Member Info for JonnyGee

Yes, exactly. Smells to me like another leverage trick (particularly as its carlyle credit) . If it were all securitised with no recourse to DEC and generating operating fees/ upside Id be in favour, but as usual we are getting zero colour on this

Yeah, have to agree. I initially read it as an operating partnership (great!) but thats not what it is actually saying. In fact its remarkably short on any kind of structure information so looks to me like another attempt at off balance-sheet leveraged-to-the-hilt financial engineering. Energy stocks generally down around 1.55 as is DEC, so looks like the market is just ignoring this as it doesnt actually say anything.

Thank you for taking the time to post this. Good colour and the responses make sense.

I was a bit surprised myself that the contract news wasnt RNS'd, but then bearing in mind the materiality requirement, I can see why it might not have been. Its definitely good news - especially the US one as its new contract work (the smaller European one is new and renewed), but the US £50mio is "ramping up over five years", so averaging £10mio per year, (though back loaded presumably), which is less than 2% of sales, so perhaps not actually RNS worthy.

A fair bit of work! For those interested I actually wrote to IR on yesterday's RNS for two points (a) their assumed Brent price (for the ROI calc) of $80 in '25 seems way over current market view of ~$73 and (b) I wanted them to confirm the ROI is indeed based on incremental flows over existing, since at first glance it does seem a bit odd to say you extend well life by one year, but get payback in only 16months (though I then note it talks about accelerating production rates, plus extending well life) . Phil Corbett's response re price assumptions were pretty much a brush off stating "The Skua-11ST ROI quoted in today’s release was first disclosed in our 25 February announcement. In the same way that 2P reserves (for example) are not constantly recalculated during the year when future expectations of oil prices change, then it doesn’t make sense to potentially confuse investors by quoting a different ROI for this Skua-11ST well to one we only published a month ago" He may have a point, though I cant say I agree - in short, returns will be around 10% less though still solid. Concerning the calculation being based on incremental flow he did confirm that is the case.

@LWHL. Yep, its clearly a management problem here. Terminix acquisition was October 2022, they've still not sorted it out, and Rollins is beating the crap out of them. I notice their relatively new head of NA has just got the chop and they are still floundering. Historically RTO was trading at very premium ratings (north of 30x adjusted eps) which I always felt overpriced given their fundamentals, and the market has now clearly lost any inclination for a premium here, and rightly so. Its going to keep drifting down IMO until there's a management change. It bounced on the Pelz news (and I made some nice money exiting on that since historically Pelz has not actually much value change) , but here we are again with no progress in sight. Maybe worth another sniff around 300 but am very wary of this.

You're welcome - I realise that despite Roxi's best efforts to the contrary, there are some people on this board who still prefer their truth unvarnished and some objective attempts at analysis of JSE. (the filter button is a wonderful tool by the way ;)

As for share price, it's worth noting that using my best guesstimate '25 real EBITDA of $135mio, that gets us to a 2025 EV/EBITDA of 2.2x, i.e. pretty darned close to the market multiple of 2.3x JSE refer to in their presentation. Now its entirely possible that the comp set is also playing ducks and drakes with hedge cost carveouts and recurring "non recurring" opex, so the only way to get a truly comparative benchmark is to do a deep dive on the comps used, which I might actually do if I find the time and energy since that gives a huge delta in the appropriate JSE target price.

DYOR/GLA

With Akatara pumping out 4,400-6300boepd, yes, since midpoint 25 forecast indicates a slight increase in oil production despite depletions and no new well activity except Skua. Admittedly there was a fair bit of weather induced downtime last year, so that may be where they think they recover some volume, but they'll need very high levels of uptime to achieve that. On the other hand though, I get the sense the new team dont wish to over promise, which may be no bad thing and help the market recover more confidence.

Also, further to my earlier email, FWIW for anyone interested, I ran the '25 numbers and it pops out around $135mio of actual EBITDA (as opposed to the BS EBITDAX number they play with). Given the capex midpoint of $85mio (mainly Skua), increased interest plus assumed proportional increase in cash taxes (caveat - this may or may not be appropriate as taxes are all very local), I calculate cash available for debt paydown in 2025 to be in the region of around $40mio - maybe $50mio if there's no increase in tax, which will make a reasonable dent in the debt, but still a fair way to go , particularly if they then start incurring Vietnam capex in 2026 (which would be a good thing for obvious reasons, but means they arent going to be anywhere net cash for the foreseeable future)

@Legache. Yes, a decent update on reserves but mysteriously quiet on profit metrics. 2024 revenue less production costs gets you to $134mio, vs street consensus of $98mio EBITDA. With $52mio of admin and other costs (in addition to production costs) in 2022 and 2023, its probably reasonable to assume similar numbers in 2024 which gets us to around $82mio EBITDA i.e. $16mio below consensus. Also, if you run the math on 2025 indications, using $75 average Brent we end up with a very slightly lower Revenue minus production cost of $130mio for 2025, so $80mio EBITDA, less than HALF of the street '25 consensus EBITDA of $190mio. Now where things go quite strange, is if you reverse calculate the 2025 EV/EBITDA multiple of 1.2x per their presentation, with $105mio net debt and £167mio ($211mio) you get an EV of $316mio, so at 1.2x multiple that would imply EBITDA of $263mio. Something really doesnt add up here.

I think everyone is watching the new management team so dont disagree with that sentiment Charlie, though not so sure Id label the CFO as having a dodgy CV. Spent a good amount of time as an IBanker at Merrills and Rothschild so should know his way around Capital markets and borrowing , plus time as E+P CFO, admittedly at micro caps/ private but still relevant and this is a step up for him so should be trying motivated. FWIW I wasnt wildly impressed by Bert Japp though suspect it was hard to get anyone top notch on board whilst Paul was around - ti,e will tell.

@Munnie: Maybe yes, maybe no. I decided in the end it was worth seeing what would happen in the market and not faff around with the options, as am sure they'll charge a pretty penny to convert, so put in a slightly cheeky limit order at 14p which actually executed and have now put in an an additional at 13p (today's low currently) for the same volume. I have an inkling that may get executed too, but who knows. These are all relatively small amounts anyway as I regard CTL as highly speculative, though like the story.

GLA whichever way you go

FYI I called AJBell yesterday to see if they were on board with the CTL Broker Option. They didnt have it on the system at the time I spoke with them but I subsequently received an email confirming it was now there and with the following instructions to make an order:

We are able to participate in the CleanTech new share issuance. All you would need to do to participate is call our team again between 8am and 4.30pm tomorrow, tell us it’s a ‘Public Placing’ trade and provide the following details:

"Name of stock

Price agreed (e.g. 16p)

Amount you are looking to invest and number of shares

Name of broker

Telephone number of person to contact at broker

There will be a £100 dealing charge to place this order"

There is no mention of confirming existing ownership of the stock so I suspect that requirement may have been skipped, though they can obviously check it on the client screen and as I am an existing shareholder perhaps they didnt deem it necessarily to indicate that condition.

Hi guys - can you let me know where on the YCA site I can find the U3O8 price? (Or even on the INCE site as I cant see it there either?)

Thanks

Toxic, Am not really a technicals fan myself, I tend to go on fundamentals and price multiple averages, but if we're at 40p the end of this month I'll buy you a beer - Hell, I'll buy you a crate :)

@Ayecuramba. It looks like its there via the Broker Option - though apparently up to the Broker whether they decide to do it (!?!). I suspect its a question of whether there's enough demand for them to do it. The shares are now trading at the placement price of 16p so you can pick them up anyway, though obviously lose the 5p implied warrant value per share if you dont subscribe

@28Jaczar - Cant fault your logic on that. Buying cheap before seriously positive price moving news would be the very definition of insider trading, so yes, Im guessing a fairly "business as usual" announcement is what we ought to expect. Happy to be proved wrong in this instance though :)

Indeed. FWIW consensus 2025 revenues (4 analysts) are showing $466-490mio of revenues depending where you look, and net income between $5mio and 23mio. That being said, IFRS hedge accounting renders O+G P+L's completely meaningless these days (and Im a qualified C.A for my sins!) which is why I tend to focus on adjusted EBITDA/EBIT (excluding any share comp shenanigans) for this sector

@ Opulentia. Dont disagree that 25p was a good price to pick up JSE. Im already fully(over!) allocated on JSE, though my all in price is 27p, so am not hurting too much but obviously would like to see a rerate. Re valuation, a couple of observations may be useful - JSE is currently trading on 2.8x '24 EBITDA, and 1.4x consensus ' 25 EBITDA. By comparison, BP and Shell trade at 3.4x and 4.2x '25 respectively. Small caps obviously do and should trade at significant discounts to majors due to higher risk, lower quality management, resources etc etc, and interestingly, analyst consensus target price is 70c/56p, which gives a target EV of 2.5 x '25 EBITDA or a one third discount to the average of BP/Shell, which feels about right and where fair value is probably located. I note that this all excludes Vietnam coming through and if that happens then I see genuine further upside and would prefer that to be developed before any dividends. Given JSE's small size, and mix of good, bad and ugly assets, asset diversification remains key to my mind and should be a board priority over dividends for the time being.

@Toxic Bull. Your short term optimism is quite touching, though rather more grounded than Roxi so I've no objection :) Given the litany of screw-ups and delays before booting Paul, however, (Montanaro multiple screw-ups, resultant debt ramp up, Stag proving uneconomic, no COO appointment, Akatara delays etc etc) the market is going to take its own sweet time to see this rerate significantly. I genuinely believe its undervalued and nice to see it gradually tick up a few pence the last month but there are going to be no quick wins here and as Paul Brains commented, I feel we are only going to see some momentum late into H2, assuming operations are run without hitches and there are no Macro/Geopolitical shocks to the market. i.e. you'll need some patience and prayers with this one.

@thBirdfeeder:Good catch, I hadnt spotted that. In that case, Ive no idea if they've included any ILiAD revenues in the £73 indication, though that should be based on their reasonable understanding of revenues they see coming through, so if they are confident about ILiAD and its commercial terms and timing then some portion of that ought to be in there. A prudent management team would only include conservative assumptions on that, but I havent been tracking HVO long enough to form an opinion on whether they generally get this right or not. Looking at historical consensus movements, revenue forecasts dont seem to move around so much, though today's update is obviously pretty material