Member Info for tonynorstrom1

Good point on the weather although the bulk of I3E's acreage is pretty much central alberta - I think a little bit of the Wapiti acreage falls in BC. I dont know if the weather is especially bad in Alberta for this time of the year.

GGG,

You've been saying it for some time - and Management reiterated that 92% of the equity (so not just the last raise) has been issued in the last year or so - so profit taking has definitely played a significant part.

However - this from Eric Nuttall yesterday on twitter:

Eric Nuttall@eri****tall:

"What to do in a sell off? I've used the weakness to establish 2 new positions in $NNRG, a Clearwater player trading at a 27% FCF yield @ $70WTI and a $3BN FCF beast trading @ 2.2x EV/CF + 26% FCF yield. Don't try to time bottoms...only a historian can ever accurately call them!"

So there are other cheap shares out there - he also uses the line that the average oil & gas share is cheaper now based on CF multiples than they were a year ago - hence why he thinks that investors will eventually come back to the sector and a re-rate will occur.

Point being there are other factors at play than just the expanded share count and churning through the shares.

1) Its hard not to disagree with you on Insider share purchases from the whole team but in particular as you say Majid.

2) As far as announcing a drill program earlier - I would refer you to the cash on hand in the full year report for year ending 2020 - it was just over $6m from memory. Then compare to the cash on hand in the last report for period ending 30th June - just over $4m. So they have drawn down cash and spent all of the FCF (about $10-12m total ) on small acquisitions, drilling and work-overs. If you accept that debt was not available prior to the closing of Cenovus - then the numbers say to me that they have spent aggressively with available cash.

3) post Cenovus they have $4m referenced above + $8m ajustment in the closingt price + $14m FCF = $26m available cash

So I fully expect some significant announcements shortly which I will be disappointed if if does not include some production gains before the year end via either new wells, works - overs or bolt on acquisitions.

GLA

Share Buys Backs:

1) I personally agree that a small buy back would be positive for sentiment and I think they can more than afford it and still fund a significant acquisition or drill program. I dont agree with the previous poster that its hand down the most efficient use of capital - you just have to run some rough and ready numbers:

1) If you were repurchasing stock at the current market cap then you would be effectively paying:

122m x 1.34 / 19,000 = $8,600 / boe

2) Cenovus was bought at $6,600 / boe as per last presentation

3) All previous acquisitions and capital spend were done as $5,500 / boe as per last presentation

4) If you drilled a well in clearwater for $1.3m producing at 150 boepd = $8,600 / boe*

*Some wells in clearwater will produce at more than 150 boepd and not only that will produce substantially a higher proportion of oil than assumed in 1) above for the whole Company making the metrics even better.

So hands down the most efficient use of capital is work overs followed by cheap wells in clearwater if they can flow at 200 boepd and then acquisitions assuming they can be bought at similar metrics to cenovus which I think may be possiible.

cmcc4395,

I share your frustration with the SP but im not sure about your conclusion. IMO the Managment have made some pretty shrewd moves and allocated capital exceptionally well.

What are you saying they should have done that they have not already done ?

I see comments on here about all other oil Companies are up yet i3e are down - this is simply not true. Sure some Companies are up but most particularly in Canada are down. Oil has retreated to an almost 2-3 month low along with many share prices.

i3e's metrics look really good and seem to be getting better so far - im a little frustrated as many are but still quite confident if i3e continue as they have done over the last year - shareholders should be well rewarded.

I dont know whether this has been posted before - fairly recent artcle on Tain:

https://www.offshore-technology.com/marketdata/tain-conventional-oil-field-uk/

"Production from the Tain conventional oil development project is expected to begin in 2022 and is forecast to peak in 2024, to approximately 7,031 bpd of crude oil and condensate and 2 Mmcfd of natural gas. Based on economic assumptions, the production will continue until the field reaches its economic limit in 2030."

"The field is expected to recover 18.65 Mmboe, comprised of 17.52 Mmbbl of crude oil & condensate and 6.82 bcf of natural gas reserves."

Remember the Tain field is still in play - Serenity potentially increases recoverable Oil to 120 mmbbl and production to North of 30,000 bopd. This just transform the economics of Tain.

GGG,

Really - you don't think they've haven't already worked on the debt funding or additional wells or work overs ?? Nearly all the drills we've heard about so far have been after the fact - I would half expect the same going forward except for something really material like Serenity or a $45m well program in Simonette which I would expect to be announced in advance.

Also it doesn't take months for wells to come online in Canada - i3e have said 4-5 weeks from spud to producing. Admittedly some of the recent wells have taken 2 months or more to announce - but i'm guessing this is to get the P30 flow test results. The same can be seen from Baytex Energy where they have brought on wells at 600-800 boepd in similar acreage to i3e in 4-6 weeks.

Well I’m hoping for news flow to start this year and maybe even this month:

1) “Finalizing Capital Budget for remainder of 2021 & 2022” - where will they spend in 2021 ? Possibly a couple of new wells in Clearwater. High impact work overs on the Cenovus Assets?

2) Pembrina well still to come on production or rather on production but still to announce.

3) As a few have mentioned including Jimbo - quite likely to hear about further acquisitions shortly-still appears the cheapest way to add production aside from work-overs.

4) Do they have a target to close 2021 above 20,000 boepd?

Maestro1,

I agree - fairly expensive on a pure $ basis but also quite productive so not that expensive on a per barrel basis.

This is I think an advantage I3E has relative to its peers i.e a large acreage position relative to its size which they are going through the process of “high grading”. There going to cherry pick and is very possible that your going to see new wells producing at 400, 600 or even higher - you don’t need many of these to add material cash flow.

I think the first Clearwater wells were a bit of a fly in the ointment - whilst very profitable - I’m sure they were expecting more hence taking their time now to high grade and select the very best prospects.

The advantage with Canada is they can scale the development to match the funding - with Simonette for example they can fund one or two wells at a time through FCF or they can fund a 12 well a year program with $45m which for sure they will need a farmin partner, FCF or debt or more likely a combination of the three.

With Serenity - a single appraisal well is somewhere in the $15m - $20m , then they may need to drill a second well and then development of the field which will be north of $100m.

So going alone with Serenity would be putting all your eggs in one basket which I don’t think they need to take that risk.

I don’t think you can read to much into today’s RNS with respect to Serenity.

1) It’s always been the plan to replace the loan notes with cheaper financing.

2) I3E has multiple opportunities to grow production which are capital intensive - Wells at Simonette for example are $4 - $8m so cannot be financed though FCF alone.

3) In my opinion they will not go it alone at this point with Serenity - to expensive / to risky . They’re more likely to aggressively expand Canadian Productlion and look at going it alone 6 to 12 months from now if the potential farm in partners are not playing ball. I don’t know whether anyone noticed but Jimmy Cranky has just come out and said Cambo should not go ahead along with other new developments!

4) We are due news shortly on the developement program for the remainder of 2021 and 2023 - the SP at some point will react more as we would expect otherwise the dividend yield is going to be heading towards 15% !!

The spring continues to tighten and the re-rate is coming !

None of us here knows the status of Serenity - but listening to Management and also knowing that it is likely tied to the Tain Project - I think Serenity is still very much on.

Remember Tain was supposed to close FID by the 2nd QTR - if ever they needed an excuse to cancel the Project - COP26 was it - they didnt do it so my guess is Tain and hence Serenity are still on. I think they will wait for Greta to get back home safely (blah, blah , blah) and then they will move forward.

I3e receives MSW (Edmonton Light Sweet), which has about a US$ 4 discount to WTI, almost exclusively. I3e don’t produce heavy oil, which WCS applies to. Gas is tied to AECO but WCS is irrelevant - just so you know.

Joe,

I’ll will admit - I know very little about license requirements - I will re-read the re-admission document. However - the information on Serenity and Tain having a Licence for exploration and appraisal is just about from the horses mouth so if I were a betting man - I’d put money on it. Anyway - I think the news was positive regardless - the UK government is backing the North Sea as part of the required transition.

as highlighted by PiratePete - the response to the parliamentary question was dug out by our friend JAdams (The Abbot) on the ADVFN board.

Doorstop123 - in answer to your question - Tain is licensed for exploration and appraisal as is Serenity. Development & Production is an additional license.

It seems that the Government have now responded to the recent question from the Green Party on the Tain Development - more positive than I was expected - it appears they are not shying away from approving North Sea Developments.

Question From Caroline Lucas Green Party Brighton, Pavilion Commons - To ask the Secretary of State for Business, Energy and Industrial Strategy

"what assessment his Department has made of the compatibility of the Tain fossil fuel development proposed by Repsol Sinopec Resources UK with the UK’s target to achieve net zero by 2050. "

Answer From Greg Hands Conservative Chelsea and Fulham Commons Answered on 10 November 2021:

" All previously licensed fields are accounted for in terms of projected production and estimated emissions and the Government is confident that they can be developed, even as the UK seeks to achieve its commitment to net zero by 2050."

Https://questions-statements.parliament.uk/written-questions/detail/2021-11-02/68176

freshair,

Trudeau - who's she ?

Eric Nuttall by the way is Senior Partner and Head of Investment for Nine Point Capital - the largest energy fund in Canada - so he probably knows a little bit about the energy sector and the Companies within it. You should check out his twitter feed - you might learn a thing or two !

As far as the energy sector being over supplied in 2022 - who knows - there is a growing concensus from what i'm seeing that the there could be a long term structural deficit in Oil due to the many years of underinvestment - this is a view shared by OPEC / Saudi's also as well as Nine Point Capital - did I mention that it might be worth checking out his twitter feed ?

To a couple of your other points:

1) "We also know that rather than grow organically, they chose to increase the share float by 33%." - They explained this already several times and I shared a little maths earlier - debt was not available and the cash flow was relatively small from just the Gain Assets. They had a choice - grow though equity and gain scale or try to grow with FCF which the could have done but it would have been slow. They made a choice which I happen to think was correct and confirmed imo when I heard the explanation again during the recent podcast.

2) My reason for investing as is probably the case for most is to find a share with the best returns not necessarily the one which has the highest capex spend. Someone here mentioned Warren Buffet - and he has certainly bought back stock in Berkshire Hathaway - if its good enough for him - its good enough for me if the circumstances are correct.

Joesoap,

I don’t see any relationship between debt and share buybacks whatsoever - Both Shell and BP have billions in debt and yet are buying back shares - explain that .

Fresh air,There’s only me that has raised buybacks in the last day or so and the answer to your question (or at least my answer) was already contained in the post.If your spending Capex and the SP is either stagnent or worse still going down - then what’s the point of Capex - surely (not Shirley) then you need to look at other options. This is Eric Nuttals view and I have to say - I agree !

GGG,

The results were released over a month and half ago - prior to which you were saying the SP performance was already below par and now your saying SP strength in run-up to results and dividend ?

I’ve not seen any of that - looking at the 6 & 12 month charts I’ve seen nice and continuous uptrend for the last year , interrupted by a short spike (1 week) to 16p and then a gradual tailing off and a little weakness in the last month - certainly no great run up into results.

As I say - I think several reasons for the weakness including:

1) Profit taking
2) investor sentiment around management which would be helped by share buy back , insider buying etc
3) ESG , COP26 etc which I believe has affected sector wide valuations and investment decisions on things like North Sea Investments, Farmouts