is a potentially better option than the L1 well.
They do not at any time say L1 isn't viable.
This is why I am so surprised that commentators can so easily write off the LIB phase 1 development, when an appraisal designed to assist with its definition, has still not been drilled.
They have 50% through a process on LIB and yet conclusions are being made about its viability and the phase 1 development. That's simply wrong.
It is also why it is clear to me that I3E will drill A3 after Serenity. They have to because it will provide the necessary data to define what LIB actually is. Why on earth would they walk away from that?
So I expect news on that drill as soon as the company is able to provide it.
2 fully funded high impact drills due over the next 50-60 days and the market is giving them zero respect right now. An extreme example of how this market works and how little it is prepared to research its topics properly.
https://www.youtube.com/watch?v=ut8Ogy-ouAo
@Backwoodsman That is a debate that has been raging now for a number of weeks. Various investors, observers, shareholders etc etc have made their case and stated what they believe and why.
In my view there are various very competent and worthy snippets out there to be found, that are for me strong tells as to what I3E believe they have, in both Liberator and Serenity.
Whether you or anyone else believes them or their worthiness, is for you alone to decide. All we can do here is offer the evidence as we see it, debate it and then individually decide what we believe and act upon it as we see fit.
One clear tell for me is hidden away in the interview from 31st Oct 2018 (see below).
It starts from 3 mins 15s but the key point in relation to Serenity, whereby the CEO Shafiq Majid says ;
"When Neil and Graham originally bought the Liberator block, they knew at that point there was an extension into the adjoining block because we couldn't see a closure on the mapping" (adjoining block then acquired later in mid 2018).
"That's the same with Tain. We have obviously the seismic across the entire region, we can't close Tain"
We can't close Tain.
In the same interview he states that at that time Serenity was a "potentially very large exploration prospect."
Since then the company has stated Serenity to be an "exploration/appraisal upside." (Jan 2019 presentation slide 5).
Now anyone reading this can take from that what they wish but for me that October 2018 interview is very insightful, not just because of what the directors say, but how they say it. I have invested in a good many companies over the years, some good, some bad, and whether it be believed or not, I know when I am dealing with professionals who are presenting the right balance of confident and assuredness, and these guys are demonstrating that.
So technically we can say this block has never been drilled and so they are drilling an exploration well. The company says differently. They say they have an audited 72% COS drill that is defined as being an appraisal.
It basically comes down to whether one believes that the 2 fields are connected or not. If so then it is 1 field owned by 2 companies with 2 different names for it.
But if it is indeed 1 field, then technically it has been appraised by the 4 wells in Tain, such that the Serenity drill is a further appraisal of that field.
The only thing preventing that from being the case is the belief in what the company and their auditor are saying, particularly after the shock of the L2 pilot well plus, the fact that the OGA have a boundary line, which separates the 2 field zones and thus makes Serenity a new exploration target because it has never been drilled in this particular block.
So the debate can rage on about exploration or appraisal but its really about believing or not believing that the connectivity is there, which I do, for all the reasons above and more.
https://www.youtube.com/watch?v=ut8Ogy-
@Alfacomp With all due respect what matters is how Vanchem gets done and that BMN have sufficient resources to cover it and their other foreseeable plans. So I disagree with your statement.
Given the reduction in the vanadium price it is a very worthy exercise to test that ability, given there are outstanding liabilities on the books.
My opinion, and it is just that, is that BMN will successfully raise debt and they will cover all of their costs but that does not stop me questioning it because to simply expect everything to be alright on the night, in my view leads to complacency.
No disrespect intended to anyone there.
