Member Info for tonynorstrom1

On SP performance:

1) 92% of the outstanding shares have been issued in the last 12 months or so . 500m plus a year ago. As per Graham in the podcast. So profit taking has been an issue for quite some time yet the chart still had a positive trajectory over 6 & 12 months.

2) As per Graham - I3E is a bit of an anomoly - headquarters in UK an Canada but operations currently only in Canada.

3) Share price weakness in the last month or so - what’s changed in this period that wasn’t there before - COP26, ESG etc.

So I think several reasons for weakness which include profit taking but not only profit taking. Again I would refer to some of Eric Nuttalls Commentary.

Again with regard to debt - do you really think they’ve not been looking at this and looking at it well before you have mentioned it - given the financials and the explanations they have provided - what do you really expect ? They have moved quickly todate on acquisitions, drilling etc and I would expect them to move equally quickly on required funding.

Scotty,

You either don’t understand or your choosing not to understand - I don’t know which. People reading your posts should pick out the good stuff and discount the rubbish.

There’s no question that PANR has a valuable resource - the question really is how valuable - no one knows not even you. Why - markets have changed - COP26, ESG and so on

Looking at the Canadian E&P universe for example - companies have traded at historical valuations of 6-9x CF. Now they trade at 2-4x CF - will they every get back to historical valuations - who knows but theres got to be some doubt.

PANR is an exploration play and is valued differently -NAV, discounted future cashflows etc and these calculations involve Sumer discounting ratio’s , risk factors etc - are these the same as they were even a year or so back - I doubt it - and these definitely have an impact on valuation - you should know this stuff.

So when you say “they sure are” in response to whether the same historical metrics apply - I think most will agree this is probably incorrect.

As smart as you are and as smart as you think you are - don’t be afraid to question and update your thesis based on the market today.

Hey - and have a good weekend.

Pirate,

That would certainly help - another would be share buy-backs.

They have said repeatedly that they would not do this because they can generate more value by re-investing into the business at current prices i.e. $1.2m invested in a new oil well will produce more earnings per share than re-purchasing $1.2m of shares. This is true if the SP is increasing which has been the case over the last year or so - capital investment has seen a commensurate rise in SP - look at the 6 and 12 month charts.

However, this is not the case if you are spending capex and the SP is staying the same or declining. This is what I think Eric Nuttall means when he says the market is not paying for growth hence his push to get Companies to return capital via share buybacks and increased dividends. i3e's chart over the last month or so is not looking as good as it did previously - I think largely due to ESG and COP26.

If the trend continues - I think buy-backs is something that i3e should look at. It doesnt have to be big in my opinion but its something I think they can easily afford to do and would help improve investor sentiment.

"As things stand, this is more a natural gas than an oil company."

Certainly natural gas has become more important and may become more important still in the future if prices continue to rise, however, as things stand today and at current prices - revenue is approximately as follows:

Gas-----------$91,847,700
Oil------------$104,883,800
NGL's---------$61,118,400

If I was i3e Management and reading some of the recent messages here - I’d probably have a bit of a wry smile on my face and be thinking to myself that very little credit has been given for whats been achieved and how quickly its been done.
June 23rd last year was the share suspension and Toscana acquisition – prior to this, zero revenue and $30m plus in debt. Wind the clock forward not too many months and 19,000 boepd production and probably around $10m in net debt – remarkable.

Reading a post from from just a couple of days ago offering the advice that they should “stop doing a little bit here and there to pick up their easy options.” Even ignoring the purchase of Cenovus which effectively doubled the size of the Company, i3e have drilled 7 wells in recent months along with numerous well reactivations/workovers adding over 1500 boepd production above and beyond that required to offset field decline. This despite the fact that pre-Cenovus the FCF generation was relatively small and the development budget tiny. So I don think they have been hanging around at all –capital investment has been astute and the action / results have been pretty swift.

Pre-Cenovus and – free cash flow was somewhere less than $2m per month – this is what they would have had to fund a dividend, repay the $30m in debt due in a couple of years and production growth – not a huge budget. Post Cenovus (which has only just been completed in the last month or so ) and with the current Oil Prices and with an estimated FCF north of $8m per month – I think its safe to say that we will see a significant ramp up of development activities in the coming months.

With respect to debt – I think Management has explained in detail why they have done what they have done and the approach they have to it moving forward. I have no doubt that they have been working on this for some time and we will hear about it it due couse though I’m sure some here will say “I’m glad they took my advice”

In the words of Doc – patience, patience, patience – its boring until its not !

With the benefit of hindsight – I don’t think that Management have done much wrong, in fact I would venture to say that they have proven to be pretty astute / active. The only critism I think is fair is around the perception of Investor friendlyness/fairness – they control the narrative so if it is negative, well then that’s something they need to work on otherwise a job very well done.

CMC,

They did say they would announce their capital expenditure plans in the next couple of weeks (almost due now) whereas they expected to conclude a FO by the end of the year.

Right now I don’t think there linked. Also I agree with what someone said earlier that they wouldn’t want to take the risk of Serenity all by themselves as of now.

I think they will proceed full steam with a significant Canadian Drilling Program and review plans for Serenity the end of the year if it’s not already settled. Remember Majid said this was “definitely going to happen” . I

Mindbender,

Agreed - you need to access value against something, I was just pointing out that Brokers estimates can sometimes pretty meaningless.

He mentions WHI's fair value estimate - WHI happen to be the House Broker of one one of my main holdings which is a dividend paying production Company and sits at almost 1/3 WHI's fair value estimate. WHI also have a fair value estimate of over 4x the current SP of Jersey Oil and Gas - not one of my holdings but a exploration / development play.

Scot126,

".......PANR is either the cheapest or second cheapest O&G stock in Canaccord's sector coverage and both Canaccord (house broker) and WH ireland assess fair value to be circa 170p, right now, today."

Brokers reports dont mean an awful lot particularly house brokers - there's plenty of oil and gas stock sitting at 1/3 of broker estimates or less. What does fair value even mean ?? A stock is only worth what someone is prepared to pay and the markets changing. Many oil stocks are cheaper now than they were a year ago on most metrics and could well get cheaper yet.

"Using the traditional risked/unrisked E&P equity valuation method ........." - are these metrics still valid today ?

Thanks Joe - scanning the documents it appears that the project is not approved in its current form and has been requested to provide further information.

Do you know whether it was ever approved for example was the initial Environmental Impact Assessment initially approved and now rejected pending additional information to address ESG concerns.

This could well be the fate of current projects in the application phase i.e. the need to provide additional information / measures to address climate.

A question posed by MP Caroline Lucas in the House of Commons to the Secretary of State for Business, Energy and Industrial Strategy on Cambo. The answer to the question on the Tain development has not been published yet but I suspect the answer will be similar. The fact that no senior Minister has publically stated that the Cambo Project should be scraped including the 1st Minister for Scotland says to me the Project will get the green light.

Caroline Lucas
Green Party
Brighton, Pavilion
Commons

|"If he will make it his policy to withhold consent for the development of the Cambo oil field for production."

Kwasi Kwarteng
Conservative
Spelthorne
Commons
Answered on
21 September 2021

"The development proposal for Cambo is being scrutinised in line with robust regulatory procedures and no decision has yet been taken."

Refer to Q5 page 3 - who says we can slip in under the radar !

https://commonsbusiness.parliament.uk/document/51187/pdf

No GGG - in its profile of a pumper / dumper - it says to be particularly wary of those that swing from very critical to very positive (and vice versa) whilst at the same time trading - I thought they were talking about you !

go to the home page and select from the menu and also check out the profile of a pumper / dumper

pumpedordumped .com

After looking again, my name is listed along with just about everyone else that has posted more than a couple of times in the last few years including Cenkmen himself which he failed to mention.

BBN was also pretty high on the list and im sure hes posted nothing about i3e in a couple of years – he’s now an expert in the biomedical sphere !!!

So a nice bit of spin Cenkmen but pretty uninteresting like a few other of your posts.

Cenkman,

I dont think I have been named - please provide a working link.

I pretty much always provide a link / reference for the posts / opinions that i express - I cannot help it if your research is poor - you need to try an do bett

Joe,

I’m all for a contrarian view - of course only useful if it’s back up properly what are you trying to say - bullish, bearish , overvalued?

I don’t think there is any longstop date connected with Serenity - they’ve already met the loan note holders longstop requirements with the equity raises and added production - so serenity is all about OGA approvals and confirmation of counterparty funds.

Joe,

Couple of comments:

1) what slide are you talking about - looking at the 6 & 12 month chart - the trend is still up.

2) jimo - what opinion are you offering - it’s difficult to say - a lot of musings but I personally don’t understand what your trying to say.

3) Cupidity - what comments do you have issue with? I have posted a couple of metrics which I believe are fact and my opinion is the outlook is still very positive:

A) production & FCF rising
B) announcement of a significant drilling campaign due within the next couple of weeks
C) serenity still in play - delays entirely understandable IMO - ESG concerns have taken on a life all of their own in recent weeks / months.

What do you think the people you are accusing of cupidity have missed?

@eri****tall
With the average CDN energy company I follow trading at 2.5x enterprise value to cashflow, a 33% free cashflow yield to equity value, and able to privatize and be debt free with 3.3 years of free cash flow at the current oil price...every day above $80WTI is a PHENOMENAL day!

Above from Eric Nuttall yesterday.

By my calculations i3e trading at:

1.7x enterprise value to cashflow, 48.9% free cashflow yield to equity value

Around 48% undervalued against the average on these metric. To be valued at the average we would trade at 18.6p

We have a couple of factors that I think says we should trade higher than average:

1) Serenity
2) Reserve Life Index of 20 years or nearly twice the average Canadian Company.

Jukesy - Yes.

Jusrbe - I think many of us have the same concern. Energy Companies tend not do so well during a recession / market crash - i have looked at a few charts to see what happened previously, We do have a few things in our favour:

1) low debt
2) low valuation
3) tight supply might offset to some extent any demand destruction.

Let’s hope we see a proper rerate before the next market crash.

Company Guided to $65m NOI for the year.

FCF = $65m - $33m = $32m approx
April Dividend = $32m x 30%/(1.4 x 1200) = 0.57p -0.2p (already paid) = 0.37p

In my opinion its likely to be a bit more than this since the oil price to the end of the year is likely to be higher than assumed, plus the NOI for the NTM is significantly higher so my guess is 0.4p or higher

September Dividend:

FCF = $120m - $33m =$87m
Dividend = 87m x 20% / (1200 x 1.4 x 2) = 0.52p

I've assume 20% as they say they want to pay a progressive dividend and they may want to keep a bit in reserve but they may be more adventurous and pay out 25% making it around 0.6p

This assumes Oil at similar levels to now and also that they don't add any significant production in the next 6 months which they are likely to do. So hopefully the above numbers are conservative and could be bettered.