Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Pipe,
Think you are conflating / oversimplifying as you are using a point in time rather than year average (not perfect due to drilling timing but the fairest approach and what they were refering to I think):
2017: 2519 bopd
2018: 2871 bopd
2019: >3000 bopd
Agree 2019 will not see 10% but they have said this is no longer a target with the focus (more sensibly imho) focusing on maximising cashflow. That said the year end outturn should be c. 3400 which coupled with SCADA should be enough to deliver c.10% next year with no further drilling needed (but assuming a good market this will happen). This is a massive step change and if delivered will leave 10p a distant memory
Buyback increases NAV by 4* the amount purchased at current price whereas dividend reduces NAV by same amount as paid out so I would be disappointed with a dividend. A tender at a premium (15p seems sensible!!) would reward shareholders directly and increase NAV by more than twice the cash outlay. Surely a no brainer at this price and used successfully at RRE
Funds in escrow are owned by the company and the company is owned by the current shareholders, not previous share holders. What a strange (non) debate this is!
S740 - makes no sense to me as the buy back would be more effective at boosting CNAV than drilling and they could do it at a premium (think RRE did same thing) so it could boost the SP significantly. Not a massive fan of 'financial engineering' but sometimes it makes sense. The board repeatedly state there is a disconnect between the share price and reality so what better way to demonstrate it.
Token dividend achieves nothing imho
Pipe, the 'fully funded drilling programe' clearly wasn't based on today's announcement, plus running behind schedule.
Currently I think enterprise values are very similar but Trin are producing c.50% more and aiming to grow at c.10% plus they are not forgoing some production / incurring 8% interest on our debts.
To me Trin looks far far better value but appreciate the next few RNS will probably get more of a reaction from txp one way or another. Good luck with txp, anything to raise the profile of the Trinidad O&G companies will be good all round.
I do think once the persistent 100k seller is finished we will have quite a bounce - just don't know when he will be finishing!!! Still can't understand how this could have been going on for so long with no holding RNS - all seems very strange to me.
CRL, the option will be priced against the underlying commodity price, not trins sale price. But yes, hopefully we are selling at a slight premium.
Lots of good activity from the company promoting the story so hopefully will continue to gain traction into Q3 production and then HAW results.
Crl - Tracey has as usual come back quickly and i was sort of right but she did point out this was one of the slides in the pack to we are both on the naughty step ;-)
" 1) 74% of volumes were unhedged
2) Of the 26% hedged, 50% of that (13% of volumes) is via simple put spreads and therefore full upside to oil price remains
3) Of the 26% hedged, 50% of that (13% of volumes) is via a 3-way option that will give up the upside exposure on oil prices above US$64.4/bbl
So in essence, upside was capped at US$64.4/bbl for 13% of volumes but uncapped for 87% of volumes. Please note we are talking about the WTI oil price versus Brent"
So the capping is fairly minimal and at prices higher than we are currently seeing.
JFK, on your earlier point about performance these last few days, I don't think it has been as bad as you make out.
Very few oilers spiked massively yesterday, the main ones who did were the highly indebted ones e.g Premier which makes sense as will help them pay back the debts (and possibly survive!). Whilst the high oil price makes a massive difference, it is likely it will only be factored in to share prices of more financial sound companies such as this if the market believes it changed the long term pricing (I think it will but time will tell).
We also have our call and put options which are great at protecting downside but from memory means when WTI is above 60 we don't benefit from all of the price gains . This does only apply to some production but will have an impact
I assume Jeremy is hard at work putting in place some more options to lock in the current higher prices for another percentage of production.
Happy days ahead imho
It's a huge asset and a massive bonus to the investment case. Where Trin incurred losses in the past, they accrued tax credits. When Trin make profits going forward, rather than pay tax as a company usually would, it can offset it against these accrued losses.
Works in exactly the same way as CGT in UK where if this year if I lost £1k my tax free allowance next year would be £13k rather than the normal £12k
Hope that makes sense.
For the first time in a long time, the rns today was pretty well written! Pleasing the the BoD have finally started to pay attention to the need to explain what they are doing. Shame the oil price had such a bad day but think we are building towards a very exciting second half of the year with significant drilling, HAW, TGAL and possible JVs. Who knows, the politicians may also pull a rabbit out of the bag with SPT.......! Still have my stupidly overweight position here and have found the last year pretty depressing, but with a strong balance sheet and all the above I remain confident that the share price will recover (hopefully strongly) over the coming months. GLA
The results should hold no surprises but hoping for a positive outlook statement and more details on development plans. Hoping to get to London for the presentation too depending on work so may see some of you there. Fingers crossed we can continue with the recent upward trend and get somewhere close to fair value soon.......