Member Info for Philsy027

Day ahead price up to £4 today in the middle of August!

Just crazy. Another £820k in coffers today for IOG.

If Southwark comes online and flow rates double to 100+ mmscf/d as expected and day ahead rates really do reach £5.50 plus in winter months that is 2.7M a day net to IOG!!!!

Just insane.

Day ahead price £3.78 today.

Another £780k in the coffers today for IOG.

IOG could be pulling in over £2M a day in winter if these crazy forward prices (£5.50+ per therm) translate to day ahead rates in winter. Majority of that will be profit as well.

They could have multiples of mcap in cash by end of current financial year. It is mental this is not being heavily bought at these levels.

Day ahead rate was £3.29 today.

Just another £675k in the coffers for IOG today. £600k net profit.

Remember this amount will double when Southwark comes online and who know what price per therm will be in winter.

Alligator - I agree there is a big disconnect between the current valuation and the true worth of the company.

I am thinking this will start to narrow when IOG publish interims (this month) to confirm some of the revenue figures and current performance and raise a bit more interest from investors that have maybe not done the sums here yet.

The real re-rate is probably once Southwark is online and when full year results released in March 23 as there can be no arguing over the audited facts and the company will have to be revalued more sensibly at that point for sure.

Forward prices are still as high as over £3 per therm into summer 23 so at some point this will have true value reflected in the share price. Who knows exactly when the mkt will wake up and if IOG will simply be taken out before it realises it’s true value.

At current day ahead rate of £2.98 IOG is making about £600k per day in rev (net to IOG).

Day ahead rate has averaged approx £2.86 in August vs

July £2.46
June £1.30 (average realised rate published by IOG)
May£0.83 (average realised rate published by IOG)
April £1.61 (average realised rate published by IOG)
March £2.32 (average realised rate published by IOG)

Of course much will depend on future prices (surely must go higher) and future flow rates (also hoping they will be higher from Nov/Dec.

Dellfrog - The average realised prices and flow rates have been in IOG updated corp presentation for over a month. So it is possible to calculate rev and net profit with some degree of confidence for those months.

Based on the figures they published. We should be looking at figures below.

YTD to June Rev to IOG £27M
YTD net profit to IOG £20M ( based on 15p per therm OPEX) ignoring capex as not sure how they will choose to amortise that.

July onwards is where flow rates and day ahead prices should have converged nicely for much higher figures.

I estimate as below for YTD to 8th August

YTD revenue to IOG approx £48M (part estimate from July)
IOG net profit approx £38M

Royalties already paid to Cal energy approx £10.5M and on course to wipe out royalty commitment by mid next year imo. At which point IOG will get 50% of phase 1 rev vs 40% currently.

I have been using day ahead prices in my estimations and 50mmscf/d for July and August. So should be fairly close. Will be interesting to see what they update.

I think IOG will do a min of £157M rev and £133M net profit for 2022 based on conservative price and flow rates. I think could be quite a bit higher than this in practice and could really explode during winter months for obvious reasons.

Yawn. Wake me up at Christmas when we are in the middle of worst gas supply crisis in living memory and IOG flow rates have doubled.

We all know SP is disconnected from reality. Unless you are already fully invested here then just accept it for the gift that it is. I will be shocked if we do not have cash equal to or greater than current MCAP by Jan/Feb 23.

I estimate we already have approx £25M - £28M from June and July.

Personally I would like to see board make formal offer to LOG administrators at earliest opportunity to buy back all shares and force them into a decision. Better to try and buy them back now while they are cheap and market is undervaluing the company.

That would see an immediate re rate to 51p and a nice increase for existing shareholders of 36%.

IOG could easily have the cash for this before year end depending on their plans.

At current share price they could buy back all of LOG shares at 2.5 months current revenue.

They could repay €100M bond with just over 4 months revenue.

These periods shrink to single month or less using winter price and flow predictions. IOG will be completely transformed as a company by end of year but market doesn’t seem to be interested.

I had a go at estimating July revenues.

Using day ahead prices during month (fluctuated from 1.66 to 3.65)

Using 50mmscf per day for low end and 60mmscf per day for high end estimate.

Total rev £39.6M - £47.5M
IOG share is £15.8M to £19M (after royalty)

IOG royalty to cal energy is £3.9M - £4.7M which indicates royalty ending in 18-22 months but will be much faster then that given winter pricing and Southwark flows.

Amazed this is not higher than 1st gas share price. But happy to hold and wait.

Futures price for December is showing at £5. I have never modelled anywhere near that price but who can rule it out with expected shortages in winter?

If we have Southwark online at that point IOG would make approx £75M net in a single month assuming production doubles! That is almost half the market cap in a single month.

The potential for IOG to be debt free and paying dividends could arrive much sooner than anticipated imo.

Day ahead price yesterday was 300p. In July!

IOG has licence to print money.

Whatever way you slice it the share ownership structure has presented a massive gift to savvy buyers

Also. Importantly. They will nearly clear the 91M cap on royalty in just over a year. Cash flow with the full 50% would be £360M.

Price will only rise into winter. Nothing can stop it. At current flow rate and spot price I now have IOG at £286M per cash flow per year.

What is the mkt cap again?

U.K. NBP at 282.8p today! In mid summer.

25 Mmscf per day (IOG share is 50%)
257050 Therms

2.5 Per therm

£642,625 Per day 50% share
£514,100 Per day Less royalty of 20% of IOG share

£15,647,918.75 Per month net IOG
£187,775,025 Per year net IOG

This is what I see currently using current flow rate and NBP price.

Of course flow rates and prices will move a lot but I would expect prices to be higher in winter and (hopefully) flow rates as well.

2023 is anyones guess but I don’t expect tightness in gas and energy mkts will subside overnight. Unless there is mother of all demand destruction recesssions (who knows).

Either way IOG will earn some decent cash this year, start paying down debt and be well positioned to take on further projects. I am happy holding and I can wait for the value to out. In this market few places are safe for your money but I feel IOG is a decent bet regardless of how the future unfolds.

IOG is raking in approx £480k a day net to IOG at current flow rates and NBP price. This is going to be a cash cow. Intraday does not concern me here. Value will out eventually.

Imagine the daily cash inflow with Southwark running and Russia shutting off European gas over winter. The mind boggles.

I think one factor playing into weak share price could be that we are selling gas at day ahead rate.

This has dropped as low as 40p in May. Currently back at 112p right now. Nothing to worry about in longer term but explains maybe some short term weakness in SP?

Drop is caused by massive amount of LNG being offloaded in U.K. for re-export to Europe but interconnect capacity is limited and U.K. demand is low leading to U.K. day ahead price much lower than in EU.