Member Info for Tamovv

Tornado, many thanks, I would have noticed this presentation much later without your kind hint. I was aware of subject event, but when I checked last time the material wasn´t uploaded yet (would be keen to see any recording of Iian presenting it, might contact ITH IR to ask if there is any...).

I very much appreciate slide 7, was expecting it in the Q1 slide-deck but maybe the last minute 2nd M&A announcement was too short notice. I have used my linear to actually measure the graph. At my screen 1 cm is exactly 50 kboe/d, haha. So the line at YE2025 matches the exit rate of 140 kboe/d they guided for.

Thus, I will use that production guidance over the weekend to update my model, also incorporate the updated tax loss position (and 4-5 year tax loss range information). Will keep you guys posting it.

From a very high level, I can just emphasize again that 500m dividend for 2025 can be taken very much for granted if you ask me. For next year, beside production guidance, CFFO (after tax) and resulting dividend will very much depend on commodity prices (obviously...). At current prices I am afraid it will be hard to maintain even 50 boe/b EBITDAX, but referring to my earlier post on this board, I am bullish for oil starting from (hopefully at the latest) H2-26.

In my opinion, the only (valid) reason for reducing the 30% dividend payout ratio is Cambo, which won´t be FIDed soon and certainly won´t cause CAPEX spent in 2026. Thus, I see potential for a dividend in excess of 500m USD next year.

So one approach to valueing the company is to define the "required dividend yield" by the market, once the dust around U&K settles. In my opinion Norwegian peers like VAR / Aker.BP / Equinor can guide, or we refer back to the ITH IPO where I remember an about 12% yield for ITH.

At 12% dividend yield and a 550 mUSD dividend (just guessing) one can calculate the share price potential...(the 2,00 gbp peel hunt price target from today doesn´t feel odd to me).

Forgot to mention that we had this negative WoC-build in Q1 this year, to be unwound during the remainder of the year. So its hard to forecaste in more detail without knowing whether they will use real H1-CFFO or adj. figures (for WoC). We also don´t know the phasing of that unwinding during Q2-4 2025. Thus, my 200-250 mUSD range cant become any more narrow I am afraid, but they seem very confident to make it 500 mUSD in total, so for me the detailed phasing doesn´t matter that much.

However, going full 250 mUSD after H1 would be a strong message to the public.

To add to Londoners comments:

The 2023 dividend was kinda "cheated" and planned as three tranches over 18 months from the beginning.

The 2024 500m dividend target was always planned as exceeding the 30% standard range, topped up with a special dividend (if you recall the strategic capital allocation slide, the far right column allows for it as additional shareholder returns. Buybacks are not possible currently, because the freefloat must be kept at 10% acc. to exchange rules as far as I recall).

For 2025, given the comments Iain made during the recent Q&A session, they are convinced this years 500 mUSD can be the result of the standard dividend distribution, which was already fixed at the top range 30% (of the 15-30% bandwich). Thus, this should be payable as Standard two tranches. Normally they could follow their guidance closely and just pay 30% of the CFFO (after tax) per half of the year and see where it gets us to. H1 should benefit from stronger commodity prices in Q1 and think summer maintenance is more towards July/August than June. H2 can benefit from recently acquired gas production.

So long story short, I see them paying 200-250m USD as a first tranche in September and the balance to 500m in early 2026 (as long as we avoid a global economic crisis driving brent below 60 for an extended period of time).

PS: not sure if posted earlier, but interesting interview with Yaniv - who I started to enjoy a lot, the trio was really in a good mood and kinda funny during last weeks call (Londoner: After reading that interview and listening to last weeks call, I think Cambo is more likely to happen than not, but agree with you , that M&A for recent prices they´ve mentioned to achieve are lower risk investments and do the job as well. Given their current balance sheet strength, I am happy to see them doing both in parallel and as much as they can, haha) https://www.spglobal.com/commodity-insights/en/news-research/latest-news/crude-oil/040825-interview-ithaca-chief-defends-uk-oil-projects-sees-upstream-consolidation

Stevo, time to come back investing into ENQ, 11.4 is a hell of a price ;)

@Krakenoil

Was considering traveling to London today for a one-day trip but didnt make it. Glad you go, please keep up posted about unofficial chat between the offical parts.

Obviously, with the consultation deadline ending tomorrow, for me, any chatter about potential "sensible outcomes" are more interesting than ENQ-related micro-chatter (they won´t disclose any more details regarding UK M&A anyways, which is the main sp driver beside UK taxation).

Not sure how close ENQ is to the core-action, think the SQZ CFO is heavilie involved "consulting" the government, but lets hope you can find anything out (they are certainly better informed that us private investors, so any indication helps).

Thanks Londoner,

your post was, as always, spot on! Seems like ITHs intraday rise during HBRs Q1-trading update day was due the good production performance of those assets operated by them (HBR), which you´ve flagged before (for the 2nd time in a row)!

Little bit disappointed by todays sp reaction, as well as muted reaction to yesterday’s transaction announcement (which is a great one in my opinion). All gains since the HBR TU have been erased despite the fact production came in significantly better than market could have expected...

aceofaces, yes and no. Of course you are right when referring to the headline number and saying "Based on Q1 alone, divi is $120 Million i.e 30% of fcf". But one could also argue to use the 625 m CFFO (before WC movements), because Ian clearly explained that this negative effect is due to unwind during 2025. 30% of 625mUDS is an astonishing 187,5 mUSD dividend creation during the quarter. Such a number is needed by the way to get to the 500 mUSD at 30% CFFO, because we will lose some "run-rate" during the upcoming maintenance period and can’t simply extrapolate on the Q1 run-rate.

In my opinion the 500 mUSD for this year are almost granted (as long as we avoid a major global recession, Ian supported this by pointing to the strong hedge book). I don´t want to mix topics and speculate on oil prices, but for me we could have seen the bottom in the aftermath of Trumps tariff announcement.

Interesting is the YE25 production rate of 135 kboe/d before Rosebank additions. Assuming we can maintain this as an average for 2026 (Rosebank startup at YE to compensate for summer maintenance) and using 55 usd EBITDAX/boe (assuming an oil price normalization in the mid-70s for brent) Ithaca could step up from 2-2,2 bUSD EBITDAX to close to 2,7 bUSD next year.

As Ian explained, EBITDAX and CFFO before WC-movements aren´t too far off each other in quarters without significant cash payments. After applying a 30% effective tax rate (mostly EPL) I see them in a ballpark area of 1,9 bUSD CFFO (after tax) for next year, even leaving room for a dividend expansion (analysts still seem worried about the 500m USD doesn´t be sustainable) – all else equal, a FID decision for Cambo with a rather large own stake for ITH could of course drive down the dividend allocation from that 30% top end.

Since today was a non-event for the SP, all eyes back on the UK government now. The consultation on tax ends in one week from today. For me it feels like the scope 3 emission guidance promised “for spring” is somewhat overdue already. Hope we´ll see some sensible outcomes (tax and regulatory-wise) during this summer.

Given all the above I would add to my ITH position if I weren´t “all-in” already 😉 Expect a flirt with 2,00 GBP during 18 months from now

Hitman1a, why? I coulnd´t find any "pattern" in all those frequent RNS. The AGM announcement of SQZ today shouldn´t have an impact as well in my opinion.

Are you just "guessing", or do I miss something?

ITH is noteworthy underperforming against peers since yesterday.

I haven´t seen any news / RNS related to Ithaca yet. POO and ga are doing okay (or improving).

TBH volume is very low, maybe I am just too sensitive.

Is there any weakness in recent physical shipments indicating lower production/problems? Some of guys certainly monitoring this.

PS: Londoner I have noticed your post on the ENQ board, asking for my SQZENQ.Newco model. I havent had the chance to finetune it, in order to feel confident sharing it, haha. Just a lot of daily work to do beside lovely stock-market analysis.

Can´t answer for Krakenoil, but allow me to comment on this as well:

I am wondering that Stevo made that 20/13p assumption, because normally he is more analytic and less "educated-guessing" than I am. This time I find it very hard to even guestimate. Think he assumes 45/55 shares in the new company and about 150 mGBP payment.

What I can say is, that I will have finished modeling SQZENQ.NewCo 2026 by tomorrow as the sum of ENQ 2026 standalone, SQZ 2026 standalone + potential synergies at SQZ, assuming 1.1.25 effective date and full tax savings for this year.

I still stick to my early assumptions, that NewCo can achieve 2b USD EV by YE25, market cap somewhat depending on net debt. (and net debt dependent on the one-off to SQZ old shareholders).

I also don´t agree that ENQ will drop all the way back to 13p. Since beginning of March we had other factors positively influencing UK O&G (Brent, Rachel Reeves statement regarding Rosebank/Jackdaw) and solid a ENQ 24 reporting incl. dividend announcement. Those things won´t completely fall apart. However I strongly believe they will come to mutually acceptable terms and we´ll see the deal work in the end.

Folks please...Stevo certainly doesn´t need to be defended, he´s clever enough himself, but let just comment on that: The idea he "believes" his posts on this board could move the needle in one or another direction (aiming to positively influence his position), is just ridicoulus. You can "critisize" his rather conservative stance, but can´t assume he´s seriously trying to influence personal investment positions with that.

His 2024 FCF guidance was spot on and given managements production guidance, I do get to nearly the same 140 mUSD FCF for 2025 (I know some folks here believe actual production and thus FCF will be higher for their valid own reasons, but thats a different story. You cant complain about people working with official management guidance figures).

However, whilst actually ending up defending Stevo, the following came to my mind:

Does anybody think its possible, ENQ is actually "slowrolling" the offer to SQZ, because there is a chance to agree on Waldorf shares in Kraken first? This would certainly be beneficial for ENQ shareholders, hence it aims to further reduce the valuation gap in market cap (as the divi announcement did) first, before agreeing on terms to merge (thus potentially smaller adjustment payment to SQZ shareholders).

It seems to have been SQZs intension to release the RNS beginning of March. Maybe (given their poor SP performance back then) they kinda lost patience (or were influenced by big shareholders) to get things moving, whilst ENQ would have preferred (or still prefers) to buy 2P reserves with cash first (as Stevo outlined here multiple times).

First of all, big thanks to Dickupham. I noticed your diligent posts on the SQZ board and got notice of JOG (otherwise I would have never heard about it in my life). I owe you a very large beer. I might attend to ENQ/SQZ/JOG AGMs this year, maybe we´ll have a chance to meet.

Wild sp action recently. Interesting to see how this plays out. If it´s really just "renewed interest" given positive talking points from UK government, or if theres any kind of "bid in the air".

I won´t sell below 250.

585mUSD was just to indicate the potential range to the upper band of 30% CFFO policy. Its way too early to tell or give any forecast. My 115 kboe/d 2026 production is pure guessing as well as 2026 price of oil and gas completely unknown.

My point was that a dividend cut, as the CPR 5y period forecast indicates a high and simplificated level, does not seem immitent for 2026 given managements confidence and current momentan (production and ebitdax margin).

Sorry, didn´t want to indicate an increase from 500 mUSD for 2026, its waaay too early (but its not completely off the table, haha).

Many thanks as usual! So it must have been the quite significant stock movements which caused the net debt builtup and gave me the impression of something unusual & probably related to the ENI UK deal.

I will comment on yesterdays call on more detail, but they managed to convince me, that the CPR numbers (next five years, 9 bUSD with 2,5 bUSD cash tax, so 1,3 bUSD avg. CFFO after tax, so 390m USD avg. div. at 30%) should be seen as a floor, rather than management expectation. Quite a few short term 2C developments as well as potential smaller scale M&A (as the deal announced a day before yesterdays release) to add up on those.

For next year, with 115 kboe/d optimistic assumption for production we should move into a ballpark of 2,3 bUSD EBITDAX. Applying your cash tax FC model (2025 EBITDAX of 2,2 bUSD - 800 mUSD CAPEX * 0,38 = 530 mUSD cash tax due in 2026) we could get to 1,8 bUSD CFFO after tax next year (allowing for 500-500 mUSD dividend, so actually no cut imminent).

They all delivered a very very solid performance on yesterday, Yaniv+Ian are a great duo (competent and funny, haha). They really avoided any indication for 2026+ dividend potential beside the boring standard guidance.

The respective slide didn´t show anything beside an empty bar for 2026 either.

But their confidence indicated sharehoders shouldn´t be afraid of a scaleback from those 500 mUSD annually. 2026 can be solved as I just briefly described. For 2027+ we have the next level of production growth coming (i.e. Rosebank) as well as plenty of time for other great things to happen (M&A, even on smallish scale helps). Tax losses were described as lasting for 4-5 years to come (including 2025).

If I might add to Londoners reply:

Their "standard dividend" is "capped" at 30% of CFFO acc. to official policy. So for 2024, they needed to call one installment "special dividend", because this exceeded that policy.

Given yesterdays results, I expect at least 2.200 mUSD EBITDAX for 2025. With 250 mUSD cash tax due, thats an astonishing 1.950+ mUSD CFFO (after tax). So this theortecially "enables" for 585 mUSD dividend payout, thus no need for a special dividend. Given the strong momentum at the moment, I expect two equal tranches as per Londoners guidance on date.

Had the time (and enjoyment) two listen to the full conference call two times on yesterday evening and gonna share some insights in a post later here this week.

Well... try a look at Ithacas results and 2025 guidance from yesterday ;)

Compared to ITHs reporting on yesterday, I am really missing official 2025 cash tax guidance. Shouldn´t be too big of a secret since its based on 2024 results and capex.

Stevo, are you able to help? Normally I would work with 40% effective tax rate for 2025, but any more precise number would be of great benefit to my model (and its accuracy of course).

Https://www.neweuropeanoffshore.com/neo-energy-announces-strategic-merger-with-repsols-uk-business/

Thats not too bad for Buchan Horst, isnt it?

Well played Duckupham:

https://www.energyvoice.com/oilandgas/north-sea/568771/north-sea-operators-neo-energy-and-repsol-to-merge-uk-operations/

Net debt. kinda surprised me at a first glance, but I now believe its as follows (other like Londoner might jump in and correct me):

Net debt. as reported at 885 mUSD is higher than we expected on this board, but 2025 cash tax FC with 250 mUSD midpoint is very low. Thus I assume, there was a balancing payment to ENI increasing the net debt., because an ENI UK LE will be hit with the payment burden of the sold assets. So ITH enjoys a 2025 tax cash saving and "recovers" approx. 250 mUSD (difference between the CPR avg. cash tax forecast over a 5y period) within this year. So "adjusted" for that, net debt would have been shy over 600 mUSD as people on this board expected. Hope this makes any sense...otherwise I can´t explain the 250 mUSD cash tax this year (EBITDAX was 1,4b, so effective tax rate below 20%).

I am not yet finished listening to todays call (1:45h) because my phone kept ringing. First impression is that Yaniv seems to be a great guy and good addition to Ian. Very very solid management team. Think Delek must have picked Yaniv to jump in after the disastrous sp drop post IPO and made a solid pick with him.

Heard some positive comments regarding cambo, but also mentioning of capital competition against short term organic investments and of course inorganic growth (see my conversation with londoner on yesterday).

Slide 29 does not include Cambo acc. to my first understanding, but less riskier smaller projects (low 9 digit investments required each).

Comments regarding ongoing consultation sounded rather positive to me, but as said, not finished listeing to the full 1:45h.

Think we can expect 1-1.1 bUSD FCF going forward. Hard to value from here, ITH enjoyed a good run this year already. 5x FCF multiple gives us a 5,0 bUSD conservative EV with about 0,5 bUSD net debt. by end of 2025. Thats 3,5 bGBP market cap. or 2,07 GBP per share. So hopefully we´ll see a flirt with the 2,00 GBP mark in the remainder of this year. Rosebank was confirmed several times as a clear go, so don´t expect the sp do react a lot to the scope 3 emission application guidance (to be released soon). But of course the other two consultations offer significant macro catalysts going forward.

Working with the CPR assumptions gives us 400 mUSD avg. annual dividend going forward (it was clear that the market didn´t believe in the current 500 mUSD being stable until EPL runout or beyond). HBR trades with about 10% yield, whilst offering more diversification. So from a pure dividend POV we might settle at target yield 12% or so, which is like 1,52 GBP, so pretty close to todays price action.

Thank you Londonder!!! I wanted to ask about your recent impression on production volumes, but felt bad since I still haven´t had the time to introduce myself to that public production reporting database and enjoy the comfort of being able to ask experts like you ,haha. "Watching offloads" reads like another source like an industry shipping plan or vessel tracker or so. So highly appreciate your kind efforts when monitoring this. Believe this isn´t "fully public knowledge", since companies like ITH are too small to get that level of "market attention". I am especially keen on captain regarding the ramp up of EOR Phase II, so what you´ve reported below makes me even more excited for tomorrow now!

Many thanks dickupham! As I´ve outlined earlier on both boards (SQZ & ENQ), to me it seems like pre-integration efforts (i.e. SQZ townhall) are already underway and they will have aligned with Mercuria and Fam. Hardy before to at least have 33% supporting the deal (including the magnitude of the payment to SQZ shareholders). So despite all challenges, I believe they deal is going to fly and positioned myself accordingly.

Regarding your structure below, in agree in theory, but assume they wont use the "official market cap" but rather build their own valuation model - both parties together (I can imagine there are tons of consultants around, who want to get payed for their sophisticated Excel spreadsheets rather than looking up two market caps, haha). Both companies mostly operate in the UK North Sea, so same impact of changes in taxation (obv. some caveats with regards to individual production and development profiles), etc..

So they will have agreed on a set of valuation metrics, to solve the payment towards SQZ shareholders "mathematically". For the FPSO problem, there might be ways to built this into a potential deal structure as well (longterm failure could either lead to noncompliance with a suitable closing condition, or trigger a payment towards ENQ shareholders to compensate afterwards if the working assumption was a working fpso from H2-25 - pun intended).

Since we don´t know this model and valuations parameters in details, we can´t say much beside the 45-49 / 55-51% with additional one time payment towards SQZ shareholders (100-300m, given recent problems, for SQZ holders it might be a win, if the dividend, so 113 mUSD, can be preserved to avoid an obv. cut - SQZs own analyst has not followed their usual bevaviour of following through with an updated report after reported bad news, stating the dividend is safe. Might be because the dividend actually isn´t same anymore, haha, or to not to interfere with the ongoing deal negotiatons too much).

Sometimes, offers come shortly before result days, so I wouldn´t be too surprised to see an offer RNS on tomorrow (beside ITH results and UK spring budget) - tomorrow could become a very very interesting day!