Member Info for G_G_G

Looking forward to their 2023 update Tony. I note the final point not happening though. They ploughed all of the excess funds into more development. I don't have a problem with them increasing production in this environment, however they should have taken at least $10m of the additional $50m development funding and put it on the dividend. I'm hoping they will correct this error in the execution of their 2022 plans next year given we should deliver at least the same $200m NOI. Imo they should aim to increase the dividend closer to 0.2p per month (£28.5m total payout), which I'm certain would create a significant sp re-rate (good for Vmax and good for 'Zero'). At this level they would be paying a 6.66% yield at 36p, which makes the company a huge buying opportunity for PIs and funds all the way up to this sp.

5) Excess funds above and beyond Capex and Dividends - they will look to return to Shareholders via buybacks , bonus dividends or additional acquisition's

You're completely missing the point VMAX. If you have 100k shares and they hike the dividend by 50% do you think you'd be more likely to add another 100k shares if the yield is 10% when you're wanting to buy? Do you think other investors would think the same thing? Do you think IIs would be interested in taking a significant position? As I've been saying it will generate value (what you seem to care about), plus income. So with a 50% hike (£10m) investors like you will gain 10p in value from this ****ty level, and receive £210 per month (rather than £140). But you could get an additional £210 per month for every 100k you add. Hence how value is created and income are created. Everyone wins. It pushes up the sp because it keeps current investors 'sticky' and new investors need to pay more for their shares. It also provides staff and mgt with a greater income after they've been given so many confetti shares in the past.

As for knowing plans and future proposals, well yes I should know them but I don't. After all this is a public company, so such things should be clear. And like all public companies shareholder value needs to be a priority. Not jam tomorrow like you've been describing, but jam today and tomorrow. You've clearly not been here very long as the 'jam tomorrow' has been happening for some time with acquisitions, production increases etc. and yet the sp doesn't reflect peer value. It's mgt's job to fix it. They spent an extra $50m!!! in development costs this year. Production has increased but the sp hasn't to the degree it should have. They could have easily added another $10m to the dividend and still had a monster $90m program. So production increases clearly don't equate to value increases. They need to rebalance fcf between dividend and development budgets. They have the NOI and FCF to do this.

Appalling description of i3e. I hope the PR or mgt teams get in touch and explain the company is built around Canadian operations, forecast to exit 2022 at +24kboepd, generating $200m NOI, and pays a market leading dividend etc. Who's going to join this call other than existing investors...? New money generates value and they can't even get a decent f@cking company description for an investor session. Amateur.

Wow, someone's going to lose their job soon. Then again the Troy party is so corrupt I wouldn't be surprised if one of these fund managers is friends with Jeremy Hunt or some other pr!ck in government who knows a tax rise is coming down the line. Just like how Kwasi met his fund manager mates who shorted the pound before the catastrophic mini-budget.

Does anyone have the latest info on short positions? Be crazy to be shorting right now, even with the government being muppets. Q3 will be another $500m fcf at a minimum, which means they can drop it onto debt and nearly halve our net debt position. At these prices it would be mad not to drop $100m into buy-backs as well. They can pick up 2.75% of shares in issue with every $100m invested right now. Take $400m off debt and the rest goes in further buy-backs. POO and gas aren't going to drop from these levels for Q4 and Q1 so debt will still be extinguished by Easter barring any global catastrophes. SP is mad at the moment.

'lol nobody mentioning the $7 Billion Derivatives loss on the balance sheet'

Deadly4U, what are you talking about here? Evidence please.

HBR and most other UK focused oilies are simply getting f@cked by a useless government who cannot make their mind up on how best to serve the people and the UK O&G industry. They're failing miserably at both, which is why the sp is in the doldrums. Providing there's no additional windfall taxes this company is worth 500p all day. But the complete lack of clarity from the new chancellor means that IIs and PIs aren't going near HBR. Same can be said for SQZ where the disconnect is just as great when you consider it has over $500m cash on its books. Accounting for cash the company is worth less than £400m. So we're not the only ones being f@cked by ******ed UK politicians. Some clarity on no more WF taxes, plus the Q3 results and the sp should recover to the high 400's. It will take another quarter of decent results before we break 500p imo. But it will most certainly happen as there's no way the combination of dividends and massive share buybacks won't take effect. Just needs commodity prices to stay at / near these levels, which means Covid not coming back and the world economy not to imploding over the next 3-6 months. If the sp doesn't jump back to the 390's tomorrow something is broken and I'll be doubling down on my investment here. AIMHO GLA

Tony, I'm glad to read your jibe wasn't directed at me. As for the game I'm playing, well I hope it's the same as most investors here - To make money. And all I want is mgt to look at sustainable ways to deliver shareholder value. If they embark on another whopping development program next year without a decent rise in dividend payments then I'd be disappointed as I don't think the value appreciation will be as great and will start to sell down and redirect money to HBR, PTAL etc. I'd also expect funds may start selling down as well, rather than buying. The 'jam tomorrow' needs to be balanced with 'jam today' in today's market. There's too many external variables at play, so by having a strong yield you're in a better position to put a floor under any silly sell-offs. I'm a lth here, just like you. We've been here since the original Nth Sea duster. So I'm not someone who is interested in getting in/out. I love my income. But I'd like to see a bit more of it and some capital appreciation. Majid can talk all he likes about value disconnects, but the only time he managed to close the gap was by increasing the dividend.

They're in a position next year to re-evaluate their dividend and development allocations and I'm hoping that's just what they do. I'm confident with an exit of +24kboped we should be able to deliver at least $200m NOI in 2023. And if you don't account for $100m in development costs next year, and a more modest, but still significant $80m, then it leaves room to increase the divi by up to 80% ($20m) on todays' annualized rate. If commodity prices dive then adjust the capital development program and hold the divi. We'll still be adding incremental barrels with $50m development budget, so we'd still growing production. Development budget should be the variable they look at next year given they spent twice as much this year as originally planed. It's only fair they pull back somewhat next year (if required) and reward shareholders (which includes staff and themselves). It could of course go the other way as well i.e. commodity prices stay the same in 2023 as 2022 and we're making significantly more than $200m NOI. But they need to close the value gap, and by increasing the divi it will get the desired result and keep investors sticky. AIMHO GLA

Just to change the topic here. Who do you think would be a good t/o target for HBR? I think SQZ looks ripe for the taking in the new year if they know they're likely to be net debt neutral in Q1. Reckon £1.3bn should do the job. You'd also get half of that back in cash. Given next year the gas crunch is likely to be similar to this year they'd be net debt neutral again 3-6 months later. Riskier acquisition would be Tullow given their debt level. Having said this +60kboepd would be added (oil skewed), and there's some tier 1 global assets in the portfolio. Providing poo stays above $80 for next year I think they'd be debt free again in early 2024 but have in excess of 300kboepd plus a portfolio of hugely valuable assets. Either way I'm expecting HBR to be looking to acquire a decent player in the new year.

Tony, I'm saying the policy of 30% fcf can, and should change. They also spent the best part of $100m in development this year. So yeah I think they can easily afford to pay a higher dividend next year on the back of the development investment they made this year.

The start of this debate came about from Majid speaking about how we're valued at half the average NOI multiple of our peers. So what will it take to get us closer to peer values? Should we keep drilling more wells and hope the market notices production has gone up further? Should we rely on PR? Or should we use more of the cash we're generating from the significant amount of investment this year to give back to shareholders next year? Dividend increases were the main driver of sp appreciation this year. We know they work. And everyone wins both in value and income. So that's why I'm saying a dividend of .at least 2p per month should be announced for 2023. For a company with NOI of $200m, and likely higher next year even with some commodity price weakness, a total payout of £28m shouldn't be an issue. And it's hardly unsustainable as you've suggested. It's just they may only be able to spend $50, 60, 70, 80m in development costs. Who knows. I just want them to think about shareholder value and increase the divi.

You seriously think they can't afford this increase next year?

You were talking of buybacks and dividends earlier today btw. So 'which kind of investor are you'?

Tony, I can only surmise you speaking to me with that last statement. Seriously wtf are you going on about? They have ample cash to pay a higher dividend and still increase production. This will increase the sp and we get paid a higher income. So what is the issue? You, me, everyone on this board, mgt, employees, and major shareholders would all benefit from them throwing more cash at the dividend. And if they hike it by 40% to .2p per month (£28m payout) the sp will most likely re-rate to circa 35p and we'd still be on a 6.75% yield. That means your investment is worth more, and you get higher income. Or are you happy with us being under-valued versus peers, receiving a much lower than affordable income, and us accumulating cash on the side? Serious question.

Jesus I timed that wrong. Dropped £110k into this a few hours ago and already down 2.5%. F@cking bonkers valuation. If this continues the next firm level will be in the 340's (£3bn mcap). I'll be doubling down if that happens. GLA

Ok, I see where you are coming from Joe. From my pov it's not really an increase to continue paying the same monthly amount as recent months when Majid is touting $200m NOI, and at the same time talking about how under-valued we happen to be. When combined with a 12 month production increase of 30% to close the year with +24kboepd it only reinforces they need to do something about boosting the sp, because NOI and production isn't doing the job. Income however will do the job, especially when you have little to no debt to manage. Our valuation is silly even amongst silly industry valuations.

Well I'm in over here now - 27k @ 398.4p for me. Crazy valuation at the moment. Almost as crazy as my other oily in i3e.

Sorry Joe, I think I'm stilling not seeing it - are you suggesting a further 20% on the .1425p per month?

Tony, yep I think they should increase the fcf payout to 40%. I think we're all in agreement that mgt need to do something to create value (except for Barnyards). It's more about what's more effective in doing it. To my mind a guaranteed £28m in divis (versus current run-rate of circa £20m) is the best way to do this. Just £8m extra. Not a lot in the grand scheme of things when we're now producing 24kboepd, more oil, and likely have no drills in the Nth Sea next year. To be honest I'd like them to sell the Nth Sea assets. Anyway, enough from me. Hopefully a strong Q3 will help to add a few pennies in the next week or so.

Thanks for reminding me how much a of ZERO you are Barnyards. If it helps maybe think of an increased divi as being able to upgrade your classic car.

Joe, just because they increased the divi once doesn't mean they shouldn't do it again. As Majid likes to point out, we are generating a lot of cash at the moment, even with commodity prices dropping back and NOI now $200m. The point of an increased divi isn't just to get m@ppets like Barnyards a better car with increased dividend payments, it will also re-rate the share price, just as it has done in the past. For the sake of an extra £8m paid out over 12 months, they can move the monthly dividend to .2p per share from .1425p per share. If you look at this from a yield of 6.75% (generally the channel we sit in is 6-7%) then you get a sp of 35p. We also get a much bigger monthly payout. I'm sure from the net cash position we'll have at year-end, forward commodity prices, plus increased production starting at 25kboepd, it would generate more than $200m NOI next year so they can easily pay £28m in dividends to shareholders. Hardly asking for much now is it.

One thing I do know is that Majid needs to do something. Shareholders want to see a meaningful plan to increase value, rather than just talking about how much we're under-valued. We flounder at ridiculous levels and PR is not the answer as their track record of actually getting any coverage, and its impact on the sp, is poor. The divi hikes have worked in the past so they should go with them again. I think they've done a stellar job of building the company, but they now need to build the sp. The monthly divi was a genius idea when they did it. They need to flex it more and give back more cash to investors who need it more in this environment. I personally don't care about a buy-back that would cost a lot of money to have any meaningful sp impact, with my divi yield virtually staying the same. But if you tell me they're committing to more than doubling my current divi then I'm not going to sell as I'd be getting a £13k monthly payment, and will also get to enjoy the massive re-rate. And I'm not talking about a 'special divi', which cause spikes and require a lump sum payment. Do it over 12 months so production continually re-fills the coffers and gives flexibility on production outlays if commodity prices take a dive. They nailed it with the monthly divi mechanic in the first place. They just need to increase it by a decent amount now i.e. +50%. This will also reward staff (and themselves) so less ridiculous amounts of 'free shares' at bonus time. AIMHO GLA

Tony, the point I'm making is using the same outlay is likely to have a significant difference in sp impact. As for HBR, I could equally say look at the 6m and 1m charts. HBR has declined at a much faster rate than i3e on the 1m (10%). And on the 6m there's a 1% difference (i3e still better off). So not sure what you're getting at here...?

But let's do some numbers and use the same level of buyback as HBR given this is the example being used, so 7.5% shares in issue buy-back. For i3e that's about 90m shares at an average of say 28p (if lucky) or £25m. Now if mgt were to add that level to the current dividend payment of .1425p per month, you'd get a guaranteed £42m total payment in 2023, or a yield at today's share price of 16%. Do you seriously think the share price would stay at this level when that yield is on offer? And the payments will be made month by month next year, so don't require the full £40m outlay in a short period of time. The sp would literally double as you'd still be getting a +8% yield on 45p sp. However I don't believe buying back 7.5% of shares in issue would have the same effect on the share price unless they did it in a short period of time, say 2-3 months. That would mean £40m of cash being used in Q1 next year, when only £10.5m would be needed if they increase the guaranteed dividend. And in the buy-back they'd still need £17m just to keep the dividend payment relatively static for next year. And that doesn't even take into account that most investors would sell into the sp strength from the buy-back as the dividend yield doesn't increase by all that much over the long term. However with an increase to the current committed monthly dividend of £17m by a further £25m (circa £42m total) most investors would retain their shares all the way up to 45p as they'd still be getting a +8% yield, which matters in today's inflationary environment. And all of this would be easily funded out of rolling monthly fcf providing commodity prices remain near these levels. They'd actually be able to still pump $50m into development if commodity prices remain at these levels and we'd be +26kboepd even when accounting for decline rates. No brainer for me that guaranteed divi payment is the way forward for both value and income.

To those of you saying buy-backs are the best course of action, what do you think would move the needle? Say 10% (£30m cost), or 15% (£45m cost)? HBR committed to $300m of buy-backs recently, which amounts to over 7% of current mcap. It's done nothing for the share price. They also paid a special divi. And will be debt free in less than 6 months printing over $1.5bn in fcf annually at today's commodity prices. For i3e, hiking the divi by 50% has an incremental cost of less than £10m. It would mean a double digit yield at current sp - Do you seriously think the sp won't meaningfully increase on the back of this? Either way Majid needs to do something to generate shareholder value. I prefer a divi hike, but if he thinks a buy-back is better than he should get on with doing it and stop talking about how we're under-valued. It's f@cking annoying hearing the same thing every time he does an interview. Do something that will generate value and thereby get some attention. The market will do the rest.

Paul, I don't disagree with there being liquidity issues in the market and money being pulled from most sectors. But companies with low debt and high dividend yields aren't suffering to the same extent. This is because there's also inflation to contend with. So money is heading for the exit from indebted companies, high growth sectors, retail etc., but nowhere near to the same extent from sectors where investors can be safe in the knowledge the divi yield means their wealth is not going backwards from sitting in cash. A divi hike addresses this investor wish. Current investors are rewarded and less likely to sell. More investors will enter the market for the yield pushing up the sp. So current investors benefit from value and income gains. And all of this will cost far less in totality versus any meaningful share buy-back program. And the cost will be spread over 12 months. Mgt simply need to commit to a dividend payout for 2023. If commodity prices go south it means we can't drill as much next year. But if they stay elevated we can continue increasing non-hedged production and generate even more cash for future growth in 2024, whilst receiving a market leading yield. AIMHO GLA