Member Info for RG100

The 7th June presentation updates on Akatara and states it is on track for 2024 H1 first gas.

I'm now over the comms disaster and Board poor faith on being upfront to smaller shareholders. However they faced a possible existential cash crunch and the 20% or so dilution has been more than offset by the chance to buy a great company with growing production and a premium to Brent at almost half price. I've topped up here as only see share price recovery from here starting at the AGM. In some senses the whole debacle over Montara exposed risk shareholders were not aware of but then it happened to BP too. Going forwards risk is considerably diminished with RBL in place which more than covers the cash dip prior to Akatara coming on line and allows for delay on this project or further service loss at another field. Once the market sees that risk is dealt with then I am confident this will track much higher as Montara stabilises, new production comes on, and deals get done. I still think this will become a $1bn business by 2026 if oil prices are at a reasonable level at that time.

I think a number in posters are missing the point. JSE are building a business here, its not about short term shareholder returns. Last year they looked like they were awash with cash (until Montara struck) and they had earlier in the year decided to do a £20m buyback. I'd rather have seen them keep growing the business, and I hope they don't repeat it again unless there really is nothing to buy. A modest and growing dividend is fine. The modest amount of borrowing to ride through the lumpy Akatara gas Capex is just what you want to see them doing as the return on that investment is excellent & flows through in 24/25 by which time this is likely to be a 25-35k bopd business with good profitability and no debt. The shares are a steal for the lth's as the short termers run away.

Hunt is learning a basic economics lesson about making investment in a sector uneconomic. Whatever changes are announced this week will be a reflection of reality. Its very easy for Labour to criticise from the touchline and say they will go further or reverse changes, but if they get into power, they will find it hard to go further than Hunt has gone with EPL

One reason this has gone down, in addition to the sinking price of gas, is AA's statement on 18th Jan.
"While we continue to actively look for value accretive acquisitions in the North Sea and Europe, the asymmetry created by these tax regimes makes this challenging.
If we cannot identify worthwhile transactions to pursue, we will consider returning cash to shareholders during this year."

Most people back AA because he is a deal maker, and in this sense when he says there may not be any deals to be done, then its no surprise that the share price sinks as it then gets valued at the cash he potentially proposes to return, rather than having the deal making growth premium.

I think he'll give it til the Autumn to see if there is any easing of the tax regime but don't see the share price doing much over next 6 months.

To be fair I think the buybacks finished because the authorised programme completed but agree with all other points in your post, and this should have plenty of good news flow from here with plenty of cash generation for organic growth and acquisitions once Montara back on

I'm hanging on in here, was really surprised how comprehensive the vote was. Somebody must think there is more value here or maybe that the Israelis will tweak the deal if nothing else.
The alternative case is that if a CEO with 27 years experience in the business thought there was significantly more value he would have probably said so, unless he just can't wait to put his feet up! I'm surprised the share price isn't more volatile.

Maybe Market spooked today by Tolmount story on Energy Voice

Don't understand why Malcy thought February anticipated re-start = another delay, maybe he didn't read the RNS properly. Story looks really strong from here, original 22 forecast with Montara was 15.5-18.5k boepd, so that should be baseline going forward but you can add in the Aussie BP assets at 2.5k and then Akatara comes on stream in 2024 at around 5k per day so this is well on the way to 25k production or more in 24, and very profitable production at that. Can see this doubling from recent lows.

Don't see a deal getting into the home straight until there is clarity on the Energy levy, which with no floor there isn't. I doubt anyone is going to invest or provide finance to this project without a floor on Hunt's levy.

you might need to do some maths prep nitro as £31m on 10th Nov at around £3.30 would have got slightly under 1% of the company

HBR looks like one way ticket to 350 or worse until uncertainty on any further 'north sea' windfall tax measures is clarified on 31st October. After that and with trading statement coming soon after I'd expect a big bounce probably back to 450 or better

JSE will have a lot of explaining to do on 20th Sept. The disappointment is that they are missing out on maximising production when oil prices are high. But essentially when this is out of the way they are in great shape and heading well to production of 25k bpd in 2024 with current assists and assuming Maari goes ahead. This strikes me as a great buying opportunity and thank goodness they have diversity of production and will increase that diversity over net couple of years.

It doesn't make sense because the investment is just another of many investments, but it is a surprise that a 250 company is not putting out an RNS when its sp drops 20%

its frustrating that these 'judges' will no doubt need all the time available, when surely after several years they know what their decision is. I have not a shadow of doubt that they will need the extension to October whilst they swim in the med over the summer. You would have thought they would have moved on from Uni days of submitting the essay 10 mins before the deadline..... but I'm forgetting that the longer they go on the more they get paid, so yes they will agonise and prevaricate all summer!!

Maybe Serica will come back with a knockout offer for Kistos, say £6.50, and AA might go that's great I've turned £1 to £6.50 - not bad for 18 months work, take it and go and start again.

When DEC had their issue with methane leaks the shares tanked and a week later were back close to level before the report, so looks a pretty minor issue, well dealt with. Meantime the cash is rolling in, what a great time to be unhedged. Unfortunate incident but a great buying opportunity.

Its hard to know if its a good deal but Capricorn/Cairn are a bit of a frontier player, and I think this is all about Kenya, and increasing the Ghana production rate. At high oil prices CNE would have to pay premiums to buy into good opportunities i.e the India money came at a bad time. TLW can't secure a Kenya farm in because no one likes the state of the awful balance sheet. So the deal gets Cairn shareholders into Kenya at a good price plus the other opportunities in Mauritania,Guyana etc, and for TLW it removes the financial straightjacket/balance sheet fix they are in, allowing Kenya to happen (probably still with a farm in partner) and Ghana to happen faster.
For CNE shareholders its frustrating having been stiffed on the tender offer (manipulated entirely by the professionals). Well done those who got the 230p, but at least the wasteful buyback is now suspended and the cash will be heading towards potentially producing assets. It would be nice to know a bit more on the Kenya arrangement with the authorities there, tax regime, profitability of production there.

https://www.nasdaq.com/articles/bp-seeks-potential-buyer-for-foinaven-oilfield-in-north-sea

Reason for shutdown was age of FPSO. Field still has 200 m barrels of oil, and AA's team at RockRose originally bought into the field. Viaro/RockRose sold it because BP as operator decided to shutdown in low $ oil environment. It did produce a bit of gas , but yes mainly oil, but its a new world now.

Perhaps Kistos will be interested to pick this up off BP. Used to be part owned by RockRose, who sold their share back to BP after production was suspended due to ageing FPSO. Did produce at 12k bpd so perfect size, though mostly oil I think so might not fit with low carbon badge.

HBR SP would be higher If they hadn't had so many operational issues, lower than expected production, Tolmount delay, Dunottar result, Kirk departure and of course poorly handled capital markets day and Divi announcement.
In the background they have probably made the right calls because they have made clear by exiting Sea Lion that there aren't going to be speculative projects but rather ruthless focus on return on capital invested, near field. If you are hoping to be valued like an AkerBP/ Lundin then you need to have the discipline and behaviour of one.... which is a move on from the PMO days... and takes time to change sentiment, just as its taken time for sentiment on the super majors to change. The journey to a Barclays type valuation will happen but its just going to take time, rigour and discipline and proving to the market again and again that you are really good at making money, driving down debt and good investment decisions to maintain production.