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Vernet, the only palatable reason for more dilution would be if they're going after an acquisition on similar metrics as the last acquisition, but is too big to swallow with cash and debt alone e.g. $100m. In this example they should be looking at 60% debt, as much cash as possible at the time (still safeguarding a 20% divi payment), and the remainder as equity. This would mean circa $20-30m needing to be raised in equity depending on our cash position. This is something I'd be comfortable with them doing as the immediate, incremental production gains would be significant versus the $60m additional debt, the divi would still be protected (with serious growth on a per share basis for payments to come), and the dilution would be relatively modest. Given these things the sp would re-rate accordingly. I'm the one who famously lost his **** with the last mega-raise due to the lack of debt being employed, and the view of how this would anchor the sp to 11p until Xmas. Imo this has played out i.e. we're still anchored to 11p and still significantly under-valued against our Canadian peers. Structuring a deal as I've described would work well for everyone, in particular PIs, as it would re-rate the sp and future divi payouts. But only on a deal that's too big to swallow with cash and debt alone would I be ok with more dilution.

Only 1 week to go for the promised news. GLA

Well let's hope they deliver some transformational news so we can at least get to the same multiples of our highly under-valued peers. Actually I'd settle with just about any news right now. GLA

XXXX://www.reuters.com/article/tullow-outlook-idUKKBN2I20HM

Change the X's and enjoy your humble pie :)

Oh, and Tullow aren't committed to paying 20-30% divi out of fcf, so all the more reason for mgt to provide this measure.

Yes they do this Tony. I read an article on Tullow Oil the other week that stated $100m fcf (alongside operating cashflow numbers) for 2021. Google Tullow Reuters. Thing is, fcf is the one consistent measurement that can be compared across businesses. All other measures, and there are many, are a bit useless because they're rarely using the same inputs. Mgt should follow Tullow's lead and provide this clarity. It should be fairly straightforward, would be welcomed by all existing and potential investors, and it would also save you some work :) GLA

I think you'll need to ask the company on those questions CaneToad. I take it you're from Qld?

Also meant to say I agree with those posters who feel the company should provide fcf estimations alongside NOI. There's been too many estimations and assumptions on this board as to what our fcf could be in light of the information they have given us. The most important measure by a stretch is fcf (in support of Tony on this point). This is especially the case when you're committed to paying 20-30% in divis. So why not give us an fcf estimation alongside NOI whenever updating the market...? And, put these numbers in context by providing fcf / NOI / divi based comparisons against other Canadian O&G companies. These sorts of numbers speak for themselves and will give our brokers the opportunity to provide hard, easily understood information to the market. I have to admit that I find it pretty frustrating trying to work out our fcf based on the number we're given. And as much as I appreciate Tony's workings, I'd rather they simply give them to us in black and white.

So when do you guys think the climb will begin? I'm thinking mid-week we'll see a slow increase toward 12p. Normally traders start taking positions ahead of news so a little surprised we haven't started already. Omicron is the obvious reason, but it looks to be nowhere near as bad as initial fears so money should start to re-enter the market in the coming days (barring any apocalyptic news). We have the development program for 2022 to land. This being in their control and overdue already is an absolute must to deliver. Then we have the f/o, which surely has to land in the coming days / weeks given relatively recent comms. And hopefully something on debt funding (or even better a debt funded acquisition). All major news items, so all to play for in the coming days. Thankfully poo and gas prices will also provide a nice tailwind to any +ve news. Outlook for both also looks strong. Polar vortex meant to be hitting Nth America end December / early January, which should provide further strength to gas prices that have just re-broken the magical $4 mark. AIMHO GLA

Hi Joe, sorry just saw your msg. The first trade I had a limit at 10.90 and it executed @ 10.825. I then had a limit order @ 10.85p for the second tranche that filled at 10.67. I also had a limit set at 10.85p for 75k today, which filled at 10.83p. Quite happy with my holding now and completely done. I literally have no spare cash left to invest here or anywhere else for that matter. Just need the bloody f/o to get sorted, or even better they do a +5kboepd deal (oil leaning) on similar metrics fully funded by debt. Both will put a 5p rocket under this share and hold it at higher levels. And even better still, someone makes a +20p offer for the lot. Yes it would undervalue us, but a bird it he hand and all that. We now have 2 weeks until Xmas and they have a couple of major pieces of news to deliver. GLA

that we haven't seen some strength building in the sp recently. I understand that Omicron has put a dampener on everything, but it's starting to look fairly benign compared to what we've been through already. In the meantime we're expected to close the f/o by year end. Plus the bod are negotiating a loan agreement that will either super-charge our development plans, or help to acquire some more cheap production. Either one of these things should generate a big re-rate. And then there's the development program for next year, which should be quite expansive if they're not going to buy-back shares and/or increase the divi with all the cash we're throwing off. Santa rally anyone...?

We've only got 2 weeks before Xmas, and it appears as though we've found our bottom (barring any more disastrous Covid news). I picked up another 2 x 50k today at bargains of 10.825 and 10.67. I have 75k left to buy and then I'm done. If anyone cares to know, I'm hoping for a f/o this Xmas. GLA

Oh, the 50k at 11.06 is a buy, mine.

You make some very good points nomadic. To be honest there's so many avenues they can take that should result in reasonable shareholder returns. It's really a question of which avenue will produce the best returns, and as you've pointed out that means having a crystal ball and knowing what's going to happen to poo and gas. This isn't possible in the best of times, let alone a decade likely to be defined by Covid and its various mutations. So yes I agree the safest avenue is what Eric is promoting. Having said that I'd still love to see what's under the Nth Sea :) If mgt are to meet their most recent delayed guidance we should be hearing something about the f/o and the Canadian drill program in the next 2 weeks. I picked up another 50k this morning so now sitting on 4.5m shares. To say I'm exposed would be an understatement. Let's hope Omicron turns out to be nothing because there's nowhere near enough liquidity here at the moment for me to get out in time if its another disaster. So quite a big, risky bet I've made on i3e. Having said that, if the f/o happens and poo / gas remain at these levels (or higher), then I should be one of those 'ISA millionaires' this time next year, whilst being able to take +£40k after tax in divi's. I can't see too much downside from here near-term unless we get another horrible mutation, so worth the risk given the reward from my pov. Let's hope these guys finally get that f@cking f/o sorted. GLA

Did a trade here a little while ago for a quick few £k. So much potential, but unbelievably poor mgt. Problem with putting a trust fund baby in charge. I've always said the assets are so strong that even even DB can't f@ck them up. Not so sure now. As someone has pointed out already it looks as though Dan is using this as his most recent excuse for not being able to hit guidance, both production and AISC. Easiest way to find out is whether other companies in the area have shut down their ops. If not then Dan needs to go. He will be guilty misrepresenting a situation to his shareholders in order to cover up his incompetence. And even daddy must say this is a step too far. I'm actually hoping he is lying and gets caught out. He's grossly out of his depth and has proven to be a complete charlatan of a ceo. Hoping he gets shown up and finally has to step aside for the sake of shareholders. The fact IIs have sold down here should say it all wrt confidence in mgt.

Agree mgt have done a good job on many levels. Unfortunately printing so many shares comes with a cost, which is the sp will remain anchored to the raise price for some time, or until major catalysts arrive. I do believe we'll start to break free in the next few months, but it won't start until the new year (note: I've been saying this since it happened barring f/o agreement).

Having a debt facility won't drive the sp. Using it for a great value acquisition or extensive drilling program will. Having a drill plan won't drive the sp. Results will, and they will take months before they're released. Plus this will happen over time. So Canadian exploration sp impact beginning end Q1, but continually supporting / promoting the sp from that point onwards. As I've said the run up to results will also help. The divi yield will be close to 10% at current sp, and this combined with significant value upside will drive the share price higher from February next year. It should in theory push us toward 15p, or 6% yield. Providing commodity prices remain buoyant these things are givens, which is why I'm frustrated but not despairing.

A joker in the pack is of course the f/o. This means our Canadian drilling program will be supplemented by high impact exploration Q2 next year (providing it's agreed before year-end). With the run up to H2 and Canadian exploration results this additional exploration upside will add a few more pennies. But the f/o is absolutely required if we're to get near 20p by early Q2 next year. Either that or a good sized, great value, debt funded acquisition. Another joker.

So we have 2 given drivers and 2 jokers. Pretty good for me. If mgt want to help the sp, and make a good investment with spare cash then I agree a share buy-back should be done. But I'd prefer they save the money and put a single well in Serenity if they can't get the f/o sorted before-hand. The farminee will be forced to pull their finger out or we'll get to see what's under the ground in the Nth Sea, whether it's linked to Tain, and how much they'll need to pay in future. It may cost us $20m, but it could easily add +$200m to our Mcap. Worth the risk when you're throwing off significant cash and have low debt levels. No doubt f/o is the best route, but we need to keep in mind it comes with time pressure with current environmental headwinds growing stronger. We're still in the safe zone, but for how long I really couldn't say. AIMHO GLA

Really think the only catalyst we have until year-end is the f/o. I agree that another great debt funded acquisition would give us a big boost. But it will take a month or so for them to finalise the debt facility. And then we still need to have a great acquisition lined up. I'm hoping they already have this negotiated and are negotiating debt based on the acquisition, but this may not be the case. Either way I'm just happy they're planning for debt funded opportunities and expansion, because everyone can see the impact of a major dilution event even when you've added some fantastic producing assets to your balance sheet.

As for any wells, they're going to take months to come online. Simply announcing a plan isn't going to do anything. They need to prove the quality of the acreage and add incremental barrels for it to impact the sp in any meaningful way. By meaningful I mean +3p.

Having said all this I have no doubt we will see a climb into H2 results and ex-divi, just like last time. If the f/o doesn't churn the placing shares, this most certainly will because the divi and financials will simply be too good to ignore. The climb will start end-Feb by my reckoning, providing an acquisition or the f/o hasn't already taken us to another level. So imo the next month or so will probably represent the last chance to buy in the 11's. If everything goes perfectly the re-rate could be huge by early Q2. Think f/o agreed, debt facility negotiated, major Canadian drilling program kicked off with first results being announced, run up to incredible H2 results / divi, run up to Nth Sea drilling, and maybe even an acquisition. Even if half of this is announced we'll be +15p. But if all of it is announced then +25p is a very realistic target. Amongst all of this though, the f/o or another great debt funded acquisition are the real game changers i.e. to take us up to, and past 25p. AIMHO GLA

Some very good points Freshair. I agree with your '1 well to the west' argument. Ideally 3 wells with a f/o, but at least with 1 well the cost is contained and we still get to see if Serenity is indeed a company maker. Hopefully not too long to find out. I'm hoping they'll have a debt package lined up before year-end and the news will start to flow thick and fast in the new year. GLA

Disagree vike. Normally when deals like our recent one are financed with majority debt the value of the producing assets tends to reflect in the sp. This is because there's a significant asset & financial performance increase versus a modest increase in share count. By debt funding something similar this time round you can have a company producing close to 30kboepd, incremental cash hitting the bottom line almost immediately, circa $75m debt, and a similar share count. The entire debt could be paid off in fcf in less than a year, but you'd have the extra 9kboepd producing for long afterwards. And if they paid down a third of the debt each year there's still plenty of fcf to throw at Canada and / or Nth Sea, and to pay the divi. Important to remember the divi is progressive so in 12 months the annual payout could be f'ing huge i.e. + 1.5p per share. This is the recipe for a significant re-rate and what will get us into mid 20's in the blink of an eye, without the f/o. Going the other way, if they're only going to drill Canada then how many drills are needed for an extra 9kboepd...? I'd think at least 40 would be required. So the same $50m needs to be spent, but you've got the time and b@ll ache in trying to drill +40 wells. And, these wells won't be paying back immediately. And you won't get any more acreage, which is an asset in itself. So with $50m to spend, imo the debt funded acquisition option is 100% best for shareholders providing they can get similar metrics to the recent acquisition. BUT ANY ACQUISITION MUST BE FINANCED PREDOMINANTLY VIA DEBT i.e. more than 80% debt funded.

I really hope they close a debt facility soon as it says they're actively on the look-out and perhaps even have something lined up. I know the sp is still in the 11's but the most recent interview and now this rns has made me incredibly excited about the near future to the point I'm going to look into debt funding some more shares in i3e :)

Well done Graham and Majid. They've outright said no more raises for acquisitions, which was one of my main fears for the future. And now they're looking to open a debt facility for acquisitions or expansion. Plus appointing another broker to push the story as it unfolds. All very good news for the near future. As much as the raise p!ssed me off to no end for the very reasons we're all experiencing now. They have proven themselves to be very sharp deal makers and this clearly shows they're now squarely focused on growth and sp appreciation. Question is how will they use the debt and drive the sp upwards...

My preference if the opportunity arises is to go for a majority debt funded acquisition if it makes the same commercial sense as the most recent one. With another $50m purchase of similar producing assets they could pay off the entire debt within a year without impacting the dividend. There's another 8-10kboped that would come online immediately and carry no risk. I'd personally prefer they do this, pay back the debt over a few years, and continue drilling the easy wins in Canada throughout. But this of course requires a good deal to be available.

Alternative would be to go after Serenity or Canada. I understand that many on here see Serenity as too risky. I see it as circa $50m for 3 wells that could potentially open up +100m barrels of recoverable Brent where we already know there's oil in place. One also needs to keep in mind that we'd be on the hook for circa $15-20m to get 1 free carry and retain circa 40-50% ownership so it's not like the Nth Sea is free. But we get to appraise Serenity and go after Minos High with this drill program. With 3 wells being drilled I simply cannot see a scenario where they won't prove up significant value in the assets. With or without the farminee there's +20p of value in those wells. This is how we smash into the 30's and 40's and I think the risk is worth the reward, which is partly de-risked already. Having said all this my absolute preference is a f/o where we retain 40-50%, get a free carry and need to stump up $15-20m for the remaining 2 or so drills.

My hope is we secure a $50m revolving facility. We secure the f/o on similar terms to the above with drilling to begin in H1 2022. We use our revolving facility to pay for our share whilst kicking off a +35 well drill program in Canada for 2022. One needs to keep in mind the amount of cash that is currently pooling on our balance sheet, which will continue to grow at a rapid rate throughout H1 whilst oil and gas remain at highly elevated levels. There's close to zero chance of a correction before H1 given where supply / demand sits in both markets. So all of the above with $50m of debt is easily possible - I don't see us breaking a financial sweat on it.

Either way this is great news. If we get the f/o secured, prove up +50m recoverable Brent plus kick off Canada, or nail another similar acquisition, then I can see us in the 30's this time ne

Jesus being in this company is so f@cking frustrating. They really need to give the market something or we'll be below placing again next week. Aren't there more drill results due? Perhaps they could finally share something on the extensive drilling program for 2022. Even then it will take months before this provides any real support to the share price. As for the f/o, if it looks like it's going to fall over they need to take out a loan and drill it themselves. There's no sense in sitting on a company making asset that could end up being worthless in 5 years if the government decides to shut down new production in the Nth Sea. Any more delays (or worse) on the f/o and I imagine the share price will take a hit due to decreased investor confidence in mgt. And if they're not going to get on with things that will drive value, they should do a share buy-back at this level. Even if it's the number of shares to replace the ton of options that have been given to mgt and employees. We're throwing off buckets of cash, commodity prices are the best they've been in many years, and the share price is going backwards. Also, if a loan wasn't possible in the time frame they had to finalize the acquisition, but was something they would have done if they had the chance, then why not do a share buy-back? With the sp near placing price there's no loss and at least the fcf we're generating is being put to good use buying a grossly undervalued investment (us).

It would be strange Maestro if we didn't have such a monstrous over-hang from the placing. It's why the share buy-back debate kicked off, which imo is a fair call if mgt aren't spending the cash that we're throwing off on exploration / production. It makes even more sense when you're sitting less than 10% above the placing price.

Yes I'd say overhang. It takes a lot to shift that amount of shares and we simply haven't had enough 'news events' to churn our way upwards. I'm very confident it will happen. It's just frustrating to watch the sp go backwards from the recent results. Unless they get the bl@@dy f/o sorted before Xmas it's going to be a long, slow grind to get past 15p and stay there, which I imagine will only happen in the run-up to the H2 results and ex-divi i.e. March. If they get the f/o done in the next few weeks with drilling scheduled for Q2 next year, then I can see us climbing through 20p in the lead up to Nth Sea drills turning. Quite a difference in base case and potential upside depends on the f/o.