C - sounds like the stakes are high...you mention the £ is tough. Is this a negative for TRIN “manufacturing” in $ and reporting in £ ?
AIUI a weak pound is a tailwind for TRIN.
Manaca...the mysterious thing that pushed TRIN up might have had something to do with the price of oil.
Don't know if it has been mentioned but the momentum Investor August edition carries a big piece on STOB...arrived this morning through the post...good in-depth reading with a confirmation that Southend Airport owns 400 acres of land.
Right...maths time again!
Let's assume that the CENKOS tweet conforms to Company expectations (House broker and all that):
"Cenkos forecasts 2019 year-end cash to be US$11.3m with a 2019 capex expenditure of US$14.3m; estimated 2019 daily production to average 3,224bopd on a realised oil price of US$60.5/bbl, generating US$71.1m in revenue with CNAV at 40p."
All in $
Cash balance now at end of H1 = 17.8mln
Assume run rate of $1.3mln X 6 months (at $60 oil) = 7.8mln + 17.8mln = 25.6mln
less Capex of 14.3mln = 11.3mln
Capex = 8 wells at 1.4 mln per well = 11.2 on drilling and 3.1 on general capex
2019 Average BOPD is expected to be 3224
Q1 = 3020
Q2 = 2996
Q3 = 3150(? small assumed uplift from a well or two coming online)
What does Q4 have to shoulder in order to get an average BOPD of 3224?
Answer: Q4 3731 bopd
Therefore, ~730 BOPD from an 8 well drill program = ~91 bopd from each well...
So the question is: Can they achieve this from the HAW, can they exceed this? We know that management likes to be conservative...this question defines the investment case right now. If they can deliver and throw in the hope of TOTAL SPT overhaul post the election next year and the monthly run rate jumps to ~$2.5mln pcm.
If you then allow a self funding series of further wells in 2020 then the momentum starts to be felt!
If they deliver on CENKOS and there is an overhaul of SPT then $30mln (£24mln) of annual revenue at 60 dollars is targeted.
If these two things happen the share price will be higher.
A few ifs...
If the govt is re-elected or the HAW program is not as successful as hoped then TRIN is a company that has spent ~$20 mln over 2 years to achieve a modest uplift in BOPD produced...hardly punching the lights out and the shares should be at...wait a minute...~10P!
The market is literally pricing in no SPT overhaul and a terrible drilling campaign already. Who wants to wait and see if the company can deliver?
Slack tide for me: Every shareholder experiences the frustration of a windfall tax set up in the early ‘80s that has not moved with inflation and is consequently a “windfall” tax for the govt alone. We have had oscillations from an announced intention to overhaul SPT through to a “wait and see” policy. We may be in slack tide but to assess the tide actually turning is for an appropriate amount of taxation being taken by Trinidad. That hasn’t happened...yet.
Nige, I can only quote from The Momentum Investor, July 2019 (Page 3)...
"Stobart's Aviation Services Division is dominated by its ownership of Southend Airport...The Airport, which also comprises 400 Acres of surrounding land, partly makes its money from a revenue share on car parks etc."
If the airport is owned by Stobart and the airport comprises 400 acres of surrounding land I am assuming it owns the land...but to assume make an ASS out of U and ME...so, I cannot say for certain certain.
Taverham...how much damage can he actually do to the numbers? How much influence (receding) does he actually have over people’s opinions given his actions look more and more weird/sour grapes/illegal(?) in assessment from the judge.
Draw your own conclusion...for me, diminishing rapidly. One set of very solid numbers and nobody will care.
I don't know the situation on Tinkler particularly well but it would appear that he has taken leave of pragmatic business sense.
To his own detriment he has pulled the value of STOB lower while owning 5% of the company...he either has seen an angle he would like to exploit that will make him more money in the long term lobbying, bullying and destabilising being the tools to do that. Or he has taken leave of his pragmatic business acumen......as is often the way in life: he seems to be doing both.
It seems absurd to me (when you own 5% of the co) to not let bygones be bygones...and work out that a bonus of £30 mln for delivering stupendous shareholder value makes him multiples of this amount with no current or latter effort...in essence, he wins!
There comes a point where you do start to look mad if you have lost in court and shareholders don't care about what you say but you plug on regardless, the old maxim: I thought the world was mad, they thought I was mad & damn it they out-voted me...
Why not embrace and endorse the way forward and chuckle quietly to yourself as success comes that you have won, that you have not done it with the ongoing sweat of your own brow...time to genuinely move on?
Finally, can someone tell me if it was actually woodford that sold shares? I don't see any RNS to that effect.
Neil Woodford is believed to have offloaded a stake of about £70 million in Stobart Group as he scrambles to overhaul his stricken investment fund.
Woodford Investment Management is the second biggest shareholder in the mini-conglomerate that operates Southend airport, with a stake of about 18 per cent. City sources said that Mr Woodford, 59, had disposed of almost his entire holding at 115p a share in a deal estimated to have raised about £70 million for the fund manager. Stobart shares closed up 10¾p, or 9.4 per cent, at 126p last night.
Hi All, I read about this company in the July edition of "The Momentum Investor" and acquired a small holding...
There is a modest amount of short selling (as shown on Short Tracker)...1.43% of the shares. (467mln * 0.0143 = ~6.7 mln shares that need to be re-purchased at some point).
I am presuming that the Woodford issue attracted this as the short selling commencement coincides with that announcement (end of May /early June) and continued until the end of June.
If those large trades earlier were partial Woodford posi closing then this bodes well as the short case starts to disappear with the "overhang" of those shares clearing off the books. An aggressive price move up to trade clearly shows an axed buyer and a less axed seller...maybe one of those trades at 125 is the short selling position stopping itself out after hearing a whisper that the Woodford short case is dismantling for STOB?
Only way to tell is to watch for the short selling update over the next few days and to see what RNS's come out in the wash tomorrow.
Apologies if this is old news for many of you; let's see what happens.
Good luck all.
I am sorry SundayRoast...I thought you indicated we should be free to add and re-post...you didn't mention that this freedom was only for positive and uncritical thoughts...
For me: I like to knock things about a bit until I form a balanced view. I have met with Paul Baay and watch this share closely. Ross has summarized the position well enough...if you see no value in what I have written then don't add it to your research...but bear in mind that your research (under a bit of logical scrutiny) looks extraordinarily optimistic and I think that potential investors (that you cite) might like a bit of balance alongside it. But maybe you disagree with that?
What you call "badmouthing" I call balance...but apologies, I will leave you to your unfiltered positive view that ultimately is unlikely to help you or anybody else.
Add to this Sundayroast that these "95% chance of success" wells producing 1000's of barrels could have been drilled in the last few years>
Instead the company went after a large program of wells that, against your analysis, stack up as lackluster (with a capital LACKLUSTER) by comparison. Why would the management do that?
The wells you cite cost 5 times as much as a normal well, so...eminently affordable instead of the program from last year.
However, the management chose to not go after the gifts from the Gods, instead they went after...lower hanging fruit/better alternatives/dare we say...less risky(?)/ less infrastructure (except you say that is cheaper)/less counterparty exposure alternatives instead...why?
And now they are going to drill the smash hit wells you refer to (coincidentally) in the year that the licenses expire (unless these wells get drilled).
Something to me doesn't quite line up in the order of priority, the requirement to drill and the risk reward profile you describe.
Undoubtedly, SPT needs to change for shareholders…profits can be overshadowed, predictability is gone, drilling can come out of equity, obvious capex budgets end up feeding 80% wrongly to the govt coffers. But, just because it is so wrong for shareholders doesn’t mean it is wrong for T&T short term...though in the long term it is disastrous with a possible failing Heritage and a non yielding asset (T&T Oil fields) while oil is still square and centre to the way the world runs.
Undoubtedly the Heritage side of things is interesting and there has been a “soft” tax break with the refinery discount disappearing. This is a space to watch particularly for TRIN…they are positioned well.
So, in conclusion…if you are a long term holder this has excellent prospects: safe, solid, viable, overhaul of fiscal regime “at some stage”, oil upside and only an obvious narrow band of pain. It is undeniably undervalued and if oil runs higher and sticks higher then expect the shares to move accordingly. If the shares do go higher then I doubt there will be another capital raise as some may fear…the public narrative from management on Galeota seems to have shifted towards a sale or JV and the company does not need the cash.
If you are short term in outlook (you might define this by how often you check the share price and how often you might feel inclined to whine on here) then probably best to move on…
Hi Spell...I don't check in here so apologies for prompted delayed response.
Yes I was at the meeting. I thought the presentation was very good, my thoughts summarized by a series of questions and answers:
Who wants to buy TRIN shares?
TRIN occupies a strange position. By virtue of what the market expects of small cap AIM oil stocks (a good deal of fizz repetitively shaken by the marketing arm / CEO) TRIN falls short of expectations...why?
The management does not play to their “natural” audience: they don’t spin it, they deliver on what they announce, they announce infrequently, they don't feel any compulsion to RNS to fill a void, they work to their own meter and they have high levels of obvious integrity that means they announce things that are uncomfortable (as evidenced with the receivables issue last year…TRIN announces, others don’t)...
They view themselves as a manufacturing business: production, costs and predictability please.
This does not appeal to your AIM gambler looking for the proverbial 5 bagger.
What about to the institution? They have a robust balance sheet, have come out of a period of near extinction (though this memory deserves to have completely faded), are solid as a rock, are on AIM and are TOO small for many institutions.
This means there are woefully few RNS announcing >3% stakes in the business.
As evidenced in the share price…the shares are unloved. There is no demonstrable reason why the shares should be where they are but an appreciation of the above “falling between the cracks” partially explains the current dislocation.
What will move the needle in the next two years?
SPT overhaul, Heritage activity (partnering, designations etc), East Coast Asset exploitation (sale or otherwise), traction with (new to Trinidad) onshore drilling techniques, possible clever hedging & the oil price leading to increased drilling and increased revenues.
What might move the needle negatively in the next two years?
All of the above round the other way plus the universality of field decline rates, and sitting in the “SPT throttle zone” on WTI.
What about SPT? YAWN…No obvious line on the horizon here…10% of the govt take home tax revs is SPT. How does the current government who just took away a load of jobs at Petrotrin turn round next and announce a perk to the Private Oil industry while also announcing a reduction in tax receipts? Answer, they don’t…not until a good amount of time has passed to allow these events to be viewed in isolation. As oil creeps higher, the critical urgency to overhaul diminishes. The only way I think this gets overhauled sooner is if Heritage looks compromised or the Producers start to REALLY suffer and that would require WTI to sit at $55 for a meaningful length of time. Hint, watch the election next year closely for a party change.