Member Info for tonynorstrom1

GGG - Have I detected a moderation in your dividend demands ? A week or two back you were of the opinion that a 50% increase was affordable and now ( as per post below) you would be happy with a 15% bump.

Stas

As you say - A lot of volatility and only reinforces how sensible I3E’s growth model is imo - oil prices are going up, there going down and quite difficult to predict especially as we seem to have a broadly positive macro picture of steady demand and constrained supply supposedly favouring higher prices. So the best chance of being able to pay a sustainable and growing dividend is to grow production because you cannot rely on pricing.

Hot chip - I think some would disagree - I note also that you subscribe also to this 10 payments per year rubbish - your comments are rubbish - go fish as the Doc would say.

Not meant to be insulting but you’re persisting with something that has been completely debunked, fails the logic test and has been the subject of probably 50 posts or more and it’s all rubbish.

Walk forever - your adding zero value to this board posting rubbish. Each to there own and everyone free to post their opinions / thoughts - but I would have though you would want to make them sensible - maybe not?

Well don’t bother going on “Who Wants to be a Millionaire” - seems like a 50/50 is not going to help and none of your friends passed any GCSE’s.

Ok - I’ll give you a 50 / 50.

Do you need to phone a friend ?

Walk forever,

Imagine your on “Who Wants to be a Millionaire” - your question for the Million is “how many dividends will you receive in a year by a Company paying monthly dividends”

What’s your answer ?

Bunkatron ,

-£20,475,000 - this is the H1 hedging loss staight out of i3e's interim report
-£13,314,442 - this is the hedging loss ive calculated for H2 - bearing in mind were into the 6th month of H2, very few assumptions here to arrive at this figure.

"If we follow your assumptions these hedges will always incur losses despite the direction the asset price goes." - Not sure what assumptions your talking about or what assumptions you think I've made - ive already stated ive plugged the hedges into a spread sheet and it spits out the number - the figures are the figures - "beliefs" dont come into it !

Bunkatron,

The hedges they have placed are in there H1 & Q3 reports - so they can be calculated with some assumptions for Q4. So when you say you dont get it - I dont get it, my calculations are either wrong or you have not done your homework.

"Most hedges would be placed at a higher price and thus generate profit no" - were they placed at a higher price or not ???

“You've been supportive of Eric Nuttall views on here for some time. So how can you agree with his 50% fcf shareholder payment suggestion and not be supportive of doing the same here in dividends on lower modeled commodity prices?”

You’ve taken this completely out of context – Eric Nuttall is advocating no growth and FCF to be spent largely on return of capital to SH’s via both dividends and a significant proportion in share buybacks which you seem to be against. This is a completely different model to i3e which is advocating a balanced approach of both growth and return of capital back to SH’s. So naturally i3e’s dividends/buybacks are going to be a smaller percentage of FCF if one of your priorities is to fund growth.This is a strategy agreed with most shareholders by the way and as communicated in numerous presentations and other SH documentation such as the admission document. It’s a strategy I completely agree with and which I think most SH’s here do also -we didn’t sign up for a purely dividend play but a multi bagger growth play that also pays a dividend.

If you want to see the kind of long term performance you get from a dividend play - I would encourage investors to go and look at the 20 year chart for BP or even Shell for that matter.

Also, a little closer to home – take a look at the i3e’s recent dividend / sp history – i3e announced a very significant dividend hike in May this year with the 1st payment to be made on 10th June. I3e’s SP topped out on about the 8th June and the SP has trended down since then – so is a dividend hike the magic bullet or are there a number of factors involved in SP appreciation such as revenue growth.

Also, with the affordability aspect of what you have proposed – have you really looked at the numbers properly – it seems not for a number of reasons that should be very evident to anyone that has read your recent posts.

I’m not here to sway your opinion – if you don’t want to be swayed, you won’t be swayed – I’m here to provide a bit of balance, facts and figures (along with a couple of opinions) and help the less experienced investors here figure out fact from fiction.

GGG,

the last i'll say on your dividnd stratedgy as we are clearly on completely different wavelengths - but imo the numbers dont validate your position at all - they demonstrate that i3e would be pushing the envelope too far and risk not having a sustainable dividend.

One point you seem to not appreciate is that with a base dividend - you are effectively locked in for a significant period since you dont want to be cutting a dividend if at all possible. With a share buyback or bonus dividend - its a one off commitment with cash that you've deemed excess to requirement. I would personally prefer a buyback to a bonus dividend as its a permanent alteration to the capital structure that should provide support for the SP over time whereas with a bonus dividend - yes its nice for the shareholder at the time - but once its paid out the affect on the SP wears off.

I dont think anyone has really said that a 10% buyback is cheaper than a £10m increase in base dividend - I think the jist of the argument is that in terms of cost - a £10m Buyback is the same cost as a £10m Dividend and the theoretical benefit to Shareholders is the same - this is a mathemmatical fact.

Anyway - thats my rant over !

I think i prefer Ricky to Williams - the fund Manager didn't say anythink particularly new that we didnt already know i.e.:

1) Generating a lot of cash
2) Paying a monthly dividend
3) Large Reserves
4) Relatvely low carbon footprint compared to LNG & offshore.

The more interesting comments came from the Vox Presenter - Paul Hill who said:

1) "another one you've done really well on is i3 Energy......I've not come across it before" - Suprising that an Investment Professional has not heard of i3e and perhaps highlights that Majid needs to do more marketing to hel the re-rate.

2) "I cannot believe just how cheap this one still is.................it still seems to be a very good potential buy" . He seemed to be genuinly blown away by how cheap - I3e is. Pretty good bet that he'll be adding some i3e to his portfolio !!!

2 more wells in the Wapiti Field licenced on the 24th November targetting oil - likely to be spud early next year I would guess.

what were the experts predicting before the drill ? Something along the lines of the SP will take a hammering if the drill fails I seem to recall !

so wacking on £10m to the dividend bill has a significant effect on CF down at $70 oil. Probably a lot less cash to play with than you thought.

So careful thought required to balance Capex Budgets with Dividends, possible bonus dividends and buybacks as well as having a reserve cash pot to cover other expenses.

The above calc is the reason I dont think they will go with a 50% base dividend hike - in my mind a much more modest increase is prudent with a possible buyback/bonus dividend to return excess cash above and beyond their other capital allocation plans.

Under the assumptions in the previous post - spread sheet spits out the following:

NOI £127m ($150m)
SG&A -£19m
Main Cape -£25m
Finance Charge -£6.5m
Decommissioning - £2.5m
Hedging Loss - £15m
------------------------------------
FCF £59m
------------------------------------
Capex -£25m
Dividends -£30m
-------------------------------------
Residual £ 4m

They still have the loan notes to pay off (£27m I think). I have year end cash at about £26m. Also i'm not sure they are paying off enough of the decommisining liability yearly - it stands at around £90m. This is the only other liability on their books but I think they need to have a plan to pay it off while the sun still shines.

Well lets test your maths GGG and run the spread sheet with following assumptions:

Production NTM - 24,731 boepd
WTI = $69.45 (85% of Current)
AECO = CAD 5.50 ($4.12 - 85% of current)
NGL's = 38% of WTI

Also I think many will agree that maintenance Capex (Capex require to replace production declines and keep produxtion flat) should be deducted from Cash Flow to get FCF. ($30m approx)

Also seems that many are in favour of some growth so lets figure this in and assume another $30m for development Capital - should be enough to add around 2,700 boepd of additional production.

Lets see whats left for Dividends and other Company Obligations.

Stas20,

I think the AECO gas price is very promising and bodes well for this increased production THAT I3E ARE STILL TO ANNOUNCE and providing i3e deliver on their forecast - things have never looked brighter in Canada.

However, and this is a large part of the reason i3e got its projections so wrong:

WTI - November average $83.74, lowest since Janauary when it was $83.05. Average over $100 from March to July with June averaging $113.87.

AECO - in May and June average was around CAD 7.00.

So despite i3e forecasting record production of over 24k by year end - revenues / sales were higher in June though with the forecast prduction - revenues are catching up fast but not as fast as GGG's suggested dividend hikes !!