Member Info for spike501

"Any views as to why Canadians continue to offload ITE?
Mystifying . . .."

Oil down 6%, Natural gas down 11%

"why are people selling ????"

Because there is a proportion of the shares traded by people have utterly zero interest in the underlying company and are just buying and selling based upon market signals, plus a few others who have specified return targets and take those returns when reached regardless of underlying fundamentals.

Need to get the results out soon or the market will start getting nervous there are some impacts from the Russian situation that haven't been disclosed or are holding things up.

"Serenity is still risky - what HUR need is another income stream by the end of 2022"

Not convinced there are many value plays out there for cashflow producing assets now and I'm not sure why they need cashflow. As far as I understand it, they can continue to run Lancaster while it is cashflow positive which at current prices should be this year and then they have the decommissioning liabilities covered - great if they can get cashflow, but they can go back to be a North Sea exploration and development company.

Serenity is ideal as it is one of the most advanced plays in the North Sea due to the synergies with Tain, which is development ready and the appraisal well is not that expensive. As you highlight there is risk, but it looks a reasonable one, and although I3E got it badly wrong with Liberator, the Liberator well did allow them to recalibrate the seismics which continue to support the Serenity case.

Not trying to talk my book here - I just highlight I think its is quite possible it happens

I'm invested in I3E and they have the Serenity appraisal drill coming in probably Q3 this year - they have already farmed out 25% for Europa Oil and gas for 46% cost carry and have stated they are actively looking to farm down further, I believe they are effectively looking for as close to zero carry as possible.

I'd suggest there is a very real prospect Hurricane farm in on this - its a very decent prospect at appraisal stage and if it shows success, development would almost be certainly tied in with Tain which is awaiting final investment decision by Repsol, so development costs are low and time to development is rapid compared to most fields at this stage.

Until now the directors of Hurricane will have been focussing on finalising the audited financials and meeting their fiduciary responsibility to stakeholders - primarily reaching the point the bondholders can be paid in full. Its pretty clear the company is at that point now.

I could see Hurricane Energy being a potential farm in partner - oil prices have saved them from certain default under the bonds and based upon the financial results released last week they expect to pay the bonds at end of June and have about $60million in cash remaining looking for opportunities - I can't see them investing anymore in their fractured basement plays after the failure of Lancaster, there is some conventional potential around Lancaster that they could explore but its pretty small and expensive, so what better than a drill ready appraisal that could have relatively short timelines to development.

I expect up until the Directors have been focussed on ensuring the going concern of the business and the repayment of the bonds as that is where their fiduciary responsibility lay, but having now released the audited financials and having clear visibility on bond repayment they can probably turn their focus elsewhere.

Agree Bots - the board have made it very clear the metrics they look to acquire on and that these only happen in the distressed parts of the cycle - which is exactly what they did. Now in the strong part of the cycle they develop the assets they have purchased cheaply, uses hedging as appropriate, distribute a certain amount of cash to shareholders and keep some powder dry for when the cycle turns again

This ought to make this interesting

Happy days eh? That should be a 31p open and clearly has some momentum now - be nice to get some drilling results to help it further.

TSX showing a rapid rally and close at $0.52 - is that real??

https://money.tmx.com/en/quote/ITE

I'm invested in both I3E and JSE and I'd definitely recommend both - I3 Energy will be quicker to distribute cashflows and I think given the comparative valuations I'd sway towards I3 Energy possibly offering more upside, but I'm much happier being diversified across both. A few weeks ago I'd have said the weakness in the I3 case was the high proportion of North American gas production, but prices there have been on a tear recently and given there is likely to be hugely increased demand for exports of North American LNG over the next years I can't see it reversing although it does rely on a lot of infrastructure investment and a US Government staying fossil fuel and export friendly.

Hopefully Jadestone can advance their own gas projects in the coming months.

Tony or anybody else - have you done any rough calcs on the amount of gas hedged as a proportion of production. Could that be a slight negative given the run that gas prices have been on in recent days, so I3e have less exposure to the market rates as a large proportion is hedged, or is it inconsequential?

Well I've come back in again - pretty much the same price as exited at. I was concerned that Kazahkstan could follow down the Belarus path and throw its lot in with Putin, given Russia supported the current regime in the recent trouble, but they've strongly pushed back and are supporting Ukraine's right to sovereignty. So political risk seems about the same as before the invasion.

Hopefully a Q1 update and 2020 financials, combined with a higher gold price should push the SP back up a but - I guess the main question as that moment is how they source the capital needed for further expansion as clearly issuing bonds through Russia is no longer an option.

"Is going up in the US ever day that's what you should be watching imo"

Long term the trends look good - North American gas is saturated hence much lower prices than global prices, however in order to replace Russian gas in Europe there needs to be a massive expansion of export facilities of LNG from North America which over the longer term should drive prices up.

"Would like to see another acquisition or a buy-in. More than plenty to do either or both."

Unlikely at the moment as sector valuations are now in the up cycle as alluded to in the investor video yesterday - they have strict return hurdles for buyins and there are unlikely to be any deals around of that nature. They also now have plenty of owned development opportunities to deploy capital.

It was an excellent interview and almost to the point where they disclosed things that should have been done via RNS - but goods things, they virtually confirmed the dividend would be increased and that they would double the capital budget to exit the year with 23-24kbopd production.

Should be upcoming newsflow on the drilling campaign and I'd expect that to contain details on the capital budget expansion - I'd expect any change to the dividend will come when financial results are released.

So opened up around 20% up - the big surprise for me is that this is actually that much of a surprise to anyone, it was pretty clear that the full year guidance was conservative and that O&G prices have and are likely to considerably exceed estimates and also that production guidance was also likely to be on the conservative side and exceeded.

Question is now what do they do with the excess cash - buyback, increase of underlying dividend or special dividend.

The board very clearly answered about capital allocation and new exploration assets and how serenity fits in. Given the terms of the serenity deal with Europa they might have well have done it themselves, but the market doesn't want that from a capital allocation persepctive

"I3 chose to JV with Europa on Serenity as an option into near Corrib gas exploration Ireland"

No chance, there are no synergies here and look what the board have said about capital allocation and exploration, besides Corrib fell through

G_G_G - I said yesterday that the farm out was certainly underwhelming as Europa real is a partner of last resort and the deal itself was pretty average at best, although it was done before the change in geopolitical situation which I think completely changes the game. However I completely understand why the market did not react positively to the farm out deal - rubbish partner, underwhelming deal.

However, I don't see the farm out as being any substantial driver of the share drop - its gained a lot in the recent weeks that leaves it even more exposed to a big risk off move, although what's very pleasing to see is that buyers have been found again and losses reduced.

As per your post the other day, I don't feel great celebrating high oil prices, given it is caused by the situation in Ukraine. Additionally there is an increasing risk that high oil (and other commodities) derail the fragile recovery and send the global economy back into inflation together with the negative impact on commodities that will have - as the saying goes, the best cure for high oil prices is high oil prices.