Member Info for DRB83

Surely it's a temporary disconnect. We sell one product and if that products selling price increases so do our sales and profits. Energy prices and our SP are intertwined in the long trend albeit every now and again there'll be uncertainty about things that creates a brief disconnect. That's all I see here. Therm back above £5 today. We have 80% of our gas unhedged so the cash will be flowing into the bank as quick as the gas flowing through the pipes.

PUTUP, I'm in for a swing trade so didn't do a full deep dive. I've seen much simpler than that but not familiar with the business model tbh and the contracts with KRG.

If I read your model correctly then the numbers would be:
Revenue $284m
Cost of sales $71m + $80m DDA
Gross Profit $133m
G&A $10m
PAT $123m

Cash
From above $123m
Add DDA $80m
$203m
Less Capex $120m
Cash in period $83m
Open cash Jun22 $231m
Less bond payment $100m
Ignore dividends
Net cash at Jun23 $214m

$123m PAT compares unfavorablly to Dec21 $163m despite producing 1.6m gross extra barrels @ $10/barrel more. Also Vs the H122 results of $163m PAT.

Does all that stack up at your end.

Thanks for the headache PUTUP and Hob lol, appreciate the notes but I have to say, I'm out. What a complex model.

Thanks PUTUP. I'm new here so it may help me understand your breakdown if you can tell me why 36000boe/d @ $84 for 182 days equates to $263m in revenue. I get $550m so there's obviously some deductions going off that the lth's will be more understanding of.

I suspect it may be to do with the r factor but don't fully understand that.

Your $83m cashflow is significantly lower than my forecast which I have built from the last set of results.

PUTUP, that's kind of the question I asked you. If you work out the cash flow to Jun23 and it to the June23 cash pile, deduct the bond payment. What do you get as the closing cash balance?

Take that off the current mcap and what EV are you left with. Divide that by the earnings expected in FY23 and you get a very attractive ev/e ratio.

Correct me if I'm wrong by all means

PUTUP

What pe do you get if you exclude the CRP?
What forward pe do you get when you look 9 months out?

Do any of them suggest GKP is fairly priced?

The only thing holding this back is Baghdad and Turkey. The rest of the points raised are just white noise.

They are only disappointing when compared to your expectations. They are not disappointing when compared to a pe of ev/e of 1.1 and a dividend return of 36%. Crazy and obviously well undervalued. The issues with the Iraq government must be chopping at least £2 off the SP.

$330m FCF to Jun23 if we have a similar year to the one just gone. $230m in Jun22. Pay the bond back $100m so a nice $460m after capex spend to distribute to shareholders. That's about £1.80 in cash by Jun23 not including any benefit from the $120 capex spend which obviously there will be. Oh and that's just based on 45kboe/d.

Assuming oil holds between $100-115 then £1.80 per share in cash is the minimum of what can be expected by Jun23.

Profit is profit so yes even at $20 we'll be self funding our further exploration which is a significant mark up on where we are today.

The market appears concerned about the current trend of the iron ore price so hopefully this will change over the next 6 months.

Annual profits Lyndon

I've arrived at $87 by using the CFR and FOB prices from Fenix report and comparing to current CFR price. It's a guide but will be there give or take a $ or 2. We still generate $20/t at today's price.

A more positive way to look at it is every $10 increase in Iron Ore CFR is around a $11m additional annual profits when we're fully producing.

$50 increase is $55m extra profits.

The growth of this share is now heavily linked to the iron ore price imo.

Considering the fall in SP today it's probably best we go back to discussing UFO selling iron ore at $60 per tonne margins and making $80m profits per year. I much prefer this picture to the current one.

Agreed Smiller but the current FOB sales price is probably $87/t not $100/t. Subtract the $65 Fob costs, less the probably $2 AA royalty and your left with $20/t

Well at least we know why the $800m of iron ore Fenix are sat on is only valued at $30m.

Come on China/India start buying some iron ore.

Smiller, my understanding is that the current Iron ore price is $100/t and that is shipped to the customer. Therefore we have to add shipping costs onto our FOB costs to get a like for like comparison. Unfortunately, it isn't $40 profit. It's probably more like $15-20/t

Fair point HH. I suspect the smaller vessels will be significantly more which would explain Fenix higher costs. They filled 23 vessels so averaging around 60t per vessel.

If you add $10/t on for shipping then we're getting very close to breakeven with the current iron ore price. We need to see some improvement in ore prices over the next few months

Thanks EWT but that's all in the FOB cost which Bill has already told us is $65/t.

What we do know is our break even point iron ore price is probably about $80/t. Fenix would have to stop selling at around $90-95/t

That's worth something.

Thanks Max

So $25/t exc royalties to AA (should be no more than $2 per tonne) so say $23/t for 1.25mt is say $29m. $3m admin costs gives $26m profit or £20m.

I think it's fair to say most of us here were hoping for more and maybe the suppressed SP is a direct result of the declining Iron Ore price which is now $99/t

Max, what is the current shipping rate out of Geraldton. The graph you state is just from WA. What other costs are incurred relating to Geraldton that Port Headland don't have.

Fenix appear to be right on the breakeven point at $100/t CFR