Member Info for tonynorstrom1

I'm not an Investor here but just received a notification that WHI's updated broker report is out. Having read the one on i3e a few days ago where I am invested - it caught my eye that JOG is significantly cheaper than i3e relative to WHI's fair value estimated i.e. JOG currently sits at about 122p versus a 622p estimate.

Has the market got it right - what are they seeing that WHI are missing?

DOPW,

No problem. Also Parge is right - don’t make any decisions based on what you read here unless you’ve done your own research no matter how convincing someone may seem. You never know the true motivations of anyone here - misinformation is rife which you won’t know until you’ve done your own homework.

updated report available on the i3e's website:

https://i3.energy/wp-content/uploads/2021/08/210817_I3E-Upscaling.pdf

Good report - there seems to be a slight discrepancy between the target price on page 1 (25p) and the valuation given on page 4 (26.5p) unless I'm misreading.

Looks to be very conservative ignoring synergies and potential upsides like ramped up drill programs in Clearwater. Not as well presented as the WHI report imo - not sure why they haven't bulled up i3e's potential more than they have to be honest. Still - target price increased from 16p to 25p.

"Would you care to let us know what the response from the Management of i3e was to your enquiry, and exactly what it is you do not believe?"

Ron - quite telling I think that GGG failed to reveal until today that he had in fact received a response from i3e to his questions on equity v debt and then basically dismissing as lies - doesn't seem very upfront especially whilst building a stake ??

GGG can say whatever he wants about my posts - but i've never deliberately mislead anyone and have always been upfront with any insight I have received from i3e.

DPOW - the best tip you got today is DYOR !

Anyway - I'm very confident in the investment case here - patient investors should be rewarded.

GLA !

GGG,

My last post to you on this - you make plenty of assumptions which quite frankly are rubbish:

“I cannot believe that a company with near 100m NOI cannot afford……”

I3E did not have $100m NOI pre deal - it was $35m. It’s bit like you going into a bank and saying I want to borrow 50k, my salary is only $35k but next year it might be $100k. The bank wants to know what your earning now - not what you might be earning next year.

Your a disgruntled investor that doesnt seem to understand that trashing Management is negative for his own investment - I really don’t understand where your coming from.

It’s not conjecture - I’ve not quoted I3E verbatum which i don’t think they want you to do in a private email exchange.

As you say you either have confidence in what management tell you or you don’t - if your a serious investor and put serious money in they you probably want to have that confidence and ask questions of management where appropriate.

GGG,

Well it appears you’ve accepted the explanation I have given ties in somewhat to what Management have said. If you don’t believe Management and don’t trust their judgment on funding - very strange that you would pump more money in when you think think they don’t have your interests at heart and are in danger of “diluting” you again?

As far as the example Fastfood brought up - it does not necessarily have any bearing on I3E - circumstance are all unique - I’m not familiar with the details - but I3E’s deal was very substantial in comparison to I3E’s market cap - as a previous poster mentioned - effectively doubling the size of the company.

Without knowing the financials (which I do because I’ve run the numbers) - a very significant transaction if to be funded from debt at a time when most other Canadian Oil Companies are deleveraging. I believe I3E have made the right call and the fact that you are pumping in more money tells me that you do to!

Mac66,

I’ve covered it several times - I don’t want to get into detail again for a couple of reasons including I object to being told I’m talking rubbish by people who have not taken the trouble to contact management direct and ask the question which includes GGG.

In summary it was about availability, affordability and not over exposing I3E to lenders. Management made a decision which they felt was in the best interests of I3E including shareholders given the variables they had to manage. I was reasonably happy with the explanation and JAdams expressed a similar opinion.

If you are interested you can send an email yourself.

Macc66,

If anyone was really interested about how and why the deal was structured like it was - they could have sent in a question ahead of the General Meeting. Also they could have emailed the Company - it appears that no one did except myself and JAdams. So no conjecture on my part - I got the response from Management.

There's no question that the SP has been suppressed a little due to the additional shares but as far as II's keeping the SP down - I dont buy into that BS - its simply supply and demand whether Institutional or PI's (IMHO).

DOPW,

GGG is up over 100% on i3e and its looking to be considerably higher than that if he sticks the course which I think he said he is. Some of his analysis is pretty good - however, I cannot recall hearing an investor be so negative on Management and being up over 100% - I don't get it !! You've got to take the rough with the smooth although IMO there's not been too much rough over the last 12-18 months.

If you really rate his analysis - go and buy yourself a chunk of NCCL and let us know how you get on - make sure you do your own DD first.

Can you name an Oiler with a better risk reward profile than i3e - I'm not talking a potential "hail mary stock" with 10 bag potential with zero earning but a solid junior stock that is very cheap compared to peers with its SP underpinned by a 5% dividend, 30% FCF yield and with 4 to 6 bagger potential with the catalysts already within its portfolio ?

Throw in very low debt and almost no Company specific reds flags that I can see - whats not to like?

DOPW,

You jumped in at a 12-18 month high -that's always a risk if your investment horizon is short term. Normally you have to be thinking in terms of a year or more unless you are a trader. If you bought 6 months ago or 12 months ago your looking at a 75% gain - that is handsome, really handsome !!!

With regards to the placement - there's no question it took a little steam out of the SP. With regards to dilution - your comments are really wide of the mark - just look at the numbers on a per share basis. Like football - form is temporary - quality if forever. Well not quite forever - but almost certainly, Shareholders with a longer investment horizon than you should be well rewarded baring any unforeseen events.

Doorstop,

It will be really interesting to see what production numbers they announce on the Clearwater Wells (Martens Creak). If you go back to the 5th May RNS - they guided by saying that similar wells in the area have produced at 150 boepd.

Since then the messaging has been strange with no numbers mentioned - i'm expecting a surprise when they announce - lets hope its good !!

I will be very disappointed if we don't shoot to a higher base in the not too distant future.

We had a new Institution come on board in the placing - I would be very surprised if we don't attract additional Institutions in the coming weeks / months. We are now getting mentioned in the main stream media - momentum is building.

GGG,

The RNS was great but your asking a bit much if your were expecting the SP to run to 15p immediately on the back of it. There was actually not to much new when you dig into it - increase in NOI was already flagged by WHI and in fact was known by anyone plugging the numbers into a spreadsheet when the deal was first announced a month or more back. But great in any case for i3e to confirm it.

Production over 10,000 boepd at the end of July was new but kind of expected based on previously announced news. Good all they same to confirm delivery on plans.

Serenity - was there anything earth shattering there given what they have previously said ? However, the continued talk and increased chatter in the press is positive.

The spudding of the well at Wapiti was new but expected in the coming weeks but very welcome news all the same.

The SP did take a nice little tick up and in my opinion as I have already said - the spring is coiling. I dont think it will take much more news for i3e to start moving meaningfully higher.

Walkley - on some metrics, the Company has more than doubled most notably reserves. Also although they did not publish any numbers - FCF has more than doubled which is key for growth going forward. There's a good slide towards the end of the latest presentation that highlights some of these metrics on a per share basis.

Walkley,

I don't think you have missed anything - i3e will rerate significantly if they maintain the current progress / news flow. I think there are a number of things at work:

1) Up until 12-18 months ago - i3e's record was poor. Results and perception are changing but it takes a little time.

2) Sentiment around the placement and additional shares has been negative - it will take a little time for the shares to wash through. This will change as i3e continue to execute particularly as evidenced by a growing dividend and perhaps a couple of major announcements.

3) As WHI have pointed out - the market has not yet appreciated what i3e have done. This will change if the execution continues and we also get news on Serenity and other significant events such as a large drill program at Clearwater, Simonette or both !

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.

In my opinion - i3e is in coiled spring mode and tightening - the progress / news flow will reach critical mass and we will see a significant re-rate at some point.

With respect to valuations and relative valuations - what the market is not seeing 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.

Listed firms i3 Energy and Longboat making progress on oilfield deals
London and Toronto-listed i3 Energy said today that it had agreed “indicative” terms on a partial sale of its Serenity field in the UK North Sea.

https://www.energyvoice.com/oilandgas/north-sea/342934/listed-firms-i3-energy-and-longboat-making-progress-on-oilfield-deals/

https://www.whirelandplc.com/research-portal#/portal/whireland/research/41_2021081606265529179

Some problems cutting and pasting - link should be correct now.

Extremely positive update - WHI think its conservative and likely to be beaten due to i3e accelerating their drilling plans. Interesting it does not mention Serenity.

Also the effective date of the acquisition does not affect the income / FCF and hence dividend, however, does reduce the effective cost of the acquisition and hence increase i3e's cash balance.

ttps://www.whirelandplc.com/research-portal#/portal/whireland/research/41_2021081606265529179

"Conclusion: opinion, We believe i3 Energy continues to vastly exceed expectations. Today’s announcement adds considerable shareholder value to the Company and sets the scene for significant and accelerated forward looking value creation. "

"Conclusion: opinion, We believe i3 Energy continues to vastly exceed expectations. oday’s announcement adds considerable shareholder and sets the scene for significant and accelerated forward In our value to the company looking value creation. "

"Significantly Positive Operational and Financial Update i3 Energy has provided a broad and, we believe, materially positive operational and financial update. We believe the most significant new information is that i) the Cenovus acquisition is expected to be effective from 1 April 2021 (reducing the effective consideration) and ii) i3 Energy has increased its “net operating income” guidance to $US94.8m (from $75.3m) due principally to rising commodity prices and, we believe, better netbacks (higher cashflow) from the Cenovus acquisition. We increase our fair value estimate to 29.0p (from 27.2p) of which 22.5p (from 20.7p) is premised on i3 Energy’s Canadian operations. We retain our 5x EV/CF approach to value the company’s Canadian operations. We expect the company to grow its cashflow further over the course of 2021 and beyond from drilling more wells than we have assumed and through securing more value accretive acquisitions. "

JeremyCC,

The dividend that will be announced in September is H1 and will be theoretically based on the income and FCF generated in the period January to June 2021. This is pre-acquisition of the Central Alberta Assets, however will include the new shares - so the dividend will be less than you are forecasting. H2 will be significantly higher.