Member Info for tonynorstrom1

47p - Wowza !!!

41p Canadian Assets and not including any value due to the likely expanded drill program or drilling locations
6p only for Serenity

Report Available through the i3e website.

I dont think i3e are worried about appraisal costs now - they are relatively small compared to free cash flow. I think they are looking forwards to the cost of a development program which is likely well north of $100m and how they will fund it.

My guess is that they are still looking to bring in Repsol in order to secure the development funding.

What some may not fully appreciate and and I think "the market" as a whole may not have have fully appreciated is that these are year end results - so not even a full year of the Cenovus acquisition. Therefore some may have viewed the financials as a little disappointing relative to all the recent guidance on NOI, however this comparison is not apples to apples as the results are up to end December (already 4 months old) whereas the recent guidance on NOI is forward looking and taking into account all the necessary assumptions on production growth etc in the coming quarters. The only thing of interest to me in the results is year end cash and the costs (G&A, Finance etc) so I can add them to my spreadsheet to get a more accurate forecast - the revenue numbers are already out of date and discounted.

The only thing of real interest in my humble opinion is the post period notes that bring you up-to-date and all these were extremely positive and ahead of expectation as reiterated in the WHI report - be interesting to see there new SP target.

I think this may explain the SP reaction - the market has already discounted the results and so it becomes a case of whether the results are better or worse than forecast.

You will note that the poster that said that we should be "10 points higher" has not backed up his statement because he cannot - it appears that he posting whatever comes into his head without what looks like a proper thought process.

The report was positive especially the post period notes and we can look forward to further SP gains - whether these come tomorrow, next week or 3 months from now - its hard to say but they will come - patience required !!!!

Austin,

Exactly right - not only that - it appears some do not know what they are looking at. Here's a tip for some - type in "i3e share price" on google. A graph should pop up - click on 5 Day, 1 Month & 6 Month and the SP returns are +10%, +40% + 115% - what are we saying - i3e's share price is going up to fast "slow down!".

What's not to like - I don't understand ?

DPOW - what's not right - why should we be 10 points higher today - can you kindly explain ?

Toad - reference was not to do with your comment on the North Sea but you apparent suggestion that Taramack has a 1.3B valuation and the implications for I3E SP - if this is what you were trying to say then again in my humble opinion - you are comparing apples with Martian Coconuts if your just basing on Boepd. Appologies if I got the wrong end of the stick - now I better get back to work on my Heavy Oils Project.

Missed 1 assumption - production closes out at around 24,000 boepd as guided by i3e in the Last podcast.

With the following assumption here is the price targets my spread sheet spits out:

WTI - $90 to $95
Gas - $3:80 to $4:10
FCF Multiple 4 to 4.5
SP = 34p to 42p

This ignores any block buster news on Serenity or Simonette which could drive the FCF multiple and SP higher.

Forecast Dividend could grow to in excess of 1.6p from the current 1.1p over the next year dependent on the payout ratio.

Toad,

I’ve let the numbers sink in - conclusion - a misleading post. There’s a reason Tamarack has a $1.3B market cap. Take a look at how much of the 45,000 Boepd is oil - then compare the per barrel
Price of oil again the per barrel price of gas.

Crwys11,

If you want to know where I am - see attached link below:

https://www.saudigulfprojects.com/2021/12/kuwait-awards-408-6m-well-hook-up-and-associated-works-project/

For those that are talking about what goes up - must come down and the risks to i3e. Listen to the attached podcast on spaces - well worth a listen.

https://twitter.com/i/spaces/1kvKpAQyOnwGE

And as far as selling up and moving on - no i'm still very much in and not sold a dime. I dont think my opinion has change much over the last few years. The potential has always been there - i3e have done exactly what they said they would do several years ago when then moved into Canada - its just taken a few years to play out and I think there's a lot more to come over the next several years assuming Oil & Gas Prices remain supportive and I think they will - again take a listen to the spaces link above. My analysis of i3e's numbers is not to dissimilar to the analyst below (Shubham Garg). In fact I think at one time he referred to my spread sheet. The main difference is he is basing his target SP's on 8x FCF and most companies dont currently trade on these multiples. I used his numbers for the 47 other companies he was following to come up with what i3e's SP would be if it traded at the average , high and low FCF multiple - if your interested - go back and refer to my earlier posts.

I also said that i3e's previous production guidance was way to conservative (it didnt make any sense) based on the Capital budget and the cash needed for maintenance v growth.... and hey presto now they have upped their guidance significantly along with a statement that they are planning a significant expansion of their capital program. Listen to the guy below - he's saying he's going nowhere for the next two years or so - I think i'm in that Camp but you still need to continually evaluate to ensure the story is in tact. I've made a little more effort with the grammar here to make sure I get GGG's approval

https://www.whitetundra.ca/archived-seminars

anyway GLA and if I have any original research to post - I will share.

In case you think you understand a little about reserve reports - a cut and paste from a very knowledgeable poster on the CEO/CA board - chew on this!

"So on the 2P / reserve life topic, if you come from a conventional world ( UK for example) 2P is what you pay for and what the company should ultimately produce on a field in production. In resource plays, like onshore NA, 2P not only depends on the size of your acreage position, but also the drill density on nearby acreage. This could mean that two companies with very similar acreage position but where one is much more developed, could have very different 2P (one has many more unbooked locations).

Depending on commodity environment and profitability of a certain play, unbooked locations may or may not be assigned a value by the market. In the hype of "Permania" when acreage went for 80-100k, that implied that unbooked locations were priced at 1-2 MUSD per well location, even at very optimistic drill spacing (typical EUR around 6-700 Kboe so 2-3 USD/bbl "2P").

If you wanted to buy Marcellus gas acreage when the gas price was 2 USD/mmbtu a few years ago, you only had to pay for the PDP, you got all future locations for free. I would say that Canada today is closer to the Marcellus example than Permania, but with such strong oil&gas prices as we have today, the market is assigning more and more value to future locations. So bottom line, you should look much more to PDP when valuing a canadian onshore player than the 2P.

In order of importance PDP > booked locations > unbooked locations. The only difference between a booked location (which can be included in 2P) and an unbooked location is drilling density nearby and inclusion in 5 year capital plan if I remember correctly. You can find all this info online from the reserve auditors. "

Seav,

Just a couple of comments:

1) In my humble opinion i3e is a much safer play than EOG. i3e has hundreds of low cost producing wells. Its also questionable how much Safer BP or Shell is compared to i3e - if you look at Macondo - it cost BP more than $70B - i3e does not have anywhere near this kind of exposure.

Also with regards to the rise in SP - when you look at 5p, a lot has happened since then - most recently the purchase of the Cenovus assets which was a game changer for i3e. So its gone up maybe 100% since Cenovus - not checked exact figure but there is plenty more upside to come - probably a lot more than the 50% you mention. I dont know how much you know about i3e but even ignoring Serenity - i3e has Simonette which could add 30,000 boepd - ( another game changer) and Clearwater which is the best Oil Play in Canada which I3e has a hardly touched and it have a large land position.

I might be missing something on EOG but in my mind - EOG has just significantly diluted the shares in order to fund Serenity. If Serenity fails then the development funds will have been rendered worthless and I dont see how the diluted shares could be worth the same post a Serenity failure. I dont think Serenity will fail but there are no guarantees in drilling.

2 -3 years back most were in i3e for the North Sea - since the pivot to Canada - most I believe are in it for the Canadian Assets. I think most see Serenity as the cherry on top of the cake - albeit a massive cherry. i3e can do extremely well without Serenity which is one of the reasons that i3e has a large margin of safety. If you've read all the updates - I3E have guided to having over $66m in unencumbered cash by year end and that was before the recent rise in the POO not to mention production is likely to be ahead of their assumptions when they made that Projection.

Anyway - I hope your EOG punt pays off .

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.

I've seen the comment below that i3e is predominantly a gas company - i'm not sure that is correct - certainly in terms of revenue / cash generation it is not. So whilst Oil makes up somewhere between17 & 20% of production on a volume basis - it accounts for about 45% of revenues (Gas 32%, NGL's 23%)

I dont think a certain portion of the market are fully appreciating this fact in relation to Serenity. Some may be looking at Serenity and the +/- 16,000 bopd that it could add to the existing 20,000 boepd - but the impact is much more profound than that - your taking oil production from under 4,000 bopd to over 20,000 bopd. Since oil is currently around $113 / bbl and gas $23 / bbl - the impact on revenue is going to be enormous!

Someone earlier was asking about the price of NGL's. Prices are very volatile and depend on actual product but in aggregate - I3e have historically got about 35% of WTI.

i3e v EOG

Both companies are very confident about the Oil in Place and the chances of success. Assuming for arguments sake they prove up 50m bbl and assigning a value of $6 / bbl - then there is the potential to create $300m of value that could be sold on. It could be a lot more due to both the qty proved up and also the $/bbl. Conversely it could be a lot less.

Value to i3e = 0.75 x $300m = $225m = £170m v £248m market cap
Value to EOG = 0.25 x $300 = $75m = £57m v £13m market cap

Based on the above - in a success case - the SP of EOG is likely to significantly out perform i3e multiple times over, however, as others have said in a failure case EOG will have blown half their market cap on funding Serenity and the impact on its SP would be devastating.

Serenity is a game changer in a success case for both companies and its not at all recognized in i3e's SP. i3e have said that they think that Serenity could be a 30,000 bopd field. Assuming that i3e retains 15,000 bopd by the time of development - that's massive. Bear in mind i3e only produces less than 4000 bopd oil so were talking potentially tripling revenues with a similar impact on SP.

So there's your risk reward equation - should you own both Companies ?

The GM is at 11am so we should hear something shortly thereafter - it should be a rubber stamp exercise since the raise has already been done with participation from Insiders and existing Shareholders. One would assume that the market therefore has already priced in a successful outcome so personally I would not expect any major SP swing - although when has the SP ever reacted as expected.

one thing that could trigger a reaction in the SP is will i3e release anything today on the back of the vote such as an update on the status of the rig contract and program update - perhaps too soon after the vote but you never no!

TSSZ,

That's a pretty wild and left field projection - if it comes true - can I ask you to get the crystal ball out again and pick my lotto numbers for tonight............no...no wait a minute - I thought you said earlier in the week 25p by Friday ??? Have you down graded i3e ?

Parge - thoughts on what?

Blackbeard,

I tried to teach you fish instead of giving you the fish - but you want the apple purée baby food - spoon fed!

You’ve lowered the tone on the board referring to stains and anatomical parts whilst at the same time adding absolutely nothing in terms of research or useful information.

Before calling people low life’s - take a look in the mirror and take a second to reflect. This board is going downhill - I’m beginning to thing the ADVFN is much more informative except for a poster on there call Spandangly.

Blackbeard - instead of clicking the message tab - click on the RNS tab next door. Dividend RNS is top of the list. I’ve timed it - took about 20 second to get the information whereas youve spent about 10-15 minutes posting lazy ass messages - your obviously not all that busy.