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In Paraguay, PL is taking this company on a dangerous journey track in my opinion. Risking a very material amount of money for what; to save face from failed results in the past. If I was on the BoD, I would argue against it and try to rein in these high spirits. Use the $10m to pay down debt including the very high rates of interest paid to PL via IYA. Return it back to shareholders - that would be novel. Without a farm in/out Paraguay is a bridge too far for PPC in my humble opinion.
It was me and whilst this may be a very acceptable way to value NPV10, I am cautious of reading too much into 2P NPV10 figure in comparison to the present mcap
Using $68 to value NPV10 when they are not getting anything close to that seems cavalier to me. The reserves rearranging of deck chairs has been well flagged and who wasn't expecting the shift to EV/PF at the cost of PG. Market has already rewarded shareholders by the price not have fallen - that's a relative rally. Looming concerns and uncertainty with Macri in Arg and the October elections. Also my bugbear of related party loan agreements. All that said I remain long PPC
Sharp!? Look back at their holding history in PPC. They've been in PPC for ages and in a big size. They must have lost an absolute fortune.
PL lending to PPC at 12.5% over LIBOR is very much getting on with business and nice work if you can get it
What steps have been taken to determine whether the related party transaction of $4m loan by IYA at 12.5% above 3 month LIBOR is fair value. With a strengthened balance sheet and good cash generation, one would expect a lower rate even if unsecured.
Is the tide moving against him? I hope not but my anecdotal evidence suggests not as popular as before. Of course we have elections upcoming the result of which will be closely watched at PPC HQ.
I don't see the SP in that light. Look at the relative performance and this has outperformed LATAM oilers massively. The rally manifests itself in a share price that hasn't fallen 30%
think he said $51 or $52 in Rio Negro and lower in Salta Province
AParky - having listened to the call this morning that same point on discount to Brent put me out a bit as well. Seems to be tracking market prices down but didn't on the way up. I too thought that we were still getting in excess of Brent. Given the economic issues in Arg, inflation being chief amongst them so you can understand a desire to see prices fall fast
and Malcy ha always been a bit too John Bercow on PPC for my liking. Would appreciate him more if he called them out once in a while - I recall the easy ride he gave on the Chinese pumps at PG.....and before you say it I am as long PPC as I was when I bought them the first time in Aug 2017
Kid1 - I take your point. Overall growth has been so spectacular YoY that it clouds your question on 600 barrels. The only place they could lose 600 barrels is at PF/EV. May be the first new well has fallen back from 600bopd or it comes from the pre-existing wells where I recall from the last conf call the ops guy implied would had been as prolific as hell. One would like to think the production arithmetic was raised as a question in this conf call.
Northern - I think Paraguay is personal for PL and think potentially doing your nuts to the tune of minimum $10m (what 10% of mcap and Lord only knows what % of free cash) on a temperamental former lover is cavalier to say the least.
good question. 1. dropped back?
hope so! It must be a very exciting time to work at PPC - so much going on.
Those sitting and waiting for the share price rise would do well to remember that we have already had it. The re rate for fantastic performance from the team has already been awarded. It is slightly more nuanced but without doubt PPC has been one of the top relative performers over the last 3 months and 6 months. Without those operational successes, sentiment would almost certainly have had this at 6-7p IMHO. Before you say it, yes I remain long. If the past 6 months had been in 17 not 18 then we would be trading at 12 - 16p.
looking at the newsflow slide there is a lot to be encouraged by Reserves update could have an impact on the price
To be clear I do support the Paraguay drill and am long PPC but to say a duster wouldn't hit the mcap is wrong. The cost is almost 10% of mcap so there would be that as an impact to say nothing of management credibility which has recently started to be restored. Yes house broker in their valuation assign no value to Paraguay but if you think a duster won't hit the price you are way out. This is why a farm in would have been preferred to share PPC's scarce resources on drill cost.
C) they are committed to a 2019 $10m plus drill in Paraguay where form has not been on their side and farm in interest is notable by its absence despite a long marketing period and two separate agents. D) PG where most reserves sit is more of a trickle than a gush and has been dogged by problems E) The highly productive PF/EV fields where all the success is coming from has relatively low 1P and 2P reserves although this will increase it is still relatively low.
As FinnCap house broker said this morning, you have to look at relative performance as well as absolute performance. Other LATAM oilers have taken an absolute battering YTD whereas PPC are about level or down a touch. PPC also outperformed AIM O&G YTD. Don't get me wrong I see value here and the back story improves every month but you have to consider relative performance. That said, when they have hit from one well the whole BOPD target for 3 wells and the bid drops 1.2% you have to wonder
Agree underplayed. The reserve update from last March includes almost nothing for EV gas which is clearly not the case imo.