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Having read the RNS at lunch time, it is clear the issues mentioned should have led to IOG inform the market at least 3 or 4 weeks ago.
Was there an earnings call today? If not, why are management not willing to face the shareholders.

No timeline to deal with the problem or ways to solve it were given in today's RNS.

For me 2022 was always about trying to end the year in a cash position no worse than at the end of 2021 and with Southwark in production.
That might still be possible. Using some asumptions DvdG wrote "Cash at 26mn after capex and based on asumption that gas price for the remainder of the year is the average of June 30 - August price (currently 278p vs current price of above 500)." Sounds reasonable.

I am going to assume problems continuing for a while. In the first 62 days it sold gas at 254 p/thm and sold (net) 140K thm/day. So £22M in gas revenue + £ condensate revenue so far.
Given that IOG's CAPEX in H2 will be c. £50M, and it needs to pay interest, OPEX, and last but not least G&A, it needs to bring in another £45M to not have to use its current cash balance. But working capital outflow of £10M (Receivables) in H1 can hopefully be in part reverted to compensate for that.
Cat it get those £45M by year end? With Southward in operation in mid Q4 that will not be a problem. But if Southwark's first gas ide delayed until 2023, then better be the case management fixes Blythe and Elgood quickly.

Sailor, Philsy and lemming might be able to add more.

The best outcome is a takeover by SQZ, KISTOS, i.e., a company that has people able to run a gas company.

Hi lemming 99 and Philsy027
what is your take on the HY results and update on operations?

baysil "decom is allowable for WT to mitigate any material adverse charge for WT". this is not true. while the decom rebates do not enter the calculation of adjusted profit for EPL purposes, thus saving EPL tax as the rebates increase profit. but, decom spending cannot be deducted as a cost for EPL purposes. so, HBR should just postpone ABEX.

in H1 net debt would have decreased by more than $1B.

where is the bottom?

Hi Londoner7,
Having read over the weekend your past posts on ENQ's gas revenues, I was tempted to reply by saying that as far as gas revenues are concerned, there was only so much they could do for ENQ, and that for anyone interested in the gas prices surge, then it would be worthwhile looking at HBR (diversified), SQZ (few assets), KISTOS, IGAS, IOG( concentrated risk on one gas field).

In the case of HBR, the "problem child"'s name is Tolmount (took too long to be brought into production, smaller production rate, etc.). We will have to wait to see if "behaviour" has improved.
But Q2 won't be a game changer in terms of gas revenue here, because the average price / thm in Q2, was not super high.
So H1 results will be subdued in relation to some people's expectations.
But, if the problem child is on her best behaviour, then the first 64 days of Q3 will have resulted in huge unhedged gas revenues. But these prices will not stay as they are. Politicians will start meddling ("the gas is ours" so say the Scottish government officials (extend the EPL, nationalize the energy sector, you name it) and factories closing.

I hope Linda Cook when presenting HY22 results says it loud and clear that there will be no more investment in new fields in the UKNSCS. Capex will be diverted to Indonesia, Mexico, etc., more stable jurisdictions. If she does not then she will have lost her credibility in light of her past statements, including at a parliamentary hearing.

ATB,
L3

Some posters focus on the cash coming in to argue that the company is seriously undervalued. That might be the case, but as we know the avalanche of cash is coming to an end shortly.
From the latest payment by KRG we know that "recurring" revenue, i.e., revenue from current production was $26.3M for April Production, but the oil price is now lower. Ok, there is more production as per the latest announcement on Tawke PSC, but it is immaterial.

So, looking at cash coming in we will have about (being optimistic) $22.5M/month recurring revenue going forward.
And since H1 results, the extra cash coming in from "arrears" in H2 will be $68 million (" from the KRG for oil sales from November 2019 to February 2020 and the suspended override from March to December 2020."; it might all be paid in 2022 given payment of about $10M/month) and close to $60M of receivable recovery. That is a lot of cash, i.e., about $128M.

In its HY results GENL stated that it made $129M in pre-dividend FCF, but there was a negative movement in Working capital of c. $40M. GENL is predicting $250M of pre-dividend FCF in 2022. So that means $120M of FCF in H2.

Here is the puzzle: Given that GENL will receive about $128M in non-recurring revenue in H2, would its current production and costs generate negative FCF in H2 if it were not to receive that non-recurring revenue?

If so, this is truly astonishing. Anyone that can add anything to this...?

If after dividend payment in H2, year end cash is above $525M, then net cash (given debt of $280M, which is costing $26M year (debt should have been repaid in part) will be above $250M.

So, half of the current MCap.

The best use for the cash is in Morocco (more stable jurisdiction than Somaliland or KRG; GENL really has to diversify, and stop investing in KRG) or dividends.

ATB

I am surprised the SP is around this level.
It can't just be due to ST at IC propping it up. On the other hand, we know that it cannot be driven by cash flow. Rob's data and figures show that with about 300 boepd the cash coming in would be (in gross terms) $100,000 per day (about $400/boe). So, $3M a month. But this is not going to last. And if it drops to $100/boe we are talking about $0.75M a month...

And, no time frame for the new wells in the Netherlands to come into production.
" We now expect to receive the rig by early Q4 2022, ahead of the schedule outlined in the interim results. The LDS wells will be drilled from the existing Diever well site and will target a combined mid-case gas-in-place of 37.2 billion cubic feet ("Bcf") in the prolific Rotliegendes reservoirs within this licence. The production tie-in period for these onshore targets is very short and, provided success at LDS, would result in significant additional revenue and cash flow for Parkmead."

Question for the experts: if the rig gets into action in October, when should we expect first gas?

There is also no revenue from anywhere else coming in any time soon (wind farm revenues barely pay TC's remuneration). No UKNSCS oil&gas fields have been developed...

So, either the market is being; (i) pretty inefficient or (ii) there is M&A activity in the background supporting the SP.
Which of the two is more likely to be true?

well, the SP moving to 80p surprised us all, and had upset the people who took CDFs that it would drop to 40p again... sometimes you win, sometimes you lose....

clearly something is in the works. rob12, what do you reckon is about to be announced?

atb,
L3

hi Philsy027 and Lemming99,
thank you for your insights. all going to plan. i see the possibility of iog ending the year with a larger cash balance than it had at the end of last year, even after spending £85M in CAPEX.
at some point IOG will need to pay dividends to get the SP going. but first the refinancing of the bond. dinsalas32 thank you for your posts. Ditto for SailorNL's posts.
atb,
L3

Hi Londoner7,
thank you for your clear and thoughtful insights, as always.
Like you I am surprised with the working capital movements. it led to negative FCF.
Taking the long term view, i believe BREE will become a more dominant force in the years ahead.
As for this year's and next year's results, we will have to expect that they might take a hit. But we have always have to remember that in some industries market power can be counter cyclical and that means that margins could increase even if volumes decrease. the net effect can go wither way.
As for the SP, Mr Market is being very cautious. I still thought this could go up above 100p, before the HY results, but clearly he is not in buying mode.
hope you are well.
atb,
L3
p.s.: isn't it great when a company does not have a "problem child"? -:)

Money Week says: " While the government’s windfall tax will hit earnings, the fact that both (SQZ and...) are established businesses in a stable jurisdiction...".

were established in a stable jurisdiction, which no longer is...

I wrote the following on 8 sep 21:
"Iofina:
- produces 500-600MT year, sells for $35s/MT. Revenue is about $30M, because some of its products have more value added. at the moment iodine is selling for c. $40K/MT, so perhaps revenue might be up 10% higher, i.e, $33M.
- EBIDTA $5M,
But IOF needs to build a plant every two years to keep production steady perhaps with an increment of 10% of annual production... so that costs $3/$4M every 2 years or so."

Update:
So, production is much lower than 600MT, but prive is much higher than at the time I posted. But as we know IOF does not sell its iodine for the prices that we hear about in the media. The CEO himself said so. How much less IOF gets is not something we know.
Yet, EBIDTA this year should be much higher than last year. (I am thinking close to $9-10M this year, easily)
And this leads me to wonder why they need the two lines of credit that it secured recently. (rylidan asked 3 questions that are connected to mine)
WHY? IOF should be swimming in cash and its OCF should be large enough to pay for IOF#9 and the development program the CEO mentioned when interviewed.
Indeed, this a question that the interviewer should have asked... But they never ask the hard and uncomfortable questions. (I am happy with CEO's delivery when presenting. Prefer that to how rogue traders sound... But he needs
to be careful when giving interviews to dispel concerns that arise of RNSs that do not address the central issue: why is there a need for more debt when the business should be genrating a high single digit multiple of the amount being secured through the lines of credit.)

In summary, until an answer to this question is provided the SP will not re-rate much higher, unless there is M&A activity by others wanting to acquire IOF.

Hello PYUECK,
"Taking into account the contingent consideration ($75 million inflow), the arbitration payment ($76 million outflow) and the pre-emption payment ($126 million outflow), and after adjusting for revenues of over $200 million relating to two Ghana liftings which took place in early June but for which cash was received shortly after 30 June 2022, on 1 and 5 July respectively, free cash flow[1] in the first half of the year was neutral."

It is good enough. It basically meant $126M "of before the above transactions FCF". They expect FCF to be $200M in H2. (with increased WI in Ghana, any production above 40K/bbl is unhedged.) Note that they have repaid $100 of bonds that pay 10% interest. Savings of $10M going forward... peants but every little helps.

TEN is the problem child. But there are hints things are imroving; "No new wells were drilled in TEN in the first half of 2022, however active reservoir management has helped slow the natural decline. A previously drilled water injection well at Enyenra (En16-WI) has been completed and will come onstream later this year to provide pressure support for existing producers."

"Work on the TEN Enhancement Plan, which has identified significant upside to the current 2025 production target of c.50 kbopd (gross). A development concept is currently being finalised for the project, with detailed engineering expected to start later this year."

I have kept an eye on TEN wondering whther it would be come a ZERO or a TWENTY... I am now more hopeful it will be the latter.

Kenya: Well, Tullow will have to sell most of its WI. There is no capital to spend on it.
ATB

Hi Londoner7,
As usual thank you for your extremely well informed opinions and thoughts on acquisitions and business activity.
It is good to see business will be very strong at least in a part of the country.

My remarks about CMA was not very precise, thus might have conveyed a wrong line of thought.
I meant that at some point, i.e., as Breedon keeps acquiring companies, the CMA will make it harder for such bolt-on acquisitions to continue when it comes to some parts of its business (which you identify in great detail, i.e., the RMC plants and quarries), as the usual remedies will be hard to put in practice in a way that makes an acquisition earnings accretive in some parts of the country.

I am sure you have been following the twists and turns of the EPL...

ATB

Howdy,
I have been very clear with my posts. I am not the one who is confused or who was wrong. I am not of the type who engages in point scoring when discussing an issue with others. If that is your type, let us not reply or refer to each other. Understood?
ATB

Hi Rookie1,
Well, some people start behaving strangely, when they have no answers and are unwilling to debate an issue ... I am not surprised ...

Anyway, I have made my point, which is that the current draft of the bill does not treat decommissioning costs the same way as it treats investment expenditure. There seemed to be a lot of people writing in many boards that thought the government had changed its mind. Unfortunately they did not.
ATB

Howdy again,

You wrote:
"Decommissioning allowances are already in the Bill." This sentence is vague and not precise... Some could read it as "Decommissioning (costs) allowances are already in the Bill." and i think that was the logical inference given Rookie1's post and others posts to which your seem to be replying to. But, the vagueness of your sentence indicates you were referring to ""Decommissioning (rebate) allowances are already in the Bill." Those are 2 different things, and that is why language has to be precise if the sender wants the receiver to understand the message.

As far as "The Bill will become law this week I think and then the O&G co's will be under a bit of pressure to assess and publish impact. The uncertainty will evaporate and this will help the SP move up."
No, uncertainty will not evaporate, because the law does not define what "normal oil prices" are.
In fact this law would be deemed unconsitutional in any country that had a modern constitution, but since that is not the case in this country, which is displaying all the traits of a banana monarchy that has no bananas, it would survive being challenged in court.

As far as my agenda is concerned, it is the truth and nothing but the truth. I am invested here and was previously a PMO shareholder. I do expect the SP to rise, but obviously the EPL has led me to revise my "valuation" of the company. I do hope that HBR will ties its future to oil production and exploration outside this jurisdiction.

ATB

TheTexan,
So you do not know the answer, then? I really thought you knew.
And by the way your statement about decommissioning expenses generating an allowance akin to the allowance that CAPEX spending generates, is not correct, as you old Cambridge law professor would also tell you...

Howdy to TheTexan again,

One question for you:
As far as the "91.25%" headline figure the government's propaganda is telling left and right, well it is not correct for a variety of reasons:
The answer t this question would provide such an example: How much will a company be able to recover when it spends £100M in exploration and appraisal wells in a field that is then found not to be economically viable to bring into production?

It is not 91.25%.

Auson,
as a SQZ shareholder I am voting against it. In fact the offer values SQZ at a price per share lower than SQZ ATH. Why? Because of the EPL bill/law.

What I meant is that this new tax will reduce investment in oil&gas in the UKNSCS when compared with the counterfactual (i.e., no EPL on oil&gas). It is a distortionary tax, not a windfall tax.

ATB

Well, I am voting against it.... It massively undervalues SQZ!