Member Info for G_G_G

Each to their own Tony, but my position on divi boost versus buy-backs is unchanged. You like running the numbers, so explain how we can buy back shares in any worthwhile volume (e.g. 10%) without the divi or production (or both) decreasing at today's commodity prices? It simply isn't possible to do and if I had a choice between 10% buy-backs and either or both of the other measures decreasing then it's easy to see the right option. Buy-backs are great if you're throwing off tons of cash, grossly under-valued, and have limited development opps. Good example is SQZ. We're not throwing off tons of cash, and we have plenty of development opps, so not the best option imo. This is especially the case if you want to reward shareholders as well, which is the right thing to do.

Not long until we find out. It will be interesting to see what Majid decides. If he goes with buy-backs then so be it. At least he will be doing something and not ploughing everything back into production. We managed to grow production double-time last year. We should consolidate and maybe grow a little if poo ad gas stay down here for 2023. But if they increase then excess cash can / should be thrown at more development. It's a WIN across the board. And if poo and gas go back to H1 levels for most of 2023 then we could go near 30kboepd and still have pushed the divi by 25%. Unlikely, but goes to show how having production variable means you can't lose and only grow even from these levels, whilst rewarding shareholders who have stayed for the ride. Just 1 week until we find out. AIMHO GLA

Source, buy-backs are a great opportunity for PIs and IIs to sell into. That's about it. You'll get a small sp bump and when investors realize there's not much left in the tank you'll get even more selling until you end up in the same place.

Btw, have you considered the numbers on how much is needed to buy-back just 10% of our float? You're looking at £30m. Then you need to add another £20m just to hold the divi relatively stable (yes you get +10% yield but that's bugger all). So £50m just for 10% buy-back and +10% divi boost. I believe Tony ran the numbers at WTI$70 and came out with £60m fcf (if memory serves me correct). So you've got £10m left-over in this scenario, which means your production is likely to decrease by about 2kboepd (keeping in mind £30m is estimated to counter 12% decline rate). So you exit 2023 at 22.5kboepd and a 10% divi boost. Income SMALL WIN, Production LOSS (-2kboepd), SP FLAT (if lucky).

On the other hand, just for arguments sake, you could add 50% to the CURRENT monthly divi payment for £30m. And put £30m toward maintaining production at 24.5kboepd. I'm quite certain this scenario will result in a better sp because you get a huge income boost, which means LESS selling as PIs and IIs have an incredible yield and incentive to sit tight. Combine this with investors chasing that yield and the sp goes up and stays there. Income HUGE WIN. Production FLAT. SP BIG WIN.

Best move imo is boost the divi by 25% and put whatever is left-over into production. That means £25m divi payments. And £35m development. Depending on where we drill it means +25kboepd even at today's low prices. Income BIG WIN. Production SMALL WIN, SP AVERAGE WIN.

Whatever way you want to play it the end result of boosting shareholder income is more people buying (chasing yield), and less people selling, meaning sp goes up alongside income. And sp moves will be less extreme as yield will always provide floor. But a buy-back is expensive and does very little for a company like ours as it takes away from income and/or production. To frame things from my pov, if Majid announces a buy-back of 10% and no divi change then he can have my 4.5m shares as I'll be no better off from an income perspective and production will go backwards, which makes the company less attractive long term, and to any would be buyers. I'll sell when he's buying and maybe get out for 25p if commodity prices stay around here. But the sp will be back down here once the money dries up because there'll be plenty of other people just like me doing the same.

Whatever Majid decides to do I think the best thing for us as shareholders right now is for a t/o offer to land. A would-be buyer can take my shares for 35p any day. AIMHO GLA

Will do Older. Even better if everyone can send the same post...

They need to do something of note and PR the @ss out of it. Not being known is a complete own goal. Look at the videos on your screen now. Do the same with a catchy headline about strong growth and massive income and then do interviews with Proactive, Malcy, vox etc. Then promote the interviews on vox and Proactive. These things cost absolutely nothing but could add 50% to the current share price if accompanied by a strong divi / development announcement. Really hoping for a bid now. They can have my shares for 35p.

Unknown company, very low volume, and a declining oil price. All factors that create a slow decline in the share price. You get this type of selling by PIs for different reasons like fear of a recession, or they simply need the money to pay the bills. And the issue with being unknown is you don't have a lot of people buying their shares because they believe the company is a bargain. Majid needs to give the market a solid reason to invest here. But then he absolutely needs to get out there and do the rounds. I think Malcy is a f@cking joke, but he has a decent following and the fact Majid hasn't spoken to him when based in the UK is absolutely ridiculous. Same with that Justin Thwaite d!ckhead. Do interviews with vox markets, proactive, and on lse. And then put the video interview from here in the side bar. The number of times I've clicked a video link here is crazy. There must be tens of thousands of active AIM investors on this board weekly who will be exposed to it.

To me this complete lack of PR speaks to how mgt don't care much for the share price, and more concerned with boosting production. And the fact bonuses were linked to production (and relatively easy targets) perhaps speaks to why they're more concerned about production numbers. Staying quiet and expecting people will find out about our company is doing nothing and completely failing at an important part of his job as ceo. I'd prefer his bonus was linked to the share price and nothing else. I think that would force him to find the right balance of production growth and investor returns to make this company more attractive. And it would also force him to do the publicity rounds. We have a fantastic story to tell, but there's no point getting a 7.5% annual divi if you're always 50% under-valued versus peers because no-one has heard of you. AIMHO

Agree Stas. As has been mentioned they also need to be consistent with most companies on how they report fcf as 30% payout would be considerably higher this year if it was happening.

I didn't realise that Stas. Good to know. Next week or the following Monday then.

Good thinking Tobin on the added % on higher volumes. I wouldn't go with an extra 2% (more like 1% maximum), but the thinking is spot on imo. The other thing they could do, as pointed out by Superhuman, is communicate to all ringleaders that any further sabotage or hijackings will result in +10 year jail terms. Then remind them of the deal they agreed and potentially throw in a sweetener as per Tobin's suggestion. But above all once the agreement is signed they need to seriously punish any f@ckers who veer from it. In the meantime I expect the sp to continue dropping until an agreement on the social unrest issue. With weakening commodity prices it could drop back to the 20's, as silly as that may sound given their resources and potential. Rebound will be huge if they can get the agreement signed though. AIMHO GLA

CT the same could be said about growth. We've added 30% production in 12 months from a very respectable 18k base with supportive commodity prices. And what has happened to the sp? I'd say the only thing keeping us buoyant at the moment is our dividend rate. Adding to the divi should in theory add to our base. But even if it doesn't, at least we'll get higher income. So with a divi bump we can't lose. And with higher commodity prices we should get the added benefit of the market knowing we can add to production, rather than maintaining it at our new, much higher level of 24kbopd. Either way we should find out on Monday as the news is getting pretty late now by i3e divi reporting standards. GLA

Stas, I completely agree that political security is key to investing in many oil companies, and thankfully this isn't an issue with Canada. So it's great for us. Funny to think that it f@cked the UK O&G industry though with recent outrageous WF taxes. I'm of course hoping that Majid doesn't sit on his hands when it comes to shareholders and provides us with a step up in dividends, however big or small it may be, so that I don't feel the urge to sell down and put my money elsewhere.

Bunkatron, again you'll need to point me in the direction of $60m fcf for PTAL @ 12.5kboped and $75 Brent. I haven't seen such numbers anywhere and the ones I have seen would suggest it's more likely to be $60m fcf PER QUARTER. And unless you have numbers for PTAL decline rates (I don't) then you cannot look at what wells were flowing at initially then say only XXkbopd were exported so the declines must be huge. They've been constraining their production due to being unable to export more than 12-13k in summer due to river levels, and no more than 14-15k due to fleet capacity at the best of times. They've also exhausted storage. These things are officially reported in many places, so can be seen as facts.

I'm not pushing PTAL here, but I'm quite certain the numbers you have mentioned are wrong Bunkatron. The one major issue it has, as pointed out by Stas and myself in other posts, is political unrest. Some locals are militant in what they're doing, and until they are brought under control (appeased or jailed) then high risk will remain. This extends to the pipeline as well. Until the locals stop what they're doing the pipeline is a huge risk. Funny how they talk about their environmental concerns only then to sabotage the main pipeline and board boats laden with oil. They're simply local commercial terrorists looking for a pay-out. So agree PTAL is too risky now. Having said that if it gets to the 20's again it's probably worth a punt. It literally has one problem, social unrest. If they can get this under control then it will be a money machine, even with $70 Brent. AMHO GLA

Can anyone explain how there can be a 5% swing on the poo in the space of a couple of hours today? Absolutely bonkers what's happening.

Bunkatron, yes I know they are owed the majority of their net cash position by Petroperu, however this will be paid in the coming 12 months with some payments having been made recently. As for production levels, they're being constrained due to the fact they're still building barge support and there has been an almighty drought impacting amazon water levels. Having said this the barges still managed to carry +12kbopd last quarter. Providing water levels continue to rise they expect to be able to take 15kbopd by boat on current capacity. They're also continuing to build barge capacity. And if the pipeline re-opens next year, as expected, they will be able to export +20kbopd, but have the optionality of going by barge if the pipeline continues to be interrupted. I haven't seen any information about decline rates of wells - just constrained production levels. Do you have a reference to this at all?

I'm not saying the company is without risks, far from it. But they're doing a pretty good job of managing the **** happening around them to still be able to get +12kbopd exported. And they're throwing off cash when the worst that could happen, has happened. Not sure about £1 next year, but if they can average a very doable 15kbopd at an average Brent price of $85 they'll make circa £200m in fcf. And that's on top of their expected net cash position at year end of circa £90m. That's a lot of money to redistribute for a lightly traded £350m mcap company. Hence why I think recent highs of 60p are absolutely doable by April 2023. I'll let you guys know if I decide to buy over there, which will depend on Majid does anything for us here.

WTI on the move back up. Just need to get back to +$80 pre-Xmas and have Majid drop a smart bomb in the middle of the climb. January divi announcement surely tomorrow or Monday at latest. I'm also expecting the 2023 development plan to be announced before the end of next week. Quite a lot share in the coming days...

Agree DM, providing the 'small increase' is 20-25% on today's payments. It seems like a lot but it's literally £4-5m in additional funds. And as I've said, they ploughed nearly $100m into development this year so it's time they put a little more into our pockets. That 20-25% increase will instantly re-rate us by the same amount, and perhaps more if they do some PR for once. With a little strength in commodity prices we could be back to 30p and still getting a 6% yield. On that note I'm hoping we've hit bottom on prices. Hard to see how they could drop further but who knows.

Less about the yield and more about what Majid can do to boost the sp Tony. He has ploughed a huge amount of cash into production, which clearly hasn't helped, and he can afford to re-route an additional £4-5m to shareholders who have seen the value of their investments go backwards if they bought in the high 20's to 30's. There's not much value getting an 8% yield (annually / paid monthly) because the value of a stock has retreated by 30%. And for Majid to calculate fcf after attributing capex to development, and then say their policy is up to 30% of fcf to shareholders, isn't really accurate as you've pointed out.

As for me losing my mind, not really. I was going to ask if you've taken a look at PTAL? If not it would be good to get your thoughts. They're throwing off huge amounts of cash for their MCAP, and production has been heavily constrained the past few months. And as much as they don't pay a divi now, they've committed to doing so from the end of Q1 and buying back stock. They will have in excess of $100m in cash at this point and generating circa $50m every quarter even with Brent @ $80-85. In summary, I think that if poo is near or above $85 next April their SP will be well north 38p. I'd hazard a guess of at least 50% higher. They can pay a very high divi, and will be able to buy back stock in a significant way in their lightly traded company. Their being held back from doing so now due to bond re-payment terms, which lapse by end-Q1. Either way I'll only shift money in that direction if Majid does nothing to increase our income as I'd rather go for income + capital appreciation, which is an opportunity offered by PTAL. Having said this it will be just my luck they'll introduce a windfall tax or something just as stupid. I do however think it's worth taking a look and letting me know your thoughts.

Funny that a few hours after I wrote my last post and mentioned PTAL there was an attempted coup by the now ex-President. Peru isn't quite Kurdistan, but country risk is easily under-estimated until something happens. Also says a lot about being invested in safe jurisdictions like Canada in today's times.

C'mon now Majid, give us something!

Hi DM, you do realize on the current monthly divi we're paying an 8% yield...? As for where I'd put my money if I sold down, funnily enough I'd probably stay in cash for a bit in the new year as I have a feeling that there will be a fairly chunky correction in Q1/2. But if I was to invest in O&G then I'd probably throw a decent chunk at PTAL. Bit risky, but even now when things haven't been going well they're still throwing off immense amount of cash. They'll also have over +$100m in net cash by the end-H1, and will have started paying divis. Finally, they will be also able to buy-back stock in a significant way next year i.e. in 2023 they can buy pay a double digit divi on today's price, and buy back 15-20% of their stock without breaking a sweat. And that's at $70 Brent. So if it doesn't look like we're going to get back to 30p and paying a better dividend then I think I'm better sitting in cash or somewhere like PTAL. The good thing about the divi at the moment is we seem to have a lot more support than other O&G companies as commodity prices are taking a beating. And for me this is all the more reason to increase it. Our base sp will rise even in this environment, and if commodity prices bounce back we could find ourselves back at 30p in a matter of weeks, especially with a 20-25% hike on today's monthly payments. It's literally £4-5m more they need to pay, so very little.

I also think some of the growth stocks that have been hammered over the past 12 months could be good to take a position. I think big tech (Alphabet, Amazon etc), and small online retail (THG, Boo, etc) have more to drop in the new year, but feel there will be some good bargains on offer in H2. They're also likely to be t/o targets as inflation and the cost of living crisis starts to ease in 12 months (imo). Sadly my other loved resource stock, HZM, has already been on a tear so not as happy piling into that company at the moment. Either way I await Majid's next move, and I sincerely hope he does something worthwhile for us. AIMHO GLA

That's a fair chunk of 'real fcf' left over Tony. No reason why they can't give shareholders a 20-25% increase based on these numbers. And we still get production growth. On the debt repayment, aren't we net cash at the moment...? Agree their calculation of fcf is bull****, which is why the whole 30% element irks me. If we were paid 30% of 'real fcf' this year the dividend would have been close to 50% higher. So in a way they owe us :)

Hi Tony, I don't think there's any moderation in what I've been saying. If you recall I was saying they could hike the divi by 50% and still grow production even if commodity prices eased by 15%. It was more to illustrate how far we could go with the dividend, rather than what I think is reasonable or even possible. From memory your figures showed it was possible to hike the divi by 50% and maintain our 25kboepd production with circa £5m spare in the event of 15% decrease in prices. So possible, but I agree risky to do it in a choppy macro environment. Having said that I don't believe we're going to average WTI$69 for 2023, but recognize it's a possibility. So +15-25% for me and I'm happy. That should be doable and provide a decent buffer in case prices do go south, but equally give the the ability to increase production if we bounce back to averaging +$80 WTI next year.

Joe, I'm not sure how Majid will be able to square his stated aim of delivering greater value to shareholders and addressing the sp disconnect by just continuing to do the same thing. He is competing for the same O&G investor money as other companies that are looking to return more money to shareholders. So if he wants the market to notice and money to come our way he'll need to increase the dividend and not try to spin some **** about the divi increasing because there's now 12 months at our current payment rate. They ploughed a huge amount of cash into production this past 12 months. They should aim to consolidate and marginally increase this level. But if you want sp appreciation then you'll need to give would be shareholders more reason to sink money here rather than in other companies. Imo divi yield is the best way to do this in the current inflationary environment. It's also the cheapest way to address the sp disconnect. If he holds things at this level with no divi increase, special divi or buybacks (my least preferred) then I'll be selling down. That's my position and I believe many others will do the same so there's a greater chance of the sp staying here or even dropping from these silly levels. And one thing he absolutely must do is hit his NOI and production numbers. Another slip up on this and we'll be back in the teens. Majid needs to rebalance some of next year's fcf from production to shareholder value. If he does this and gives us a 15-25% divi bump then I believe we'll back in the 25-30p range within a week or two. And I, like many others, won't be selling, just accumulating.