Member Info for tonynorstrom1

Well I thought so - picked up another 135,000 shares.

TSSZ - hard to take any of your posts seriously - lol

Three main take away's from the interview for me:

1) Constant news flow over next 6-12 months - not seen too much so far so hopefully much more to come.

2) no mention of buy backs - not a surprise really given what they have said previously although I personally I would like to see a little to cap the share count.

3) Graham's hair gel - that's some good **** there !

https://www.weforum.org/agenda/2020/05/oil-demand-price-coronavirus-world-bank/

interesting article on the effect of recessions on oil demand - after 1982, recessions have typically led to a loss of less than 1% in demand including 2008 & 2009. According to Nuttall, OPEC spare capacity is just about exhausted and their is a structural supply deficit of about 1.5m bbl / day. The super Majors are not spending on mega projects which in my eyes puts companies like i3e in the sweet spot - they have the ability to bring incremental supply online quickly. from internal FCF.

Unless the recession is unusually severe with respect to historical norms - its likely that the supply / demand balance will remain tight supporting elevated prices. I think the last few days have been a market blip and possibly a knee jerk reaction contrary to the fundamentals.

still a decent possibility that the SP will be markedly higher in the months ahead despite the threat of a recession.

Shubham Garg's analysis is excellent - you should be aware though that his price targets are based on 8x FCF. A more realistic target might be to look at the current valuations of all 57 companies he follows and base the target multiple on that.

leave OUT the maintenance capital.

................(Calculated the same way as Nuttal , not i3e)

Add back in the development capital and leave in the maintenance capital (about $11m) and you get the number.

This is the way i3e should calculate otherwise they undersell their numbers in Comparison to Eric Nuttalll who runs the top Energy fund in Canada.

If you are referring to me - maybe 10 years ago I said that. I now have FCF yield at around 40% on a NTM basis and in excess of $180m (Calculated the same way as Nuttal , not i3e)

https://www.cnbc.com/video/2022/06/10/i-do-not-see-a-respite-in-oil-prices-in-near-term-says-energy-aspects-amrita-sen.html

Eric has not bought because i3e is still a little on the small side for his fund. He did mention one Company (Gear Energy I think) in a recent podcast and he told a call in guest that the reason he didnt buy was it was too small to a meaningful stake . This Company was at least 50% bigger than i3e in terms of revenue - anyway his loss as I think i3e offers more upside than many of the Company's he is looking at.

Bunkatron,

Agreed and in my opinion small Oilers like i3e are in the sweet spot. The World needs more oil - companies like i3e can supply and fund through internal CF with very short pay back periods.

Large Projects take 5 years or more to come online with massive upfront investment and equally long payback periods - this is why I believe large projects will be a lot more difficult to get off the ground and is the reason why the sector has suffered from underinvestment in recent years.

Even Serenity has several investment options - if the reserves are less than they hope for - there should still be an economical project partnering with Tain utilizing existing FSPO's and producing in around 18 months after appraisal. If they prove up 100 mmbbl recoverable - then its a relatively large project producing at up to 30,000 bbl/day. This is not the icing on the cake but nearly the whole pie - this is a game changer - it will more than double the size of the Company in 2-3 years.

Wouldn't mind smoking some of that weed myself - where did you get it from ?

Not sure what you mean by margin calls but the swaps is purely a contract with a counterparty covering an agreed volume of oil / gas at an agreed price. Every $ over the agreed price - i3e owes the counter party the volume x delta $. So currently with the hedged price being below the actual price - this is an actual cost / loss on every barrel of oil / gas covered by the SWAP's and its quite a significant cost / loss.

fairdealer - good point, but on the other hand is it conceivable that Canada may also look at windfall taxes at some point ? Who knows but regardless - i3e is looking strong.

Everyone who has experience in stocks and shares (particularly AIM) understand that shares never go up in a straight line - why people expect i3e to behave differently is a complete mystery to me.

With regards to the odd comment that i3e is the only share not keeping pace with the POO and Gas - I say rubbish. Shubham Garg published valuations / metrics on 57 Canadian Oil and Gas shares which he tells me is the complete universe of oil and gas stocks in Canada. When I compare valuation metrics (mainly FCF yield) - 3 months or so ago i3e was the 4th cheapest stock on this metric by my calculation, when I re-ran the calculation a month or so back i3e were about the 17th cheapest out of 57 stock i.e. i3e had rerated higher relative to many of its Canadian peers.

Despite the bullish oil and gas prices - one item that may be impacting share prices is the prospect of windfall taxes and how they might apply to i3e. The Telegraph I think has an article this morning that says the Chancellor is just about to do a u-turn on this. Lets see how this impacts the SP today. Even if they do apply to i3e - i think i3e is so cheap and FCF is so strong that any impact is likely to be short lived in the scenario that it is a one off tax.

and thers's a Muppet on the ADVFN board called Fandangle expecting 9p !

F_ck - disappointing . I was expecting 7p

and for those that were / are a bit critical of some of the projections i have posted - consider this

as per todays update (9 May) - Q1 Production (ave) = 18,095 Boepd (less than Q4 !)
as per Q4 update (24th Feb) Production (ave) = 18,229 but current 19,000 !
as per Final Results dated 12th April (post period) exited Q1 in excess of 20,000 !

Similarly OPEX and other metrics are variable report to report. It highlights that things are evolving rapidly in addition to seasonal variations in production and hence NOI qtr to qtr but the trend over the year is definitely up and up quite sharply.

I think i3e could do a better job with respect to consistency of reporting - perhaps by providing monthly updates as some Candian peers provide including monthly numbers for production, NOI/Net Back and some even month end cash.

I have emailed i3e a couple of questions on pricing (Realized price v WTI and NGL's V WTI) which have changed over time. If I get a response - I can tweak the model and produce a more accurate forecast on likely dividend range which im more than happy to share.

Very good update and the price action is good considering WTI is down 5%, Gas around 8% and a big down day for equities in general.

Dividends taking i3e's NOI ($241m)

$241m - $40m(losses on swaps) -$17m(SGA) -$9m(Finance)- $98m(Capex)- $3m(abandonment)= $74m

$74x30% = $22m / 1100m = 2.0c = 1.5p per share.

How are people coming up with 7p per share? The swaps may role off and they hedge at better pricing so maybe could approach 2p per share and this is based on the maximum stated payout 30%

Yes - I've screwed it up. I've been taking a closer look at OPEX, transportation costs and "Realized Pricing"- when I confirm the correct numbers I will re-post the correction. Bottom line appears to be that FCF and hence dividends should be a little higher than I forecast previously.

"Realized Pricing" is a little lower than I had previously modeled, however, the OPEX number now appears to include transport and then of course I missed the improved pricing being realized for NGL's.