Member Info for SeplatWinner

Here's a direct quote and from the Minister of Petroleum himself:

"In pursuit of resolving the ExxonMobil and NNPC divestment dispute, as per our mandate to agressively increase production , I engaged in constructive discussions with Seplat Energy, led by Managing Director Mr. Roger Brown. "

https://twitter.com/senlokpobiri/status/1725622722229608693

To backtrack these comments and instead engage in a full break-up of the deal is completely off the table now, IMHO. I'd say it's plausible some tweaks and changes are made to the final deal, as to save face for the NNPC. If the deals goes through as originally intended, we're breaking 200p intra-day.

BNP Paribas reiterates approx. +70% upside this morning, after the Q3 report yesterday. A friendly reminder that both JP. Morgan and Jefferies issued 1500p & 1555p i.e +65% upside in October, respectively.

Https://twitter.com/FMPRng/status/1725536699390816616

Mr. Brown in meeting with the Minister of State Petroleum Resources

Israel accordingly keeps fossil fuel infrastructure in the Mediterranean heavily guarded. “We say that whenever a new offshore installation is approved in Israel the commander of the Israeli navy throws a party because that means he gets a couple of new warships to play with,” Sagi Ganot, the Ministry’s head of upstream regulation and trade, joked on a webinar late last year.

Just look at what several insiders did on the first day the market was open after the attack. Surely they understand that this was a steal. The assets are national security: 16 years of gas supplies, all for the local market.

Follow the insiders.

10 Oct 23 Matthaios Rigas 50,000 UK£9.10

10 Oct 23 Karen Simon 50,000 UK£9.26

10 Oct 23 Efstathios Topouzoglou 50,000 UK£9.10

10 Oct 23 Panagiotis Benos 27,958 UK£9

+10% since several guys here said we had huge downside, not to mention how everything was to be blown up :) Always buy at peak fear, gents.

Please disregard earlier post, the news outlet seems to just copy the language / confidence used by Seplat in their PM to the market yesterday. No news from what I can see. https://www.vanguardngr.com/2023/10/fg-will-approve-acquisition-of-exxonmobils-assets-seplat/

Is this Twitter post correct, 20 minutes ago. ?

Big if true

https://twitter.com/TodayNews0001/status/1719244431314825644?t=OuzfbrVzx_XS0oQh4fccUw&s=19

Free cash flow generation (i.e. after CAPEX) is +$200m on a LTM basis now which means the earnings yield is above +20%, of which we get approx. 13% back in dividends.

I guess we all knew that ANOH delay was inevitable, but still disappointing to see. Hopefully the MPNU decision is sealed within year end. If it indeed was a hard reject from the government, surely that would have been enforced sometime the last 18 months this has been going on. Probably high level talks at the moment. Doing a rug-pull on Exxon is surely a reputation risk for any country, and also Nigeria.

"Both U.S. and Israeli Officials have now Confirmed that Prime Minister Netanyahu has Agreed to Delay the Invasion of the Gaza Strip until the U.S. Military is able to move more assets into the Region including at least 12 Air Defense Systems, for the Interception of Cruise and Ballistic Missiles as well as Rockets and Drone, which are set to be spread across multiple Countries in the Middle East including Bahrain, Iraq, Kuwait, Saudi Arabia, Qatar, and the UAE."

Link:

https://www.wsj.com/livecoverage/israel-hamas-war-palestinians-news/card/israel-agrees-to-delay-invasion-of-gaza-so-u-s-can-rush-missile-defenses-to-region-wFU3kduhruPhm6e8OM7b

Energean is a bargain here and I'll increase my position tomorrow.

Although I see in your profile your writing about "risks" in about 10 different companies per day - i.e. it's very hard to keep a gentleman as yourself positive about anything - here's how I see about it:

I'm investing and I'm not trading. Currently, the market cap is below the value of the wholly owned FPSO - not accounting their wholly owned ROVs, OSVs, hundred of miles of pipelines - and so on. Add to this the largest Gas producing asset in Italy coming online in Q1 2024 (will Hezbollah attach Italy as well, according to you?), Egypt, Croatia, Greece and so on. You're also probably aware that their largest producing asset outside of Israel sends royalities to Lebanon (Hezbollah) - making little sense for it to be a target. Let me not rehash what I said earlier about two carrier groups from the US + Israels army protecting their own gas supply.

I'm willing to give you that the share price will be weak as long as this escalates, but as a investor I have to buy assets at 2x earnings whenever the markets provides me an opportunity to do so.

I have no clue what the SP does in the short term, however - this is a incredible bargain for anyone with a 2-3 year holding period. It will earn its market cap & net debt in free cash flow within 36 months. Hard to beat IMHO.

If we come to a situation where Israel gas supplies (i.e. Energean) is bombed - I'd say the whole ME will be up in flames. Let's hope not. And, as I said in my first post: it's not that the Israel and US army are unaware of the situation. The amount of security assets safeguarding this area is breath-taking; not an easy task to get through. We also know, unfortunately, that the Hamas/Hezbollah prefer civilian targets over military/economical targets any day of the week.

A few things to consider:

- Energean FPSO is 100% insured

- the largest Carrier Battlegroup in the world just entered the same seas (and they are on Israels side)

- Energean now supplies 90% of Israels own gas needs. I'm pretty confident the security of Energean assets are top of mind in the government

- 2-3x ev/ebitda next twelve months

- monster discovery outside of Egypt

- 19 years of reserves for a $1750m yearly production (pre any other discoveries)

I'm willing to agree that ANOH is delayed to mid 2024, but I'm also somewhat confident that a fully operational ANOH is not in the valuation - at all. Not to mention the 90$ oil price and absolutely not a MPNU deal of any kind.

If it's delayed, I'm taking my 10% div and wait. (:

Pretty harsh reaction today, to be honest.

Plans to sell approx. 1000 plots for +£50m i.e. current amount of wholly owned plots (+6500) should exceed market cap (and debt) with a substantial margin.

Also, we shouldn't be more than 1 year from SPR returning to +£20m yearly PBT. Current market cap £58m.

All the other builders delivered the same results and outlook, but received a decent share rally afterwards. I guess it's the cancellation of the dividend that hurts.

Here at p/tangible book 0.35 one have to bid (I'd argue). What's not included in that price?

Here's a equity research report on "Africa Oil" https://shorturl.at/pGWY5

I invite you to turn to page 11 where the NAV is stated. AOI Nigerian operations are 2 licenses in decline at 20k boed and almost 1/10 of Seplats reserves. These assets standalone are valued the same as the entire market cap of Seplat Energy.

(of course, there are big differences of these companies - but it speaks volume of the valuation dislocation looking at the assets in isolation)

July 2023 - "An undervalued, high quality growth story"

Link: https://www.docdroid.net/9Vxp94v/spring1-pdf

August 2023: "Distinctive model in growth market"

Link: https://www.docdroid.net/7Hk8wPO/spring2-pdf

As most of you probably know, Warren Buffets only net purchase the last quarter was three (3) different house-builders. Should you buy it now, trading at multi-year lows and sentiment at peak-fear? Or should we wait until the market recovers fully? Absolute no-brainer.

In short:

£65m mcap

~£16m in profit before tax this year

~18m in profit before tax next year

Over +15 000 plots on the balance sheet. On the balance sheet each plot is valued below £8k. However, Springfield occasionally sell plots themselves at +£80k a plot. Furthermore, use any available real estate portal and let me know if you can find wholly owned land at £8k a plot.

Debt is optically high because it's not bank debt in that sense, but recourse to a seller over 5 years (and based on actual sold plots, and can be deterred).

What are we looking at, 1 or 2 more interest increases? Tops. Housing demand isn't going anywhere.

I increased my position today at 60p.

Link correction: https://t.ly/bjw0Z

Attaching Cardinal Stone's latest Buy Research on Seplat (not commissioned research, FYI).

https://research.cardinalstone.com/storage/ResearchReports/CardinalStone%20Research%20-%20%20Company%20Update%20-%20SEPLAT%20-%20Tax%20credits%20to%20rescue%20bottom%20line%20in%20FY'23.pdf

TP 205p excluding of MPNU.

Fantastic! I figured MPNU 90bopd was gross production, and not working interest - thus a huge upside to my bear-case below.

Thanks for all the feedback. Very helpful!

Incredible bargain. I guess all the "francafrique" commotion going on in the adjacent countries puts a wet blanket on Seplat, and the Nigeria stock market as a whole.