Member Info for G_G_G

Oil Analyst, I think you should spend a bit more time doing some analysis. The oil they will be producing is Mixed Sweet Crude, otherwise known as Edmonton Par. It's not even close to WCS as a product, or in its pricing. It's priced at about $3-4 less than WTI, so they will need +$25 WTI to be in the money. They can of course reduce their volumes from the nodding donkeys quite easily. They also have 500-700 boepd (oil and gas) shut-in at the moment. Overall it's a good deal for the future. If they can get that f/o over the line they will be back in the game.

If we're all correct about the nature of this deal, why does twitter has so many self professed oil experts ****bagging it...? Share prophets and that Gary whatever the f@ck his name is had quite a negative view of the deal.

From what I can tell we've managed to buy a very low cost oil producer, which operates at cash levels close to the multi-decade low oil prices we're currently seeing. They have an ability to pull back or shut-in the oil and gas being pumped until prices increase. And they now have producing assets allowing them to raise capital to potentially go it alone on Serenity, or add a few more wells in the Canadian acreage if WTI prices rebound and hold above $30. They also have a new listing on the TSX.

If the above is indeed correct the bod need to go back and redo their interviews to spell out the deal in simple, layman terms. I really don't think most people see the deal as what I've just described.

There seems to be quite a bit of confusion surrounding this deal, including from myself. My understanding is we bought the debt plus the company, so we now own a debt free Toscana with all its assets. Can someone please correct me if this is wrong.

Guess we need to hope that deal is close to being done then.

That's the only clever thing you've said on this site Simon, and probably your entire life. Well done.

Freshair, why do you think the debt facility is debatable? Haven't we bought a $28m (CAD) debt facility for $3.4m (CAD)? And we've purchased the company and all its assets for a further £300k at current share price value. Or am I missing something?

NKOTB, yes sadly we've had another leaky ship example. The fact another poster pointed out it was likely US buyers driving up the SP last week due to the time when volume starting picking up appears to be incorrect only in so much as it was most likely Canadian buyers. Hopefully we'll see another surge in the next week or so prior to a f/o being agreed :)

I agree with some other posters this deal on its own isn't anything to get excited about, but it does have a number of strengths, namely: access to debt facility / funds, access to another exchange (liquidity), additional leverage in f/o negotiations. The f/o is key to this mcap returning to circa 20p levels. If we can get a free carry for 50% of Serenity then we're back in the game. Hopefully Repsol, RRE, Serica et al. are circling for some additional leverage in our negotiations. If they can secure that f/o and it's an easy 2-3 bag from these levels.

bod need to get on the road and really start plugging the benefits of this deal. A breakdown of the deal and how they intend to utilise the debt facilities would be welcome. Far more important is an update on the f/o process and how this would work with the current deal. On its own the deal is ok. It gives us access to another exchange (more investment potential) and immediate funds if needed. But it won't pay for Serenity on its own. If they can secure a f/o for Serenity they will be in a very strong position. They will hopefully have a free carry on Serenity, and once drilled (field / model proven), they can buy back their 10% and potentially go it alone on Liberator. I wouldn't like to see them try to go it alone on Serenity. A bigger player that de-risks their position and ensures the field gets appraised and developed within 1-2 years is required. If they can secure the f/o we will be one of the few oilies that will be making ground swimming against the tide, which we know is going to turn at some point in the future. Will be interesting to see if the bod gets on the road with this or if they sit back and try to push harder for the f/o before covering all the good news. If they can secure the Serenity f/o it will truly be exciting times.

I agree nomad. Interesting the volume and value has got on a roll today. Whether this is just a bounce or the next leg is the question. We'll soon find out I suppose.

Looking like it's settled around the 7.30-7.50 range. Gutted it wasn't a 'good leak'. Maybe we'll be surprised later today but not holding my breath.

Seems the company only believes in releasing an rns after hours when there's been a 'bad leak'.

We're 50% up at the moment. Jesus I hope this is another leak and there has been a t/o offer.

Your thoughts on value for a t/o given current climate...?

NKOTB, I see you regularly post on RRE as well - Your thoughts on a f/o or t/o (my dream).

NewKOTB, why a big US buyer?

Reggie, what do you mean by big buy 8.5p? Is this showing on level 2?

I can sell 100k at 8p...

Yep it's a very leaky share. We'll learn soon enough I suppose. If no news on Monday morning I imagine this will drop back quite a bit. Good to see how it can move so much on such little volume. Goes to show how many people are underwater here.

Bit late for some speeding tickets...

Oh my god there was a 100k buy at full ask. Where is Stocktracker...? He must be running around outside in his underwear screaming BOOM!!!

Hi Genghis,

Ordinarily I'd agree with you on O&G companies restricting capex but there's a difference for us, accepting there's a degree of rose tinted glasses being put on here.

RRE are our most likely suitor. They have limited reserves in a series of small fields or small stakes in moderate sized fields. They need more reserves. These reserves should ideally be realised quite quickly (2 years) and at low cost. This is why we're attractive. We are sitting on potentially large reserves in Serenity alone at 200m STOIIP. It will also be v.low cost to appraise and develop the field. It will also serve and additional RRE objective, given they need to utilise excess capacity in Bleo Holm to lower overall per barrel costs across their neighboring acreage. RRE are also sitting on a huge pile of cash that will carry them through this period, but will be better used by building out low cost reserves and being production ready for when the oil market inevitably bounces back in 12-24 months. They could of course buy more current capacity, however this comes with higher purchase and operating costs as most ageing North Sea fields are quite high opex and have decomm costs associated as well. So i3e are in a unique position here. Having said that they didn't manage to negotiate a f/o when the oil price and Covid weren't an issue so this needs to be considered before thinking this stock is anything other than reasonably high risk.

If i3e can pull off a f/o (50%) that involves free carry for the remaining circa 80% of drilling costs on Serenity alone we should re-rate to around 12-15p. If they prove Serenity to be commercial and having 100m+ reserves high then the stock price will be much higher, depending on how much oil they can delineate. Liberator is a potential big bonus field.

Just my thoughts. Obviously as a holder I want the above to be true and I'm telling myself the f/o hasn't happened already because i3e are standing firm on reasonable f/o terms (with rose tinted glasses on).

Harel, I agree that at least 50% of Serenity will most likely go to a bigger player, perhaps RRE/Repsol. That's about all I agree with. I've never seen f/o terms an generous as you're suggesting for a company in i3e's position, let alone in current market conditions. I'd be incredibly happy if they can get a free carry on Serenity for 50% of the company. SP would re-rate to 20p+ and they could easily raise additional finances for Liberator if they hit oil in Serenity as SP moves to 30-40p. They would only need another $15m for their 50% of the Liberator drills.