RE: Mount Teide14 Sep 2025 22:46
If McDade were to significantly veer from following a strategy other than identifying and buying attractively priced, high quality second phase O&G assets with material reinvestment and efficiency improvement potential to maximise reserves recovery, I would look to sell down my 7 figure holding bought at an average of 25.8p.
However, McDade clearly believes Afentra has an opportunity to replicate the success of Tullow, Talisman and Apache in the North Sea 20 years ago, not least because fortuitously Afentra has the tail wind of the recovery stage of a new oil market cycle, a strong post pandemic recovery in demand, and a major programme of disinvestment of high quality assets that are no longer material to oil majors and NOC's in a number of mature O&G basins around the world.
The holy grail is to find a lowly valued second phase O&G company with low producing costs, strong cash flow generating assets and highly material organic and inorganic development potential, run by an experienced management in a high growth, high energy price mature market, thinly contested for high quality assets being vacated by oil majors and NOC's, due to owners and Governments willing only to consider companies with management able to demonstrate a previous history of managing O&G assets to the highest operational and safety standards.
Should the company also benefit from a regional Government keen to offer highly material fiscal benefits and long license extensions to attract new investment to maximise recovery from large mature fields, and a drilling/oil service sector still largely beaten down by the ravages of a long recession, and a location in a region with mostly benign sea and weather conditions enabling shallow water offshore field production development and maintenance work to be carried out year round, that would be the icing on the cake.
On the balance of probabilities, over a 2-3 year view, I consider the risk/reward of an investment in Afentra as good as any O&G company in my portfolio.
Sign In
Follow the stocks
