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@ maestro1 Sat 22:05 - yep, I think we may just have a money printer on our hands.
Remember their noi projections are based on gas prices being much lower than what they currently are. Also they assume a theory of oil and gas price backwardation despite no evidence of such an occurance atm (infact some reckon the opposite is gonna occur since they figure there is a tight supply outlook. I3E are also assuming natural declines of 14% - despite declines being reported at being lower than that in previous operational updates. In a nutshell they are being super conservative in their projections.
@ Olderandwiser - yep, I reckon the dividend can be further increased with ease (but let's not forget that the dividend is already gonna be least x3.5 more than what was paid out in 2021). In their capital budget rns they mentioned - "Cash could be used to support additional dividend distributions", I'm not sure if the monthly dividends recently announced may negate this but to me that reads as that there could also be additional special dividends on top of their normal dividends.
What I'm not sure about is does higher o&g prices affect the costs. My understanding is alot of the Alberta oil rigs are the pumpjack type and use either steam or electricity (so gas or oil) to operate.
Yep, I agree with you and nomadicinvestor who posted in a thread called 'share price'.
I think some people may need to take a chill pill or learn to manage their expectations.
To comprehend what we have let's have a quick look at their website:
"i3 has an average working interest of 46%, over 457,000 thousand net developed acres and 171,000 thousand net undeveloped acres of land."
To put that in perspective 628,000 acres is ~2,500km2 - or roughly the size of Luxembourg!
We own a truly substantial amount of land some of which is developed, some has substantial infrastructure on it, some of it was unloved and needs workovers, upgrades and optimisation. Some of it needs to be developed. The website mentions that there are many opportunities that were missed by previous operators.
It's not something that you can of spend a day on (or even a couple of months) and be like 'so we are gonna do x, y and z'.
There are over 700 production wells on our acreage.
I have no doubt Majid, Graham et al are working tirelessly to determine the best course of action to take giving us the best rates of return.
Whilst also scanning the market for opportunities - mergers and acquisitions may still be more cost effective than additional drilling for all we know.
@ Maestro 20:38 - did you mean NOi for 2022/23 is $184m at $69?
I watched a video in which Graham mentioned that I3E's peers are at between x4 to x7 NOI
Based on that assumption I'm getting:
S69 Oil = (184 * 0.74 (USD to GBP)) = ~£136M / 2 = £68M
Market Cap @ x4 NOI - £272M (share price ~24.15p)
Market Cap @ x7 NOI = £476M (share price ~42.3p)
$80 Oil = (244 * 0.74) = ~£180.5M / 2 = £90.25M
Market Cap @ x4 NOI - ~£361M (share price ~32p)
Market Cap @ x7 NOI = ~£632M (share price ~56.1p)
Now I may be completely wrong here and this completely disregards gas production but the difference between $69 and $80 Oil = $11
$244M - 184M = $60M / 2 = $30M
$30M / 11 = $2.72M / $2.72M * 0.74 = £2.01M
In my rudimentary attempt at a sensitivity analysis a one dollar fluctuation in the price of oil affects NTM NOI by £2.01M
$90 Oil ($244M + ($2.72M*10)) =$298.4M
$298.4M * 0.74 = £220.8M
£220.8M / 2 = £110.4M
Market Cap @ x4 NOI - ~£441.6M (share price ~39.16p)
Market Cap @ x7 NOI = ~£772.8M (share price ~68.6p)
Yep Clearwater is hot. But a closer look at I3E's assets reveal that its all pretty hot.
Our assets are absolutely outstanding and extremely undervalued.
There are so many opportunities to increase production.
South Simonette could potentially produce ~16,000 boepd peak oil production
North Simonette could potentially produce ~10,000 boepd peak oil production
I3E owns key infrastructure in North Simonette - "including a 50% operated working interest in the Y-Battery, an oil and gas processing facility with liquid handling capacity of 12,000 bbl/d. The Company also owns a 100% working interest in a water disposal well and the rights to a 7.0 mmbbl stream-fed, freshwater reservoir. "
A Canadian oil industry expert called Shubham Garg was talking about I3E on youtube and he said that we got the Cenovus assets at a price "that makes absolutely no sense. They basically stole that asset".
Basically our Cenovus assets were neglected for years, there is so much optimisation and upgrades of equipment that can be done at not a substantial cost. He reckons our 8-10,000 boepd Cenovus production can be increased to 15-20,000 boepd through increased efficiencies.
Well I3E have committed to pay a minimum of £11.827 million in dividend this year. Remember the projections in the capital budget are based on oil being $69 and gas at $2.5.
That figure could always be doubled or tripled depending on the price of oil.
@ Tony 06:47 - for no such restrictions just right click the link and open in incognito or private browsing tab.
@G_G_G 10:01 - looks like the Scottish government would rather prefer off shore wind turbines and crap like that in the North Sea.
https://mobile.twitter.com/CrownEstateScot/status/1483016712203255818
@CrownEstateScot
Today, we’ve announced the results of ScotWind, the first Scottish offshore wind leasing round in a decade. This is an early but important step towards building the next generation of offshore wind projects. https://bit.ly/3roSWzH
1/3 #ScotWind #NetZero #OffshoreWind
I brought a few shares a little ago - as with every company I buy shares in the price immediately plunged. I'm down like 15% atm.
I'm really impressed that management are buying £1000s worth of shares on the open market every month.
However based on the Q3 report stating production of crude oil was only ~1,333bbls/d ( I do note that the reserves report released in May mentions that P2 reserves are just under 65M boe). Is the current market cap of ~£195M justified?
@ Tony - Thu 15:09
Not really lots amount of time for me, but thank you for your view on how I allocate my time.
Here's a metric for you - in my view the amount of time I spend reading about oil stuff isn't nearly enough versus the proportion of my portfolio that is in oil stocks as a proportion of my net worth.
It's so nice of you to act as the judge, jury, executioner and also as the court reporter. All the time.
You seem to get into altercations with people on this forum, and on the advfn & ceo.ca forums? Which many a time involve you spewing Ad Hominems at people. Calm down. This is just advice - but it might be a good idea to take a short break, go somewhere warm and have a few sangrias or something.
Yes I did mention about communication previously and I did state that I had a theory that may prove controversial to some people. Am I allowed to have my own views and opinions?
*Hedge funds don't control most of the company.
"The other thing is that many companies highlight “liquids” v “gas”. Not all liquids are created equal and in fact at today’s prices I3E’s NGL’s attract almost the same price per bbl as gas which is a little less than half the price of Oil."
This goes back to what I said about comparisons being fraught with difficulties.
"If I3E were to pull off Serenity and get that into production - personally I cannot see why we wouldn’t have a similar or better rating than KELT which should put us North of 50p."
Well Q1 may be the date that things start to get moving.
Simply Wall Street - reckons our current fair value is 62p.
https://simplywall.st/stocks/gb/energy/aim-i3e/i3-energy-shares#intrinsic-value
In any case say the farm out was not forthcoming I think we just need to wait for a few more reporting periods to see the financials before we move up to the next level. WTI is nearly at $79 atm and gas is nearly at $3.90.
"The trouble with FCF is that it’s a Non GAAP measure and not all Companies Calculate it the same."
There you go - so right off the bat any comparison is fraught with difficulty.
For example i3e deduct all Capex to come up with FCF so would report a lower number than other Companies that just deduct maintenance Capex which is a more logical definition IMO."
There you go, I3E doesn't release clear RNS' in comparison to other companies.
Practically every other publically listed Oil producer in Alberta produces easy to read tables and stuff. They release information like previous quarter financials, I3E releases 'ntm guidance' and has as you've put it illogical definitions.
An investor/would be investor even gave them feedback in the comments section of their 22nd December tweet about their new website.
https://mobile.twitter.com/i3energy/status/1473663561322811393
"Eric Nuttal looks at the ratio Enterprise Value to CF (EV/CF)."
Great, but there are also plenty of other trading metrics that's that can be used to derive different multiples.
"CF appears to be the same as I3E’s NOI and what most other Canadian companies report as Funds Flow from operations.
So it looks like you have all the numbers to calculate EV/CF and rank the Companies."
I could do that. I could also calculate what the aggregate Executive Compensation is as a Percentage (%) of Revenue and see how I3E compares with its peers.
I could also compare I3Es General and Administrative expenses with that of its peers on a per barrel basis. I wonder what the findings will be for anyone undertaking such an endeavour. Will I3E be lower end of the scale or are their costs substantially higher than that of their peers.
"I noticed KELT in your list which had very similar production / production mix to i3e several months back although I note they have since added a couple of thousand barrels. This was the closest Company to I3E that I have come across and trade at about 3.8x I3E’s market cap. If I3E traded at just 1/2 Kelts MC we would be at about 26p. "
Kelt Exploration may look similar to I3E at first glance but if you scratch beneath the surface, you'll see that both companies have quite different strategies. Kelt Exploration prove up, develop and sell off assets. In July 2020 (so when oil prices were quite depressed) they agreed the sale of their Inga assets in Montney to ConocoPhillips for $510M. They had proved up over 1 billion BOE of reserves and built up production to over 15k boepd in Inga which they then sold on. In a nutshell with their Inga transaction they sold half their entire production for more than the Enterprise Value of the entire company.
I3E have mostly been purchasing already producing assets using equity raises and small fields that require reactivation. But we are new to Canada so what else where we to do.
The management in Kelt own alot of shares ~16% of the total shares. Institutions and Hedge funds don't control most of the co
Some pre-88E history here, 88E were previously known as Tangiers Petroleum and operated in Morocco (for those that didn't know)
Oil explorer's bid in chaos after two directors ousted
05 Feb 2014
A £20m bid by Aim-listed oil tiddler Tangiers Petroleum for an Australian rival has been plunged into chaos after rebel shareholders forced two of its three directors off the board.
Tangiers, which is listed in both London and Australia, agreed an A$37m all-share deal in December to merge with Australia’s Jacka Resources to create a pan-African oil explorer, combining Tangiers’ interests in Morocco with Jacka’s in Tunisia, Nigeria, Tanzania and Somaliland.
The deal was the brainchild of Tangiers’ executive chairman Eve Howell, a former Woodside Petroleum vice-president.
But the mooted deal is now in disarray after Ms Howell was ousted from the board, alongside non-executive director Max de Vietri, by a dissident group of Australian investors. Largely represented by Perth-based stockbroker DJ Carmichael, they are thought to speak for about 30pc of the shares.
The exit of the directors has forced the suspension of Tangiers shares at 9.975p “pending the appointment of new directors in order to validly constitute the company’s board under its constitution”.
Tangiers said yesterday that Ms Howell and Mr de Vietri had “resigned” as directors just before an investor meeting, due on Thursday, to vote on their re-election to the board – leaving Brent Villemarette as “sole director”.
The company also pointedly drew attention to one of the “risk factors” to the deal detailed in last months’s prospectus.
It said: “If these directors are not re-elected at that meeting, 2 of the 3 directors who approved this bidder’s statement will no longer sit on the board of Tangiers.”
Pointing out that the offer would still “remain in place”, the prospectus added: “A change of two out of the three Tangiers’ directors – one of whom is the executive chairman – may result in uncertainty regarding the future intent and strategy for the merged group.”
Ms Howell was due to become executive chairman of the enlarged group, with Jacka’s boss Bob Caisse taking over as managing director.
Sources close to Tangier pointed out that the same group of shareholders had also ousted Ms Howell’s predecessor, Mark Ceglinski.
While DJ Carmichael could not be reached for comment, market sources suggested that the rebel investors did not want to risk diluting their position, via a merger, before drilling starts on Tangiers' Tarfaya offshore block in Morocco.
Tangiers said Mr Villemarette was “currently assessing suitably qualified candidates for the appointment as directors” – though analysts were not hopeful of him salvaging the Jacka deal.
InPlay Oil Corp.
6,011 boe/d
3,817 Oils (63.5%)
Q3 AFF - $15.6M
$71.3M net debt
Recently acquired Prairie Strom with mix of borrowing and equity financing- new production ~8050boe/d
Market Cap - $187.95M
Journey Energy Inc
8,164boe/d - Liquids/Oil (3,848 boe/d or 47%)
AFF Q3 - $11.97M
AFF first 9 months - $29.71M
Net debt $67.8M
Market Cap $129M
Hasn't drilled or completed any wells in 2020 or 2021. Capital expenditure limited to maintenance. Will explore and drill in 2022.
Perpetual Energy Inc
4,876 boe/d (1,272 Liquids- 26%)
AFF Q3 - $2.17M
AFF 9 months - $7M
$56.6M net debt
Market Cap $45.2M
Petrus Resources Ltd.
5,937 boe/d (32.79% 'Oil')
FF Q3 - $7.9M
$60.1M net debt
Market Cap $85M
Pieridae Energy Limited - some assets are in British Columbia
38,595 boe/d- 6,688boe/d liquids -excl Sulphur production - 17.32%
Q3 AFFO - $12M
AFFO 9 months - $34.36M
$50M short term liability but its been defered
Market Cap $1.57B
Paying a monthly Dividend since November
Some dude on Twitter reckons it could more than ×3 within the next couple of years
https://mobile.twitter.com/Edark94/status/1445666904761200642
Prairie Provident Resources Inc.
4,273 boe/d (65% liquids)
AFF Q3 after decommissioning settlements $4.3M
$121M net debt
Market Cap for some reason only $17.3M (up 12.5% today)