Member Info for Tobin

I have said this before, I am not a chartist but ..

SP chart often does represent sentiment of investors as well as fundamentals.

The share price has been on a long term down trend, and in fact in a descending wedge. SP is now sitting at the bottom of the wedge, it could breakdown... But descending wedges are usually seen as a BULLISH pattern and SP as eventually the share price will break to upside.

So for the first time in a couple of years I have bought (using last years ISA still sitting in cash).

The wedge may run for another 6-12mths, we may see a bounce then further lows.

My reason for buying is ultimately on fundamentals, but also at this degree of under valuation there could even be a bid.

The oakbloke and others note the tax losses alone will deliver an extra $60million in free cash. Compelling case just on its own. Extra largely unexplored acreage onshore and offshore…

Can see why PB likes the deal.

No mention of the trin tax losses which on the trin board have been estimated at $166million. If true makes the deal much more attractive.

The presentation

https://www.investormeetcompany.com/meetings/full-year-results-129

Https://www.investormeetcompany.com/investor/meeting/full-year-results-129/presentation

One noteworthy point is that the loss rate, ie investments that fail to return a profit (after fees and expenses) was only 2.3% over past 10years and 2.9% over 15years that includes the last financial crisis. Remarkable.

Very informative presentation by Helen Steers https://www.investormeetcompany.com/

The video should be available shortly but a pdf of the presentation is available to download.

Helen’s presentation though is worth watching as she walks through the presentation giving a much better idea of how Pantheon works.

I don't like the term gambling, though there is a large element of "chance". This is investing albeit high risk and possibility of losing most of your investment.

CEG may not "strike oil" (or gas") but it could have a 2billion barrel field, or maybe more than one. That sort of field could deliver $billions.

Assessing the risk and putting a price on it is difficult. The deal with Chevron tends to indicate that at the present price CEG is under valued. Chevron may be wrong but buying in at these prices you are in good company.

I would recommend you look at what methanex actually say in there investor presentations..

https://www.methanex.com/wp-content/uploads/MEOH-Investor-Presentation-May-2023.pdf

Page 9 they highlight a chart of profit they make with NG at $4/mcf, and methanol at $375/MT.

It is the price they get for there methanol that is important for them and the price at the moment...

https://www.methanex.com/about-methanol/pricing/

Yep about $400/MT

The Henry Hub price is irrelevant as their plant is on T+T, and you can not cheaply move gas from the USA to T+T, and that is where there plant is.

Methanex have even said that they are willing to pay more for NG on T+T

"President and chief executive officer of Methanex Corporation, John Floren, has told an investor conference in Louisiana, USA that his company is prepared to pay higher prices for natural gas in an effort to restart its Titan methanol plant in T&T, but not so much that it makes losses when prices are low.

Floren told the conference last week: “The economics of the gas will be different from the economics we have traditionally enjoyed with Titan. So we will pay a little bit more for the gas, but we want to sign a take or pay contract to invest the tens of millions of dollars we have to, to get the plant restarted, we would want to be cash positive through the cycle, so that’s our goal, and we won’t sign a contract that assures losses during the bottom end of the cycle and that’s part of the challenge that we are having with the Government, as the Government renegotiates with the upstream, they certainly know the downstream’s position. It is not only ours but our competitors, the ammonia guys and LNG.”

https://www.guardian.co.tt/business/methanex-willing-to-pay-more--for-gas-in-tt-says-its-ceo-6.2.1510956.8a012035f4

Henry Hub prices are down at the moment but its not the long term price. Companies like Methanex can and do make good money even when gas prices are higher, cf $4/mcf.

Quote:

"In a report sent to Rigzone recently, BMI, a Fitch Solutions company, projected the Henry Hub gas price out to 2028.

According to the report, BMI sees the commodity averaging $3.4 per million British thermal units (MMBtu) in 2024, $3.6 per MMBtu in 2025, $3.8 per MMBtu in both 2026 and 2027, and $4.0 per MMBtu in 2028.

A Bloomberg Consensus, which was included in the report, projected that the Henry Hub price would come in at $3.3 per MMBtu in 2024, $3.8 per MMBtu in 2025, $4.0 per MMBtu in 2026 and 2027, and 3.4 per MMBtu in 2028."

Methanex have plant worth several hundred million $ sitting idle.

Google methanex Trinidad News

If there is gas to be had at a reasonable price aka $3.50-$4/mcf they are going to take it.

Trinidad is short on NG for its industrial sector,

There's deals to be done and the price is higher than what TXP is getting now.

I think PB will not be rushing to deliver 200mmcf/d at present prices.

A nice little rise in the NAV, still not broken the record set at the back end of last year.

I look back at the long term chart on the PIN site and as always it starts at the bottom left and ends up at the top right.

The performance in the last year doesn't appear great but its a lot better than AIM has done. It seems that those who want risk have gone to Bitcoin but PIN will have been doing what they always do best and taking the opportunity to invest in good companies on the dip and eventually the market will see sense and the discount will narrow and follow the NAV.

PIN remains a great way to invest in a broad basket of companies that one day will be the future.

Malcys video is on you tube.

It was enough for me to buy a few million shares ... even though that isn't actually that much cash.

There is clear potential for the to 10bag from here.

I suspect that the casual investor maybe put off by the 3 fold gain in the past 3months but the upside is still huge.

I look forward to the ride.

So one day in the not to distance future TXP could be producing 200mmcf/d and getting paid $3.50-$4/mcf. Not all will be profit, I will let others do the maths.

NGL will be extra,

Other discoveries will be extra.

There is an argument not to push for 200mcf, and PB has eluded to in one of his presentations. Th price they are being paid for the gas is less than it is worth. One of the offshore producers I believe got $4/mcf and industrial users on Trinidad are probably quite happy to pay that sort of price.

https://www.methanex.com/wp-content/uploads/MEOH-Investor-Presentation-May-2023.pdf ... page9

There are negotiations on going with Methanex, it may be that the contract price could be increased or a better contract price when the current contract expires? If you read the latest annual report, and read between the lines, there is a lot of negotiations going on, the current 20year methane contract runs out in September.

https://finance.yahoo.com/news/methanex-corporation-provides-trinidad-tobago-121500487.html

PB knows he can get a better price for the gas, probably 50% more, and he just needs to wait.

The NAV end of August up nicely, 2.6%, to late for the AGM.

The tender offer buy back of shares will have increased NAV by 3.5%, so NAV around 486.5p, and discount still over 38%.

Its the "problem" that buy backs to reduce discount increase the NAV. oh well.

Yes, made the AGM again. John Singer giving the meeting a different flavour; keen to be seen to be open to new retail investors.

They are still vexed quite how to do this but making sure investors are at the forefront.

They were very clear that the wide discount was not acceptable or justified. The notion that the NAV was somehow over inflated by valuations not supported by continuing realisations that show marked uplifts from booked valuations.

In the questions I reflected to the board that maybe the best way to reassure investors was to put "their money where there mouth is", but that Mr Burgess maybe didn't need too. There was a hearty laugh.. John Burgess has recently just bought a further £700,000 worth of shares. He was happy to take up the opportunity to express his opinion that he was quite happy with the valuations of PIN and he thought at these levels of discount that the SP was very attractive... He seemed quite happy with his increased investment.

There was clear message that if the discount didn't narrow more then there would be more buybacks as capital allowed.

So it looks like the tender offer has been successful. It appears to have increased the share price for now, and narrowed the discount. It will have improved the NAV.

I did trade this for a small profit, sold to the tender. I suspect that SP will soften. I have a long term holding I can not sell for capital gains reasons, oh dear.

So rinse and repeat?

We may hear more of the companies thoughts at the AGM tomorrow.

There is a reasonable chance for this. Gas on the island primarily goes to the industrial sector, LNG and methanol. Methanex is the worlds largest producer and has significant plant on the island sitting idle. It only makes money if the price is right but at the moment it can make money with NG at $4/mcf. The contract is for $2/mcf.

Methanex are having to buy in methanol to meet orders, that isnt the business they are in; not when they have idle capacity.

https://www.methanex.com/wp-content/uploads/2023/04/MEOH-Investor-Presentation-April-2023.pdf

They have a fair rate of cash flow from distributions. Last financial year they reinvested £441million in new ventures, and still had £200 million for buy backs. Why invest in new ventures when you can effectively invest in other ventures that you clearly want and know really well... because you already own them... and you get to buy more of them at a 30-40% discount?

So rinse and repeat? If the reverse auction and/or further buy backs to not significantly narrow discount .. maybe not tomorrow but maybe in 6months or so.