Member Info for Tamovv

*end of March 2025 obv. for the final 2024 200 mUSD tranche - sorry.

The date will clearly be ex-dividend end of March 2024, as they hinted to in the conference call on yesterday.

Regarding the size, they described the 200 mUSD announced on yesterday as "special dividend", thus on top of the 30% CFFO (after tax) they have committed themselves to.

So the question is, whats their 2024 CFFO (after tax) of the combined group, with ENI UK contributing from 1st July. Working with midpoint guidance from yesterday it should roughly look like this:

28.653 kboe 2024 combined production at about 56-57 EBITDAX/boe (my best estimate given strong gas prices)

So Ebitdax of about 1,65 bUSD, whereas cash tax payments about 10 mUSD below guidance (380 mUSD) lead to CFFO (after tax) of about 1.270 mUSD (first calculation)

Second calculation approach could look like:

793 mUSD YTD09 CFFO as reported (no tax yet, they actually even have received some refund if I recall the conference call correctly)

Q4 production to be at the top end of guidance or even higher, so maybe 115 kboe/d (partly 120 kboe/d as they communicated on yesterday). Cash costs should be in the low 20s (so lets say 22 usd/boe), whereas revenue to be at 76 USD/boe oil after hedging and about 78 USD/boe gas after hedging, so about 77 usd/boe combined assuming a nearly 50/50 ratio now, leading to 55 usd/boe EBITDAX in Q4 (feels rather conservative compared to 53 USD/boe during the first 9 month given lower volumes). Thats 580 mUSD EBITDAX for Q4, or about 200 mUSD CFFO (after FY tax payments), thus about 1,1 m 2024 CFFO (after tax) for the combined group as the result of my second calculation approach.

So with a 1,1-1,2 CFFO (after tax) FC for the combined group, I feel quite comfortable. Thats in any case sufficient to justify another 200 mUSD "regular dividend tranche" (at 30% payout ratio) and the reason why the market reacted so positively in my opinion, which kinda surprised me, because I believed them to pay 500 mUSD the whole time. So "the rabbit is out the hat now" and everybody realizes, that 500 mUSD can be taken as granted (no investment advice.).

Sure analysts will ask the same question today. Conference call is running (with some technical issues...).

Boom! 200 mUSD special dividend announced. Didn´t expect that tbh. Should give us a boost today.

Here was one guy always willing to look into public production figures available from sources like NSTA if I recall correctly and to share these information with us. Would be interesting to see, how actual production came in during Q3.

But as Londonder always says, others also look into these public sources, so the actual Q3 production should be reflected in the SP already. Any information on caption EOR II ramp-up would be interesting. But I doubt the SP would stand where it does today if the Q3 actuals had told us any positive ramp-up surprise...

Personally I am looking very much forward to hearing Luciano for the first time since we have got to know Yaniv on the last call.

Other than that I am afraid Thursday could turn out to be a "non-event" since other figures like net debt. development etc. were already published indirectly in that investor presentation released in October I have already pointed to earlier on this board.

Afraid it´s too early for them to comment on the dividend, since their 500 mUSD "ambition" was communicated already and the actual dividend to be declared with the FY24 results next year.

So as next big catalysts to really move the sp I see:

- development around the Rosebank legal case (early 2025)

- farm-in process around Cambo (probably not before legal settlement of Rosebank for obv. reasons)

- final dividend declaration (end of Q1-2025)

- Caption EOR II ramp-up process (anytime)

- not even sure if UK NS (or any) M&A activity would boost the SP. With the new ENI.UK production contribution ITHs tax losses seem well sized for their new production profile. So any deal for about a "fair price" would be nice to have to gain size, but won´t be game changing in my opinion (very very discouraging to see where HBR stands today given the massive deal they´ve done to diversify away from the UK North Sea)

So boring times until year end ahead for ITH, but hope I will get proven wrong.

Was going to ask the same this morning... still can´t find a date, whereas "investor meets company" sends me upcoming events on a regular basis as mail update. Thus, I assume SQZ isn´t scheduled yet, which doesn´t bode well...

"HARBOUR ENERGY PLC will be holding a Investor Presentation meeting on 29th Nov 2024 at 11:00am GMT."

Is this known to everybody? It is not shown on Harbours website - financial calendar. I got this invitation from that "investMeetCompany" service (I mainly use to follow SQZ).

Sorry, still don´t get it. We are curious about the Q3 operations update. The RNS you´ve filtered to are half year results. I just checked it again and coulnd´t find any explicit date mentioned for Q3.

Feels like Q3 operations update is new this year, following their itention to increase coverage/news flow, combined with their payed analysts and to have the chance to react to the recently announced budget and communicate to shareholders accordingly.

If I couldn´t find that date in the RNS file, please excuse me if I´ve missed it. Would you than please be so kind and post that date for the upcoming event "mid of November"?

Last year there wasn´t any as far as I see.

The fact that 2024 will have a Q3 operations update comes from the analyst note dated 31st Oct.. "We have not changed our production and capex forecasts ahead of the operating update expected to be published by Serica in mid-November."

On the website I couldn´t find any financial calendar, has somebody spoken to IR regarding the exact date?

That is the best possible outcome for today in my opinion. SQZ up massively already, hope ITH to follow soon.

Many thanks linnn for posting these so frequently, very interesting. Mostly aligns with my model, always good to have confirmation.

"Today is the day", let´s keep fingers crossed!

I am really surprised that nothing has leaked by now. Prices havent really moved despite following the poo. The oil price clearly indicated an Isreali attack on Friday before closing, which should be very sensitive information, but I couldn´t find any indication for tomorrows results regarding UK investment allowances.

Is there any chance discussion are still ongoing behind the scenes, so we won´t have anything tangible by tomorrow?

PS: As a German citizen its my first "UK Budget". How does it work? The chancellor is set to speak at 12:30. Is this the important speech we have to listen to, or is there any press release expected to be released beforehand? If somebody could explain the event in detail to a foreigner I would be very grateful

Megla,

Exactly. Thats what I am worried about. This "skills passport" to me looks like populistic "green/white washing".

So I would be glad to get to know any sources / news of recent developments / discussions behind the scenes, indicating that the worst possible outcome could be avoided. The absence of any positive results yielding from all those union, lobbyist and CEO-level efforts combined with Milibands answers to questions he faced during his visit last week make me feel more and more uncomfortable (whereas I was strongly conviced that "sense will prevail...").

Hi Megla,

Sorry, it was actually called a "skills-passport":

"Miliband announced a new “skills passport”, a digital tool for workers who want to transition from oil and gas to renewables, was set to be piloted by January 2025.

Overseen by industry bodies RenewableUK and Offshore EnergiesUK, and supported by the UK and Scottish governments, it is designed to recognise transferable skills and qualifications and lay out career pathways.

Nine out of ten oil and gas workers have transferable skills for offshore renewable jobs, according to research from Offshore Energies UK."

Source: https://www.bbc.com/news/articles/cvglyz9p805o

Hi Sekforde,

Are there any sources supporting your statement that "the budget won´t be as bad as feared"?

I would love to read some articles pointing in that direction.

Unfortutately, the coverage I found, was about this meeting in Scotland last week, where that new "green pass" was introduced to appease worried operators. But in the same time it was communicated that "tough decisions are to be made during the upcoming budget"...

Japan's Japex seeks UK North Sea exit with oilfield stake sale

The exact value of the stake was unclear. Bid deadline for Japex's stake is expected in December 2024.

In the Seagull field, Japex's partners include UK oil major BP (BP.L) with a 50% stake, and Ithaca Energy (ITH.L) holding a 35% interest.

Source: https://www.reuters.com/markets/deals/japans-japex-seeks-uk-north-sea-exit-with-oilfield-stake-sale-2024-10-17/

This would bringt to a 50/50 share with BP. Shouldn´t be too expensive in the current UK North Sea environment. They do carry some 200 mUSD tax losses with them as well.

Megla,

Many thanks for sharing! Always good to see people interacting with IR seeking for confirmation for some of our assumptions.

My model currrently forecasts 5 bUSD profit before tax from 2024-2028. Recent set of ITH credit market slides (p. 14) shows 5-6 bUSD depending on RFCT/SCT (whereof 0,5 bUSD have a low likelihood of beeing utilized). Think I have said something different here on this board. I must have mixed my year end with my beginning of the year tax loss balance - sorry for that.

I have adjusted my operating expenditure per barrel slightler highly (to 23 USD/boe) and now get pretty close to Werner Ridings numbers in terms of next 2y FCF.

Mondays weak SP performance was probably based on an analyst downgrade: https://www.streetinsider.com/Analyst+PT+Change/Ithaca+Energy+%28ITH%3ALN%29+PT+Lowered+to+GBP1.05+at+Stifel/23832196.html

I normally respect Chris Wheaton very much, but he is also a big critic of the current EPL-environment (and he is totally right with that!). So the valuation hopefully shall be understood with a grain of salt (bias to the negative).

@Scrodingerscat, I expect Itsanponzi to compare ITH against SQZ. Not in terms of EBITDAX, but on daily production.

SQZ has no debt. and 50 kboe/d foward-production. SQZs current EV is 460m GBP. New.ITH should have stable forward production of at least 100 kboe/d, so twice the EV should be reasonable for this comparison. However, ITH carries net debt.

I think I have to correct my recent post and re-evaluate their latest statement regarding the new loan and corresponding debt. levels. It is said that ITH "has commenced a refinancing of its existing debt facilities via an offering of an aggregate principal amount of $700 million senior notes due 2029"

So they added 700 mUSD in debt. via a Senior Loan. But in the same time "The gross proceeds from the offering of the Notes, together with $85 million of cash on hand, will be used to: (i) redeem the Company's existing $625 million aggregate principal amount of 9% Senior Notes due 2026 in full; (ii) repay amounts drawn under an existing loan" and

"The bond proceeds will be used to augment the liquidity of the business which as at 4 October included cash of $194 million which incorporates cash balances related to the Combination."

Thus, my new (and hopefully correct) understanding of that information is, that they end up with 194 mUSD - 85 mUSD cash on hands and only have 700 mUSD gross debt left. Net debt after receiving the 700 mUSD new tranche shall be just shy of 600 mUSD.

Coming back to the production based comparison against SQZ, this translates into:

1b GBP EV (relative to SQZs production level) = 1,3 bUSD EV for ITH

minus 600 mUSD net debt

= 700 mUSD equity value = 538 mGBP equity value

= 0,32 GBP per ITH share (new share count is 1,65b)

So yes, from a pure forward production perspective, Itsaponzi isn´t to far off. However, ITH has the biggest undeveloped resource base in the UK north sea right now. So that the chosen metric for comparison might not be the fairest one...

If we compare LTM EBITDAX new.ITH vs. SQZ its 2,2 bUSD vs. 485 MUSD (205+279). Applying the same logic as above this translates into an ITH SP of approx 1,0 GBP (close to yesterdays closing SP).

Since LTM EBITDAX comparisons do look into the past, this also does not take ITHs undeveloped resource base into account (markets also seem to not give too much value to them under the uncertain tax environment).

So coming full circle, ITHs sensitivity for the budget in exactly two weeks from now should one of the biggest in the sector. So lets wait and see another 14 days to find out

No, must be a mistake. Have red the full site on laptop and mobile and tried to expand all "read more" functions, but nothing about Ithaca unfortunately.

PS: Delek waited until the very last moment to process their required sell-down of ITH shares. I am convinced they HATED selling their shares for 1,02 GBP last week. Thus, the levels seen today should be a pretty damn good entry point, if you ask parent company Delek Group ;)

I am a little bit surprised of the missing upwards momentum. Normally I thought the message that the "forced selling" is over, will boost the share price