I think potential investors are put of by the long timeline to first commercial production, in 2024/25. And by the need for more funding, after the current spend on drilling, the PEA and PFS in the next two quarters.
Hello EyeGuy. Good to see you here and building a position. I've been here for several months, waiting patiently for production decisions. I suppose Covid restrictions haven't helped, but the assets aren't going away. In fact the Gold gets bigger, so eventually, you would think management will give us that production decision rns, to start unlocking value.
Colin Bird is doing what Colin Bird is best known for, raising money on AIM. A bit of a low blow, coming so soon after the previous £5mn placing which also includes an element for xtr's profligate African assets, but the optimist in me says that this will be the last such need for funds to the end of the year and the full Phase 2 drilling program yields its results. I'm sticking. The prize is potentially many times the current valuation, even with the reappearance of those pesky warrants to each placee.
The company also said in that rns that they opened to start production at Garalo in Q1 2021, and before any further land acquisitions. Coupled with the missed timeline for starting up coking coal production, it seems Mr Market prefers to wait and see some delivery on earlier plans, before reflecting the true value of their "near term" producing assets, dividend payout plan etc.
Indeed, that is probably going to be the near-term catalyst for a re-rate here, although a Lubu coking coal contract could come at any moment, also. My only question is, even with a limited Gold production start-up, Contango will need additional capex to get it started. Only £1.3mn in the bank at year end.
Charlie, sorry, I'm not with you. What do you mean by "MY 42% in ground" figure?
It's SENX's estimated assumption of the effective tax rate in Tunisia on Pre-tax profit. Nothing to do with "in the ground" reserves. I'm talking PROFITs, not ASSETS. The Romanian numbers used do not include anything for depreciation, by the way, which you should make allowance for.
But then surely you must work with SENX's assumptions on netbacks including royalties and taxes (42% effective in their presentation), at various price levels, to come up with realistic numbers, or else what's the point of them producing these pages?
I am not an expert on O&G, but I can read company presentations. If you can't accept my numbers, please take it up with Serinus, as I am only taking their costs and revenue figures using realistic spot prices for gas and oil. The basic point stands. Use their company AT netback numbers in your expected revenue projections, and then apply an appropriate PER to them, to arrive at expected MV.
P14 of the March 2021 presentation, Romanian indicative Netbacks.
Using a most likely $6/mcf market price, the after tax netback to SENX is $3.17, which, at a conventional 6:1 gas:oil energy conversion basis, is equivalent to around $18/boe. That's after ALL costs and taxes, which your calculation doesn't include.
Then, on p20, Tunisia indicative Netbacks. The presentation highlights a spot price of $50/bl but let's be more generous and use $60/bl. That results in an AFTER TAX netback potential of $19/bl to SENX.
I believe these are the figures you should use along with the volumetrics you apply, rather than $40 for Sabria, for example.
Charlie, I'm afraid you're way out with your back of the fag packet calcs. Please refer to SENX's last presentation where they specifically mention netbacks for both oil and gas, and importantly, indicate after tax netbacks. From memory, these work out at something like $10/bl for oil and a much lower figure for the Romanian gas.