Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi. Has anyone else noted more adverts at the bottom left of the screen lately. Also I used to be able to see trades from a few days back but now I can only see one page full. I don't pay for this service but just noticed the change.
Malcy's Comments
Sometimes when stocks have incredibly good performance and particularly if that is followed by a deal and a raise the market takes a fresh look at a stock to see if there is significant further growth yet to come. For Zephyr the answer is a resounding yes as the high quality non-operated acreage build is showing ahead of exciting times back at the Paradox. It seems as if the market has forgotten this already successful find and now with dedicated cash flow being lined up to pay for this season’s drilling
Back down at the 5p level these shares are as cheap as chips and at the risk of repeating myself has one of the best boards in the industry well capable of delivering Zephyr at a share price a lot higher than this.
From his blog - Malcy's comments - "This looks to be another exceptional deal from Kistos even though the market looks like it will take some persuading. The acquisition had been trailed but looking at the numbers it looks pretty good to me. At the current natural gas price of 220p which is the equivalent of around $200 in oil terms I think it pays out in 12-18 months which is an impressive number. Indeed by the end of Q2 when this will complete I estimate that the company will already have taken C. $60m which put next to the year-end cash of Euros 77m puts the deal into perspective.
Kistos will now have a bigger, more diverse portfolio which I am confident will continue to grow. The company has a policy of only hedging its capex budget which is without doubt the best, if only thing to do. They have doubled the size of the company with no fundraise and at highly advantageous terms, most fields are already onstream and without building costs to take into account.
With regard to the operational update although the Slochteren formation proved to be water wet, two other, shallower horizons tested and produced at more than 1,700 boe/d. This may obviate the need for a new platform and instead the producers might be tied into the Q-10A platform for an easy, cost saving solution.
These are cheap barrels, already built by someone else and the company has doubled its size by taking them on when others may not have done so. By that very nature it makes the barrels bought very attractive and also low emission barrels, GLA production operations are forecast by Kistos to be approximately 13 kg CO2e/boe in 2022, which is significantly below the North Sea average of 22 kg CO2e/boe.
This looks to be a sizeable acquisition made without funding and adding low emission barrels to the portfolio. It is what CEO Andrew Austin and his team are proven to have done in the past and will undoubtedly do again in the future, the smart money here is buying the shares on the dip, more often than not a wise way of making money. "