Member Info for damofarl

tartine; spot on your post.......the one thing i think is missed here, i haven't seen anyone comment on is the mention of income at various oil prices in the RNS, and the quite specific flagging of exceptional income in the current year, and that any over their base projections WILL be returned to investors.

"Prior to the invasion of Ukraine and the associated increase in the oil price, we were well positioned for our free cash flow to materially increase from $86 million in 2021 to around a quarter of a billion dollars this year. At the prevailing oil price, and given that there seems no quick resolution to the appalling events unfolding, this figure is expected to increase significantly."

"The forecast extent of our cash generation, from an existing position of financial strength, provides the potential to deliver significant growth and further returns to shareholders."

"Genel expects free cash flow of over $250 million in 2022, pre dividend payments, at a Brent oil price of $90/bbl
An increase or decrease in Brent of $10/bbl impacts annual cash flow by c.$50 million"

"Should the current oil price strength persist, Genel will consider incremental returns of cash to shareholders in addition to our commitment to a material and progressive dividend"

i do agree with your new/diversified production comment; they seem either indifferent or incapable to such; that said, at current SP just churning the asset will reward all holders.

ingridcold; despite the fact i don't really get the relevance of your posts to GKP, with regard to power flexing/Ukraine? Putin? i feel your thesis is pretty sound; not quite sure why it has elicited such trashing, but then i can never understand why opulentia gets such a fan base, and Putup gets such vitriol......thats life's rich tapestry all here on the GKP board!

Anyway welcome. And whats your stance on GKP?

still awaiting your insight bananaman....

"morning banaman; Who has estimated between £7.50 to £75 a share? What detail did you ask them to tell you to validate such? Were you as superior snooty and dismissive on that assessment or was it valid because it was what you wanted to hear?

You nitpick on what you don't like in my post, can't find anything to support/agree with, choose not to acknowledge any detail that doesn't suit your narrative. Maybe you should, for instance, take a look at " without notable progress on production increase/new production", look in more detail at where your little under 30% is coming from.

Rather than sniping at others views, maybe you could detail your own rather than blowing vanity bubbles."

well the RNS is out, commenting on media speculation. The tone of it dents my confidence, and have to say surprised at its vague non commitedness. Acknowledging without commenting, neither disputing or denying.

And i think, Chief Timipre Sylva, Minister of State, Petroleum Resources, applauding Seplat on the deal, as the boss of, Gebenga Komolafe The Chief Executive, of Nigerian Upstream Regulatory Commission (NUPRC), rather trumps his declaration.

That said, Nigerian poitics......never say never and take your chances!

hedder; whilst a little old, great find that post link; i wasn't aware that SEPL was interested in Shell assets. No Company/RNS mention of that.

Interesting indeed....

trek; in sending a letter SEPL may have gone about it in the wrong order, which surprises me somewhat.

Anyone can err, but i think their 'acquisition' RNS, showed astuteness and awareness of the first rights obligations issue, specifically avoiding by declaring Mobil would remain a stand alone unit.

Bar news noise, and local grease palming, one has to consider that Mobil want out; they offered their product and SEPL won against punting shell companies. The govt didn't bid, but were aware of the bid process in plenty of time. The suggestion now that the govt will block, to enable pre-emptive rights requires the state partner is in a financial situation to do so. Notwithstanding the agreed price is an unbelievable bargain, the state partner isn't; so what happens next? it is reauctioned, to the same interested parties, who bar SEPL, have no local domain, no local interest, ergo no local contribution. So in the interests of the Nigerian people, the national interest, it is sold to a shell company indifferent toa the Govt's stated aims of national interest, a national champion. Whilst the local company, that could be the national champion, SEPL, is discarded to the side.

a cursory glance shows this is local politics (someone annoyed they missed a bung). A cursory glance shows this is in Nigerian's national interest, ergo, bar this noise, post payment of the inevitable 'established' bungs , it will happen.

The fundamentals haven't changed; this is accretive without Mobil

thanks all for the news links; on the face of it, wow. But i'm willing to go out on a limb here, i think this is politicking/news talk.

On the face of it these are absolute statements. Refused. For me, if you read the very reasons they state refused, they are also the very reasons why i'm dubious, and even if true, subject to challenge...

"Even if the transaction has been between Seplat Energy Offshore Limited and the MPNU shareholders, responsibility to ensure compliance with Nigerian laws, rules and regulations always remain that of MPNU, the entity that was awarded the assets." - the entity hasn't changed, it is still MPNU.

"“Please be advised that even if the transaction in question were between parties who are not privy to the JOA, MPNU remains the leaseholder of the assets subject to the transaction and the focal point of contact with the federal government of Nigeria on any matter or dealings with the assets." Exactly, MPNU is still the leasholder and is still contacting the govt on dealings with the assets.

"“In this regard, you may wish to note that paragraph 3.1 of the Guidelines and Procedures for Obtaining Minister’s Consent to the Assignment of Interest in Oil and Gas Assets 2021 provides, in line with extant Nigerian law, that ‘an Assignment involves the transfer of an OPL, OML, MF or OGPL or an interest, power or right therein by any company or person with equity, participating, contractual or working interest in the said OPL, OML, MF or OGPL, through merger, acquisition, take-over, divestment or any such transaction that may alter the ownership, equity, rights or interest of the assigning company in question,". MPNU aren't assigning anything to anyone, it's business as usual.

As i said, willing to go out on a limb here, but don't believe the substantiality of this - it would have had to be RNS'd

thanks coolbeans/mrg; i understand the purpose of hedges, was just curious as to what type of hedges DEC utilised; i see the vast majority of the hedging is swaps; and yes i get the hedging provides certainty, but the preponderance of swaps suggests to me that a considerable amount has been lost not only in upside but in servicing that security.

They do hedge a very high percentage - i'd prefer it to be less.

morning banaman; Who has estimated between £7.50 to £75 a share? What detail did you ask them to tell you to validate such? Were you as superior snooty and dismissive on that assessment or was it valid because it was what you wanted to hear?

You nitpick on what you don't like in my post, can't find anything to support/agree with, choose not to acknowledge any detail that doesn't suit your narrative. Maybe you should, for instance, take a look at " without notable progress on production increase/new production", look in more detail at where your little under 30% is coming from.

Rather than sniping at others views, maybe you could detail your own rather than blowing vanity bubbles.

malcolmj; i agree with your sentiment; i get a bit peeved at people salivating at a 40% takeover premium, when i'd rather have a 10% divvy for 5 years; peeved that people can't see that such is worth more; that said, without notable progress on production increase/new production, i don't see the current yield maintaining going forward; credit to them, they are paying out the earnings to shareholders (other Co's should follow their example), but they are paying out the cash throw off out (that frankly very long term holders invested/lost) of previous costs/investments. Going forward (post this year) it will be an enrinching 10% - i don't see the frankly stupendous 20% you suggest as sustainable.

cost of production are key here.

olderanswiser; the answers are all in the thread, but for brevity...

"I'm new to looking at SEPL. The numbers below by posters are impressive, certainly. But, can someone please explain why the sp is still stuck at 2019 levels, rather than making new ATHs in this super-bull market for O&G producers?"
- Well none of us here can quite fathom that, but your answer is sort of in your other questions...

"Is it down to the Nigerian main market listing, and limited float availability in the UK for IIs?"

I don't think it's down to the Nigerian listing, but the limited float is an issue; posters here calculate there is only a 20%ish free float, and the closely held shares are held by investors/pension companies who are more prioritised with sustained predictable earnings/income, than short term fluctuations, see the value here, ergo don't/won't sell; collectively this long term large holding prevents speculation/upward gyration. Because of such, those like me that believe strongly in the fundamentals here, have to chase the price (UP) of an infinite supply, but because of that major 'controlling' holding, often then feel frustrated at it's lack of movement, become impatient, sell and force the price down. In my opinion, the wild gyrations here, both ways are because of such limited supply/ a holding that isn't interested in the SP short or medium term.

"Is it the perennial worry about sabotage of potential income in Nigeria?"

leakage/theft here to me is factored into the price, just as a supermarket factors 10% waste into their pricing; frankly it's an accepted practice and accordingly has no SP impact.

"why hasn't the sp already re-rated on the Exxon deal, even allowing for a non-completion discount?"

Good question; one has to consider that not long before Christmas this was valued at 70p odd, so it has appreciated, albeit it was undervalued then, and is still undervalued now.

Bar the low free float, to my mind the SP/appreciation has been held back by 2 factors; a general waryiness of the governance environment of places such as Nigeria (corruption/bungs etc) and the ESG trend of the last couple of years.

I feel that the governance is becoming more professional/accountable and in the context of current world affairs, looks relatively far more sustainable/reliable. Those same Ukrainain invoked energy issues, have also made a reassessment of ESG averse investors - namely how ESG is it to procure war inducing supplies of say gas, against procuring dirtier oil from an increasingly stable (notably friendly) country that doesn't induce war, but through SEPLAT's diligence, local involvement, is promoting sustainability, local wealth dispersion and positive involvement of all parties. Yes the oil price may drop, but it is those 2 factors to my mind that driven the rise up; they are the change of sentiment to this stock, a stock that prior to oil rise, prior to Mobil, was always undervalued. Good govt relations, and the low cost of

Can someone clarify the hedges for me; are they a fixed price, or are they a fixed minimum price with potential for upside?

seatank8300; good article that; which for me puts to bed any objection of the govt to the acquisition (the NNPC had a representative there). I don't think you can get any greater confirmation the govt is happy with the deal, prior to the RNS stating finalised, than the energy minister saying so,

This is going to fly on that RNS

Just seen your post; truly shocking behaviour; i'm struggling to have belief in a professional company that acts so unprofessionally. And the bill just shows how the partners are profiting and not all shareholders

This share always gyrates quite quickly/notably. It has since flotation; i wouldn't worry about the short term noise, or it's apparent lack of love; the numbers are there, and people shouldn't be concerned by the recent drop. US markets place a lot of importance on meeting/exceeding mkt expectations on earnings, and punish, often disproportionately, any miss, which is what they did here, disappointed that earnings were 'only' $3.94 for the quarter against an expected $4.85

The perspective for me here is they were marked down because the earnings weren't astronomical, only excellent - and $354 million for a quarter, or say £1.4 billion for the year, is hardly shabby/struggling. It is after all a third of its mkt cap.

I don't see the recent interest rates rise as an issue, only a positive, as it tends to drive demand for the security of their products.

Just because this seems unloved (10% shorted) doesn't mean there is some skeleton in the cupboard. Just as believing that this is undervalued as i do, when few others seem to, doesn't mean you/I am wrong. I'm not in the business of pumping holdings, but forget the noise, and hold; it will rise through the gyrations, and whilst i don't see the $60 aspirations ive seen, for anyone holding, there is good appreciation, and what i believe will become a 10% yield for those holding through 5 years from here....

Hi Agd50; point taken. I'm not a day trader, more a buy and holder. I'm holding because of the potential and opportunities, which your post intimates, but i am increasingly starting to agree with many here that feel this is more of a mgmt self gratification club. I do think they are unambitious as opposed to conservative, lack vision. Increasingly i see that they are merely churning the asset - and a number of stocks i hold do the same - the difference is the benefit of that churning seems wasted on disproportionaly high mgmt costs, mgmt renummeration/reward rather than being shared amongst the shareholders.

As an aside, it was raised here about the appropriateness/cost of buying like 20,000 shares at a time every day under the buyback - it does lean to a very relaxed unfocused mgmt style. That said, i find it amazing that the buybacks are predominately at 21 or 21.5p a time......how are they getting a purchase price that i can never get near? As such the purchases are accretive, but in their number aren't really that great a show or confidence, and not going to engender a reevaluation of the SP.

In summary i remain very positive on the potential, but growingly wary of the management priority/ability.

nightpusher; some good thoughts there, that i find balanced and insightful; as you say much maligned. Your honesty with regard to your investment history here is instructive, both as to the risks in following euphoric expectations, and to the value of investment in the long term, believing in the fundamentals of your investment irrespective of the noise; i do hope you get your £2 - your patience deserves such!

Ive been here about 3 years....ive seen the wild gyrations in the SP/sentiment, but always believed in the fundamentals, and never sold out. Yes, i do wish they would kick on with diversification, but frankly without progress, this will throw off the equivalent of its SP in 5 years at $80 oil. You've waited 8 years, i think the next 5 years you'll spend polishing your badge.

I found the accounts RNS openly blunt about lack of progress new production/diversification wise but also about the positive cashflow mechanics of the current oil price - just the override (to end) gives us $100 million, and the statement that elevated cashflow will be returned, shouts special dividend to me. Yes i'd like them to be more ambitous less milking the cow, but that cow alone is going to see us all right.

As for no bargains out there, well GENL is definitely a bargain, but i would argue that GKP and SEPL are similar bargains (all with geopolitical considerations, all subject to wild gyrations).

I hope you keep your bargain for the next 8 years - i will be.

SD235; yes the BGEO price is holding up well; i don't see them selling their stake here, and its improving and see it being held long term as investment yield.

I always consider where there is a large NAV the possibility to take private at effectively undervalue, but that is normally a concern where a large/majority chunk is held; i see there is a wide spread of holders here so don't feel thats a concern here. However i do feel private equity could take this out - offering a 40% premium to SP would look good, seal the deal but really would only be paying the intrinsic value of the Company rather than any 'premium' for the potential/growth.

yes, albeit i feel a large chunk of the pension holding would be govt held related and hence still considered free float, hence thinking we are closer to 25 than 20%.

I have emailed SEP to ask the question regarding inclusion. Agree a small share issue dilutive, but if say MAU were persuaded to reduce their holding by 2%, that could be the difference, and counter intuitively feel would make their smaller holding more valuable.