Member Info for Grill79

I'm just theorising but it may be that due to the massive hike in gas/oil prices since January that it dramatically changes/accelerates the company's program & plans, possibly a significantly compressed timeframe and they want to let people know? Heres hoping...

https://twitter.com/echoenergyplc/status/1509542840061341700

Well, if he was saying 'Interoil's sale price is currently USD55' thats not the same as the prevailing rate, could be due to having signed long term guaranteed price contracts etc. We've been selling products for the contract prices we established March/April last year (and just about to be updated) so presumably its a trade-off between best price versus guaranteed sales

Breaking news on BBC -
** Georgia to apply to join EU immediately - ruling party
Georgia - a former Soviet state on the eastern shore of the Black Sea - will "immediately" apply for EU membership, its ruling party Georgian Dream says.

It comes a day after the European Parliament backed Ukraine's bid to apply for EU membership.

Georgian Dream's Chairman Irakli Kobakhidze told reporters he was calling on the EU "to review our application in an urgent manner and to make the decision to grant Georgia the status of an EU membership candidate".

Georgia has seen big demonstrations against the Russian invasion of Ukraine.

Russia has controlled two Georgian regions - South Ossetia and Abkhazia - since 2008, when Russian forces ousted Georgian troops from them.

It followed a Georgian attempt to recapture South Ossetia, which had fought a separatist war against Georgia in the 1990s.**

https://twitter.com/echoenergyplc/status/1486273362372575233

Tweet from company this morning maybe triggered a bit of trade

This is not the RNS I was hoping for or waiting for and it seems like the market doesn't like it either. 14 October we heard about the first of 16 workovers and have heard absolutely nothing since then. These were supposed to be low cost, quick payback actions to drive and underpin solid core value for us which could then in turn be used for wider company development strategy (e.g. our exploration prospects and yes, maybe solar). MH is putting the cart before the horse. The workovers were supposed to be our near term focus and we've heard nothing for 3 months - have written to the company this afternoon to say just that but I have a feeling it will fall on deaf ears and be ignored. Very, very frustrated.

could this just be kicking the can a long way down the road with the expectation that something (one way or another) will get settled (with the company/ies, Georgian gov etc) before then?

Maq - Its worth noting that in the interview whilst MH did mention the 20k boepd production levels he also said that these were historical and that now it is a mature field they would not expect to get to those levels going forward, good levels no doubt, but not hitting the highs of 20k.
Would have been nice to hear some sort of expected timeline for workovers to be completed, e.g. 1 every .... or aim to complete X workovers by X date etc - same with CL project. He definitely gave himself plenty of wiggle room but better than complete radio silence I guess. GLA

Yep, and whilst here in the UK the astronomical gas prices are happening just as winter is starting, in Argentina its just as winter is ending so I guess we would expect to sell less gas over the coming 6 months anyway. Not great but at least its not right in our peak season for gas sales (I think?)

bugger.

Back on 19 April 2021 in the Q1 2021 Ops update there was detail of gas contracts for Industrial customers, extract below;

***Following the Company's announcement of 24 March 2021, relating to new gas sales contracts for 2021-2022, the Company has now agreed summer and winter pricing for its annual industrial clients, with the contracted winter premium providing substantially increased cashflow in the near term for future operations and production enhancement work programmes. For the committed production over the key southern winter period (May to September), the Company will sell natural gas at an average price of $3.52 per mmbtu, which compares to $1.35 per mmbtu for industrial clients the previous year.***

Do we know if those contracts are now due to come to an end (i.e. at end of September) or if the 'summer and winter' pricing agreed means we are tied into prices for the coming Argentine summer (i.e. October onwards)? I suppose what I'm getting at is were the 'summer' prices for those contracts relating to last summer or this coming (southern hemi) summer? Anyone know?

Util - all good, it was a bit of a quickdraw post by me and should have thought it through a bit more, make sure of the facts and perhaps also stated sources/rationale. Anyway, will be interesting to see what if any general market reaction there is (or isn't) depending on the primary results, Reuters and some others suggesting in that at least some of recent Arg-mkt rise is investors eyeing positive outcomes from upcoming mid-terms (along with other factors). Link to an example article for those interested -
https://www.reuters.com/world/americas/argentinas-markets-are-flying-yes-you-read-that-right-2021-09-01/

Utility - I wasn't ramping, just referring to significant National event that could affect market prices, thats based on various news articles stating the same; Reuters etc - general view that opposition gaining significant ground on the ruling/incumbent. My mistake that these are mid-terms and won't actually remove Fernandez but they may still lead to policy change(s) and force him to be more moderate as won't have the votes/control that he has enjoyed so far. He hasn't been good for markets (is my understanding), when he was elected the Argentinian stocks plummeted and have struggled to recover, the recent news articles have been reporting that Argentinian stocks have been rallying a bit, in part due to these upcoming primaries and mid-terms (hold my hands up to that mistake). It might just help us a bit is all and may (or may not) explain to some degree why the company is and has been a bit unloved (ie. due to being in Argentina)

Agreed, although the fact that we are Argentina based may also be (of have been) holding us back a bit as well. I think the election primaries are this coming Sunday (12th) and it looks like the incumbent party/president who has not been favourable to markets/trade in general for some years is due to take a bit of a drubbing. If thats the case and there is more positive outlook then to the upcoming general election (i.e. regime change) then it may give the market a more confidence in Argentinian stocks again and we could see movement in general and more interest in the country/region. Maybe some investors are holding back for that?
Just my opinion/hope

Jamesy - maybe a few speculators getting in or some extra pre the meeting tomorrow thinking/hoping it might start rising quickly following that. We'll see I guess.....

So 4 out of 10 wells brought back so far. Importantly for me the wording of the RNS indicates that the others have not been forgotten about at all. The wording/terminology used in the RNS demonstrates that the workovers are still ongoing with the rest to come in due course (RNS extracts below with relevant wording highlighted in CAPS). This is encouraging IMO. How long that takes who knows but they are still expected. Would be better for MH to state categorically that 'work on the other 6' etc is 'ongoing', it would be more open/informative, perhaps with expected online dates etc - again MH/team not communicating optimally it seems.

Extracts:
'...and shut-in wells are BEING brought online'....'TO DATE, the Campo Molino oil field has been brought back online with FOUR OF the shut-in wells now back in operation and producing from the Springhill reservoir. This FIRST TRANCHE of restored production will increase the number of active producing oil wells at Santa Cruz Sur to 18.'...'The production levels from the INITIAL reactivated wells...'.

interesting + useful, thanks Abzzba

Dfens - so you're suggesting it may be the NH's way of getting their cash early - taking the shares as they go with the expectation that they can/will sell them on any reasonable SP rise therefore getting their cash far ahead of maturity by-the-backdoor?

Hi Dfens,
Yes you could be right there - my only problem is that if we've negotiated a deal with the noteholders then trying to effectively wriggle out of part of it via that technicality is very Boris Johnson esque and I'm not a fan of that - doesn't instil confidence or trust in the company when we want to deal with any other parties. Also the interest is accruing and creating a liability on the company's balance sheet - capitalising that liability at the prevailing share price isn't really diluting anything anyway which is why I haven't got a problem with it.

You could also argue that the shares only get issued IF the noteholders elect to take them instead of cash at maturity, which in and of itself may show the market that at least the noteholders have some confidence in the company. Of course it could work the other way if the NH's say 'stuff that we'll take the cash thanks'!

On the other hand the whole Resolution 2 issue I do disagree with. The board need to show that they can be a good solid producer, generating cash and profit, bolstering the share price and giving the market some confidence in the company before asking for extra/additional funding than the company is already generating to fund anything further. If they start giving the market decent updates showing genuine improvement and returns and the share price better reflects the actual value of what the company is supposed to have and be able to produce (instead of what it is now!), then, and only then should the board be asking shareholders to allow additional issues to fund expansion/exploration - at the moment with Resolution 2 the board are putting the cart before the horse; asking us to allow them to expand/dilute for potential before they've shown us they are actually generating and improving value with what we already have. The board need to get us to a more realistic and relatively steady share price based on solid fundamentals first. IMO

Yep, so

Resolution 1 - this effectively enables the company to honour its debt restructuring agreement with noteholders in which the noteholders can elect to take new shares when their (quarterly?) interest is due, the number of share they would get would depend upon the prevailing share price at the time. This means potentially bits of dilution periodically IF the noteholders elect to take shares and will be at the 'then-current' share price (share price goes up then less dilution). I don't have the legal text to the restructuring agreement Digitt but find it hard to believe that there a get-out clause if the shareholder don't approve any new shares - my guess is that the company would be in default of the agreement and the noteholders can call in their security (what ny or somebody was referring to earlier I think). Given that the shares would potentially be issued in bits over the coming years and only at the prevailing share price (and not the god-awful current price) then I don't have a problem with this and would vote to approve Resolution 1.

Resolution 2 on the other hand is a re-hash of the request at the AGM to allow the board to issue new shares to finance projects, acquisitions, development etc - the only caveat this time being (I think) that these new share would get offered to current shareholders first. To me this is a *******s Resolution and is simply another attempt to get the facility that was denied to the board at the AGM, the shareholders said 'nope, we want you to finance anything new out of earnings'. I won't be voting for Resolution 2