Member Info for tonynorstrom1

I check Malcy's Blog now and again to see whether he is ready yet to eat a bit of humble pie and admit that he got it wrong on i3 Energy -still no humble pie, looks like he prefers cheeseburgers.

I did note however he covered a Company called Petro Tal in his latest blog which has set a 50p price target (current SP 15p). I took a quick look at their presentation and an interesting Company - what if someone was to put forward Petro Tal as an alternative to i3e?

Parge,

That is not my estimate - its Tennysons though my calculations are in the same ballpark. You should also note that the numbers below are in cents so their estimate is :

2021 0.33p (0.16p paid) 0.17p balance for September H1
2022 0.93p

Ron,

The numbers did not make sense to me so I emailed WHI - they have updated the notes in the table in page 1 to make it clearer. I'm still not 100% sure what they've done so I've sent a follow on question. I think what they have done is:

2021 estimated dividend for H1, excludes special dividend
2022 H2 (2021) + H1 (2022)

i.e. you cannot match the dividends to a % of FCF because the periods dont line up.

Have a good bank holiday all and it looks like we are due further updates next week !!

To explain further - dividends paid in 2022 relate to H2(2021) + H1 (2022)

So the actual dividends in the table wont match up to a % of FCF for that year.

F_ck I missed it - let me take a look and I will get back to you.

I think there are a number of things at work:

1) I think the wider market still remembers the failures at Liberator and the loan notes - results and perception are changing but it takes a little time. You only have to look at the views of people like Oilman Jim and Malcy who have been quite negative until very recently.

2) Sentiment around the placement and additional shares has been negative - it will take a little time for the shares to wash through / be absorbed. I don't think we are too far away now on this front.

3) As WHI have pointed out - the market has not yet appreciated what i3e have accomplished. LTH's will have seen the progress over the last 10-12 months but you had to have a bit of faith as it was a bit of a jam tomorrow story. Its really only in the last 2-3 months where it has been jam today with the dividend, added production etc which will be the things that catch the eye of new investors

4) Valuations within the sector are pretty depressed particularly in Canada where SP's are at 10 year lows relative to Cash Flow. Nine point Capital believes sentiment in the sector will improve in the coming months once dividends and buy backs kick in. If you look at some of the charts that Eric Nuttall shares on his twitter there are a couple of companies that trade on valuations not too dissimilar to i3e particularly when you compare to ie3 on pre-deal metrics so there is competition. This latest deal which has put us on another level in terms of scale and valuation has only just been completed so the market really are just seeing this now.

With respect to valuations and relative valuations - what the market is not seeing at all (IMO) is the potential in the portfolio relative to i3e's current size. i3e have drilling inventory of over 20 years which is more than double many of its peers and includes the some of the best acreage in Canada.

In my opinion - i3e is in coiled spring mode - the progress / news flow will reach critical mass and we will see a significant re-rate at some point - even if the market ignores everything else, it will be hard to ignore the dividend which is set to grow substantially.

All in my humble opinion !

Fatsam,

Are there any joint venture opportunities - aside from the chatter here, i'm not sure ive seen elsewhere where this is a real possibility.

This appears to be a trading opportunity at the moment and not really a long term investment - lots of rumours, nothing concrete and a big pile of debt to sort out - not for the faint hearted.

Fatsam,

So basically nothing concrete - just speculation !

Additional drilling seems a bit fanciful given that they don't yet have a plan to service the current debt.

What are we waiting for here - the BOD / CA to come up with a plan forward ?

I heard some chatter on here about buying back some of the bonds at a discount - is that a realistic option?

What if the bond holders sit tight and want payment in full next year - my understanding is that at current oil prices that's not going to be possible - what happens then ?

Oh - and as far as them not having the money - they had $4m or $5m in cash by my estimates end of June and may be more. As per WHI - they have an additional $10m due to the elapsed time between the effective date and the closing date of the transaction and they are generating an additional $3m - $4m in free cash flow per month from the closing date. They have pots of money for developments / workovers.

You've revealed that you've been at this since 1979 - scary, really scary !!

Freshair,

When the data changes (Oil Price, Acquisitions etc) - you have to update your analysis. If your making money on other shares - that's great. But your analysis here has been way off and I think you've been guilty of spreading a little bit of misinformation. I'm pretty happy with my analysis and the calls i've made - It can never be 100% because we are not party to the actual data until well after the fact. With regards to FCF which I think is one of the most important metrics - i've not been too far out and if you go back the record supports this:

1) If you go back to the February time frame - the 1st Mirabaud report was out - i3e released their first operational update and I immediately flagged an issue i.e. that the Mirabaud report significant overstated profits / FCF. I was proved right - the next update of the Mirabaud report significantly increased projected costs and hence reduced FCF. You can go back and verify this to be correct. GGG & Ron know this to be the case because I asked them to double check their calculations.

2) More recently when i3e provided an update to their forecasted Net Operating Income (NOI) after the latest acquisition - again I flagged and issue - If you go back you will see that I speculated that the production from the acquired assets must be hedged as the Projected NOI and hence FCF was significantly less that I projected. Its on the record - go check. It was proved correct when WHI in the latest update stated that they believe NOI will be significantly higher that i3e were projecting.

So i'm not sure what you are saying - it appears to be rubbish.

With regards to "dangerous ramping" - please highlight which comments you think are blatant ramping. This is the 3rd time I've asked you to point out the offending comments and so far you have been unable to do so.

Finally - my understanding is that you own i3e stock and are long not short - please clarify if this is not the case i.e. that you are shore and have an interest in talking down the stock. That would make sense and at least be logical i.e. highlighting i3e's missteps (albeit in my opinion you are mistaken) so that you can successfully short.

If you are long - your comments indicate that you are at least a couple of beers short of a case !! Everyone here knows your opinion on the financing / dilution - you made your point clearly. Is it not time to move on and by continuing to hammer home you point - how does this help your investment - It doesn't and probably indicates your thinking is not straight.

Anyway I think the metrics on i3e are great, the potential news flow is transformative and you are nuts !!

CMCC,

Obviously purely guesswork and depends on whether i3e are valued at a premium or discount to peers. Currently we are at a discount - but if we announce a big drill program at Simonette or Serenity we will re-rate up.

With good operational updates - I see i3e maintaining a dividend yield in the 4-7% range with the SP adjusting accordingly. With Serenity its possible we could rate much higher.

If your following Eric Nuttall - he's talking about Companies in his investment orbit being able to afford payouts of up to 20% (dividends & Share repurchases) - this i'm sure will impact how Canada value i3e.

Tennyson have forecasted the dividends in their report (2021, 2022 etc)

Bearing in mind that the special dividend was 0.16p - this is what they forecast:

2021 = 0.45p
2022 = 1.28p !!!

The 2021 dividend is weighed down due to the revenue from Cenovus only kicking in from August but the increased sharecount effective from July. Still the 2022 dividend is almost x3 the 2021 dividend and around x8 the special dividend !! Just goes to show how accretive the deal is in terms of effect on FCF and hence dividends per share.

What does this mean for the upcoming H1 dividend - assuming that that they don't thrown in any of the reduction in the acquisition price into the dividend pot (which they could )

Dividends might look like this:

h1 2021 = 0.18p (bit of a guess depending how they split h1 & h2)
h2 2021 = 0.27p
h1 2022 = 0.64p (assuming WTI around the $67 level)

If oil & gas prices remain supportive and they up production which they plan to do - h2 2022 and beyond could be significantly higher than this.

Justfencing,

You jest - but I agree that if the market was entirely rational, the SP should have moved higher due to the accretive nature of the acquisition - reserves more than doubled, NOI up over 70%, Free Cash Flow more than doubled and controversial to some - debt to FCF less than halved !!

Looks liked we've picked up a field crew with the assets so there should be pretty quick action on these potential 80 quick workover / reactivations they have spoken about.

Expected but good news all the same. Looks like they are saving up some of the news for a future announcement - what about the net price of the acquisition due to cash generation of the assets after the effective date in April ?

Also an update this week on drilling / flow rates ?

Justfencing,

Someone on here told me that Barnyards is a Crusty Old CEO of an AIM listed Company - if anyone know how the trading works on the AIM - it should be him !

Justfencing,

MM make a commission on buys and sells - there's no money for them to be made out of the spreads.

When volume is extremely light (which it is now) then the spread increases to stimulate both buying and selling. When the volume is heavy the spreads shrink - its the reason spreads on a share like BP are tiny - volume / liquidity is always there.

If I was the board policeman (which I'm not - Scot123 appears to be) - I would ban the use of the word dissembling !

the rational is maintaining a market - finding buyers for those that want to sell and sellers for those that want to buy.

What transparency are you looking for and how would it work ?

Justfencing,

Well there was news - Oil was down nearly 4% yesterday.

Also from my limited knowledge - the market maker is tasked with maintaining a market for anyone who wants to buy or sell shares - someone wanted sell yesterday and the only buyers at a particular time were at 5% below the open. Given that oil was down 4% - nothing strange there imo.

I was also going to comment on the last trade which took the price up to 11.7p before the market opened this morning- but its just opened and done exactly what I thought it would do i.e. someone wanted 50,000 shares late yesterday and the only sellers were at 11.7p but not well supported because all the other preceeding trades were at 11p +/- so the likelyhood was that it would open up around 11p this morning where more buyers and sellers were likely to be found and this is what its just done - so again nothing strange imo.

I hear the constant conspiracy theories on market manipulation and their overblown in my opinion - i've not seen anything too out of whack in the shares ive dealt in at the times ive dealt at - it may happen but ive not seen it .

there you go !

https://docs.londonstockexchange.com/sites/default/files/documents/MIT201%20-%20Guide%20to%20the%20Trading%20System%20Issue%2015.2.pdf

https://docs.londonstockexchange.com/sites/default/files/documents/Market%20Maker%20Obligations%20Factsheet%20-%202018%20June.pdf