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Slightly off topic, but this O&G analyst just published a photo diary of his recent tour of Azerbijan, which included meeting various Govt ministers/representatives.
The short article gives a good flavour of the country. Landmine clearance clearly a big issue in NK..
https://www.energyflux.news/p/from-baku-with-love
I think WF got the Chinese bid thing from this Canadian board;
https://ceo.ca/tal
All just speculation as far as I can see, happy to be shown otherwise..
There was an interesting thesis on Burford published in Value Investor Club recently, excerpted on twitter here;
Target price £32-38 for end of 2026.
Made up of core business £20-25, and YPF estimate in range of £11-22, with a stab at £15 as the median outcome.
There is also some useful commentary on the sustainability of ROCE etc in the business, flywheels etc, and a deliciously casual aside saying that Burford management have been in BA recently talking to the Milei team?! Sadly this comment is not evidenced further 🙂
The report will be publicly available on VIC 45 days after publication.
https://twitter.com/TheBenSchmark/status/1772286619296387255/photo/2
Thanks, Mr M
This podcast from a couple of months ago, might make a good companion piece.
Two legal academics specialisising in sovereign debt discuss Jay Newman's recent FT article on the YPF case, and the prospects for a Burford recovery.
https://podcasts.apple.com/vn/podcast/ep-123-ft-mitu-mark/id1528208049?i=1000641710695
Bowtied Mara has published a useful piece summarising events around collection of the YPF judgement up to and including the recent London court application, and next weeks court session by phone with Judge Preska.
BTM has been resident in Argentina for 20 years, and writes generally about both Latin America and Argentina.
https://www.bowtiedmara.io/p/the-16-billion-ypf-inheritance?publication_id=946567&post_id=142551125&isFreemail=true&r=1zvm0&triedRedirect=true
Actually PTAL were at the Govt. meeting according to press reports, and will also be at the 23rd March meeting to discuss compensation.
https://diarioahora.pe/loreto/comunidades-de-puinahua-afectados-por-la-fuga-de-petroleo-reciben-apoyo-mientras-avanza-limpieza-del-rio/
Agreed that this incident does seem to be over, and that the barges are or will shortly be moving again.
Partly because Montara was acquired with AUS$ 3 billion tax losses. These won't be materially utilised against Montara anymore, but they should be allowable against the Woodside stuff.
Which might make those assets more attractive to JSE than other bidders, which in turn means JSE could potentially make a more attractive offer..
I have no idea how any financial package would work though. Debt seems to be the preferred route (equity is bombed out anyway) The new assets could count against a reworked RBL, so perhaps there's scope for some rabbit pulling from hats?
No problem.. I tweeted Seb with the Magazine editor's details.
Seb replied to me saying that they had contacted him. He is now waiting for a copy of the actual document to see the details.
https://twitter.com/BrianCop/status/1765513935866798125
Things are hotting up!
A claim for the full $16B was lodged in the commercial court in London today.
Make Hastings of Quillon law filed it.
https://www.cdr-news.com/categories/litigation/20272-argentina-investors-file-usd-16-billion-london-enforcement-claim
I would disagree - as far as I know Jadestone is the only bidder with $AS 3billion PTTR credits (tax losses)
Logically it follows that the asset is potentially more valuable to JSE than the others, and so it can 'afford' a more attractive offer. After that it becomes a matter of putting a finance deal in place.. the other two suitors may well have an advantage there, but to reiterate it may be less financially attractive to them.
Thanks for your good work OG.
Regarding your PenMal speculation, this may be relevent. A poster on the ADVN board received a reply from IR this week after querying why there had been no RNS re PM428;
"The PM428 licence application was a tactical decision by Jadestone in the context of its ongoing discussions with Petronas around the Puteri Cluster (renamed from PNLP, or the previously non-operated PenMal assets acquired in 2021). The PM428 licence is in very close proximity to the Puteri Cluster and would represent upside potential in the event we were awarded the Puteri Cluster. However, as those discussions are ongoing, we need to take a balanced approach and not create unnecessary “hype” around the PM428 award, which carries a minor financial commitment to reprocess vintage seismic. This does not signal a change in strategy (I have seen some speculation that we are pivoting towards exploration with this award, which is incorrect)."
Peruvian government unwilling or unable to further bail out the new refinery/Petroperu, so Petrotal is right not to bank on the pipeline anytime soon;
https://www.bloomberg.com/news/articles/2024-01-22/peru-says-it-lacks-funds-to-bail-out-struggling-petroperu?sref=f2E6A62x&leadSource=uverify%20wall
P.s. I didn't mention the bear case valuation of $22, as that assumed Burford had lost the YPF case!
I don't know if this document has been referenced here before, but in March 2023, private investor Malcolm Brown published a near 100 page thesis on Burford. It's very well researched, still relevent (especially on enforcement) and most definitely worth a read. Very little bearish in nature has happened since then, in fact the settlement comes with a higher interest rate for a decade than the 7% assumed.
He comes up with a base case valuation of $47, and a bull case of $59...
https://www.dropbox.com/s/9fd9kg5wlcrhtaf/Burford%20Investment%20Thesis%20%28full%20deck%29.pdf?dl=0
A good summary of the issues here from an Argentine TV news channel, followed by Seb M's take on possible next steps;
The mess started in Congress in 2012, and it should finish there with them approving a settlement. Best to start negotiating soon as possible, early settlement = greater chance of discount/less interest.
Seb repeats the line about Burford potentially being part of the solution not the problem, and talks of the huge infrastructure investment that the country needs.
I wonder if Burford's SWF partners could conceivably become part of a package (with IMF?) of investment to kickstart the economy at the same time as the judgement settlement, to be approved by Congress in a single Bill?
https://www.youtube.com/watch?v=h-KA8GtgoMg
(you can use the settings cog at bottom of screen to get YT to translate)
TwT - In fact it was more than that, the Spanish government got the EU on board so Argentina faced a possible trade embargo from all Europe (including the UK at the time).
Hence they caved so quickly, the power of pooled sovereignty!
Useful summary of where Argentina is at, just published in the FT and in advance of representations to Jusge Preska later today.
https://www.ft.com/content/88731450-2019-4375-a544-24d2f511bf28
Paywalled but googling "Argentina’s new government faces crucial test over $16bn US judgment" and clicking on link may work!
There's some pretty serious statistical analysis of Burford's detailed case history contained in this thread;
https://twitter.com/clonedcapital/status/1744023568629858751
Slicing by IRR, ROIC, and vintage, the author has fun plotting linear regressions and other analyses.
Overall conclusion, the IRR and ROIC % should remain at least maintainable and stable for the near to medium term..
Are in.. 632.6K for December, 5179.4K for the year, and average 14.2K bopd.
Well done Petrotal, a creditable performance given river/barging problems.
Looking forward to an even better 2024, with an increasingly resilient distribution structure.