Member Info for tonynorstrom1

Thanks to Bunkatron for highlighting the mistake in the spreadsheet. I've incorrectly shown NOI after deduction of loses on the Oil & Gas Swaps. So reversing this NOI is indeed higher - however, FCF/SP/Dividend Calculations are unchanged. Corrected sheet attached. I'll get it right eventually.

https://1drv.ms/b/s!AoSqKfvcR4IMgYMhrTaSi5VHaKXBHg?e=NDx2k5

Everyone should do their due diligence and make their own decision whether to buy.

Here’s my spreadsheet updated with more accurate NGL pricing. Includes my short term targets for SP and dividend.

https://1drv.ms/b/s!AoSqKfvcR4IMgYMfXmvvDuK19_ki8Q

Toad,

I'm chilled - just pointing out that you appear to have the equivalent of verbal diarrhea.

Toad,

You have no idea whether someone has bought to flip the shares - its pure speculation on your behalf and serves no purpose whatsoever other than to exercise your fingers.

Personally and in my humble opinion what you are saying doesn't make any sense - there appears to be a more logical explanation, i.e. Bybrook have decided to take profits on a small portion of their holding and are finding a buyer/buyers with deep pockets to take the shares off their hands at a small discount to the market. A win win for Bybrook and the buyer / buyers. Why would the buyers be looking to flip when they are probably seeing what many on here are seeing - i.e. the likely hood that the shares are going to be worth more in a few months time than they are now and they get to buy them at a discount !!

I also thinks its a positive for existing holders - i.e. it diversifies the shareholder base - I dont think it was good for one holder to own nearly 30% of the shares. I believe the small drop in SP is going to be relatively short lived - momentum seems to be to the upside.

Bunkatron,

Realized price is selling price which is WTI - $4 approx (at the point of sale). As far as the definition of Revenue - you need to look at the income statement to see how they present it. Some Canadian Companies show revenue as net of Royalties others include gross.

ok - I see what your doing but that's no how its done - hedges is a seperate line item in the income statement.

Realized price is about WTI-$4.

Another thing that some may not have accounted for is the Royalties - Oil price goes up a certain number of $ and royalties go up a tier - its not just a % of revenues - the % also goes up

How do you come up with WTI at $94.45 v I3E at $86.5.

Historically I3E has been WTI - $4

I stand corrected Bunkatron - NGL’s are indeed 50% of WTI as per the 4th Qtr operational and financial update. It’s crept up from the 35% a year or so a ago. I3e do a poor job in my opinion in highlighting these numbers - this information is missing in the interim and full year results and I somehow missed it in the 4th Qtr update.

It makes a significant difference to my model - I would expect an increase in the dividend or a special dividend sometime in the next few months - I think the dividend will be hiked by atleast 30-40%

Bunkatron - don't be sorry - are you looking at the right numbers?

First of all - NGLs' - there's no benchmark - its a generic term for a mixture of products. Price received is based on a number of factors including , actual product (eg propane which they have hedged in the past), well location etc. The 35% of WTI is an aggregate number based on historical data from i3e.

Gear Energy ?? - see above

34% 51.7% Gas 10517 $101,044,397
40% 17.3% Oil 3522 $118,339,200
26% 30.9% NGL 6290 $77,052,500

So gas nearly 52% of volumes but 34% of revenues. NGL's historically about 35% of WTI.

and by coincidence - just looking back to a previous post / calculation - I guesstimated that i3e should trade at least in line with the 25% percentile of the list of Companies that WhiteTundra follows which would put i3e at 39p

Jack,

I don't necessarily disagree with the number - but does 39p mean anything in relation to 2019 - i3e is a completely different Company 2022 v 2019.

Good question Toad - let’s see whether there’s a good answer - I suspect we will be disappointed.

Nice Work Abbot !

yes - there is someone called "theabbot" (although he keeps changing his moniker) who seems to be pretty clued up - I will request him to give us his latest read on the technicals.

Olderandwiser,

Only 7% of the stock trades on the TSX so its questionable how much this affects the trading on the AIM. However, if I was an institutional investor in London - I would certainly be using Canadian Oilers as the bench mark for valuations.

i3e does seem to be re-rating relative to its peers as reflected in the numbers - last time I posted the table below - there were only 4 Companies out of the 49 cheaper than i3e - that number is now 16.

I'm not totally surprised at where i3e trades - its only in the last 6 months or so the numbers are demonstrating the quality of i3e's assets. In addition Malcy and Oil Man Jim still refer to the mishap at Liberator though both of them have had to eat a large slice of humble pie (begrudgingly I might add). It can take time for the market to recognize the story but I think i3e is making large strides - they just need to keep doing what they've done the last 2 years and we should move higher.

FCF/EV(%)-----Company-------------------------SP
8.0--------------Rubelitte Energy (RBY)----- ---108p
22.7-------------ave------------------------------ ---32p
29.6-------------i3e----------------------------------29p
46.5-------------Vermilion Energy (VET)--------17p

22%-------------25th Percentile------------------39p

Updated table based on White Tundra's latest numbers for the 49 companies he is following. I3e still a little cheaper than the average company in his table though it is clear that i3e has re-rated higher relative to the average.

As I said previously i3e is probably better than the average company in his table due to higher growth prospects including transformative catalysts such as Serenity, Clearwater & Simonette. Taking a rough swag and guestimating that we should trade on at least the 25th percentile in his table puts us on a FCF yield of 22% or 39p.

This assume oil and gas price remain supportive. It also ignore Serenity or any expanded drill program.

GLA

This is what I posted on the 26th March when i3e was 21.7p

https://www.whitetundra.ca/pricetargets

FCF/EV(%)-----Company-------------------------SP
8.1--------------Rubelitte Energy (RBY)---------80p
22.7-------------ave---------------------------------28.5p
29.6-------------i3e----------------------------------22p
46.5-------------Vermilion Energy (VET)--------14p

Parge - you asked for my thoughts - here they are. The table in the above link provides the FCF/EV yield for 44 out of the 57 canadian companies the analyst is following including i3e. The highest rated company on this metric is Rubelitte with a yield of 8.1%, I3E = 29.6% and the lowest was Vermilion with a 46% yield. I calculated the average yield as 22.7%.

I then made a rough calculation what i3e's SP would be if it traded with the same yield as the other Companies so if it had the same yield as Rubelitte we would be at 80p, Vermilion 14p and if we traded at the average we would be at 28.5p. There are only 4 companies out of the 44 for which he has provided numbers that trade on a lower valuation that i3e.

I took a very brief look at both Vermilion and Rubelitte to get a sense of why they trade where they do in relation to i3e.

Vermilion is a large multi billion cap company with a $1.4B debt load at year end 2021. Current dividend yield is 2.5%. I didn't look much deeper than this so high debt, pretty mediocre dividend and probably anemic growth prospects given its size and debt.

Rubelite - new Company by the look of it with only a one or two year history, focused solely on clearwater with production of around 1700 bopd and targeting 2000 bopd by end of March. No debt but interestingly a $30m revolving credit facility - also a significant drilling program in place for a company of it size. Current reserves of only 6m bbl but I imagine likely to grow - also no dividend as far as I can see.

I think its clear why we trade at a premium to Vermillion so no need to mention that further but its not at all immediately evident why we trade at a significant discount to Rubelite - its clear that future growth is being priced in whereas it looks like the market is recognizing virtually nothing for the future growth potential of i3e which is significant and unlike Rubelite - the potential derives from multiple basins. I3e is also paying a generous dividend and has in excess of 20 years of reserves and also net cash positive

So i now have a short term target of 28.5p (ave) although imo we should be trading at a premium to the average company in the table so I think we have plenty of scope to re-rate higher. I was surprised that the SP did not react a little more strongly to the recent Serenity news although I think that there are signs that we are starting to rerate - we just need the incremental good news to keep flowing and hopefully more solid plans for Serenity and it could be a very good year for i3e.

In a rising market especially in a bull oil market like we have now - you can pull names out of a hat to pick your stocks and there pretty much all making money - some more than others and we're all looking super smart and patting each other on the back.

In these times - its worth remembering the words of the great Warren Buffet:

"You find out who's swimming naked when the tide goes out !"

@Darcyslaw - This guy on the CEO website knows what he's talking about. Ex - Petroleum Engineer I believe. Worth reading some of his posts in the CEO website.

"If you look at strip prices, I would say all Canadian O&G companies are really cheap but some (e.g. i3) are cheaper than others.

i3 has a few extra things going for it that others may not have

1) a well stock that has received little love last years leading to many capital efficient work-over opportunities and ability to lower OP costs .
2) a good mix of oil and gas focus acreage, meaning they can choose to allocate capital where it pays the most
3) low decline rates due to mature operations (flip side is higher opex)
4) very low debt meaning they can direct FCF to shareholders
5) Serenity. Currently receiving no value, could be worth current MCAP alone.

I believe just to trade at par with the Canadian peers, i3 should trade 30-40% higher, but I haven’t run my number lately. One more point, it is still not on the radar for many investors!"