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Vulcan998, Iread the results exactly as you describe, so I cashed out, because the EPS is really low, and I do not see it increasing by 200% to justify a share price of 120p. DYOR. GL

Hi Tom8080,

If you re-read my first comment you will see that there are all kinds of interest that can end us as a PIK. It is not just the two bond issues. There is RCF interest, and Oz/Sculptor loan interest. So does ENQ's FCF figure exclude all or only the first two? All, I would say.
It surely will include (i.e., be net of) the servicing of the Magnus vendor loan (but repayment in H1 was small given the target amount) and the cash waterfall arrangements, as per the Free cash flow definition PRD refers to.

The bottom line is that I do not trust those break-even figures ENQ has provided, because I do not know what is in and out w/ enough detail, as all that was PIK will matter, and equally importantly, so will changes in working capital. Suppose ENQ has asked for a longer payment period from its suppliers than it was asking before. My conclusion is that only after we see the accounts in March will we know.

Hi Londoner,
Thank you for a very detailed and comprehensive reply and the good news on Magnus. Wrt Kraken I did not and do not disagree with your interpretation numbers. It is just that in mind I really would like to see ENQ releasing the production numbers for the western flank wells, so that I can compute the decline of the older ones and to assess the potential of the western flank oil deposits still to be drilled. I guess that the largest shareholder in the company knows.

Hi hitman1a, note that replacing RCF debt with PIK of the bonds actually increases the interest bill, as the latter pay 2 to 4 additional percentage points in interest. Still given the $140M swap in debt, that only amounts to an additional $5M in interest.

When I have the time I will go back to my notes to check if the low FCF b/w July and Oct was due to poor hedging, and what in my book would be necessary to clear the RCF w/out help from a friend. Until then I will read with enthusiasm the exchanges b/w Chilting and Comrade tarmak on tanker loads, and hopefully Therapist's production figures in cases he shares them with us all.

Chilting, my 95% confidence interval for the average price of oil in 2021 is [42.5,60]. Whatever is outside the interval is due to the extreme mood swings of MbS, Putin, Biden, a few Ayatolahs, and perhaps IS and their friends. Their mild mood swings are taken into account in my interval.

GLA

Hi Pelle,

Thank you for your kind words. I'd still say there is some debt item in there that was not there at the end of H1 that ENQ did not reveal. Could be the SVT related loan having been renegotiated as I allude to in my comment.
The Magnus vendor loan is not classified by ENQ as debt. But your comment alludes to a possible reaason as to why FCF b/w July and October was so low.
If working capital stayed constant, and being generous if all the remaining CAPEX ($20M) took place in this 4 months period, then Operational cash (here we exclude PIK) flow minus Admin expenses and decommissioning expenses, and costs with staff redudancies ($6M budgeted) was very poor. Basically, it would have been $40M (RCF repayment) - $2M (decrease of cash balance) - $17M (received from Malaysia), i.e., $21M. If you add the $20M CAPEX it would make it $41M.

Hi Londoner7,
I am curious as to how you get that debt reduction in Nov&Dec could amount to $90m (i.e.FCF) under your assumption of $45/bbl until year end.

Also, how can we find out how much the western flank wells at Kraken are producing? Any ideas? This is key to get an idea of what production to expect next year. I would like to see 35Kboepd, but as you point out it might get down to several thousand boepd lower.

Magnus: re-reading your comments (after having read the part of the TU related to Magnus), do you have any idea if the second water tower that was expected Q4 is being postponed or instead abandoned? W/out Magnus making a significant contribution to production there is not much hope that the RCF will be repaid w/out help from a friend (ie., some other loan).

ENQ is now down to 5 production hubs, w/ one of them, (the Dons) coming offline in H1_21. One can only hope that Malaysia's hub is fixed and that as you say Kwittwake can remain viable until oil prices permit the Eagle tie in. I would expect ENQ to move ahead in H2_21, w/ CAPEX outflows deferred to after Oct1st, after the RCF is due.

I have been looking at the propsects of the Kraken premium returing to a double digit figure per bbl. All I read suggests that will not be easy. It seems the massive VLFSO premium over other types of marine fuel seen in Q4_19 and Q1_20 will not be seen again. A premium of $10/bbl over Brent at $50/bbl over the first 9 months of 2021 and RCF would be repaid in full, assuming no production surprises and no CAPEX.

GLA

I am returning to the TU and som of the comments by Londoner7, Tomo8080, Therapist, hitman1a, Pelle, gkb47, Comrad Tarmak and others interested in matters of substance

I start w/ net debt, as i have yet to reconcile the figures. I know that every year b/w 1July and 31Oct Enq always faces a big interest expense bill. Both bonds pay interest during that period, the Oz loan also pays interest in September (I assume interest is paid every quarter, but to err on the side of caution I will assume that it is paid once every semester), ditto for the RCF, paid at the start of October every year (although RCF's interest migh just be paid once a year, instead of every semester which is what I assume below.

My calculation find that ENQ must have sold its production at low prices during that period for net debt to have increased by $37M.
First of all I want to ask how could have net debt gone up by $37M. Given that there was a payment of $40M of the RCF, this means that other gross debt (net of cash) would have to have gone up by $77M. We know that the cash position b/w 30 June and 31 October changed only slightly, as cash and available bank facilities amounted to $270M on June30 and $268M on Oct31. This means that gross debt on all other items besides the principal of the RCF went up by $75M.

The question is how we get to that $75M. Several additional debt lines can be listed more or less objectively. The retail bond's PIK interest bill was $8.3M. The higb bond PIK interest bill was $27M. To this amount I have to add the increase in the debt due to the appreciation of GBP versus the USD, since there is one bond denominated in GBP. My revised calculation for this is $14M, (not the c. $10M I had indicated before). These 3 items add up to $49.3M.

So, I am missing c. $25.7M to get the debt up to the stated figure!!! The The RCF interest bill in the semester would have been $12.8M, and this was PIK interest. But, it is possible that RCF interest is only paid annually, in which case the PIK interest was $25.6M. And suddenly, the LHS=RHS!
Note that this hypothetical last item would imply that the OZ loan lalf-yearly interest due, about $3.2M would have been paid to Oz capital. But on the other hand the principal due on the Oz loan would have not decreased (which does not seem possible as the hedges at $52/bbl +- Kraken premium would have generated positive CF, and so there would have been some repayment). IN the case there is no quarterly cash flow sweep, the reduction of the Oz loan will only occur in Nonv/Dec, so all is fine! A repyment made on the Oz loan messes up the calculations. The only way to balnce the numbers is for the SVT $10M to have been renegotiated and increased by an amount equal to the amount the Oz loan decreased.

Finally, let me add PIK is not part of the FCF break even figure ENQ has put forward.

GLA and keep safe from the posters who appear in green on my screen

rusty,
When will we know if finally the house is in order, and the growth in sales is here to stay, and that we will see profits materializing as free cash flow.
What is the view of the experts on the technology that tremor has? Is it long lasting in terms of driving sales in the future?
Thank you.

Indeed, CofE.
One does hope that IRC is also investigated. It is an asset that will be worth a considerable amount of money if money stops leaking. Fortunately 65% iron ore prices have stayed high, c. $140 some days, and this means that this quarter, like last quarter, a lot of money should be coming in to IRC's bank account. But, part from working apital movements, the TUs/ results suggest money is leaking somewhere, because cash balances are not increasing by much. IRC's quarterly cash income at the moment should be enough to repay $15M of the loan it got from Gazprombank every quarter. Why that is not happening is anybody's guess. The strategy should be to pay as much of the loan it can while the prices of iron ore stay high, as otherwise, if the prices drop, it will find itself renegotiating debt.

As far as POG is concerned, any competent CEO/CFO should hedge the gold production that is attached to the thir-party purchases, as otherwise they can generate a loss, if the price of gold drops. It would be wise to hedge 5Moz per month for the foreseable future, so that POG keeps earning its margin on the third party purchases.

Hi Pelle,

So no Brazil for you this year?
Make sure you leave the jeep running all night. We need to bring those distillate stocks down. gkb47 fined you again. please remember that no fines any day Brent is above $55/bbl, but even that ony until the Oz loan has been repaid -:)

Why did debt go up? Londoner7 just explained why. But it is possible that there were a lot of private jet flights by AB and his mates b/w April and now to Malaysia , Aberdeen and Shetland. All locations very far away from London, as you know.

My point about jet fuel and flying like i have been doing, is that jet fuel was being used as maritime fuel for a while thus depressing the price of other IMHO20 compliant fuel. That led to VLFSO prices collapsing. W/ people flying VLFSO prices will increase quickly because jet fuel will again be in high demand.

I am defintely not increasing my ENQ holding. Bought a tiny amount of Tullow the other day and Petrofac today. At some point I will reduce my ISA's ENQ holding. The SIPP one might stay untouched as my entry ticket to Jan's 60p party.

Hi Londoner7 and Tom8080,

Kraken: It is disappointing that we are not told anything about how the western flank wells are doing. This matters for me to form a view if additional wells in the western flank would be worthwhile (con those 2C reserves there be converted into 2P reserves). I am not sure how mich additional water handling capacity would be required, Londoner7. I thought AK was not water handling capacity was far from being maxed at the moment.

Magnus: I was actually shocked when I read "natural declines", thinking back to the CMD19 like Londoner7, but opted to write nothing about it. It does not make sense, production this year should have been 18 Kbopd and should increase to 22.5Kbopd by 2023. So, are AB's expectations about Magnus's oil production no longer aligned with the CMD graph? If so, we should be informed of the revised estimates. As I wrote, I do not mind not producing if the oil is still there and can be extracted when the price is right...But, if it is no longer viable to extract then that is a different story.

Malaysia: I am sure the fire has an impact on the FCF in the short run because production will be lower, and I doubt that ENQ was not making money out of it, even at current prices. I interpret no impact on FCF as meaning that the extra expenses they had with the fire will be recovered by year end through PETRONAs getting a smaller share of the oil while ENQ is being reimbursed.

Net debt: The appreciation of the GBP vs. the USD would have had some impact, and added to the debt in USD figures. My calculation is that it increased debt by $9.7M.
The information we were given today on hedges is of no use to learn more about this. But, we were told that ENQ has for the remaining 2 months of 2020, c.0.7 MMbbls of hedges in place ( new OZ loan mandated hedges?) at an average floor price of c.$41/bbl. Let us hope the ceiling is at le

Hi Tom8080,
First and foremost I was surprised by the fact that is was very succint, and did not mention anything tangible long term. They never tell investors too much... Is an agreement with PMG for the GPA in the making, using Enq Producer? This seems more likely than getting the Exxon oil fields either here or in Malaysia. But would not bring FCF immediately, which is what is needed to reduce net debt.
I was suprised by a few things:
i) The Malaysia fire, which was unknown to the PIs as far as I can tell. I would have expected them to have said something.
Although it has no impact on FCF as cost are recoverable under the PCS agreement and thus might have little impact on FCF this year. Bottom line is that ENQ's assets are ageing assets, apart from Kraken, and Scolty/Crathes.
ii) Net debt going up. I still have to open Excel to use my toes and fingers to figure out what happened. But, I believe that hedges (in the form of swaps, probably) played a role... I was hoping for $1250M net debt at the end of the year, but I got the second digit wrong, it is a 3 rather than a 2.
iii) It seems Magnus continues to give headaches and ENQ is yet to find a way to operate it to its advantage. I do not mind that production is lower than planned, if that was the result of a choice made by the company (after all, ENQ should not sell its 2P reserves at prices below $50/bbl, so choking production would be smart). But, the worry are that the issues with the kit are yet to be solved.
iv) Kraken premium: I thought there had been a premium all along throughout 2020. Apparently not, although now there is a premium, and on that is increasing by the day, w/ increased jet fuel consumption. Incidentally, I am not to blame here as I have been flying since March. In fact, for some trips had to take 2 flights, while in the past there were direct flights...
v) Kraken's good production numbers given there was a mintenance shutdown in Q3. But, I am not pleased ENQ is not saying anything about the production of the new Kraken wells (Worcester's figures are not discussed)

Now, ENQ should embrace new techniques to extract oil to scrape the bottom of the barrel:
https://www.energyvoice.com/oilandgas/north-sea/277561/microbes-deliver-production-boost-north-sea-field/

Finally, all the above has less impact on SP than Brent. If Brent goes up so will the SP. And Brent seems to be on the up (conflict brewing in Lybia once again; rigs down; frac crews down; a lot of ships moving stuff from Asia to the western world, and perhaps Pelle flying on holiday to the Souther hemisphere -:) ) SP can still move above 15p in a flash. We are talking peanuts difference in terms of market cap.

RCF: Paying down $40M was received well by the market. With the $17M coming from Tanjong Baram they can repay the other $25M in Q4. Seems ENQ knows that repaying the RCF is a desire of Mr. Market.

Now, let us wait for Londoner7's insights.

GLA

It must be something else. Sales figures were good, even if profitability is not that great to say the least.

With the end of 2020 in sight, ENQ's YE2020 financials are pretty much locked in (btw VLSFO premium over brent has been c. $5/bbl in H2. Kraken's production selling b/w $47 and $51/bbl in H2). All that remains to be known is if any deal was struck since the Bressay acquisition.

H2 production will be lower which is good as I do not want to see 2P reserves sold at a low price. Better hold on to them and sell them at a higher price in 2021. Capex in H2 around $20M per guidance, and as londoner7 brought to our attention there are no plans to drill in 2021. Is this good or bad? Lower capex means higher FCF, and thus higher repayment of debt. Furthermore, it means lower production in 2021, definitely below 60Kboepd, but hopefully above 55Kboepd. POO will only increase if oil production outside OPEC+ goes down. So Enq will do its part. Lower production means less debt repayment in 2021, unless the increase in the POO more than compensates the reduced production, which is fine as long as another Oz-type loan, or a mercury oil sale is secured.

Barring any surprises, Net debt might come around $1250M by year end.

POO in 2021 will make or break many companies. What to expect? i) Lybia's production above 1M//bopd (recovered muh faster than anyone had forecasted), but once the warring parties have replenished their coffers will the peace agreement fall through?; ii) Iran's production increasing from the current 2M/bopd to an average of 2.5M bopd (i expect it to add 1M/bopd within a semester); iii) US production above 10M/bopd (the shale ponzi scheme is still alive and kicking - it is not rational, but the executives's incentives still have production as a major goal) (US production changes will be the key in determining the increases of the POO) ; iv) Non-OPEC production excluding the US to drop by at least 5% (look at the international rig count outside OPEC producers); v) Venezuela's contribution to production (This is the big unknown and what could surprise the market).

Wrt ENQ a lot can be learned by reading the RI document, namely the part on Magnus, which has deviated from the baseline case.

GLA

You are wrong again, NeilHannon. Stick to your beloved PMG.

Hi Therapist,
Many thanks for sharing your data and analysis with us. Very, very useful. You predict $50M debt reduction since end of June to end of Oct (+$34M from Malaysia), and Pelle indicated a similar figure. Well, that will be a start towards repaying the RCF. We know that some of the cash is ring fenced for the Oz loan and BP vendor loan. And, I hve now expect the cash to be sitting in the bank and not be used to repay the $65M RCF due in April, because if ENQ is sniffing at deals it needs cash at hand to do them. So, cash in the bank brings optionality in these difficult times. Many thanks for all your valuable info.

Pelle, you have relapsed twice during my absence. I see you have diersified your oild holdings. Wise move, given the two other companies you have put your money on. We cannot invest in AfricaOil via London's LSE. We would need Swedisk krone to buy through Stockholm.

gkb47: hope you and the Therapist can settle your disagreements in the best possible way. You are both very valuable posters. W/ news about vaccines perception of value of many healthcare shares might change rather quickly.

Hitman1a: thank you for your interesting thoughts.

Chilting: thank you for keeping us informed about the offloads.

I will wait for anything new in the TU. Hopefully it will be exciting enough to bring epiphany, londoner7 and maybe the matrixobserver and prodopt back to posting here.

GLA and protect yourself from one line monikers...

Hello Londoner7,
I am very glad to hear you are doing well. Sometimes people stop posting for not so good reasons...
W/ regard to ENQ, I have not looked at it for several weeks. Still holding all I have, although more and more sure that at least half of RCF's balance will have to be repaid with more credit. Let us see what AB comes up with in terms of a new deal. I am now convinced that the $65M due to be repaid in April 2021 will not be repaid before the next TU. ENQ is probably holding on to all the cash it has.

In terms of investments, my gold related holdings are now my priority given limited time availability. All of them operating in iffy jurisdictions. POG (my largest long term holding) is a basket case in terms of governance. I also have punts in minor AIM companies like KMK and IOF and a few small health care stocks, and TRMR.

What is catching your attention nowadays?

gkb47, Thank you for your posts. I like to read a variety of opinions. You allude to ENQ's production decline in August. That was the time at which Brent was highest. ENQ always times it right, doesn't it?! I read some of your previous posts where you mention you were onto health care stocks at the moment. We have had JNJ for decades in a family trust and since the early 2000s a healthcare focused fund. They both have done very well. We had AZN but sold out almost a decade ago when the patent cliff seemed unavoidable. Got it wrong! More recently, I got into IXICO and VLG. What catches your attention in healthcare.

hi Therapist, I was wondering if you could please post your lovely tables with production data. What is your prediction for FCF in H2 assuming Brent at whichever level you factored in?

Hi Pelle, You mentioned you partly moved out of ENQ for other 2 oilers. Which ones may I ask? BTW, I am collecting GENL's divi soon -;)

GLA

let us hope he is ok.

Biden's options on energy related decisions:

https://twitter.com/leslietron/status/1324015732024291329/photo/1

I start w/ a comment on the POX HUB's value as per 2020H1 processing of 3rd party refractory gold!

Margin on refractory gold purchased was $300/oz. Is this worth the POX investment (Total POX spend = US$316m)? It is not. Need to have own refractory gold to use full capacity of POX.

Trading update for 3rd quarter:
- A marginal 4% decrease in total gold sales to 121.1koz (Q3 2019: 126.4koz); Not good!
- Average realised gold price increase of 38% to US$1,919/oz in Q3 2020 (Q3 2019: US$1,388/oz); Very good!

Net debt (unaudited) reduced by c.US$56.8m to c.US$481.2m as of 30 September 2020 (30
June 2020: US$538.0m) principally reflecting partial conversion of the $125m Convertible Bonds.
This is an absolute joke, because b/w 30 Jun and 30 Sep $87m were converted, but net debt

was reduced by US$56.8m, so $30.2m of the cash balance was frittered away b/w 30 June and 30 Sep.

So, where is the cash going?

Same old D(P)OG.

Cash magically continues to disappear and profit is elusive as usual. This is not a company. This is a pot of honey for the Russian bear who happens to be in control.Example: All-in Sustaining Costs (AISC?) increased 19%: US$1,220/oz (H1 2019: US$1,029/oz) mainly due to higher TCC as well as an increase in capitalised stripping expenditure at both Pioneer and Malomir.This is all very strange: What decent and profitable miner has such high AISC? What is going on? It does not matter what the price of gold is, there is never much money left. Net debt reduction was minimal: $23M + repayment of the interest-bearing gold prepaid loan of c. $50M = $73MIn 3rd quarter the interest-bearing gold prepays which stood at c.US$72.3m as at 30 September 2020 (US$121.0m as at 30 June 2020), a net decrease of US$48.7m for the third quarter. Not much given the gold price. This should have been below $50M by the end of 3rd quarter. Where is the money going?Well, the interest-bearing gold prepaid loan cost US$6.3M in interest paid in H1. Overall, interest is running at close to $65M per year. This is really harming the profitability of the company.

petra53,

Unfortunately the news are simply the illustration of what Peter and Pavel have always done with POG and IRC. The money somehow vanishes, regardless of how profitable the operation is.

During the third quarter of 2020, c.US$8.8 million was paid to Gazprombank as principal repayment and interest in accordance with the repayment schedule.
As of 30 September 2020, the unaudited cash and deposit balances of the Group amounted to c.US$14.3 million.

Well, at 30 June 2020, the carrying amount of the Group’s cash, deposits and bank balances was approximately US$5.0
million. The cash balance on 30 June 2020 was relatively low due to the temporary increase in receivables because of timing of funds receipt. In mid-August 2020, cash balance has increased to c.US$17 million.

This is simple arithmetic, even if receivables stayed the same. $18.1M ($14.3+8.8 - 5) is the amount of cash flow in Q3. This is laughable given the iron ore price and the supposed costs of $50/Mt. I was expecting at least $25M. So there is money leaking somehwere. the Hambro guys need to be kicked out. IRC should be paying the loans much faster given how high iro ore is selling at the moment.

Crazy stuff is part of POG's DNA. No news here. The good news is that this provides a lot entry point for the ones of us who focus on production/finances. In the meantime IRC keeps on making enough money that should allow it to repay its loan much faster than anticipated.
We need to know what is going on w/ TEMI purchase and the sale of stake in IRC (the latter should fetch at least $50M)

I see the old management returning... There is definitely someone high up in Russia's deep state that wants the old CEO back.

Strategy: KMK is a company with good R&D, and some good intellectual property. But it is not the only operator in many of the areas it is in. It needs patents that bring market dominance and lead to expressive sales, and a stream of future sales over several years. The issue will always be the leapfrogging by other competitors. I have not seen evidence that the intellectual property KMK has has led to large volumes of sales, say £25M+. Until that happens I do not see KMK becoming a company that has proven it can do very well over the next decade.

Accounting: The recognition of revenues as it is done is very iffy. The saga of the £13M
"Exceptional loss in respect of trade receivables and amounts recoverable on contract due to the economic and operational impacts of COVID-19 was £13.1m" makes one wonder what is going on w/ the CFO... Also, It seems "contracts" w/ DARPA etc. are really seen as revenues. In fact, they are more like R&D subsidies to get the next product developed. KMK should in the accounts show split of "actual sales of its products" and "R&D sales" if it wants to call DARPA's and others' "research grants" (that is the way I see them!) "sales".

At YE 04/2019 KMK had £20M in cash. At YE 04/2020 KMK had £9M in cash. Unless it can get that sale of £13M to bring cash in, a new RI will take place soon. Mark my words! The last one was not that long ago. A lot of the visibility KMK is trying to generate at the moment is a signal that is coming.

I have been a holder of a bit more than 10K shares for a couple of years, which is my punt on the company. I do not think at the moment it is worthy of a large LT investment.
That is my view, DYOR.

Hi Londoner7
Apologies for late reply. Barely any time to think about stock makt last 2 weeks. Thank you for the clarification. In a hurry I did not read the pie charts properly. But, an extra word, "remaining" before reserves, on the slide would have made a difference.

I see your point about Catcher going forward w/ PMO acquired. However, Chrysaor might be a "difficult" partner, as it has a "predatory" DNA. It also has other development opportunities in its portfolio.

This leads me to Kraken, which is the other part of CNE's production. The transcript of the call mentions production decline in 21, but does not detail the % of decline. It also mentions the possibility of further work on the Western flank, but it mentions a new drilling center. Well, at current poo ENQ cannot afford such CAPEX. Thus, I do not see this being possible. This means CNE's production in 21 could decline by more than 5-6%. Fine!

I believe CNE will win the India case, but it will not get the money. India is not a jurisdiction where you can build a success business and keep the profits you make. I have never invested in non-Indian companies with a large share of their busines in India. I was never a shareholder of Cairn while they were there. I always thought the Indian nation or one of its own oligarchs would eventually want a large share of the pie.

If CNE wants to have more control over its poduction it needs to buy producing assets. It could make a move the BP assets for sale, or even crach the Chrysaor acquisition of PMO, by crashing the party, with an offer to buy a large share of Tolmount, and perhaps part of Solan, and may be even part Zama, with a deal structured so that PMO could capture some of the upside of FCF if the POO went north of current levels, so that it would derail Chrysaor.

A straigthforward M&A of PMO would also be possible as CNE is in a better position than Chrysaor. CNe will have $600M net cash by the end of the year. A merger with PMO would increase its production massively, and CNE's financial strength would allow it to reduce debt quickly.
I know CNE is comitted to pay $250M in dividends, but it could shell out less than that by offering a scrip version of it. I would surely want that.

So, the question is: can Simon T and James S be brave? They have surely been the best performers among all the teams of CEO&CFO of the large and mid-cap UK O&G companies.

GLA

Until there is enough evidence that the financial position of the company is better this is going to bounce up and down, probably w/out a cear path. TU states "Iodine prices and demand have softened recently." I see this as a truthful and neutral statement on price of iodine (lower end of $33-$35), and on demand. The latter is what is creating uncertainty given that the unsold stock of iodine (thus working capital increases) in H1 as result of soft demand then. If demand has softened further, the the unsold stock of iodine would have gone up. TU does not mention quantity sold or sales (that is the cue here...)
If that is the case there is no need to increase production in Q4. My view is that the balance sheet needs further strenghtening (repaying the $3M drawn of the revolving facility, easy to do if working capital increases are reversed) before IOF embarks on a new production facility. Better to invest money in generating products with higher margins (Iofina chemical).
Until then, I do not see a clean break that would double the market cap.