Member Info for deepbluediver

transfer of wealth from the impatient to the patient -

well, i bought another 15,102 shares @ 19.7852p....

shopping day for me today on HE1

- beat those muppets outside Selfridges queuing for hours throwing money down the loo

for dividends, i am with AT&T. bought in at 27.8. yield is still good at current sp.

Dai,
I thought i'd take KIST discussion away from HE1 board so its clean. Recent COVID19 downturn presented an opportunity to buy into legacy and bellwether companies. Shell was a great example. I did invest in Shell at £9 but exited when management decided partly to move to renewables. in my view, either do a Dong and convert fully to renewables (Orsted), or do an AkerBP and stick to HC. all this wishy washy positioning will cause trouble with valuation over time (its not the first time).
AIM co's: From my previous life experience, I generally avoid buying AIM E&P company shares and prefer to stick to industry bellwethers - namely Shell, XOM and Schlumberger. Strong fundamentals and safe bets particularly now I suspect we are about to enter a commodity supercycle (plenty of articles online on this).

Why KIST for me?
1. track record: AA has tremendous track record from his days in Igas, Rockrose.
2. legacy look: I didn't rate any of the fields from Igas or Rockose and I know them well - I was working on those fields before AA had even thought of forming RR so i didn't invest. However, its not all about assets, its also about managing CF and cash waterfalls and dealing with city folks. I was impressed with what AA did at RR even with those poor portfolios - respect to him on returning cash, maintaining an upward trajectory on sp and then exit, therefore i decided to take a closer look at KIST and AA. Management and board composition is key.
3. I think analysts are unified in their view that KIST's first acquisition is miles ahead in quality, upside and NPV than RR or IGas. I am too.
4. focused on HC (gas) but clean ops (lowest carbon footprint). I like this.
5. Asset: see CPR published 15 Apr 21 for valuation [https://newsweb.oslobors.no/obsvc/attachment.obsvc?messageId=530295&attachmentId=215065&obsvc.item=1].

Potential Value
- we know equity in pot at IPO: NA
- we know equity raised recently - £52.5MM (~EUR 61MM)
- we know transaction value: $262.2MM or EUR 220 MM (base offer) + $194.5 MM (defered with trigger)
-We know costs: BOND 1: 90 MM EUR @ 8.75%, Nov 24 maturation to replace incumbent + BOND 2: 60 Mm EUR @ 9.15%, maturing in May 26.. so;
total raise: 211 MM EUR (EUR 150 MM from bonds and EUR 61 MM from recent equity raise)
transaction cost: EUR 220 MM minus capital adjustment* (Net ~EUR 200MM)
*expected annual FCF in 2021: 22 MM EUR (BTAX) @ CPR EUR4.28/MCF gas price assumed, its higher than that. so expect circa EUR 40MM FCF pretax by YE 2021. based on economic date vs completion, i expect EUR 15-20MM capital adjustment to KIST. *
- total costs of funding:
--- Bond 1: (EUR 90MM + EUR23.625MM) + Bond 2: (EUR 60MM + 27.45MM) = EUR 201MM
- All pretax: valuation (nominal) on reserves & risked contingent resources (nominal) for TONO [~EUR 2B total] – see CPR tables.
huge upside. My expected net sp circa £2.26-£3.73 post closing (a bit more work to tighten spread, I considered only base, no contingent here)

Dai, let me reply on Kist BB.. give me 30 -45 mins as i just left home - out for a walk at the moment. I will share key dates too and what to look for.

Sold some of Kist on ISA and swap it to HE1 (top up) ... tiddly amount - 31 500 shares @ 22.549p. Plan to rebalance back at some point since its for ISA.

with DM going live tomorrow, I wasnt surprised to see a bit of a shake / minor dip today. A small retreat (still above Cannacord target sp pre spud), then DM goes live tomorrow, followed by a rocket sp heading into drill ..

Ive passed my exit point with the recent sp (3-4x) and now moving the goalpost to 20x on my initial investment - £1 and beyond...

too late? errr... spud is in June. its May now, and its AIM. We are only just counting down now before the rockets shoots to the Exosphere.

Mr ST - That story was from Colombia some time ago. tanks were still rolling in Bogota town then. but what a fun place - better than London for a night out. Peru & Argentina was also not so bad, no bullets flying around so they are in my good books. Not done Chile yet (too late now).

If my SIPP lands after drilling its fine too. hopefully my next phase of investment in HE1 subject to our upcoming drilling success (less risk on SIPP - thanks again for the shared view), and i am awaiting giddily for the listing of Oxford Nanopore to pour my SIPP into....

Glib - enjoy the profits and that is one diamond hand you have to hold so long. Dip back in when you can and don't go off on the chart sharing - muppets like me who still get confused charting really find it helpful.

Harpmandoodle

Blind is correct - old 2D seismic. Now with infill, they have their glasses on. And with 3D coming, that's 20-20 eyesight sorted.
I would be appalled if they find a better target with the glasses on but decided to stick to the old target... why stick to old target if a better one was found?

its called high grading.

Noix - cant agree more. I have a great track record on CFD - 100% fail. bar one which covered costs and maybe a cup of coffee. HODL and sell .. all the way. (IG app is wonderful and the desktop app allows all sorts of charting which I am still rubbish at.)

@ GG
In my previous life, i had to manage an oilfield in a very remote area in Latin America where guerilla warfare was very active. Like most expats, we waltzed in a few plane load thinking we were the bees knees. well, that didnt pan out too well especially when the wellheads were located in villager's backyard and they come and greet you with an automatic rifle (or two). It all got resolved when we made a deal with the villagers to train them up and hire them in full - it took several years of hard work as the part of local inclusion were missed out at the beginning, something HE1 is taking care off which I am very happy to see. By the time i retired, the field was 100% local run, uptime was in the 90+%, reserves significantly... totally great success. but very painful lessons learned. and a few near misses.... Keep it local, as much as possible.

Mr ST. i am jealous on your SIPP top up... ... by the time mine gets transfered into a SIPP, this sp will be £1 or something....

Mr ST
What caught my eyes is the inclusion of local community, hired to work for the project. This is very good especially when working in remote areas - both to manage costs (expats will want an arm and a leg) but also to ensure project success / continuity with local community support. Local employment (and training) will be key here.

Thanks again guys. Sincerely gateful for your views and thoughts. Will dwell and sleep over it. For a few days (until pension moves to SIPPS) then decision time....

thanks guys.... its easy (me) to "lost in all this excitement". grateful for the reminder and recent examples -> to keep it sensible (dont really want to lose my pension).

Phantom, Mr ST, StewartyBoy, thanks...
If it works, I might just dump enough into HE1...

Can I ask for some help please with a stupid question - what is the threshold before we have to fill in a TR1 form? Googling it seemed to give me everything else except the threshold limit.

HL promise the earth and IG keep saying next week they will have SIPP account ready (like the 6th time now)... really hoping it would get done before we hit TD. trying not to feel hopeful though. lets see....
else, need to find another "once in a lifetime" opportunity like HE1. they don't come often...

Thanks @dai2belts.
Good link - and good target sp at or around spud... I almost spill my tea just now seeing the new 30p target... bring it on!

"https://www.youtube.com/watch?v=9AL_p1eQNMI&t=303s"

I am now contemplating moving my whole pension pot into a SIPP to buy this share... (checking if this is doable).

Mr ST, happy to. sorry my notes below is a bit here and there, a bit in a rush today at home.
- Lets start with objective. Like He1 investment, I am looking for a min 3-4x multiple on exit within 12 - 36 months of investing. He1 obviously is unique here.
- AA had a good track record at Rockrose (RR) although I personally don't think RR as a company was any good, but the return to shareholder were amazing (multiples were good).
- AA following sale of RR to Viaro made a ton of cash, and this time round, he opened his wallet, with enough skin in the game for me to be comfortable to invest along him. He didn't with RR, so you see where i am going with this (for E&P play).
- I bought in early days of IPO, at risk, as the company was an investment co, not a trading co. I parked sufficient cash early which allows me to add and dilute later, or exit with minimal losses for whatever reasons. call it a best guess punt.
- Kistos is about to move from investment co to a trading (in the next 2-3 weeks I think) following their recent acquisition of Tulip Oil assets. This is key.
- Recent capital raise were oversubscribed, Institution and PI (via PrimaryBid) got 40% of ask.
- Completion for the acquisition is yet to happen, awaiting formal approval. but these are formalities.
- RR's asset are dogs in my view.
- I like the Tulip deal and asset, pay fair value for production (with upside) and large 2C for rapid development to get the multiples, taking them from 5500 gross boepd to around 15 / 16k gross. The deal is paid via recent equity raise (although they had equity already** i will come back on this point) and the rest through bonds. Saying that, coupon seems a bit high but checking with friends in the city, apparently its not bad and its me who has lost touch a bit. therefore he has plenty of FCF as the coupon payment is easily manageable. 5 years horizon to then refinance or settle. Unlike RBLs, he has a lot of room to manoeuvre.
- with equity intact, I expect AA to run several parallel M&As so i expect 2 further deals to be announced by Xmas this year.
- *** the fact they have the original equity intact + further equity from capital adjustment on the Tulip deal from economic date to completion + FCF that comes with the asset , this tells me he is already gearing up for the second deal, and a 3rd.
- the current sp hasn't yet fully factored in the Tulip acquisition as its not yet approved. hence why I bought further chunks recently.
- fair value post Tulip likely around 230-310p (i will revert back once I finalise my DCF model).
- Q10 field has the lowest carbon footprint (of any development I know of), therefore he has the city behind him and therefore I expect some premium.
- by year end, I expect 2 further deals to be announced, 1 in July and 1 towards year end.
- https://www.malcysblog.com/2021/04/core-finance-ceo-interview-andrew-austin-kistos-energy/
- My target sp by Xmas is £5.

Please please DYOR

I had put a nibble into SCIR some months back in haste (along with another 5 oil co's), with a view to tidy up and top up once due dil was done. having done some homework on the management team and directors, I sold all. I am now left with only 1 E&P co in my portfolio (KIST). Please DYOR. Sorry for this, it is HE1 BB so this will by my last post on it.