Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Wolster, I think everyone will be keeping it to themselves until they've loaded up. Only problem might be doing that on the day first gas could be announced or the first trading session after some juicy potential sales numbers.
I do love the conversations today :^)
it's a happy board.
My 2c re dividends is that theoretically they don't matter, however they do have two useful benefits. 1) they keep the BOD focussed on shareholders and keeping us happy 2) they open us the ability for funds to buy shares (if they're not anti gas)
what I don't like is firms that juggle their debt and inching up their dividend perhaps even above 50% of FCF. I like to see at least twice the amount of money flowing in as flowing out.
I'm not a fan of 1 big divi and 1 small one a year. I much prefer the same divi paid in quarters. start it at 0.1p for example and build an expectation. I believe that it keeps your average investor more engaged with a share, just like BATS or Imperial Tobacco. (i also see that a firm wants to be like others, perhaps why all the banks announce at the same time etc) so i would agree it's logical to pay out like other similar companies (i.e. not like tobacco, but I still like the quarterly thing).
Of course paying off the debt in its entirety would be a good plan first, but re: points 1 and 2 divis are good.
In the same way (from memory) that IOG have made a plan to hedge half of their production over time (I think get it done on day 2 personally) it would be good to have an official policy on dividends. e.g. in Year 1 from now we're going to put 100% into debt reduction and Phase 2 acceleration. In Year 2 we will pay out 40% of our FCF in 4 equal quarters trailing 6 months after the cashflow, we will increase debt to cover the x months lifecycle of phase 2 but agressively pay down phase 1 debt.
It would be fun to see an RNS in a few weeks time that says we've got 40% of 2022 production hedged at £2 a therm and 25% of 2023 production from field 1 and 2 at £1.80 a therm. The cash would (almost) literally be in the bank; albeit if a large chunk went to pay for phase 2.
just some happy musings
Thanks Scotty, methinks I will read this several more times before 8am Monday... Potential for £30.7m extra revenue in Q2. And that's at circa 10% of peak flow rate of first two fields. Think I will need a calculator. What I've just written can't be right.
it's been quite frenetic so far in 8 trading days of March average volume has been 3,673,483
per day, i.e. 29.4m in total or aprox 5.6% of 523m shares.
volume numbers from here: https://www.sharesmagazine.co.uk/shares/share/IOG/historic-prices
I guess for almost every buyer there has to be a seller and vice versa subject to the MM appetite.
However, methinks that as the SP has gone up from mid 30's to 40 that the action has been on the buy side
It'll be interesting to see what tomorrow or Monday brings with first gas. I've only been here since 18p and averaged in at 27p (or maybe a bit higher after Friday and Mondays top ups). well done to all those who have stuck this out for multiple years; I know the feeling from other investments.
I still think Buffet's CalE did quite well to buy half the farm in 2019. Their £165m investment must be worth ever so similar to our £212m marcap today. That's a 28% profit and counting. I seem to remember that some of BH's long term investments make free cash annually of the same amount as their original investment. Nice..
A profit is a profit - surely that's why we're all invested. Well done.
If you're investing your own money you can decide how long you ride the tiger. All the way past £1 is my plan with the number of fields IOG have lined up.
If you're investing other people's money and you didn't take some of a large profit and then what goes up also went down, methinks you might have to join wassis name, you know thingy from Maidenhead who used to be the fundy superhero. Weil Noodford was it?
Perhaps the start of some wider press coverage
https://www.fool.co.uk/2022/03/09/why-the-iog-share-price-was-up-10-on-monday/
very interesting view Megla. In all the noise of life and investing it's often possible to lose track of the simple valuation method. I've long thought that an oil or gas company is only valued by the speed with which it can get the resources out of the ground and the prevailing price of course.
When our fields were first on the market the sp was similar; people could see the potential. It strikes me as slightly illogical that people would wait for first gas (but we might have the first 3 of our 6 fields up and running by the summer.
To get a true picture; let's wait for the annual results to see the cash flowing in and the final capex and opex figure. Let's then make a decision on whether to invest. I don't think we'd catch the Buffets of the world taking this approach. ;-)
good points, but I think Berkshire Hathaway are focussed on their $5bn just ploughed into Occidental
https://www.cnbc.com/2022/03/05/berkshire-hathaway-reveals-5-billion-stake-in-oil-giant-occidental-petroleum.html
In our farm out of 50% (around July 2019) CalE paid £40m upfront and promised to pay up to £125m in development costs. They got a tasty deal for this £165m. As they have almost exactly the same potential as our 523m shares you could value their £165m investment at £188.6m as of now (40p sp)
Even if the current spot price of gas is in excess of 10x of where it was in July 2019, we're not going to move the Berkshire Hathaway needle with a valuation of 400p, although I'm sure they might like it (and the spot price would have to stay north of 450p for some months/ years to warrant this.
Need for gas is probably not going down. I would say if sanctions talk continues we might be in a different position in a few months.
I guess we might even have our 3rd field live by then. (first two due to produce from 4pm Friday 11th. (a week or so since RNS)
great news; so it was w/c 28th Feb after all
yes, trench humour dunder. I think we all know why the price is so high and it's awful.
I wondered if it might happen today... currently £5 and 7p for an April therm
cripes. Good job we didn't go into production earlier and waste all those sales at £2 a therm :^)
Well done the board I say
ditto to that Denis, and as always they felt toppy when I bought at 18,20,23,28 and 33. After that last one the sp then went straight back to 30. however if you look at the graph in retrospect it looks more ratchet-like than it feels day to day. I'm averaged in at mid twenties and it's a nice place to be. (I've also been in the years of pain situation in other investments so I hear what others are saying on that front)
I think there's an excellent opportunity for newcomers to build a position under 40p. The company is currently worth £187m, has 523m shares in issue, about another 100m options floating out there. About £100m in debt and about £1-2m per day of revenue once fields 1 and 2 go into production, even after giving 50% to CalE. (let's not forget our 3rd field for some weeks/ months time)
Tipped by AJBell in Dec 2021 as a top 10 for 2022 here are a few links and facts (and some opinions) to hopefully save you some time if you're new to IOG
https://lemming99.blogspot.com/search/label/IOG
If you're long on gas, or IOG invest 3 mins 43 watching this, some interesting stats
https://www.bbc.co.uk/news/av/world-60608699
If you're hoping to buy in some more IOG at a lower price; don't watch it as you might not have a relaxing weekend.
On another note I see that the price for a therm of gas; a 4 foot 7 inch cube that your average Tsar or Emperor would fit into is getting quite pricey for April delivery.
https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5863521&span=2
Let's hope for some news in the coming days; otherwise there will be more handbags at dawn on this board ;-)
I'm joking if you just spluttered your coffee. I'm open to both negative and positive discussion, let's hold the company to account. This is such an important investment to me and the litle lemmings that if there are any bad bits of news out there, I'd like to hear about them.
we know how dangerous it can be to sit in a sycophantic echo chamber even if it has crenellations on the walls (or kremellations)
3 days of 1m traded then 800K then 2m today
https://www.sharesmagazine.co.uk/shares/share/IOG/historic-prices
I wonder where next month will take us
Hi MVSP,
I don't think thtat will be an issue. Every contract I've ever seen has a force majeure clause. Here's a quick google result:
What are examples of force majeure?
Examples of events that might trigger a force majeure clause into effect include a declaration of war, a disease epidemic, or a hurricane, earthquake, or other natural disaster events that fall under the legal term, “act of God.”
Just having a look at some stats and it would seem that the EU imported 36% of its gas from Russia and Ukraine combined in 2020.
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:5_Extra-EU_imports_of_natural_gas,_by_country_of_origin,_2019-2020_(%25).png
I wondered what a therm looks like... I know a strange question
It's this many million cubic feet
https://www.convert-me.com/en/convert/energy/therm/therm-to-mscfgas.html?u=therm&v=1
i.e. 97 cubic feet
so that's a cube that a 4 foot 7 inch person could stand in
Robiz, our share is 50% of the totals, but accounted for in the maths.
So at 70% of peak flow from 2 of our 3 fields due for first gas this year we would see £228m revenue in 291 days remaining of this year (after the share taken by CalEnergy). That's at an average per therm of £2.11 for the year.
Lucky for CalEnergy, they will see a nice return on their £165m total investment. They should be in the money later this year. where do they get their investment ideas from?
Here's a summary of third party resources with information about IOG and commentary
https://lemming99.blogspot.com/2022/02/media-coverage-and-recommendations.html
anyone got any good ones I've missed; share the links here and I'll update. Thanks for whoever shared the AJBell tip from a couple of months back. To make it into anyone's top 10 for the year is good, but they have quite a big team of analysts, and not least customers
The following for IOG is growing nicely - am getting 100-120 page views within 24 hours of a blog post.
A bit of news and there might be some interesting activity on the you know what
Hi PipeDragger, there was a comment from IOG that they wouldn't do any hedging until after first gas. That's not to say that they haven't, but I think the plan was to wait.
Happy to share some thoughts about the potential revenue this year from our first two fields
https://lemming99.blogspot.com/2022/02/running-numbers-for-blythe-and-elgood.html
I'm more familiar with oil companies, so if I've messed up the maths (or 70% / 90% assumption) please let me know here and I will update.