Member Info for tonynorstrom1

Ron,

Can you remind me again who Barnyards is - I seem to recall you saying he was a CEO of an AIM listed Company.

regards

Jukey,

Decline rate is just over 7% - not clear to me whether this includes well interventions so I took 10% of 19,000 boepd as the decline to be replaced. In the presentation the cost todate of buying the barrels was about $5500 per barrel thus maintenance capital is approximately 19,000 x 10% x $5,500. I think they may even have quoted a number for the estimated maintenance capex in the podcast.

Ffit,

"But maybe when you are holding your bags you should educate the ceo on how funds work and a bloated pig won’t get picked up under $1."

Please translate that into English and i'll pass on the message and see what they say .

Doorstop,

"Capex necessary to maintain production levels though so I’d say correct to include it as a cost like that, personally." - you are correct - maintenance capex should be deducted which as per the guidance from i3e should be about $8-10m - he's included $24m so not correct !

19,000 x 10% x $5,500 = $10M

DOPW,

I've taken a look - I think he has underestimated FCF. A couple of things stand out:

1) He has capital expenditures of $25m deducted from CF. Basically only maintenance capital should be deducted - Capex is a discretionary spend and so you can add $12m or more back to FCF.

2) He has Royalties of $16m and Production Taxes of $24m - total $40. Not sure how he come up with the production taxes but Royalties are about 10% at $24m - I think he's over estimated by $10-$14m - but I need to check on the production taxes.

1)

Ffit - and watch out for the door on they way out !

GGG - it blew past 11p mid August - so about 5 weeks, by mid September is was 12p and rising - so nowhere near as pessimistic as you had forecast.

It does not feel familiar - you’ve ignored points 1 & 2 which I think is much more relevant than your “confetti” shares theory.

I’ve also said said several times - 3 ways for the SP to increase:

1) oil sector to rerate and I3E to move with it - it hasn’t happened yet but I think it will.
2) I3E to rerate within the sector - it hasn’t happened yet but I think it will - market needs to see more evidence of delivery.
3) i3e to increase volumes - there working on it and when the RNS’s come in showing production gains the SP will rise.

GGG,

I don’t think so - you were saying anchored to 11p for months - now you’ve shifted to 14p. I did say it would rerate and it did from 11p to 14p - I don’t think I ever defined what fair value was in part because fair value is a bit vague - basically what the market is prepared to pay.

I also pointed out where I3E sat in relation to its peers I.e at a EV/CF of about 2 with several companies sitting at similar metrics I.e. if the market is giving us the same rating as these peers then we’re sitting pretty much at the correct price.

DOPW,

You’ve got to know what you own and the value - there’s something wrong if Dr Doom comes on - gives his opinion and now all of a sudden your doubting your investment.

Nothing has really changed - the warrants / options were already there and to a large extent all priced in.

And for your info not all Oil Companies are flying today - look at Serica and Pharos to name just a couple.

Look at the positives - most of the warrants are now out of the way and also most of Dr Gloom’s confetti options are not priced at 0.001p - there mainly priced at 5 - 11p. Still too many options in my opinion - but unless shareholders are prepared to challenge Management - then accept it or go invest elsewhere.

I’m still positive - I maintain my prediction of 14p plus in November and climbing.

No one knows what the SP will be in 6 months - certainly a lot of catalyst to push it significantly higher.

GGG - "Without some positive news we could be down here for some time to come. GLA" - that's a bit of a no **** Sherlock comment plus there will be news !!!

In the webcast - Majid briefly referred to a "top 20 list" - I thought quite encouraging, they have so many options they are being properly evaluated to ensure that they are prioritized for capital efficiency / maximum returns.

With regard to Serenity - it has been a bit of a saga but they could not really have foreseen the full impact of the ESG lobby. I think with the sharp rise in energy costs and the possible energy shortages - this has to improve the outlook for Serenity.

"Canada up 15% - 15p equivalent, hmmmm let me think who said 16p by Friday or definitely by Monday - oh yes it was me !"

When the sun is out - bold predictions galore - a little cloud appears and he's packed up for the winter !!

With the strong oil and gas prices - things have never looked better - got to say I dont understand the mini-sell off. An opportunity for those with a bit of spare cash to top up at a lower price than they should. Next news:

1) Wapiti Well Production Numbers
2) Work Over update
3) Details of Winter Clearwater Drill Program.

Oilprice.com

there's a tab at the top on the home page to switch to view Canadian Prices.

Probably not every one here knows it but i3e's gas sales are largely pegged to AECO (Alberta Natural Gas) prices which have lagged massively behind international and US spot prices. Well today US gas prices are up nearly 10% to $6.30 / mmbtu and AECO prices are up nearly 30% to $4.80.

Gap closing and significant for i3e's earnings!!!

Gap closing and

blended price !

Doorstop,

He's trying to come up with a blended cost . i3e sell a variety of products but a small portion is linked to Western Canadian Select which is approximately WTI - $13. I understand the Majority though is linked to Canadian Light Sweet - refer to the table in i3e's July presentation.

Ron,

Ive not invested in PTAL but since I first mentioned it which is not that long ago production has already jumped from about 10,000 bopd to about 15,000 and I understand they are on course to add another 5,000 in the coming months and its all oil. It already looked very cheap (even cheaper than i3e) and is set to be cheaper still even though the SP has climbed 40% plus in the last several months.

There are of course several risks:

1) Local unrest although this seems to have been manageable to date
2) Access to markets - there are some constraints that mean production may be shut in from time to time.
3) Aside from 1) above other political risks although Peru is reportedly amongst the safest jurisdictions in South America.

If I had spare money I would probably be invested but i'm all in on i3e.

Ron,

I actually think that FCF and the dividend can be modeled with a reasonable degree of accuracy - there's not to many unknowns left and those that there are do not have a massive effect on the calculation - you just need to make sure that you are using the most correct and uptodate numbers available. I have maybe been a little conservative with the hedging and revenue - if I pay around with these I can see the FCF edging just over $100m.

Couple of things i notice with your calculation:

1) Have you included 10% royalties on revenue?
2) NGL's at 55% of WTI looks high - refer to page 19 of attached and remember i3e's hedges were for propane.

https://i3.energy/wp-content/uploads/2021/07/20210708-i3-Corporate-and-Transaction-Update-vF.pdf

3) Check the interims for actual finance costs.

One slight downer on the dividend is that the next financial period is for July through to December 2021 i.e. Cenovus revenue kicks in halfway through the period so unless i3e do a special adjustment to the dividend again (like they have just done for H1) - they dividend may be less than we are forecasting here.

Yes - there are several major errors that significantly inflate the FCF / Dividend.

1) Productions cost miscalculated - he's doubled the interim costs to come up with full year costs. Remember the interims are just based on Gain / Toscana Production - he's going to be closer if he doubles again the cost he has put in. I calculate Production and Transports costs at nearer $80m
2) NGL's at 55% of WTI - we dont have a detailed breakdown of the Cenovus NGL's so ive based my numbers on the Gain / Toscanna Production and I think the number is less than 50%. I call calculate the revenue from NGLs at about $73m i.e. 10m less
3) He's not included anything for hedging loss - we dont know what the full hedging program looks like for the nest 12 months yet but at $80 WTI the hedging losses are likely to be significant - guestimate $6M

Bottom line is - I calculate the FCF at nearer $95m which at 30% Dividend would equate to about 1.6p or 2.7 Cents Canadian.

for some reason - i am unable to comment on the video, however, just emailed the comments to the link provided.

I also sent him the link to Doc Jones and EMO - we might see a video in due course on EMO!