Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
i3 is pleased to announce that due to the ongoing exceptional performance of its production assets, positive results from the initial phase of its 2022 development drilling programme, and continuing commodity price strength and the resultant positive impact on our cash flow projections, the Company has decided to increase the minimum dividend to be paid in 2022 by 25% from £11.827mm to £14.784mm. The increase will be implemented by increasing the monthly dividend.
Monthly Dividend
i3 announces its June 2022 dividend totalling £1.6052 million and confirms the following:
Dividend: 0.1425 pence/share
Western seems pretty confident about the well given their years of work on it. Can't recall this big of a drill by junior. Basin in Australia is prolific.
All imo
The Sasanof Prospect has anticipated resources of 24 trillion cubic feet (Tcf) gas and 1.1 Billion bbls condensate.
https://www.offshore-technology.com/news/western-gas-drill-sasanof-prospect-2022/
Cheers Pelle. Can I ask what is the production and realized average oil price(post hedging) you are assuming to come to that $700mn FCF number for full year 2022? So you see net debt at $500mn year end 2022... Cheers
And the illustration of 44kboepd production and realized oil price of $68, I meant for 2021. So the net debt essentially would be down $300mn in '21 from $1.2bn to $900mn, if there was no GE acquisition and all things stay equal.
So enq can hopefully be in a net cash position or very low net debt by end '23 if oil prices stay high and production outperforms at about 50kboepd? Can someone check if it makes sense with their numbers? Feel free to correct any estimates. Cheers
All IMO
Heavy - comparing against oil and gas etf is not correct imo. You need to look at a basket of leveraged oil plays as not all companies in that etf are leveraged plays and they tend to expand a lot which enq has not done yet. Look at the USA E&Ps as well as Canadian ones as they have quite a few leveraged oil companies similar production/size, etc. to enq to get an idea of what sort of catching up needs to be done by enq? Not sure if anyone on here has a good comparable to enq. Hbr can still be considered for peer analysis if enq production,debt, etc. Is taken as a proportion of hbr to get proportional equity value for enq from hbr valuation ?
Enq has a rapid deleveraging capability if oil prices stay high. How fast and by how much? The resident experts might be able share some estimates on that as to what will be fcf and net debt at year end '22 for enq at
45kboepd and $80 &$100 realized prices for conservative estimates and
50kboepd and $80 & $100
But to illustrate - enq production was around 44kboepd and realized oil price was $68. For that production and oil price enq would have net debt down $300mn if GE acquisition was not done? Could that be extrapolated?
And a quick question for resident experts - when enq says it's hedged 8mn barrels does it matter which oil enq uses to settle those hedges? I would imagine selling premium Kraken oil on spot prices is more sensible than using it to settle the hedges? Cheers
Is that 20% of outstanding equity dilution? Quite sizable given the float?
Security question is answered in the last bullet point.
Price tag Valuation itself tells you how it compares with saves acquisition. SAVEs acquisition was priced around $600mn with dilution, while sepl is priced around $1.2bn without any need for dilution. Obviously clear sepl would be massively accretive per share basis given no dilution.
Another interesting part of the acquisition is the "The Qua Iboe Terminal, one of Nigeria's largest export facilities"
All imo
"Transformational impact
· The Transaction will create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster Seplat Energy's ability to drive increased growth, profitability and overall stakeholder prosperity
· Based on 2020 pro forma working interest volumes for Seplat Energy and MPNU, the transaction delivers:
o 186% increase in production from 51 kboepd to 146 kboepd
o 170% increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl
o 14% increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, plus significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf)
o 89% increase in total 2P reserves from 499 MMboe to 945 MMboe[1]
o Includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability
CaneToad- ExxonMobils RNS also gives a confident deal closure tone. After all, ExxonMobil is not exiting the country and hence the government wouldn't want to upset a big player like ExxonMobil who will have major Deepwater operations in N by messing with their deals/transactions. ExxonMobil seems pretty confident deal will close especially given seplat might have negotiated and locked in the $1.2bn price tag back in 2021. If NNPC or anyone else wants to acquire the same assets then the price tag would change substantially as the assets sale price would be renegotiated using the current oil price environment rather than when sepl negotiated and locked in the purchase last year at much lower oil price levels. As there is no pre emption rights by anyone else - apart from sepl no one else will get the price tag of $1.2bn for these massive assets that sepl has negotiated exclusively. All imo
“This sale will allow us to prioritize competitively advantaged investments in our strategic assets, and it supports the Nigerian government’s efforts to grow its oil and gas operations,” said Liam Mallon, president, ExxonMobil Upstream Oil and Gas. “We value the relationships we have spent decades building with the government and people of Nigeria, which will continue as we maximize the value from our deepwater operations.”
When finalized, the sale will include the Mobil Development Nigeria and Mobil Exploration Nigeria equity ownership of Mobil Producing Nigeria Unlimited, which holds a 40% stake in four oil mining licenses, including more than 90 shallow-water and onshore platforms and 300 producing wells."
https://corporate.exxonmobil.com/News/Newsroom/News-releases/2022/0225_ExxonMobil-to-sell-Mobil-Producing-Nigeria-shallow-water-affiliate
Herminator - the effective date of transaction is not 2022, but Jan 2021. So cash flows from Jan '21 till completion date will be adjusted to the purchase price. Given high oil prices in '21 and possibly '22 would mean the final consideration would be a lot smaller and hence debt that sepl will have to take on for the acquisition would be a lot smaller imo.
"Seplat Energy will acquire the entire share capital of MPNU from Exxon Mobil Corporation, Delaware (USA Incorporated), with an effective date of 1 January 2021 for a consideration of $1,283 million, subject to lockbox, working capital and other adjustments at closing relative to the effective date"
Worth reading seatanks previous posts and down the threads. If you look at the acquisition metrics and price tag, it's clearly a distressed sale by exxon. The director purchase of 100k shares post the acquisition news recently should give a hint on what their expectation is in terms of deal closing. And you have sizable oil production churning $300-400mn free cash flow at Q1 prices. Sepl is paying you dividends to wait until the acquisition completion. Once the deal closes, would be really surprised if sp would be below 180-190p by then. I guess once the deal completes, it'd be time to double up on sepl position as the fair valuation would imply above £3 per share with dividend/ buybacks yielding 10%. All imo
Hum is an operational disaster.
Another oily producer worth checking out is Seplat energy - sepl. Nice 6% yielding, quarterly dividend player and got an acquisition lined up that will triple its production to 150kboepd. Acquisition debt funded so can see potential being valued at least 100% higher post deal closing. Similar to save, operates in Nigeria. Dyor
I3e has definitely surpassed performance of EOG. I3e needs to get the Serenity cherry popping and we could be looking at much higher valuation above 70p imo.
Ggg - well done on your sizable hold from 5p days. Thing currently with i3e is we don't hold enough of it. I3e was the most obvious buy at 10p post CVE acquisition and was obvious buy at 20p-25p post reserves upgrade and still is. Serenity can take us much higher.
On a reserve basis, rough valuation estimate from the RNS says;
"P50 PDP net present value ("NPV"), using a 10% discount rate, increased by 231% to £0.24 per share, 1P NPV increased by 195% to £0.30 per share and 2P NPV increased by 172% to £0.52 per share, as compared to the prior year.
o The NPV calculations performed by GLJ used an average 2022-2026 WTI price of $69.18/bbl (three consultants average) which is significantly lower than current strip prices."
Update to the recent oil and gas prices and the valuation estimate goes much higher. And then on top add on the current drilling program and it's reserve conversion which is yet to be done. And the cherry on top would be Serenitys 75mmbl oil 2p reserves conversion potential.
And another $55mn is incoming for Ubima disposal. Curious if they will increase dividends substantially if the deal doesn't go through, which the market seems to be discounting? Hardly anything seems to be priced in the share price for the acquisition? Definitely a lot better value than save imo.
Also good to see the recent director purchase of 100k + share here.
"A settlement agreement of $55 million has been agreed with AGEL and we expect to receive payments in due course."
And if we include the $128mn that has been deposited for the acquisition, in the cash balance , the net debt would have been down to low $300mn levels. Without the acquisition, at current oil price levels we would have been headed towards a net cash position end of year or early next year ?
And a bit confusing on the dividend payment dates. How come q4 and q1 ex dividend dates are so close? Does it mean the q2 and q4 payment dates would be much further out I.e.after the quarter ends?
And is there a Nigerian withholding tax on the dividends? Recall fxpo had Swiss divi withholding tax.
Cheers.
Cheers for that.
I think the final acquisition cost would be much lower given the cash flows retained since Jan 2021 compared to the original headline. So basically the final debt drawn for the acquisition would be much lower especially given high oil prices so lower debt servicing post acquisition. Wouldn't be surprised if the assets have already produced at least 25-30% of the headline price tag by now in cash flows.
L3 - even if you risk the production figures for your concerns on magnus etc. and assume let's say a production figure at lower end of current range say c.45kboepd - what does your model suggest enq FCF and net debt position would be for end of year 2022 at a realized oil price of $80 and $100 per bbl levels?
If you stress the production level even further to say 40kboepd , curious to hear what your FCF and year end net debt numbers would be at $80 and $100 per bbl realized oil price average?
Then sensitivity of production fluctuations of individual fields in individual months could be incorporated in answering the final exam question regarding net debt and FCF generation.
Any thoughts? Cheers
So at least $100mn FCF in Q1, and at Q1 production and oil prices, the full year FCF amount would be $400mn+?
Thats a massive 50%+ FCF market cap yield?
And if the acquisition does not proceed (although hopefully it should complete) - it would mean the massive cash flow from existing assets would go towards reducing debt and increasing the dividends and shareholder returns, if no further acquisitions? A win-win irrespective?