Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Nice one Peaky. I would buy more were I not already north of 60% of portfolio (in at about 27p). I have been 100% in different stocks before. E.g. GKP. On reflection and with 20/20 hindsight we'd all be miyonayers rodders.
Still, very happy to be here for I'm thinking at least the next 2 years. I remember reading once that Buffet has some long term investments that annually give him just over 50% of initial stake. I wonder how long it might be before IOG can produce 27p FCF and distribute 13.5p. I feel a blog coming on.
Did someone say cash cow?
Moo
thanks L3
7 minute discussion from 2 hr 43 on this link
https://www.bbc.co.uk/sounds/play/m0018x0n
i.e. 8.43-8.50 on shale vs south north sea gas
no mention of IOG, but lots of interesting background that we're familiar with
e.g. 43 different countries bidding for LNG and also how ineffecient that is
I read the investor presentation this evening and there were 2 or 3 hints that we will be taking over another entity (at least a field). I know it's very common in O&G to buy 10% of this or 20% of that to build out a portfolio.
Those revenues are already looking nice in the bank balance. (It would be nice to throw in some net debt figures onto the occasional RNS to let us share in the fun)
In my experience companies that have acquisition as part of their strategy have a pipeline of opportunities that they're looking at at any one time (I know; obvious right)
Someone who owns a field of gas within reach of Saturn Banks might reason that time is of the essence and they should take that aggressive deal that we've put on the table and hope to get to market in 18 months with some prices that still look favourable.
I know we took the right decision to farm out nearly 50% to team Buffet. I expect they would like to have bought 50% of everything in retrospect. Tbh probably slightly moot as they could have 48%, and the more established of the reserves. That last bit's a guess would be interested in other views.
Anyway, the point I'm trying to make is that we have an internal pipeline of projects and are thinking strategically, it would seem, about how strong we are in a negotiation.
We don't need them; but they sure as heck need us.
thanks Philsy. Does anyone have a good URI for the NBP spot - the one I have doesn't update.
I have a good one for UK Gas spot (which might actually be the NBP)
https://tradingeconomics.com/commodities
Having watched it a bit, I don't tend to get too excited on one day's price even though it's up 20% today.
But having said that - it does seem high for the summer!
Don't forget the 10 to 15p opex and 100m ish of debt. Oh hang on what do we call it when we pay off the capex, opex and debt. Depending on the accountants I wonder if we might sneak in a small profit. Will be normal tax and save big dog tax to pay, but there again we might be able to offset some of the capex with higher % tax efficiency. Sounds like we'll also fast track some other fields.
All in all I think this a good place to be. I think someone mentioned Baron was investing now at this price. Good to have some new faces, and those guys and girls know what they're doing.
Just my 2c
Buy and hold what you're comfortable to and tuck them under a rock. The maths will work through.
One morning there will be an RNS, the price will go up, and you'll be thinking I could have bought these on 1st July for 29p each. I'm averaged in at 26 or 27p and last bought at 44p. Doh!
GLA and DIY
Here's some links to help anyone new to IOG
https://lemming99.blogspot.com/search/label/IOG
So we're at half production whilst the equipment is upgraded. Meantime the price per therm goes from 145p to 300p. Spotted an article that the Russians are bleeding the German's storage in time for winter. Aren't they lovely. Any Russians here? Certainly a lot of angst being added to the board at the moment. I think that's a thing they do, the information wars.
Anybody reading the board. I would ask yourself does the writer want the sp to go up or down.
Me; I'm all for up. We're currently up 12% in 12 months. Not bad with all the world's turmoil. Let's go for 13 eh? (Half joking of course I wish the price was higher)
As a layman it sounds to me like once the drainage is finalized we'll be able to fully open the taps and see what these fields are capable of.
affecting a third of exports into the EU - I hope they can fix it soon, otherwise they're not going to be cooking on gas and taking Wim Hof's advice on shower temperature. I read in the FT about 10 days ago that Bulgaria had a month of supply, so all is fine. Nothing to see here, move along.
Hi L3 - thanks -
I considered the higher prices in the early days and plan to try and work out aprox revenue for March and April accordingly. Do we know actual figures for flow rates in the earlier days? I know there was a 10 day hiatus on one of the wells so accounted for that
I didn't include condensate - good point. I saw some numbers that the board worked out a few days ago.
thanks for the opex and capex summary. I must have another look at the updated numbers in the powerpoint/PDF and find some time to form some opinions.
In general terms I'm working on the basis that a) we've got a lot of gas in the ground, b) O&G only tend to be valued on how quickly they can get the stuff out of the ground and to market; but let's not forget a) in the medium term
Very pleased to be here, and just need to get used to the short term in and out crew who are driving the SP yoyo (and the LOG bunch of course, who probably deserve some profit)
hey ho - everyone deserves to take a profit if they can - it's why we're all here.
About 51 and 56 days since first gas we'll have lots of cash in the bank by now
Using the updated gross production of 55-65 mmscf/d our 50% share will be 27.5 to 32.5
At today's spot of £1.48 this equates to a daily revenue of £418,477 to £494,564
Annualised revenue at the lower end of the range £152.7m
Annualised revenue at the higher end of the range £180.5m
2022 aprox revenue estimate since first gas in March at £1.48
At the lower end of the range £121.3m
At the higher end of the range £143.4m
On the up side we have our third field planned to open up later this year
On the up side we might see higher winter prices
On the down side we might see lower summer prices
But in general this business has been planned around a price of £0.45 per therm so at £1.48 today each day of production counts for 3 against the orginal plan to net cash.
I last topped up at 35p and 44p, of course hind-sight is a great thing.
You pays your money, you take your chance
At £159m M/C with a week of updates from the likes of Shell and BP I think we can see that this is a good place to be. (unless you just bought at 44p and sold all your shares at 29p)
I guess it's all about picking the business you want to own part of and then being sensible / lucky with your timing.
GLA
we have the potential for £1.50 to £2 turnover this year for every £1 of market cap at the current £185mn.
circa £100m of debt to refinance. (might just be easiest to pay it off)
Drilling for 3rd field underway
first two are producing about £1m in revenue a day
not sure what the profit will be, guess it depends on how much the drill bits cost
trying to think long term and ignore any short term price swings on this one
shh don't mention it, but we're in the middle of quite a hot sector at the moment. A bit like a cash machine someone said. Will be interesting when we get an update on net debt and rate of production. I guess there won't be any warning of either RNS.
Good to see the updated ppt on the corporate site. Keep up the good work IOG. I just saw that Harbour Energy just brought Tolmount north sea gas field into production; albeit a bit later than planned.
My 2c is if you look back at a 1Y view of the SP there are a series of steps broadly as the market becomes used to a particular price. I'm not a fortune teller, but when and if we do go up the next step it will happen quickly.
then probably retreat back a bit (as people that were sellers at 30p are also likely to be sellers at 40p and 50p etc)
The core question you should ask yourself is do you feel lucky?
well do ya; punk?
(dirty harry, clint eastwood reference to any young'uns out there.)
bit of fun for Wednesday :-)
1/523,000,000 x £1m daily revenue x 2564 shares = £4.90 in daily sales for your £1000 investment
(based on £1000 /0.39 = 2564 shares)
not bad eh?
sweat those assets
Although not for production estimates, the story so far:
In excess of 40 for Blythe is 88% of 45.5 peak measurement
In excess of 50 for Elgood is 86.5% of 57.8 peak measurement
My previous calculations had been at half of 70%, i.e. 35% of peak which would be £981k a day at 264p per therm.
An extra 1% to 36% gets us £1009k per day
Were we to get 43% of peak flow it would currently bring in £1205k per day
Perhaps a planning figure could be 39% of peak and £2 per therm. This would bring in an annualised £302mn from our first two fields. I know in this world no value should be attributed to our third field that's not yet producing and has a pile of rocks on it ready for the rig to be moved back next week ;-)
Hi Trustatrade, I don't think so; uncrossing trade would be bigger methinks.
anyway, Google has unticked up the uptick now (38->39.75), so I'll retreat quietly ;-)
wondered what caused that tick up at the end:
someone had a cheeky little buy processed 5 mins after close. £24,700
https://www.sharesmagazine.co.uk/shares/share/IOG/trades
I sense that we are becalmed on our voyage over the ocean to see if the Aztecs do have gold afterall ;-)
A little news would put some wind into the sail. nudge nudge
It must be at least eleventy three days since we've had any
Meanwhile gas spot price up 7% today to 254 pennies per therm which should be £944k based on 35% of our peak flow from first two fields. Annualised to £344m against a £208m marcap.
We should be able to make a couple of quid profit on those numbers. Anything north of £41.6m (i.e. 20%) might be greedy. Anyone think we could make 41.6/344 = 12% margin on these types of sales figures
I think the maths will push its way through at some point; perhaps when we publish some comparative figures (e.g. net debt dropped £xm in the first 30 days of production. Was £56.6m at 31/12/21; probably then went up a few 10's m with all the spending.)
An enjoyable journey across the ocean though
from the pink paper (you know the one I mean)
Money section 19th March
I'm slightly shortening it
"One of North Sea's largest gas producers Neptune Energy has paid $1bn in divis to its owners (prompting call for windfall tax)
Private Equity backed Neptune said increased production and higher prices had raised operating cashflow to $2bn in the year to dec 31st 2021 enabling payout
Harbour Energy the biggest O&G producer in north sea also confirmed $200mn payout to shareholders this week"
At half (other half for CalE) of 70% peak production as per previous (45.5 Blythe and 57.8 Elgood) we should be getting £390k per day revenue from Blythe and £495k per day from Elgood. Calculated at £2.38 per therm.
Total revenue from 11 days at Blythe £4.87m
Total revenue from 6 days at Elgood £2.97m
Annual run rate for Blythe (revenue) £142.2m
Annual run rate for Elgood (revenue) £180.7m
Total Annual run rate for fields 1 and 2 = £322.9m
Marcap £211m
Net Debt £56.6m + whatever we spent since Dec 31st 2021
Anyone care to guess what Southwark might be from Q3 in revenue + opex and capex for the year.