Member Info for spike501

"The country’s finance ministry announced Friday that it would repeal the 35% additional tax on firms’ profits if the average price of oil and gas fell to, or below, $71.40 per barrel for oil and £0.54 ($0.68) per therm for gas."

Unfortunately this is news from 2023 - it was never enacted.

"Brokers can't really wax lyrically ( bull5hit ) on NS assets like we sometimes see on say African mining firms, has to be more specifically and fact based calculations."

Brokers notes on exploration companies are always bull5hit as they never take into account the impact of the upfront funding needed to move from exploration to development.

That 79.4p value for Selene is based on the lifetime NPV of the cashflows, but before any cash actually comes in (and first gas is not planned under 2028), Deltic will have to fund it's share of development - say £50million. Deltic doesn't even have the cash to run operationally until 2028, let alone stump up £50million - that will have to be funded. Deltic has no other cashflow so that's not been doing through debt, therefore two alternatives - equity raise or farm out.

Equity raise is clearly not feasible for that amount with current market cap, so farm out - possibly Deltic could farm out 50% of its remaining stake in Selene for free carry to development - so already your broker note valuation per share for Selene is almost cut in half.

Deltic is also going to need to fundraise to survive operationally until then - in theory they could survive on a a few million if they do absolutely nothing else but wait for Selene - its hardly a compelling story for equity investors, give us millions now and then wait years for any sort of activity, especially in current climate where there is no certainty that Selene even goes ahead. So any equity raise is going to include funds for the overseas expansions they have just outlined, so further dilution.

I'm pretty sure Deltic know Selene outcome is good - that broker note was highly likely released to pump up interest in this, support the SP when the positive news is released to allow Deltic to make a placing to give themselves a few more million.

Double the shares in issue, half the stake in Selene to ensure free carry to production and the value per share from that broker note is down in 20-30p range .

“2028 spike.Where on earth are you getting that date from??“

Page 14 of Deltic’s latest investor presentation on Selene. The Operator will likely need 18-24 months to complete the FID, possibly more with approvals, then procurement and development before first gas.

https://delticenergy.com/wp-content/uploads/2024/07/Corporate-Presentation-July-2024-Final.pdf

First gas at Selene would be earliest 2028 - I’m sorry but if you think She’ll or Dana are paying £30-40million in cash now for a development project with no cashflow for 4 years then you need your head tested. Everybody can see the mess Deltic are in so they will drive a hard deal and I doubt that involves any substantial cash upfront - they could equally do what She’ll did on Pensacola and sweat Deltic out.

Union Jack lol -absolute dog.

“That is huge even 45m is commercial“

Prognosis was at this location it would be 155m so it’s pretty much spot on.

Selene is a wholly different proposition to Pensacola - it’s a simple tie in to existing infrastructure, Pensacola is a completely new development.

Horizonte minerals

"Well it won’t be worse than you projected since you"

2024 will be substantially below guidance as even after hedges average price was gas will be less than $2.25 guided and average price for oil will be less than $82 guided. Next year based upon current futures pricing gains in gas price will offset by further reducions in average oil price for the year. Either was 24 and 25 are going to be below the guidance amount for 24.

Thanks for the correction Tony, which likely means 2024 cash generation will be substantially worse than planned.

Current 2025 futures for gas average about $2.25Gj which was the same as planned for this year while oil is about $12-15 less per barrel, so very difficult to see any catalysts for pushing the SP up.

“Yes, so I don't see the same downside risks if the T/O doesn't go ahead .. and we see AECO follow the trend of the futures points to $2-$3Gj”

$2-3Gj isn’t particularly exciting, a substantial amount of I3E production was protected at this levels through hedges and current year guidance was based up $2.25GJ so is just returning to expected levels.

Meanwhile oil is substantially below guidance forecasts and the entire 2025 curve for Brent is sub $70.

If the deal doesn’t go through I’m far from convinced the I3E SP is going anywhere quickly, can’t see it recovering current levels any time soon.

“IF GTE wished to increase its offer it only has to get the consent of the panel, the panel would never reject an increase.”

What’s the point of no increase clauses then? If the takeover panel just grants them at any time they are utterly worthless, so the regulation is a joke.

The offer isn't a fixed 13.92 per share - the final value depends on the GTE SP. The offer is fixed at 10.43p cash, dividend 0.2565p plus one GTE share for every 280 I3e shares.

I wouldn't necessarily think they anticipate the deal will fall through, I think they are taking.a substantial rise in a short period and not sitting around for another few months for another 10-15% while there is the risk it could fall through and the SP fall back.

"What! you call 100 a tight spread"

No, the poster was looking at the secondary listing in London where there is no liquidity. The primary listing is in New York and the spread is tiny as there is loads of liquidity. You'll be issued shares to trade in New York. not in London.

"Just looked - the GTE spread is 100p

buy 700 - sell 600"

Main listing is in US where there is plenty of liquidity so the spread is tight

Jubilee Metals has been on a 3 year SP downturn, don't see much excitement with that, looks fully valued at the moment.

G_G_G - have you looked at AltynGold (ALTN)? Gold producer, about to commissioning an expanded processing plant which will take annual production to 50-60koz - AISC of somewhere around $1000 per oz so would throw off $60-90million of operational cashflow in 2025 from a very large resource. They also have a second substantial resource in final stages of appraisal. Debt is low, especially in relation to expanded production.

Mine is in Kazahkstan so there is political risk and it is majority owned by one family so liquidity is low.

SP has been bouncing around low for a long time, combination of missed targets, poor shareholder communication and some lax corporate governance (briefly suspended a couple of years ago due to a delay in financial results).

However all the points above seem to have been addressed - the SP has reacted, up 100% in the last 6 months and still on a charge - despite the increase the market cap is still less than £50million, there is a strong case for it to be multiples of that.

There is certainly risk, but also a real opportunity for good returns.

Yeah, agree, I also completely understand why people are against the dealer, ultimately I suspect this deal is saving investors from themselves.

Interesting side note - Brent is now below $75 across the entire futures curve.

The gain they get from the offer is more than 3 years of dividends - and that's assuming the dividend is sustainable which at a 10%+ yield the market thinks it isn't. Take the gains an move on, plenty more fish in the sea.

You're right the share price performance has been great, that's why everyone here has been so happy.