Data and Catalyst over the next year. Near and med term6 Apr 2021 16:59
In 3-5 weeks the first ever Q filing will be filed on TSX/AIM as a producer, dividend payer and production growth company. After which, quickly Analyst will crunch numbers and release their price targets. We are beginning this journey from a low production base which means a little capital invested will cause tremendous growth. Considering we only produce 1500-2000 barrels of oil a day, 15-20% of production but 44% of rev, a modest increase in oil production will have an outsized effect on fcf. AS well the infrastructure in place supports a +3x production growth.
1) First ever filling on TSX, what to look for:
(in Canadian $)
- current production profile, fcf forecast and at what product price, current rate of dividend implies 27-41 million in FCF, therefore including cash on balance sheet - 8 million in dividend annually = cash balance of 43-55 million year end, therefore they have a lot of cash to develop and grow, what is the amount slated to grow in 2021. What is the forward production guidance? Hedging update, what %, at what price to protect downside and secure cashflow in the event of another downturn in prices. Launch of new website and updated presentation, detailing each area, reserves mix, drilling locations and economics. Updated NPV, etc...
2)- North Sea update
3)-Clearwater Update, when is the first well
4)- Plan of expansion of area where Noel was successful drilled, Reserves attributed to Noel and offset wells
5) Any bolt on acquisitions for cash, adding production and reserves
6) Plan to put a reserve base leading facility to grow company by buying PDP assets
7) Increase of dividend in q3-q4 as prices and new production comes online
8) Long term in 2023 the debt will mature and be paying off by cash on hand adding 4 million a year to FCF that was servicing debt. That means they could increase dividend 50% by simply transferring those payments to shareholders.
Data Points
Dividend yield = 6%
High-Quality Asset Heavy
High Liquids Production
High-Quality FCF
Low-Cost Producer, low base decline rate
Only JR. with jurisdictional Asset Diversity (Canada and UK)
Leverage to international Brent Oil Market, forecast now targeting Brent at $80 = $5 Billion field level cashflow from Serenity discovery
Current Policy to payout 20-30% of FCF in dividends to shareholders, increasing to 40% over time
Completely unknown to North American investors
NAV of +$700 Million USD, trades at a massive discount to every multiple used to evaluate Oil and Gas Companies in Canada
WCS oil and EDM. SWEET are at/near 7 year highs in Canadian Currency
CLEARWATER, CLEARWATER, CLEARWATER, IRR's over 350% UPSIDE TO OIL DISCOVERY, NORTH SEA, UK already +600 million ooip barrels possible and up to 300 million barrels recoverable, 100 million barrels recoverable discovered already
Announcement of a Reserve Backed Lending Facility to acquire more Producing Assets / Take out the remainder of Term loan / accelerate Clearwater Developm
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