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I will give this a final go, to finish my sentence! The other related point I was trying to make refers to Alex's nod to the "integrated" E&P aspect, and MPNU's related opportunity in gas to Europe. Seplat's growing midstream business is a long term contract fixed price business, which deserves a higher valuation, and this business will multiply in scale if SEPL can install infrastructure to process and export MPNU's huge gas reserves to Europe, again under long term contract. All of this comes on top of the core oil business's prolific cash generation. When the MPNU deal is cemented, this "hidden" upside comes into play.

Starting a new chat since the other seems to have a bug. Point being many very low multiple E&Ps deserve to trade at a low multiples as they have short reserve life, some

My post was also cut short! Some tech issue/bug. I was just saying that not all multiples are equal and many very low multiple E&Ps deserve to trade at a low multiples as they have short reserve life, some

Thanks Alex, interested in your further thoughts.

You mentioned that SEPL is one of the cheapest valuation integrated player in the world. I agree and would make two specific points that relate:

1. SEPL's valuation multiple is of course very low indeed, but it is even cheaper than it looks because SEPL has a solid life span of reserves (25 years+), whereas most of the other cheap names in the market have much shorter life reserves, say 10-15 years or even

Today is the last chance to get the quarterly and special dividend. Last year the share price took just 8 days to recover the value of the dividend adjustment. Suspect something similar will happen this year too given the stock's positive momentum.

MPNU is producing at circa 70k bopd today, which is quite a bit lower than the 90k+ bopd when the acquisition was announced two years ago, which is a result of natural well decline as MPNU is not drilling new wells. The operation is obviously profitable and cash generative, but margins must be lower than SEPL’s onshore operations as MPNU is offshore and carries higher costs re Exxon parentage. We won’t know the details until the Prospectus is published. However we can safely speculate that cash generation is still significant, more than enough to cover capex to raise production back to previous levels whilst also upstreaming free cash flow to SEPL. As I see it, MPNU will justify another big increase in SEPL’s dividend. I would be surprised if an additional 10 cents of dividend is not possible from MPNU alone.

Do the math on conservative assumptions: 70k bopd @ $80 oil – 20% royalties - $25 opex - $15 capex = $16/bopd – 30% cash taxes = FCF circa $10/boe, or $250m in annual FCF on 70k bopd. An increase in dividend of 10c would cost SEPL around $60m. In my view, this is the least one should expect.

A year or two from now ANOH will be generating around $60m in FCF too, so that’s another 10 cents in dividend on top, taking total dividends to 35 cents or 25p net of withholding tax (16% dividend yield at today’s share price).

This would leave circa $200m/year free cash generation from MPNU alone for servicing and paying down the debt taken to acquire it. SEPL will likely be debt free within five years despite the leap in dividend payments to shareholders. Then there are SEPL’s current operations, which are also generating plenty of cash. Depending on whether additional investment opportunities can be found, SEPL’s current operations excess cash generation might also need to be passed to shareholders, which would present further upside to the dividend beyond the 35 cents. It becomes quite easy to make the case that SEPL should be trading closer to 300p in 1 or 2 years’ time alongside ongoing large dividend stream.

The stock is clearly completely misunderstood by the market. I see “Nigeria risk” being used liberally as a reason why it is trading in deep value territory, but as I’ve pointed out in many posts before, Nigeria risk is objectively lower than UK risk these days in E&P because the government is wholly committed to encouraging more investment in E&P not less. The UK North Sea operators face many more legal, tax and regulatory risks. The commitment of Nigeria to increasing oil production also means an improving security situation as one can’t have the second without the first, not to mention SEPL’s own advantages regarding impenetrable underground pipeline for evacuation and MPNU’s offshore operations which can’t be easily disrupted. Anyone who says the “country risk” is too high does not understand the landscape.

Exactly! The market cap is lagging previous highs, so we must have further to run. The market cap should be higher to reflect all these positives, but still remains lower than it was in 2022. Ridiculous.

The more shares in treasury, the more value is concentrated in what shares are left in issue. They have been buying back shares at heavily discounted price levels, which is only a very good thing for all of us shareholders. Their EPS is enhanced purely by these share buybacks. Considering more than 10% of the shares have been purchased in the past year, the market cap of PLUS is actually still below the high at end 2022 and early 2023. To be precise, the market cap today is £1683m, vs £1730m in Jan 2023 and 1800m in Nov 2022. The share price looks like it is run up a lot, but the market value of PLUS is actually still lower than it was at the end of 2022, which is very odd considering they have created a sizeable and fast growing US business since then, not to mention opened UAE, Japan, etc.

Arbitraging this is difficult unless you have a custodian relationship in both jurisdictions that can handle the share register switch, which is entirely possible but requires the custodian to action. Basically only institutional investors can do this. Once you have the Nigerian stock, you need to sell it and FX the proceeds back to GBP, which shouldn't be an issue now that currency controls have supposedly been lifted. Liquidity in the local share, the small volumes, and sheer admin hassle means few institutional shareholders are likely to bother. Hedge fund types might do it but they have to open local custody in Nigeria first and I'm not sure that is a priority for them or anyone! I do wonder if the investment banks might do it as a prop trade, but it is not really their business. More than anything, it is just a great signal that SEPL is mispriced here in the UK.

I don't think anything can be done without a shareholder vote. I'm going to hunt out the detail from Israeli corporate law, give me a few days...

Mele Kyari, CEO of NNPC, is the blockage to this Seplat-MPNU acquisition. With the weight of political statements expectant of immediate sign-off, it is about time he folds or is fired. These people are the worst face of corruption, pursuing self-enrichment at the expense of the Nigerian people, it really is despicable. About time he is fired.

Management have pointed this out a few times in calls

Hopefully you all will understand by now, the shares held in Treasury will always remain there, and can never be re-issued, which is a feature of Israeli law. They are unable to be cancelled or deleted. They are unable to be re-issued to anyone, neither to management nor to shareholders in an offer. They will just sit there permanently. In effect, they don't exist any more as shares. This is a feature of Israeli law and nobody can do anything about it, I'm told.

I'm guessing we'll breach 2100 then consolidate for a while. I guess the market will be watching progression of CFTC data to observe how the US business is developing. VIX is up 40% since end March, so that is broadly supportive too.

MPNU production is around 70k bopd I hear, the difference being the natural decline rate of wells when there is no new/replacement production capex. That is what Lokpobiri is referring to.

The terms of the deal remain the same as originally agreed, as far as I know/have read

Lokpobiri's statements certainly suggest a higher likelihood of imminent closure, as he already has egg on face from his comments at Davos in January, so I don't see why he would make such a statement again and one so clear if he felt the delays could continue much longer - it would just make him look even more impotent

What institutions overlook to date but will appreciate in time is the diversity of the business today, by geography, regulatory oversight, and product. PLUS does not need to hammer one particular market, such as UK CFDs, with marketing dollars to squeeze growth out at any cost whilst eroding margins. PLUS can be seen as a technology and regulatory platform which is truly global, thus targeting niche markets and segments all over the place at the same time, eeking out incremental clients and profits without depressing profitability. The next legs are US commodity futures, UAE, Japan, but there will be more after that, such as European derivatives.

This is why this is a sustainable growth business and is worth an ex Cash PE of >10x, in my view.

On valuation, personally I look at ex cash PE.

The market cap is USD2,000m

Unrestricted cash (non-regulatory) is around USD500m

Net income will be around USD300m

Ex cash PE = 5x

What is it worth? My view is that this business can maintain the profitability of its legacy markets while growing some new markets, so it is worth a minimum of 12x PE today.

That would indicate a fair value of 12 x 300 + 500 = USD4,100m or £42/share

I don't think there are any complaints here. The business is growing, just ramping up in USA, UAE, and elsewhere, is throwing off cash, and enhancing EPS through buybacks alone (at a very low valuation). This share is going to £30 in my view. The issue has always been converting Institutions to the story, so the journey to £30 will be incremental wins.

Just through £20 it appears

Does nobody find this share interesting?