Member Info for Tobin

Norths selling has helped keep prices down which has let investors like me buy more at a lower price.
The fact that they are clearly open for offers but now own less does make it that bit more difficult for a buy out at relatively low price.
The fact that they have stated this as their position in a report , and as the biggest shareholder in TXP, doesn’t this suggest that someone is sniffing around???

Link to report
https://northenergy.no/results-for-the-second-quarter-and-first-half-year-2020/

Sounds like they are open to offers....
“North Energy decided to realize some profit during the quarter by selling 5.7 million shares, resulting in cash inflow of NOK 26.1 million and a net profit of NOK 17.6 million. Through these transactions, North Energy has realized values in an amount equal to its total cash investment in Touchstone Exploration. As such, the remaining shares held represent only profit and the Company has an opportunistic approach in respect of maximizing the total value of its remaining shareholding.“

Hard question. Finncap estimated gross profits of $27.2m to December 2021 https://ufile.io/1yuwbk04
But that will be based on approximately 6mths of production from Cascadura. And remember they are and will be spending a lot of cash, free cash flow will be about $14million at the end of December 2021, and we expect that will be well spent.
Wall of cash could be $50million/annum, but they are certainly going to put a second well to Cascadura at some point next year, and this will certainly grow.
If Chinook and Cascadura deep come in then the gas output could ultimately be 3-5 times current projected figures.

A company doesn't have to be creating profit to be successful, but it needs to be creating value.
If it is reinvesting profits, or just spending money and creating value (building a mine, or inventing a new product, Tesla) that's fine. Often the value of new developments isnt recognized, and it certainly isn't by accountants applying GAP and this has often been the problem with UK business. Old British Leyland, new manager came in. Edwards, slashed the development budget, BL went into profit briefly; and then the rest is history.
So what value is a company creating, and how much is it costing you to get a share of that value.
"Price is what you pay, value is what you get" .. so Tesla vs JLP ... $$$/unit value??

TG In a nut shell, it is a lowish grade potash, but most potash is in layers below aquifiers at very high pressure and requires billion dollar mines to access. This doesnt, capex costs are low.
And Morocco has very good infrastucture, also results in very low capex.
And finally close to end consumers, such as Brazil, a cheap boat ride across the atlantic. This is a major cost saving compared to other mines.
Also Morocco has a huge phosphate fertilizer industry. I think there is a hope for a buy out at some stage.
The down side is that this project still requires hundreds of millions $$, and raising that is never easy.

TM, some would say that there is a solid upwards trend channel from April. it is at the bottom of that channel now. Even with no news and we get out of August and it trends to the top of its channel TXP could make 85-90p sometime in September.
Ultimately SP in the short term is always up and down on a very random walk but what matters in the longer term is the fundamentals and this share is undervalued compared to quite predictable future cash flows. Even without chinook etc, its still undervalued.

This company has to raise a lot of money. To some extent it looks like it will raise a not insignificant amount with relatively small discount. This means there are big shareholders prepared to back it.
For small shareholders who may not even get the opportunity to even participate in these capital raises then it looks less attractive. Even if capitalization increases we need to see SP rise. I have a little exposure but it will say small until I have more confidence that I will not be diluted out and those on the inside are able to pick up more exposure at tasty discounts.

Just an opportunity to buy more!

M2 There is gas at chinook but we dont know how much. Another Coho? or another Cascadura? or something else??

Its the industrial sector that is short of gas for producing thinks like methanol. The wall of cash will really come from Cascadura+ ?/Cascaduradeep/?Chinook and that will be 2nd quarter next year. At present it looks like they can sell all the gas and more. PB has mentioned that industry is short of about 20% of gas at present. We wait for the deal with NGC.
Not surprisingly this has waited until after the election, and ministers will be reshuffled. No state "minion"is going to sign of a deal like this until the minister is in place and given it his nod. Indeed Ministers usually like to be seen to signing this things themselves.

North energy remains an interesting way into exposure, but the SP has risen to 1.70NOK, up from 1.46 at the end of July while TXP is at 73p, the same as the end of July. So doesn't look quite so good but still at a significant discount to NAV.
Its only other significant holding, Reach Subsea, has also been doing very well. It was 15% of NAV at the end of March at 0.82 NOK and is now 1.50NOK, and most of that gain since the end of July 1.07 to 1.50 now.
Theres an update on NAV at the end of August, and it will be interesting to see if they have utilized their "cash mountain" in the past few months (50% of NAV was in cash at the end of March).

FinnCap note at the end:
"Our 91p/sh risked-NAV and price target remains unchanged. However, of note is the fact
that this only includes Chinook at less than 2p/sh versus 78p/sh for Cascadura,
highlighting the material upside that a successful well offers. "
And the rest!

Dear PT3, I share your sentiment an I posted similar a few weeks ago that finance was likely to be a bigger issue than some think. This was my experience from SXX. EML is a different beast but I cut back my position significantly over the past few weeks. Salt Lake potash and TXP you can see the value and money rolling in with out any more dilution (well salt lake after its placing)

MD, I agree, they have to agree the NGC deal and saying anything can set "hares running", with politicians getting involved etc. He is best saying nothing.

Interesting to here the mention of Lake Wells. They do have a MOU with australian potash who have the lower half of this lake, but an interview with Matt Shackleton recently he doesnt mention anything about this, they appear to be carrying on their own https://www.youtube.com/watch?v=4AozFfZn3hw
Lake Wells has high level of SOP. The Capitalization is A$37million so a lot less. It will be interesting what happens there.
Trigg Mining also looks interesting with a high level of resource just 50km to the south and sits nicely on the Great Central Road with a gas pipeline. Market cap A$5.7million.
It will be interesting to see how this all goes. Room for some consolidation??

Dana, you say 75p on the open? .. Canada 78p mid price on the close. If it is 75p, I will have to buy some more!

The Chinook well, they should be starting, spud, in next week, and 5 weeks to drill, so hopefully mid September. Then Cascadura Deep, spud in October.

Royston has been a clear target for some time but it needs a "million dollar road" to be built and the building of this will have to wait until after the rainy season that extends from June to August, though the potential for Hurricanes is until the end of November.
PB mentioned the possibility of a second rig.
If they have a big hit with Chinook or Cascadura deep then the second rig and a more rapid drill programme is more than a possibility. On the road to Royston there are 4 or 5 possible targets, and there has to be a senario were they do more 3D seismic as they build that road, and then bring in a second rig.
If they have a hit at Chinook or Cascadura deep they are also like to need to put in extra wells. Certainly Cascadura needs a second well, but this maybe the Cascadura deep well which I understand will be able to be used to drain Cascadura if Cascadura deep turns out to be a dud.
This is all going to take time but in 18-24 months TXP could easily have 6 or 7 production wells and still 10-12 more targets to go at.

If there is something better than TXP then I am interested. I have had a look and I like to see them making ££, but do you think they are better than TXP? Save me some time and please tell me why !