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Seatank - on your previous comment, is the lower levels of cash in Q1 '22 compared to end Dec'21 is because sepl had to pay the acquisition deposit amount? Cheers
From acquisition RNS ;
"Under the Sale and Purchase Agreement, Seplat Energy will pay a deposit of $128 million, which will be applied towards the purchase price on closing."
Ex divi was today it seems ;
"Note that on the LSE: The Associated Record Date will be 5th May 2022 and the Ex-Dividend date will be 29th April 2022."
https://www.lse.co.uk/rns/SEPL/corporate-actions-announcement-bmsmuxdjfuss01i.html
Didn't see the ex divi drop today. Not sure if it's today or in May. Either way it's very undervalued especially compared to Save imo. After the acquisition completion surely sepl will be comparable with HBR in operational size minus the obvious geographic location and other aspects. Could see the current yearly dividends as quarterly once the scaled operations hit bottom line? £1.5-2bn seems realistic market cap with the new acquisition?
Q1 results out. Pipeline on track. Acquisition interim production adjustments since effective date of Jan 2021 will surely reduce the headline price tag significantly. Means less debt or cash required by the time the deal completes.
Forgot to add - GBP has gone down massively against USD in the past few weeks since results. Benefits USD assets/revenue generators like enq with lower costs in gbp and higher revenues with higher oil prices denominated in US dollars.
Gross debt of $1bn would mean a net debt of $700mn?
Hard to find any other UK listed E&P with a market cap of £600mn and FCF potential of $500mn+ at $100 oil and net debt dropping fast. At 0.5x leverage you could be looking at $300-500mn net debt with $70-100mn interest costs even at 10% interest rate levels.
Once net debt reaches $500mn - even with conservative production held flat at 40kboepd, capex 100mn and oil at $80-90 /bbl, FCF will be above $200mn? No point in being debt free - so that $200mn will go towards growing production/development projects, acquisitions or dividends/buybacks. Ab said at the recent results call that shareholder distribution is under review as part of capital allocation framework - so dividends or buybacks are a real possibility. And the biggest beneficial will be ab himself given he is the biggest shareholder. Maybe all the non-stop averaging down in enq over the last 5 years is going to pay him big time. All imo
In micro cap - try NTOG -they got Permian oil wells being drilled which will boost their production and cash flows onshore US. 200-300bopd production should value them similar sized onshore UK microcaps like UJO. Ntog market cap is £4mn vs ujo of £20mn +
Others worth taking a look -
i3e - uk listed E&P, transformed with their Canadian gas assets acquisition. Monthly dividend payer
EOG - UK Serenity appraisal dril play
Sepl - transformational deal completion waiting. Quarterly dividend payer.
Take your pick. All of the above have different aspects to them but in terms of pure FCF generation and deleveraging capability at $100 oil, hard to find any apart from enq. All imo dyor
Why would all be repaid? Don't think anyone thinks enq is going to repay all debt by Oct 2023 as their target is 0.5x leverage. Hopefully if free cash flows allow, then most of it should be repaid and enq deleverages faster by paying off the debt it took the past 5-6 years of low oil prices via paying back in higher oil price environment.
Agree. Been pretty hard to even buy 5k shares today. Need some buybacks from sepl to boost liquidity?
Let's hope they bump the dividend soon. If they increased the dividend to say 10% yield at 137p - that should attract a lot of income investors and boost liquidity imo.
What are peoples thoughts on the two US onshore players?
Both produced roughly 11k barrels previous quarter - ntog produces oil (bopd) and msmn produces gas(boepd)? What is the sort of growth potential posters see in terms of boepd for msmn vs today? Any thoughts?
Cheers
Cheers H.
The recent director purchase should give some confidence to the deal closing.
But strange how £1mn worth of shares traded moves market cap by £70mn or so for £700mn+ market cap company. Surely the volume is low for a reason I.e. Low IIs who don't like the political risk? Once the deal closes it can be RRE mark 2?
Cheers. I think he was a non-exec Chairman at PRD, and is now non-exec Chairman at NTOG. Recall, some posters on this bb speaking highly of him when he was at PRD before the initial drill in q1 last year. Guess there was no particular reason given - although pretty strange for a chairman to stepdown with "immediate effect ".
Hopefully the acquisition closes successfully.
Does anyone know where to find the major shareholders list for sepl? And do we need to choose a currency for quarterly dividend or is the by default payment currency GBP, if one is holding via Halifax share dealing? Cheers
Does anyone know why Dr. Staley left PRD? Couldn't find anywhere... He is the Chairman of Nostra Terra oil and gas, NTOG - seems to be overseeing the Permian drilling and oil production growth of a £4mn market cap company, ntog? Curious on his preference for onshore (with PRD and now NTOG) and microcap oil and gas space. Any thoughts on his skills/experience with PRD etc.? Cheers
http://ntog.co.uk/our-team
And it's not just that - it's the growth that's possible. As the CEO said "We're now in a virtuous cycle, where we can re-invest cashflow to further increase our growth rate."
So you need to look at the potential cash flows from the new wells and increase in reserves and that in turn will increase the $10mn facility size and borrowing base which in turn funds more drilling of new wells in the acreage. As drilling complete and wells come on stream the funds would be flowing directly into new wells - now it's a matter of scaling well.
The chairman is very renowned - he was with PRD recently and before that at Cove energy. Can see him overseeing growth of product. All imo