Member Info for tonynorstrom1

Its actually a "Contract for Difference" and a short term bet on SP movement - i'm not sure it results in an increased holding - they've made this play one before.

Bunkatron - dont let the facts get in the way of of good yarn !

Bunkatron,

You logic is nonsensical and flawed and you even contradict yourself - your ramble is nothing more than that - a ramble and merely your personal opinion.

No one is penning a narrative - only you. Its a fact that Oil companies in the last 10 years or more have been in general a poor place to invest and shareholders in aggregate have not done well.

Shareholders this time round (and Eric Nuttall as senior partner of Ninepoint Capital represents a lot of shareholders) are demanding their fair share of the profits. Why should it fall on Oil Companies alone to fix this energy Crisis when tree huggers have played a major part in killing investment in the sector - and now undoubtedly part of the crowd complaining about the high cost of living.

I'm not against hugging trees - I think we need more of them but I think the green lobby has focused on supply instead of demand and in the process has spoiled things for everyone.

Eric Nuttalls focus/narrative is simple - maximizing shareholder returns and he's been pretty good at it - Ninepoint was the top performing fund in Canada in 2021 outperforming the 2nd place fund by 100% - so yes - I would say that Eric knows a thing or two about the energy sector and maximizing shareholder returns.

Ive explained many times why I am invested in i3e - don't be lazy - go back and read some of my past posts if you are genuinely interested and now that we've established that Eric is somewhat of an expert - why dont you go and read up some of his past articles on shareholder returns.

And if you dont have any confidence in Eric - what about Warren:

"Berkshire Hathaway bought back about $2 billion of stock in the first quarter through early March, Barron's estimates"

i3e have spent heavily on development - $96m this year - so i'm not sure what Bunkatron is talking about. i3e is forecasting to close out the year above 24K boepd and there is a fair chance it will be closer to 25k - so a 25% increase in production since the close of the 1st quarter.

WTI has averaged just over $100 so far this year so provided WTI doesn't drop too much further - I think we will close out the year with in excess of $80m in cash which will grow by about $15m per month after the turn of the year. What are they going to do with all this cash !

Bunkatron or Eric Nuttall - Hmmm.

i3e is an Oil Company unless you missed it - if you want to hug a tree or help the homeless - your on the wrong site !

Eric Nuttall@eri****tall

"Buyback update! In June, energy companies bought back $5.4BN of stock, which was the largest one-month repurchase of stock of any TSX sub-sector in ~2 years, and likely the busiest month for energy sector buybacks in history!"

Obviously Eric Nuttall and the average Oil and Gas CEO in Canada are not listening to the experts here on share buybacks !!

https://www.cnbc.com/video/2022/06/09/were-at-the-beginning-of-a-commodities-supercycle-says-goldman-sachs-jeff-currie.html?&qsearchterm=commodities%20supercycle

Interesting interview - a month old now but still very relevant.

Key takeaways:

1) Were at the beginning of a commodities supercycle.
2) Energy makes up 5% of the S&P by market cap but 9% by earnings

Top 3 reasons in order why there is not more investment in the Oil & Gas Sector:

1) History of poor returns
2) High Volatility
3) ESG

What will it take to attract more investment into the sector - "3 year track record of investment returns ........were about 18 months in"

This is all in all in the opinion of Jeff Curriet but it resonates with me and is very similar to what other Industry insiders are saying such as Eric Nuttall.

Nuttall thinks 3rd quarter results will help drive a rerate with significant hikes in dividends and buy-backs - buckle up and lets see what happens over the next couple of weeks !

I’ll go with 26 days. Previously - lots happening but nothing really concrete in terms of production increases. That’s not the case this time round - quite a few wells drilled and brought into production this quarter.

I think we’ll here a lot about the central Alberta assets and quite a nice production bump. Also clarity on the remainder of the expanded capital program and of course Serenity. So potentially one of the best updates inbound!!

Its hard to say - there's no consistency when they release results. Q3 last year was within 30 days of the cut off. If I were to place a bet - $100 each way they release next week.

"Half of all the oil consumed since the dawn of the modern oil age in 1859 has been consumed from 1998 through 2021 inclusive based on data available from the BP Statistical Review of World Energy. Approximately 1.4 trillion barrels of oil are thought to have been consumed to date (though there are estimates as low as 1.1 trillion). That means that in just the last 24 years total historical oil consumption has doubled."

From an article today on Oilprice.com - "Technology v Scarcity".

Also listening to Bloomberg this morning - India's net zero goal is currently 2070. This is quite a backdrop for Oil & Gas over the medium term and Companies such as i3e.

Hedging up to 50% of production on a rolling basis is Company policy and is stated in their various reports - that's a fact. The pricing of the hedges / swaps is done at market and therefore you can have no informed knowledge of what these are - hence any statement such as "the dividend is assured for 12 months" is surely your projection i.e. guess ?

The current dividend policy is 20-30% of FCF period - its been stated many times. I'm pretty sure that i3e have never promised to "maintain" the dividend though I think at current prices and with the swaps they have in place the dividend is well covered.

However, as I have demonstrated via numbers - if Oil was to crash to the $60 - $70 range then i3e would have to alter their dividend policy (i.e. payout in excess of 30% FCF) to maintain the dividend. Given that Citi are forecasting $65 oil in a recession scenario - how you can say the dividend is assured - unless assured can mean 70% certain or 55% certain or 85% certain ?

The only thing that is assured is death and taxes.

1) If the oil price softens then automatically hedged prices soften.

2) Protecting the dividend is not the same as being a "progressive dividend" which I3e have backed away from i.e. no guarantee of maintaining or increasing the dividend - only guidance is to pay up to 20-30% of FCF. They did at one time state somewhere that this could move up to 40% though not recently.

3) Currently the majority of the hedging is until the end of the year so to forecast that the dividend is assured 12 months ahead is nothing more than an educated guess at best.

I do think though ( and this is only my guess) that if prices did slide significantly - then they would probably slash capex to the minimum and focus on dividend payments and building cash.

Olderandwiser,

Dusted off my spreadsheet for you - @ $65 WTI and assuming they payout 50% of FCF - they can still payout the current dividend and still have about $60m in excess cash to play with. This assumes no hedges in place. We are hedged though at around $76 WTI which means that Oil could drop to $60 and cover the dividend with around $60m excess cash.

So bottom line is that the dividend is well covered. The most bearish forecast ive seen is that oil could crash to $65 in the midst of a recession - I think this is Citi Bank and they seem to be very much a lone voice at this point in time with most other analysts calling much higher.

Personally - short of something extraordinary - i3e should be able to maintain the current dividend for the next 6 months at least and if current prices hold around the current level - we could see further dividend hikes.

https://wp-i3energy-2021.s3.eu-west-2.amazonaws.com/media/2021/11/20190115-i3-ENERGY-Q1-UPDATE-v1.3.pdf

Referring back to an old presentation (slide 7) - for any of those interested in what a NS development might look like. Liberator Phase I is now gone but this was only a very small slice of the pie anyway - production from Liberator Phase II (Liberator West + Minos High) and Serenity is indicated at over 50,000 boepd - potentially a massive prize.

This is why I think Repsol Sinopec have pushed back FID Tain to Q1 2023. Repsol as per the latest press release are still working the FEED.

Stas20 - Interesting articles - thanks for posting

Tom,

Check out the spreadsheet i posted a few days ago. Oil is less than 20% 0f production but 43% of revenues. Gas is 50% of production but only 23% of revenues.

Thats why Simonette is transformative - these wells should flow at 500 - 800 bopd and its virtually all oil. Every 1000 bbls of oil added to production generates around $25m in FCF

The April corporate presentation is well worth a re-read just remind us what we have:

https://wp-i3energy-2021.s3.eu-west-2.amazonaws.com/media/2022/04/20220404-i3-Energy-Presentation-vF.pdf

Wells paying out in 6-8 months, work-overs / recompletions paying out in less than 6 months.

We have 3 company making assets - Clear Water, Simonette and Serenity - each capable of moving the needle substantially. They were talking about a farm-out / outside investment in Simonette - perhaps we hear more about that
in the coming update. They drilled one well in Simonette in the 1st quarter - its likely that they spud at least a couple more in the current quarter. Shubham Garg referred to the Cenovus assets - I recall him saying that he thought that i3e could boost production there significantly with low cost work overs.

Then you've got Canadian EP's reporting 2nd quarter results that are likely to be stellar including announcements of significant dividend hikes and buy backs - this potentially could lift the whole sector. A lot to look forward to.

https://www.cnbc.com/video/2022/07/08/energy-still-king-of-the-jungle-for-next-two-years-fund-manager.html

"Energy Sector Screams value"

seekinginvalue - not sure what you are talking about - im not converting from CAD - im using the WTI price in USD.

https://1drv.ms/b/s!AoSqKfvcR4IMgYMmTp1YgfNP8m2tyw

Run the spread sheet again at $90 & $95 and reduced the dividend to 30% of FCF. The spread sheets
Spits out a monthly dividend of 0.167p to 0.19p.

Also the spread sheet is based on my estimate for year end production of 23,429 boepd.

Also at an undemanding 3.5x FCF - a forecasted SP of 35p.

This excludes Serenity which I think could double the SP in 12 to 18 months.