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I would imagine you’d need to provide some solid assurances to secure those 12 month contracts, a veiled msg to the mkt? Sure it may be a coincidence but I find the timing intriguing and am now more convinced than ever MH has the BH votes he needs for the restructuring.
This deal will be music to the ears of any wavering BHers. (Paltry IMHO). I see it therefore as a msg to SHers. The commercials are more than indicative that on even the current, let alone the yet-to-be exploited asset base, the business is in good shape. Very good shape, given cost cutting this past year.
As have said before, you just don’t push a profitable going concern t/o $15-22m, off a cliff. That’s Deutschland 83, Soviet era business decision making!
So... Kick-off the flares and let’s put our shoulder to the wheel, leverage these cashflows and get production towards 3k boepd over the next 12 months (achievable from current low risk assets).
Yes, there’s wildcat upside, big upside, but we’ll discount that for the moment....as we should.
Re-rate
Hmmm let me see. How about a 7% increase in the SP and a narrowing of the spread for the first time in a fortnight.
Sorry, but MMs aren’t in the habit of happily loading their books with unwanted stock (at a premium to the offer!) in the hope someone might take it off them at a higher price.
Very good call, maybe take out original investment and allowing free carry on remaining. Think 2p this year is more than achievable, but if CL flows well then we could be on our way to 3p as the CL-MA acreage is derisked and reserves revised upward, but upside is difficult to call just now. Too early yet, but plenty to go after.
I think everyone is underestimating just how large this block is and how underdeveloped.
If cashflows are free to be reinvested in opening-up the prolific, low risk sands of this terroir then who knows where we end up. What’s clear is the debt restructuring changes everything, but there has to be that understanding between Martin and BHs. FWIW I believe the relationship has now been completely reset. Martin is cut from the same cloth and is a man they can trust. Added to that he has a clear and realistic plan for taking the company fwd.
Wouldn’t disagree.
On the other hand, “Those that didn't vote in the 1st round possibly were unable to vote or just didn't like what was being proposed and were hanging off with a view of the vote failing and a better offer coming forward.”
That makes no sense to me. If any BHs disagree with proposal terms of course they vote against. It’s really very simple. If they don’t vote, that’s up to them and it gets carried.
I think a lot simpler than that...
If you don’t like the proposal you vote against.
If indifferent or expect to pass you don’t vote.
If happy to endorse, of course you vote for.
End of.
What you don’t do is allow a going concern, that’s turning over $12m (historic), with huge upside on the back of a dramatically improving O&G mkt, to go up in smoke!
Strong buy IMHO
MH has a clear and realistic plan for ECHO. Good financial discipline has been the order of the day this past year for obvious reason but the emphasis from 30/5 will shift decisively to execution.
I’m in no doubt we’ll see production steadily increase from the ongoing programme underway across their PA acreage and this is EXACTLY what BHs want to see - also having a like-minded prof at the helm of ECHO will have gone a long way to restoring trust and resetting relationships for the future.
Exciting times
It’ll pass, of course it will.
Turkey don’t make a habit of voting for XMAS ffs...
Given the new cycle being powered by recovering demand and scarce supply you’d need to clinically insane not to support the proposal and the commercial pragmatism and focus of the new leadership.
This business will be a veritable cash machine in 2H.
Folk won’t believe they didn’t exploit the current weak SP in just a few weeks.
The bigger issue for future supply is the lack of investment over what has been a sustained period (12-18 months) in upstream exploration and exploitation. I see oil prices getting spikey!
If folk think we’re just going to effortlessly and instantly make the switch from fossil fuels and HCs for petrochemical and power gen, to some yet-to-be-identified alternative, frankly they’re in a dream world. Even ICEs to EVs will take 20-30 years (min) and when greens realise just how nasty and inefficient current battery tech is, possibly a good deal longer than that....and that’s just the ‘relatively easy’ transition to EV. We may well shift to carbon capture at combustion as current battery tech is simply not good enough, is toxic, demands huge quantities of precious minerals and does not scale.
Springhill in this location has a lower risk profile, the questions yet to be answered 1) does it/how well does it flow and 2) what’s the net pay.
Think they’ll have a good idea on both from the drill... they’re keen to test.
Good they’re now targeting more conventional Springhill rather than the more brittle tobifera.
Fits a pattern of progress and updates from MH. Continues to deliver on the brief.
Still the debt restructuring to conclude (which will happen) but steady, solid progress being made here and more news to come. Good.
...perhaps not as the priority would seem to be increasing production from low risk work in PA (SCS) but I just wonder should CGC not drill in TAs western cube in 1Q, has that come back into play for ECHO given improved cashflow, cost mgt etc? Might ECHO be able to participate in 3Q?
When there is news, it will be communicated.
When there are routine operational updates to provide, they will provide them.
The Exec have made their intent crystal clear - with primacy on cost management and production growth by exploiting low risk, proven assets in and across PA.
Let them get on with the job.
4p seems realistic and if CL flows, we could be there in a matter of months. Thing is, if CL flows we should put in the context of Monte Aymond. The entire area has the potential be a tidy little ‘play’.
This is an exciting and relatively low risk dev project, that could drive significant production growth into next year.
Production back to 2.5k boepd would be a rather good start, makes a nonsense of MCap given the assets in CSC alone.
So, Q for today... will CGC drill Western TA in Q1? If deferred are ECHO back in with a shout? Was the last RNS on the subject a necessary exercise in expectation mgt?
Things really could shape-up here nicely, if ECHO can deliver production increases through well interventions and W/Os against a backdrop of market re balancing a firm/stable prices, we’re better placed than ever before. New wells only add to a rapidly improving outlook for this minnow.
Ditto, guys and galls.
Still massive upside here. Utterly bonkers valuation with Brent and now gas prices firming. To be able to build production and cashflows so quickly in a strengthening mkt, on a restructured and strengthened balance sheet - well, recovery stories don’t get much better. There’s no BS wildcard promises now thank heaven!
3p+ comfortably achievable ahead of interims IMO.