The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
As for being a long term investor, I've been here since the insider trading days of our failed Nth Sea exploration wells. So Tony and I have been sparring every now and then for years. How long have you been an 'investor' here? Sounds like you're a bit salty about the recent pull back. Don't worry, it's part of being an investor in i3e. You'll get used to it if you stay here for a few years.
bit of a weird little rant there ibb. firstly, i'm not sure anyone on here kisses my feet, and certainly not tony. i'd also say it depends on how you define the word 'investor', but holding onto a stock when it's likely to go down isn't exactly smart investing now is it. i'm guessing you're one of those types who believes 'investing' is sitting in a stock no matter what. thankfully i'm not, which is why i managed to get out in the high teens and buy back in the 9's. you should try it some time.
as for 'doing homework', who gives a ****. it's not about who provides the information, it's what you do with it. i like to read everyone's views on here, positive and negative, and appreciate the workings of people like tony. ultimately it's my call on where to 'invest', and it all boils down to whether you're making money or not. thankfully i've done alright out of i3e. nowhere near as well as i could have done, but nowhere near as bad if i held all the way down to the 9's.
and yeah i like to call my trades, in and out, like many on here. i'll let you know when i start accumulating again :)
It would be even more disappointing if in another 2 years we're still below 16p though. Have to keep in mind we've been given a couple of pennies in dividends the past 2 years. But if I were a major holder right now I'd be very tempted to take 16p rather than sitting and hoping AECO is resurrected in the next 24 months. This is why 16p I think would be considered given where we are now. AIMHO GLA
one more thing i should add is we're a very tasty t/o option right now. no debt, 180m 2p reserves, **** ton of drill ready locations, and likely commodity price upside from all the pipelines coming online and access to global gas market. that's the other possible outcome here. and the longer we stay at these levels the more attractive a t/o offer will be for our major shareholders. reckon 16p would get over the line right now. aimho gla
Stas, you were right that it was me offloading last week. I dropped about 1.5m shares at an average of 11.4p. I was hovering before the development plan wet f@rt landed - I got 150k away in the high 12's the day before and was going to drop 1m. Only if eh.
Very good value again now. Anything up to 11.5p is good to very good value with +$70m NOI and +20k production. Anything near 10p and I'll be shifting a lot of cash back into here. Horrible to watch £100k evaporate in two trading sessions. Hopefully a bounce back up to 11p which seems fair value until we see the direction of AECO.
Reckon this is a hold until H2 before seeing some strength if gas prices turn upwards and look to be staying there for the next year or two. If so I think this will bounce back to the 13-15p range this time next year. As another poster has commented, any other jumps will rely on more asset / land disposals, or a decent f/o. For those of you hoping for director buys, good luck on that one. Majid won't part with anything substantial from his $600,000 salary. He prefers to take cheap options instead. One thing that would help is a reinstatement of the monthly dividend. If AECO improves then 25-35% value uplift and a 10% dividend on top over the next 12 months. Decent return, but it will require AECO to take a step-up in that time. Decent numbers and good safety margin in between though. GLA
Agree on retaining a contingency fund, but one needs to keep in mind we'll have +$100m in the bank at the end of Q2. That's one hell of a contingency fund when the sp is below 50p. My shares are in an ISA so nothing other than 15% tax for me, which is why I don't mind the increased dividend option. But if they increase BBs to the maximum allowable amount and retain the base dividend I'd be happy. They have the money to do it, and you should only do it when there's a disconnect like what we're seeing now. Either way they need to do something. The sp is a joke given production and cash in bank. Brent also doesn't look like it's going to do anything silly. Having said that I'd hedge a decent chunk of production (about 1/3rd) in the mid 80's right now. Doing so at a good historical level will protect the dividend, BBs, and the contingency fund. Would be silly not to do it. AIMHO GLA
I'm unsure what their allowable limit is on buybacks, but they need to throw some of their cash at them. In general I think buy-backs are a complete waste of time and money. However when a company is this under-valued, illiquid, and has so much cash in the bank, it's a no-brainer. However it has to be done in a way where they are taking 5-10% of shares in issue off the table each year. Otherwise it's a complete w@nk, like now. Either push the BBs to their limit, or give the cash back to shareholders with increased quarterly dividends. But having it sitting there doing nothing is plain stupid. GLA
Look at Q4 RNS in late February. I was pleasantly surprised by the below numbers at the time. Still doesn't make today's numbers look any good though. Are they planning to drill a lot of gassy wells with this $50m? I know development is back weighted but the numbers 2024 don't look great. Having said that, value is looking much better after taking a 10% knee to the nuts.
· Full year 2023 net operating income ("NOI")1 (unaudited) is approximated at USD 93 million, in line with guidance, with year-end 2023 Net Debt2 expected to be approximately USD 23 million (unaudited).
Stas, I think your 2023 numbers are out to begin with, but today's figures are undoubtedly not numbers the market was expecting. We've just been sucker punched 10%, which is probably fair given what they've just quoted. Basically a wait and see job. They provided December NOI / EBITDA numbers to indicate how much end of year will be contributing to this year's numbers, and next.
I think the only way we'll get back to the 20's is with gas strengthening to an average CAD$3.00 or above. Many posters are certain gas prices are going to strengthen at year end, and into 2025. So not that long to wait.
Good thing is they can now safely throw USD$50m at oil development over the next 12 months so even if gas remains subdued there's a decent chance we'll be in the high teens based on greater oil production. Plus we can pick up a guaranteed 8% yield whilst we wait for production and gas prices to increase. This will be a slow build, but certainly looks good for 30-50% (inc. dividends) over the next year. Looking forward to the development plan. GLA
This is the first trickle of news to come through. Once we get the f/o confirmed for Penascola then we're off to the races. Not including the next licensing round, there should be regular news flow from June. This is just 5 weeks away. Success case at Selene and the NPV10 here is going to be circa £200m, assuming we retain a reasonable stake in Penascola. That's a lot of upside over the coming months. GLA
I'd certainly hope they're going to hold the dividend at $2c. Ideally they'll increase the payout with a special divi if they're restricted in what they can spend on buy-backs. Very good value again down here. Anything below 48p is a steal and paying 13.5% yield. Hopefully Barclays and II are finally going to shift the remainder of my ISA across and I can access some cash to add here. GLA
Are these guys able to increase the value of their daily buy backs? Absolutely pitiful at the moment, and almost pointless.
Agree Dr P on the Penascola deal being the one that has potential to significantly re-rate the sp as it will open up all the milestones and news flow for 2 x major dills in H2. Having said that, it will ultimately come down to the deal itself. If the value of the deal is similar to Penascola for us, then we could jump quite a lot, quite quickly. Anything starting with a '5' or more before we get results would be a great springboard should we have success at Selene. That's where 100p starts to look like a realistic target.
Either way it's all down to the terms of the Penascola f/o now. Not long to wait before we find out. GLA
Holding pattern over the next 2 weeks unless we get news. Reckon we will start to edge up from mid-May as most will realise the f/o could land any day. Providing it's a solid deal I see us in the mid 50's within a week or two. GLA
SP starting to do an upward run. Will we break 13p with the development plans for this year...? Great to think we're about to get some more good news in the next couple of weeks. Q1 results should be solid as well. Nice. end to the week. GLA
You have a good memory Stas. I think Tony was the one arguing the most about the sp not going below the raise price back then. I waited and bought a lot in the 4's. Should have bought more. Also bought more after the second great dilution event in the 9's and 10's. Also argued with certain posters the sp would be depressed for up to a year and would go below the placing price.
Agree that we're well set up for growth at the moment. I'm not in the same place as some on here about buying distressed gas assets. Although I think there will be a lot floating around, I don't believe gas prices will recover for some time. The world is awash with it, and a lot of countries are using less as part of their energy mix.
I am however confident that oil will average above $70 for the next year or two. OPEC is seeing to this, and so long as Ukraine keeps fighting Russia they will continue to target energy infrastructure. And then there's Iran and sanctions. Plus the US is starting to deplete its reserves. So I'd start a decent oil drilling campaign but keep some cash in reserve. Maybe invest USD$50m over the next 12 months. Some will be paid for out of cash we're generating, and the remainder should be topped up from debt. A poster commented on companies with dominant liquids ratios being valued higher so this should yield value and support income. As I've stated previously we'll also prove up more acreage / reserves, which will make us more valuable to investors and would be predators.
If I'm wrong and gas prices improve to average CAD$3 or more then a dividend hike would also be good to see. I agree the Nth Sea is a waste of time and money now. It's also very risky from an execution standpoint, let alone adding h@lfwit government risk. They should write it off if needs be. Ideally they will get a bit of cash though. Only reason I'd progress is if we get a bigger player on-board who run the show e.g. Serica.
Either way all looking good right now. PTAL back on sale currently so grabbed another 25k over there this morning. If my 750k shares in DELT pay off in the coming months then I'll be buying significantly more here and in PTAL (providing prices are near these levels). Not long until things kick off over there so will find out soon enough. GLA
Agree on your last Nomadic. I'm hoping they'll head down this route. Benefit of going after oil is we can prove up more reserves, which in turn pushes our value and makes us more attractive as a t/o target. Would be very happy if they plough a good $50m into oil focused wells over the next 12 months. We're still making cash and have our loan facility to draw down from. And they can steadily add more wells to avoid too much risk should poo take a turn in H2, or they can pivot back to gas if they see prices increasing.
Would like to see some PR around this deal. The deal won't move the dial on the sp if no-one knows about it. They've now had a couple of opportunities to do interviews and push for more coverage. Hopefully on the back of the development plan they'll get out there and beat the drum. Still great value to be had here. If gas prices improve to CAD$3 in H2 like some are saying, then we should be at 15p quite easily.
I'm up to 4.75m shares now with an average of 10.1p. Funny thing is I had this level when I started to sell down a little while ago. If this stays around these levels over the coming months I'll be adding more. My DELT speccy is the big upside (or not) play I'm making this year. Probably in too deep but the reward profile is very attractive. If it comes in I'll add a lot more here and in PTAL. These are my safe 10-25% capital gain and 10% income payers over the next 12 months. Even if we get the lower end of value uplift it's still a solid 20-25% overall gains. What's not to like. GLA