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G&A spending is indeed extraordinary high. As I have mentioned many times before, this “aspiration to grow and become an operator” is costing shareholders dearly right now. Had the company embraced its non-operating role and reduced G&A to a minimum, it could have saved 10 mln over the last three years and doubled the dividend. It is also not certain that this growth aspiration will actually lead to anything, or even be genuine: it could be an excuse to simply continue using the company as a personal piggy bank. However, the fact that the company hires new people and presents to shareholders regularly, gives me hope. And why would anybody accept a role as COO, if the company is non genuinely working on becoming an operator.
In all honesty, I have to admit that I don’t see the share price moving up until they deliver on this growth aspiration or until production reaches 95-100 MMscf/d. Personally I’m hoping that WEN will buy out part of M&P soon (6 months?) and for ~20 mln US$ I think they should be able increase their stake to 41% and become the operator (60% of additional 2P NAV). Orca still has 5 years on its licence, so I doubt that they will be in a hurry with any deals at this stage. Maybe later, in three years time or so.
Hopefully we will find out soon.
Vike,
Aminex holds 17.5% of Ntorya after the mandated farm-in from TPDC, no?
Not very appealing I would say, given that WEN's stake in Mnazi Bay field is about 32%. Mnazi Bay is also a much larger field. The next development well, MB-5, is waiting to be drilled and in addition to that more than 2 TCF of resources remain unexplored. As you know WEN's GSA is for 130 MMscf/d, so there is plenty of development scope, if gas demand allows. No need for more non-operated exploration acreage.
Does it make WEN an operator? No... Does it add production? No....
As a final comment: a tie-up with Orca might also be an option. Given the serious disagreements that Orca had with the government in the past, I doubt that the company can count on a licence extension (in 2025?), unless perhaps they are "taken over" by a company with a better relationship... Who knows.
Sorry to say, but I don't believe in an AEX/SCIR/WEN combination, and sinking lots of money again in an exploration project.
Unless WEN increases its stake in Mnazi Bay an becomes an operator it certainly doesn't make sense. However, if they do buy out M&P, I'll open one of my finest bottles of wine and celebrate... And I'll happily apologise of course for my comments about WEN's management and state the opposite.... :-)
WEN certainly won't be drilling any wells. They have in fact never drilled any wells in fact (only as Artumas, as operator in ~2007). When and if M&P will drill MB-5 depends on gas offtake and the licence extension, but I don't expect anything the next 2 years at least. WEN holds a decent stake stake in an excellent field, but the company is held hostage by an incompetent management that prioritises its own hobby projects over the interest (and at the expense) of its shareholders. G&A was 7 million in 2020 (incl. this "new venture and pre–licence costs" item) which is absolutely outrageous for what is ultimately an investment company. Compare that with the meagre 3,27 mln dividend! WEN's management seems to be focussed on pretending to be an operator, and one more appointment may help to maintain the confusion.....
Chief operating officer, at a non-operating company. Absolutely laughable, unless they will become an operator soon. WEN continues to confuse "operating" with "non-operating" (as well as "growth" with "demand increase"). If the guy is there just to create the same hype as with Aminex a few years ago, they better hire Tiptop as well.... Perhaps Tictac would be a good name for his reincarnation! :-)
No, I’m not saying that. In this worst-case scenario the 40-45p is the total value of the company that will be paid out as dividend over the next 10 years (~15-20p) and a lumpsum for the remaining value (another 20p?)
Hi Thordon,
In my worst-case scenario (zero production growth, no M&A success, no MB-5, recovery of 1P volumes only, zero cost savings, wrap-up of the company in 2031 and significant self-rewarding of management) I still expect the company to return 40-45p in total to the shareholders until 2031. Not great, but not too bad either: about 6,5% yield annually, inflation corrected (gas price is linked to the US CPI).
Upside is significant, but for that we need a management that actually does something, either regarding M&A or serious cost reductions.
If you are looking for a safe 10 year "bond like" investment (with significant upside) it is actually quite OK at the current price.
All the best to you as well.
Hi Thordon,
In my worst-case scenario (zero production growth, no G&A success, no MB-5, recovery of 1P volumes only, zero cost savings, wrap-up of the company in 2031 and significant self-rewarding of management) I still expect the company to return 40-45p in total to the shareholders until 2031. Not great, but not too bad either: about 6,5% yield annually, inflation corrected (gas price is linked to the US CPI).
Upside is significant, but for that we need a management that actually does something, either regarding M&A or serious cost reductions.
If you are looking for a safe 10 year "bond like" investment (with significant upside) it is actually quite OK at the current price.
All the best to you as well.
Geowiz,
The 1P reserves (240 BCF) are enough for 8 years production at the current rate, and obviously there are plans to develop the field further, read the latest CPR. As I told you before in fact.
I wonder why you actually keep posting all this garbage... Stop talking out of your arse and simply sell the shares if you don't like them.
That went too quick... again:
You are comparing gross production with net reserves. 2P gross reserves are 445 Bcf. So no, the tank won't be drained quickly . At 30 bcf annual production it will take about 15 years.
Geowiz,
You are comparing gross production with net reserves. 2P gross reserves are 445volumu
Gazelleman,
Zero growth, high costs and negligible cost savings. For years now. As long as the company continues to fail on basically any relevant business performance target I don’t see interest returning. All we can expect right now is a steady dividend of about 1.5p a year. Peanuts really…
Unlikely I would think, but I'd love to be wrong on this! :-)
https://www.fool.ca/2021/06/07/millionaire-maker-stock-could-this-uranium-bull-market-give-you-20x-your-money/
Interesting discussion with a lot of background info:
https://stockhead.com.au/stockhead-tv/uranium-a-2021-inflection-point-supply-shifts-and-role-in-a-carbon-neutral-economy/
https://www.fnarena.com/index.php/2021/05/25/uranium-week-struggling-with-low-prices/
https://uraniumequities.com/uranium-reports/2021/05/Cameco_EightCapital_May07_2021.pdf
And the buying continues...