Member Info for MountTeide

With respect, you appear to have zero self awareness and even by the legendary standards of equity investment bulletin boards, one of the most hugely overinflated opinions of their own self importance and equity investment talent I've come across.

Despite being consistently proved wrong about the merits of the investment case of Afentra, you have the gall to continue to publicly lecture others, many of whom are now sitting on hundreds of percent of capital gain. Its behaviour that smacks of narcissism bordering on sociopathy.

I'm not licensed to offer equity investment advice but, you would do well to swallow your pride and reflect on what many successful investors here have charitably suggested, as once you improve your equity investment research your bulletin board behaviour will likely change for the better, and leave its highly opinionated, poorly researched, destructive perspective where it belongs, in the rear view mirror.

Block 3/05 - Interesting to note in the CPR that of the 108 mmbbls (gross) of 2P reserves, 35.9 mmbbls is attributed to water injection restoration....$3.1bn of gross future revenue at $85 Brent potentially generated from restoration of water injection.

This is a huge financial incentive to the field partners to continue making further progress on this relatively low cost production development initiative, since the peak water injection target calculated to deliver the P2 figure is just 50% of the design capacity of the existing equipment/infrastructure.

Block 3/05A - outrageous good fortune for Afentra shareholders that the Punja Field development Area has very recently been approved by the Angolan Government as a Marginal field for tax purposes, when considering that peak production is estimated at 48,372 bopd of oil and condensate, with 203 million bbls of recoverable reserves.

https://www.offshore-technology.com/marketdata/punja-conventional-oil-field-angola/?cf-view

Since the Angolan Government has already approved the sale of a material working interest in the same asset to Afentra from Sonangol, the National Oil Company, it's virtually inconceivable they would prevent Afentra from acquiring the Azule working interest, particularly when Azule is the highest producing independent O&G company operating in Angola, and is owned by two oil majors who are currently investing heavily to materially raise production at its Angolan offshore assets.

In addition, Afentra were selected by the Government as the preferred partner to Sonangol for one of the most prized onshore blocks in the most recent License Round.

IMO - On the balance of probabilities, there is more chance of Dianne Abbot winning the Grand National riding side saddle on a Shetland Pony than the Azule deal not completing.

Work to repair Sudan oil pipeline progressing well - South Sudan Finance Minister Chuang......expects export restart in 6-8 weeks.

https://www.argusmedia.com/en/news-and-insights/latest-market-news/2558621-south-sudan-eyes-dar-blend-export-restart-in-6-8-weeks

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.

AIMHO/DYOR

My money would be on a further shallow water Angolan acquisition.....NOC Sonangol have a large number of O&G assets potentially available as part of their huge privatisation programme.

In Jan 2024, the AET management stated they had been working through further regional M&A opportunities for 18 months.

So, relatively soon after completion of the Azure deal, the likelihood of AET announcing another attractively priced acquisition of high quality, long life, mature assets with excellent reinvestment potential and a very significantly backdated effective date, is probably quite high.

Would not be surprised if the next acquisition was similar to Block 3/05 - ie; a non-operated, significant working interest in a large oil asset being vacated by an oil major or NOC.

'Afentra’s entry into Angola in May 2023 saw the Company establish a foothold in a key target geography with a wealth of future growth opportunities. Afentra is acquiring interests in quality assets with scope to enhance and extend production alongside improving environmental performance, while positioning itself as a key stakeholder to support state-owned Sonangol with its transition strategy.'

'Afentra’s strategy is to build a material diverse portfolio of mid-life producing assets that no longer fit the portfolio of major companies. We seek to optimise, redevelop and extend their lives in a safe, responsible manner whilst reducing harmful emissions. These production assets underpin the business with low-risk cash flow. Over time, Afentra aims to build a portfolio of operated positions, levering the extensive technical operating experience possessed by the team. We will also acquire non-operated positions alongside quality operators and credible JV partners with a shared alignment to operational excellence and environmental stewardship.'

AIMHO/DYOR

554 days and counting of accrued revenue at an average $85/bbl Brent price from 1 Oct 2022, the effective economic date of the Azule deal - should have generated circa $118m of gross revenue to date to Afentra (Circa $35m of free cash flow).

Azule Deal - Total consideration of up to $84.5m, split $48.5m upfront and up to $36m in contingent payments:

* Up to $21m in contingent payments payable on a sliding scale above Brent price of $75/bbl with an annual cap of $7m over the years 2023, 2024 & 2025; and

* Up to $15m in contingent consideration linked to the successful future development of the Caco-Gazela and Punja discoveries (split $7.5m equally), payable 1 year after first oil subject to a Brent price of $75/bbl and production hurdles

So, likely payment due to date on completion: $48.5m - $35m + $7m = $20.5m

"We see opportunities for ESPs [electric submersible pumps], infill drilling, water injections really improving. Just all the classic things you'd be doing with an old mature field to offset decline and boost production. We think this asset with the fullness of time, between 3/05 and 3/05A has got the potential to go up to even as high as 30,000 b/d." McDade August 2023

30,000 b/d gross is circa 11,400 b/d(80%) ABOVE the reported level of production when the deal for the 3/05 assets was first announced.

Brent is currently around $90 and averaging over $83 YTD - rather fortuitously, this is coinciding perfectly with the huge circa 5,000 b/d gross increase in average production the 3/05 asset has delivered since AET negotiated the deal.

Post closure of the Azule deal, Afentra's 30% shareholding would generate 5.7 lifts a year of 450,000 bbls, one every 9 weeks, and deliver circa $217m of annual revenue at an average of $85 Brent......more than TWICE Afentra's current market cap.

Food for thought - Block 3/05 has a STOIIP of 3.15 billion bbls, with a 43% recovery factor as of 30 June 2023. The new fiscal terms greatly incentivise a much higher recovery factor from the block - at a 30% working interest, a 10% increase in recovery would equate to an additional circa 93m bbls net to AET.

AIMHO/DYOR

Vietnam - 80 mmscfd under a take-or-pay arrangement over a targeted minimum plateau period of 55 months - so 13,700 boepd take or pay.

The circa $8.0 mmBtu regional nat gas price is around $50/boe - and would generate the same annual revenue ($251m) as 8,600 bbls of oil per day at a sales price of $80/bbl.

Overall opex/bbl - highly material downside potential available with the development of the Vietnam assets:

Plateaux production from the Vietnam nat gas assets would likely drop the current 2024 guided $36/boe opex to circa $25/boe, and down to the $mid teens/boe if current contributions from Montara and Stag were excluded.

NWS Oil Project Asset - What is remarkable is the low OPEX of the CWLH fields considering their age and production profile.

The Catcher field in the North Sea has a BW FPSO on charter at a cost of circa $210m a year for the initial 9 year fixed charter period - which at circa production of 26k bopd in 2020, indicates an operating cost JUST for the FPSO of $26.7/bbl. At a production level similar to the current gross 14k bopd of the CWLH assets, it would increase to $41.2/bbl, JUST FOR THE FPSO.

Initial production at the CWLH fields were circa twice that at the Catcher Field, averaging circa 72,000 bopd over the first 15 years of its life to 2010, and 27,600 bopd since. With a large STOIIP of around 890 mmstb - the JSE management believe there is considerable potential to add incremental reserves through infill drilling, targeting unswept oil across all four fields(three of the fields currently only have on a single producing well), and an opportunity to extend the asset life beyond 2031, the initial design life of the double skinned Okha FPSO.

The North West Fields have a current OPEX of less than $25/bbl INCLUSIVE of the finance and operating cost of the Okha FPSO.

In 2022, as a consequence of the comprehensive maintenance work plan carried out in 2021, the CWLH CAPEX budget for the next 4 years was forecast to average circa $12.5m/yr ($2.72/bbl @ 2,100 bopd), while the OPEX was forecast to average $100m/yr(circa $21.75/bbl) for 2022 and 2023, and an average of $110m in 2023/24.

The first CWLH deal provided the blueprint for the industry to provide Governments/Regulatory Authorities with the comfort necessary to enable the future transfer of large company mid/late life O&G assets to smaller players.

By implication, it also means from a competition perspective that only smaller players with considerable cash resources and industry experience are likely to be considered for such assets now increasingly becoming available across SE Asia and the Pacific Rim as their O&G basins mature....... meaning a very small pool of potential buyers for a very large pool of mid/late life assets.

Another very good acquisition if your investment outlook is longer than the lifecycle of a mayfly !

Reading between the lines of Paul Blakeley's comments - Interesting that JSE see serious re-investment potential in the asset - while the other partners do not since the upside is no longer material for them. Infers that JSE could not only be in the market for a further slice of the asset but operatorship.

Parex Q3 Results / 8th November - Interesting to note that Colombia's largest Independent and AXL's Tapir Block neighbour is on schedule to increase production by around 3,330 bopd in 2023 - for which their Capex budget is expected to be between $450m and $475m.

Arrow is currently producing around 3,000 bopd, has a market cap of circa $62m and is expecting to increase production in 2024 by around 3,000 bopd (my estimate assuming the 11 well plan of mostly high performing horizontal wells at CN, and a general 15% field decline rate) for a capex budget of around $40m(my estimate).

On a development cost comparison per bopd of production - its makes AXL look a highly accretive acquisition target even at double or triple the current valuation.

Interestingly - after the shares were suspended at around 14p during H1/2022 to facilitate acquisition negotiations with Sonangol, the short position increased from 1.8% to 5.1%.

When the suspension was lifted in H2/2023, the shareprice surged to circa high twenties on confirmation of the proposed Angolan offshore acquisition deals....yet the short position has only since fallen to 3.58%.

Although some have seen the light and accepted their fate and losses by reducing the overall short position from 3.95% in September to 3.58% in October, there is clearly still a huge volume of highly risky short positions seriously underwater and, facing the mother of all losses when the inevitable finally happens and they're forced to stampede for the exit door pushing, shoving and snarling like attack dogs to avoid being the last out.

JA500 - Anyone doing a little decent research would find that that on expected completion of the two Angolan acquisitions in Q/2023, the overwhelming majority of the headline price for these assets will be paid off from cash due to Afentra generated from the effective date of the acquisitions.

The pro forma earnings of all the assets are in the admission doc (page 80). It shows 2022 ebitda of circa $90m and operating profits of $70m+. Outstanding numbers for a company of this size.

I'm estimating net debt of circa $20-25m assuming completion by year end.

Following completion of the deals, given the very strong cash flow generation and credit lines, it would be very difficult to see why they would need to issue equity for any further similar sized acquisitions.

AIMHO/DYOR

Block 3/05 - 'Sonangol assumed operatorship in 2005 and has since focused entirely on sustaining production through workovers and maintaining asset integrity.

No infill drilling campaigns have taken place for 18 years on the asset. The asset currently produces from around 40 production wells and has nine active water injectors.'....Offshore Technology

Block 3/05 - what is remarkable about these conventional, swallow water field's production performance is that despite not having an infill well drilled on them for 18 years, they're still producing at close to 20,000 bopd!

Peak production was 193,000 bpd of crude oil and condensate.

Would not surprise me if the third transaction in Angola is for a further chunk of Block 3/05:

Maybe ENI's 12% or Somoil's 10%.

No one ever got poor taking a profit!

They're doing what all low IQ criminals do when caught out - blame everyone but themselves.

To describe the Chad ruling elite as a Mafia Organisation would be an insult to the Mafia - as the Mafia would never be so so brazen and stupid.

'Perenco is no longer picking up Idriss, Tahir and Djerassem Le Bemadjiel's phone calls.'

If this is the case then a strategic retreat with their tails between their legs is basically the only option left for the gangsters, as the Nation and they are totally reliant on the oil and pipeline revenue.

However, they have already publicly demonstrated that 'intelligence' is not their specialist subject, and so are likely to attempt to double down further before legal, political and commercial reality finally brings these hot headed, reckless knuckleheads to their senses.

Some great research published by Rystad Energy today on the growing M&A boom in SE Asia.

Money on the table: M&A boom in SE Asia to see $5 billion of upstream assets for sale

https://www.rystadenergy.com/news/money-on-the-table-m-a-boom-in-se-asia-to-see-5-billion-of-upstream-assets-for-sa

'It must be admitted that the Chadian state missed a great opportunity in front of the International Chamber of Commerce in Paris because if Chads file was well prepared, the country was going to win the round, but alas this part was handled with negilgence and incompetence and which gave Savannah Energy a head start.' Lol!

Would like to know how he came to that conclusion. Exxon and SAVE's very expensive lawyers will have made sure the transaction was watertight before completion.

Hence the decision by the ICC to find in Savannah's favour on 7th Jan 2023, and the gangsters predictable response since it appears the idiots didn't have a leg to stand on going by their actions to date.

Nationalise a private sector asset in order to run it with a management implicated in a massive industrial scale embezzlement and other mafia practices, that a subsequent police and security service investigation failed to find any trace of the cash or people involved in its theft, despite removing the MD and his deputy? The keystone Cops spring to mind!

“Many people have been arrested and some have been freed in the context of the investigation into financial embezzlement at SHT,”

“The case is currently being handled by the judiciary,” and some of the accused will eventually be brought before a judge at the end of the preliminary investigation."

"Among those arrested are the powerful former private secretary of General Mahamat Deby, Idriss Youssouf Boy, a cousin and childhood friend of the previous head of state who was considered one of his closest aides."

The ultra slippery Idriss Youssouf Boy, who oversaw most of the last President's corrupt practices has since resurfaced as the Director of Civil Cabinet and close aide to the new President ruling by decree.

It would be an insult to the Mafia to call them that, since the Mafia would never have been so brazen!

AIMHO/DYOR