Member Info for L3Trader

Let us not get carried away...
Revenue for H1 will not be very large. But if there were no more issues with Elgood and Blythe, if prices stayed yp you could see revenue of £75M. Remember condensate will decline very fast and gas production also declines. Remember Elgood reserves are not high and were revised down.
Elgood's Gross Estimated 1P/2P/3P Reserves 9.6/14.1/18.3 BCF
Nevertheless, a lot of value is being added to the company everyday.

This is a smallish cap after all. If LOG is trying to decrease its position we will see volatility. Voluime is not that high. Nevertheless, I am surprised an II with deep pockets is yet to appear.
There are no public news on anything going wrong with production at the moment. But SailorNL could tell us what he sees offshore...
Of course, UK's government announcement they could close the Bacton interconnecter over the winter is all abour limiting the upside of gas producing companies. What if the EU does the same, if we have a shortfall at some point?

Key here is Southwark starting production in Q4... And I do not mean 31st December, but by the middle of November...
ATB

(all figures $ million) Payment
Tawke 24.2
Tawke override 15.6
Taq Taq 2.5
Sarta 4.6
Receivable recovery 13.7

Total $60.6M

RECURRING REVENUE $31.3M

Hi Londoner7,
He for sure does. I am happy to add to my holding like he did.
ATB

Spindok, all paper, not real, losses for Mr. Lagan. It simply shows that only Mr. Market can time itself... no one else can time the market.

" I read this will generate £352m per yr to IOG with their percentage." revenue in 2022 will come in below £100M. that is fine.

Hi Londoner7,
Much appreciated. That is reassuring, i.e., that it isnothing that is BREE related.
I do not expect the slowdown, at least in 2022, to be so bad that it will bring about a much reduced CF generation by BREE.
I might embrace the volatility by adding to my holding. Although, I usually buy and hold and never trade for years. This is very much a major and core holding for me.
ATB.

Whare "Richard Griffiths and controlled undertakings" selling 1/3 of their holding? Makes no sense given the info publicly available.

GiGi,
yes there is the possibility of re-routing the gas through the Bacton interconnector to the Netherlands.

https://www.fluxys.com/en/company/interconnector-uk

So, yes a gas company in Belgium could buy IOG and get its 50% WI production sent there.

Prices will be irrelevant if there is a big shortage of gas in the Autumn.

Key for IOG is to generate enough revenue in 2022 to add to its cash balance a the end of 2021 to pay for OPEX+FinEx+ Capex (of $70 to $85M) + HMRC... If it achieves this w/out relying on Southbank revenues in Q4, it will do very well. In the meantime some company is going to bid for IOG, IMHO.... But, the predator might be sent packing unless it offers a very substantial premium to current SP.

ATB

Does anyone know anything that has not been communicated to shareholders with a RNS? It is hard to understand why the SP is now below Covid SP levels...
Have the cement factories stopped operating because there of a lack of energy sources?

Hi Modestus,

Many thanks. I did sell VET at some point, but bought part back when they tanked a few weeks ago. My CPG puchases were a few months ago, at close to 7USD. but, I might add more even as they are now 30% higher.
I will look at the ones you mention, namely ESTE.
Suncor has done very well, as you will have noticed.
ATB,
L3
p.s.: North Sea focussed oil&gas companies will have a hard time regaining momentum, because of the new levy.

RG100's views are similar to mine. I own both CNE and Tullow, but a lot more CNE. The deal is better for Tullow than CNE. I am voting against the deal.
ATB

I too have added. At this SP as long as production keeps going and SailorNL keeps relaying good news and Lemming99's posts are enthusiastic ( -:) ) it is all a matter of time until this company rerates.

producing again at 30mmsfd is not bad, and hopefully within a week at twice that, plus condensate reaching peak levels of up to 1,850bbl/d is not bad...

ATB
L3

What does it mean for SP? up, debt problems are gone for Tullow. CNE HAS PLENTY OF CASH COMING IN.

https://www.thenationalnews.com/business/2022/05/30/why-the-uk-windfall-tax-on-energy-companies-is-a-good-decision/?utm_medium=Social

"So, this legislation is a boost to other global energy producers: Gulf countries, Iraq, Norway and others."

I just watched the AGM video. While it was disappointing to see that the AGM statement did not have any information about production b/w Jan and April and change in net debt, etc., the CEO did make a good impression on me with his delivery at the AGM. He came across as genuine and someone who has a vision that is being pursued in a methodical way. He answered the questions that he was asked, promise to take on board some good suggestions by PI who asked him questions about the performance of the wells, etc. He also gave away that they are now targeting Gearing of 1.5 by sometime 2023. No hints on the farm out of the Kenya assets, but he was reassuring. He really wanted to dispel the idea that EN is going to become ZERO, and instead spoke of the plan to get it up to 50Kboepd by 2025. The Ghabon assets seem to be performing well. I would not be surprised, that despite the hedging in place Tullow will make headway in paying down debt that I originall anticipated despite shelling out $118M to increase the WI in Jubilee and TEN. If the increased WI adds $5kbopd in 250 days, we are talking about 1,25MMbbls sold at spot prices, e.g., $100, that is $125M with OPEX costs of $15/bbl, would still net Tullow $100M to which 2022 CAPEX that relates to WI will need to be subtracted, whixch is oughly $20M given increase of WI by 7.7 pp. Even after this, $80M would be knocked out from the $118M purchase price in 2022. If all goes well, and even w/oyt Kenya farmout FCF in 2022 could still reach >$200M. This would mean net debt at c. $1.9B by end 2022. The significant decrease would then happen in 2023 if the price of oil stays at $100/bbl.
GLA

drice and Ecclescake, agree w/ your views. The issue with IOF in the last few years was the level of gross debt it carried. This prevented it from enaging in expansion plans during the downturn, so as to be ready to profit then the tide turned. (Although it made some profit from selling its inventory at high prices) Another problem is that even though CF from operations can be quite healthy, it has to invest about $2-3M in a new facility every year (real depreciation of facilities is quite fast). This limits FCF generation. Thus, it is important to get the location right everty single time they build a new one. Yet, I expect Mcap to reach $100M if the current prices continue.

Quick question: is the new capitall allowance applied to expenses that can then also be depreciated later using standard accounting decpreciation rules? I thought not (as otherwise you are being told that you can depreciate your equipment expenses twice (first through the capital allowance and later through standard depreciation rules)...
If not, and as I imagined how it worked the new capital allowance, the only advantage of the capital allowance was an accelerated depreciation rather than over time.

Anyone has any ideas here on how this works for oil&gas?
Thank you.
ATB,
L3

Hi Modestus,
Thank you for the new names of Canadian companies. I was not looking at the SP of them for close to two weeks i should have increased my CPG holdings. I will look at Spartan Delta.
Unfortunately all of thse holding sit outsite tax wrappers so selling them will attract CGains tax. Then again I would rather pay this tax directly than pay indirectly via the companies them seles as with the new levy on UK production. I saw it coming but thought it would be a windfall tax, not a multy-year tax and such a high rate. It is absolutely farsical that the high prices of oil are already leading most companies to have huge tax bills this year at the old 40% rate. I fully agree with your comment on the ENQ bb. The new levy is so poorly thought out: "when oil price is back to normal, levy will end".. what the heck is normal $100/bbl? $65/bbl? As you wrote there confidence in the UK NS oi industry is gone. What investor seating overseas will want to invest or lend money to companies? To compute the levy financial expenses do not enter the profit calculation. So, a very indebted company could sill pay a huge amount of tax, even if it made a zero accounting profit because of its finance expenses. Think when ENQ was paying $200M in finance expenses. It would have to pay 25% of that as levy on top of those $200M.
I will keep posting here. The ENQ bb's environment realy does not suit my interaction style. So, I will post here more regularly.
ATB,
L3

robs12, the production level is laughable... Unless Diever gets back to its level of early 2020, OMG's revenues will not change the company.

Hi January,

I was not trying to undermine your calculations. Just asking you to not jump to conclusions on how the new levy would work. My interpretation (which I did not write in detail) is in line what just was published today:

" An ‘allowance’ will be generated on investment expenditure (capital expenditure and some operating and leasing expenditure) at 80% which can immediately be used to reduce profits subject to the levy."

See more at:
https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-technical-note

Jefferies estimates are WRONG. I stand by what I wrote on IRRs yesterday.
This is my last post on the bb on this issue and I won't post again until there is a RNS with a new deal / bond issuance / HY results, even if my flight next week gets delayed!
Hope you all have a good Summer. Back to work for me.
All the best to all of you.
L3