Member Info for tonynorstrom1

Jodo - agreed a lot has happened including the POO which perhaps most didn't forecast at this level 6 or 7 months back.

However, the potential in the portfolio has been evident ever since they made the Gain acquisition and gave some of those early presentations - i recall Graham saying to get to "all time high highs might be difficult but we expect to get someway to clawing back previous highs. What's happened to the Company and SP is pretty much what they said would happen albeit the SP appreciation has been a little slower than many thought including probably i3e.

GGG,

I recall maybe 6 - 7 months ago you said something like 20p and then your off - have you changed your strategy / target.

Your not going to a Doc Jones and slink off in the middle of the night ?

NOI excludes SG&A but EBITDA does not and personally I would disagree - EBITDA is a key measure as it discounts the non cash charges of depreciation & amortisation. Cash is king so I think its an excellent measure and is probably one of the reasons that WHI used is to bench mark i3e against its peers.

Also WHI listed a group of I3E’s peers and I recall that they were saying that i3e trades at 2.2 x EBITDA v 2.9x for peer group (average) so in a similar ball park to what the “geezer” is saying.

Cenkman,

The geezer (Eric nuttall) runs the largest and most successful energy fund in Canada - his holdings are almost exclusively Canadian ( he might have 1 US holding) So he is somewhat of an expert on the Canadian oil patch hence his commentary on oilers and metrics is very pertinent to evaluating I3E.

I think you might be mixing up CF , EBITDA and NOI. I think I3E are forecasting NTM NOI of $150m (not $50m) - so I don’t think anyone in their wildest dreams are forecasting an SP of 9 x NOI.

Historically and again using the geezers number - he says that oilers have traded at 6-9x CF at the top of the cycle. He’s not forecasting that now but he has targets of 4-6x CF and his companies now trade at 2 - 3x CF.

Its worth paying attention to valuations - Hargreaves Lansdown has interactive charts where you can pull up your share and compare against multiple others. Just for laughs I compared i3e's relative performance over 1,3 & 6 months against Tamarack Valley, Kelt & Cenovus. Results below:

1 3 6
i3e 45% 90% 80%
Cen 6% 20% 85%
Tam 10% 40% 110%
Kel 20% 0% 70%

So whilst I think were still on the cheap side - above numbers indicate we've reduced the valuation gap over the last few months against some of our peers in Canada or at least again the Companies mentioned above - Cenovus is not really a peer but I thought it would be interesting to include since we just bought some of their assets.

Always worth checking the data yourself and not blindly following posters who shoot from the hip.

where did Graham say i3e's peers were trading at 4 to 7x NOI - it seems extremely high. Eric Nuttall stocks within his Nine Point Capital Fund trade at between 2 to 3x 2022 CF.

Thats a lot different to what you are quoting - still demonstrates that i3e is undervalued against its peers (average) but no way we should be trading at 40-70p now.

If they announce Serenity and a large development in Simonette then we should rerate significantly but still not to 40 - 70p in the immediate future.

The wording is a little odd - I dont think I read much into it other than I3E is operator and the 3rd Party has to commit the funds. Maybe ties in with Repsol confirming FID.

Quite a good interview I thought - a couple of things caught my ear:

1) “we can double our drilling program in the 2nd half if we choose to do so” - very positive and I cannot see why they would not choose to do so short of an oil price collapse.

2) In response to questions on going it alone on Serenity - basically said we won’t have to and was confident that they could get it across the line with a partner and announce something shortly.

Some here may say same old same old - dangly carrot - but I think quite positive and understandable in the context of North Sea politics over the last year.

So a very solid report today - no fireworks , but the fuse may be lit shortly!

Can you post questions in advance?

It’s perhaps a little of buy the rumour sell the news. Most were expecting a good report ( it was good) but was it as good as the average investor was expecting ?

IMO the relatively muted response is due to what Equa has already flagged - a very solid but probably not spectacular update. Incremental progress but nothing that really moves the needle that much in itself. I think this is also reflected in the WHI update which adds a relatively small 0.8p to the valuation and pretty states that most of the update matches their forecasts plus or minus. You need to bear in mind expectation we’re pretty high going into this so to move the needle I3E would have had to issue something that met of exceeded investor expectations - I’m not sure that was the case - I was fully expecting today’s report if not a bit more. For one I was expecting more production - probably should not have as I3E I think has matched or exceeded their stated projections.

I agree that the platform is very solid and if the drilling results come in like I3E expect - there will be further positive catalyst to the SP.

Anyway - good luck all and I hope there are some good questions.

WHI update out - gives a good read on the update IMO. Fair value upped by 0.8p.

Jolly - don’t want to be a party pooper - so my last comment today on the update - remember when your comparing 2021 with 2022 - 2021 only had 3 months of Cenovus production .

I wouldn’t call a Qtr by Qtr comparison micro analysis.

For example - take a look at the Q4 oil production as a percentage of their overall production and give me your thoughts ! If Graham is taking questions tonight’s - it’s one I will ask along with a few others.

Jollygoodya,

Most holders recognize the progress that has been made since liberator and the entry into Canada - but it’s also important to monitor the progress Qtr to Qtr if you want to see where the SP is going - after all last years progress is somewhat reflected in the SP already.

Did I miss something on Serenity - status appears to be exactly the same as previous update but some are touting it as excellent news ?

Need to digest the numbers a bit to see where they are compared to where I thought they would be.

A reduction of nearly $9m in ARO’s is very positive.

Initial reaction is solid as mentioned by Equa but no fireworks - the fireworks could yet come on some of these wells that they are drilling.

Also there is a year end reserves report to come which should be very positive.

Hababo,

You’ve got your 20 -20 hindsight glasses on when you say hedging oil was a bad idea - if you were able to consistently call the macro picture - you would be sipping ****tails and counting your money In Saint Tropez and not posting on this board.

Whilst I agree the macro picture does look strong for oil - things can change. I also imagine that when they decide on their hedging policy - they have access to better information than the average Joe Smo here.

Mention I3E’s “hedging mistake” to Graham on the interview tomorrow - he’ll probably tell you that “the job always looks easier from the outside - when your not the one that has to do it” - a quote from one of the books he recommended !

And if they don’t have anything better to do - pay off those pesky loan notes!

There’s no guarantee we get the Q4 update tomorrow - ordinarily we should have had it already - strange. But we are guaranteed Graham’s interview - so wonder what he’s going to talk about?

With regards the cash - not sure they need any advice . The decisions they’ve made over the last couple of years have been on the nail including the recent dividend announcements - I’m sure they will continue in the same vein - and they’ve already told us the options for dealing with excess FCF - any one or more of the following:

1) scale up field development which i think they will do - I like the sound of those 600 - 1000 boepd gushers at Simonette.
2) share buy backs
3) one off / bonus dividends - probably more likely than buy backs but who knows.
4) Additional acquisitions.

GLA !