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Interesting article on North Sea Drilling / Exploration - Tain mentioned briefly again. Seems to be plenty of drilling activity particularly with Chinese related entities - it seems like its when, not if !

https://issuu.com/energyinst/docs/petroleum_review_august_2021_open_access_articles/s/12933679#:~:text=Repsol%20Sinopec%E2%80%99s%20Tain%20project%20is%20anticipated%20to%20reach%20FID%20(final%20investment%20decision)%20this%20year.

MissAnneGrey,

Your summary perhaps highlights who the farm-in partner is - Repsol Sinopec. They to per earlier communications to the market were supposed to complete the FID in Q2. This has slipped with no update yet provided. However, as per the earlier link I provided , industry insiders are still expecting an order for well equipment in Q3.

Tomhuk,

No - no update has been provided. If you check the link in my earlier post below - that appears to be the latest news shared in the press i.e. that industry insiders are still expecting awards for equipment in q3 for Tain.

The Environmental Plan and Field Development Plan are approved - however, they would need to be revised to incorporate Serenity if indeed Serenity is part of the plan. There used to be some pretty knowlegable people here on the approval process for the FDP, drill permits etc - lack of comment on this and approval times leads me to assume that drilling is not before next year.

Nomad,

I think your estimate is in the ballpark i.e. $7-8m.

Its going to be hard to figure out the H1 dividend because there's a few moving parts including that the dividend is 20-30% of the FULL YEARS FCF meaning that even assuming the FCF is the same in both H1 & H2 - the dividend does not have to be the same - it just has to add up to 20-30% of the full year.

It is interesting to note that WHI seem to imply that i3e are going to pay out 20% presumably to maximize available capex for drill programs etc - I assume this is why you reference 20%.

My guess is that they wont want to pay out any less than the special dividend for H1 before significantly increasing in H2 as per the calculation.

I'm thinking that H1 might be in the range 0.18p to 0.22p

I'm really surprised we have not seen an updated Tennyson Report yet - however, given how bad their previous reports were - they were probably waiting for WHI so they have a chance to check their numbers before they publish.

In any case - an updated report is expected shortly.

Excellent report -couple of notable points:

1) The forecasting basis was changed from a Discounted Cash Flow basis to a multiple of Cash Flow. Had they stuck with the DCF method - they say they would have come up with a 10x multiple so presumably a price target in excess of 50p.

2) new forecast is based on the currently announced work-overs and drilling programs which is quite limited. If you add in the planned South Simonette Program (up to 18,000 boepd) and an expected expanded program in Clearwater - WHI's estimates will rocket up - I could see their estimate double quite easily.

3) Strangely silent of Serenity.

4) Production could exceed 25,000 boepd next year just funded from internal cash flow (fig 4) and 30,000 in 2023.

5) Nearly 300 identified potential drilling locations and this excludes Clearwater and Wapiti - the upside here is potentially huge !

6) Within 12 months - the dividend could more than double from that just paid out i.e. over 1.2p per share on a yearly basis depending on where they plan to pitch it (20-30% of FCF). If they get production to 25,000 as per 4) above the dividend could be over 1.6p per share !!

Reasons for the current depressed share price:
a) Sentiment in the Sector is relatively low - this is expected to improve in the coming months with the arrival of dividends and share - buy backs.
b) The placement and associated additional shares have depressed sentiment in i3e - this will improve over the coming months with news flow / execution and dividends!
c) Market as per WHI has not yet recognized I3e both its current status / execution and the future potential - this will change if i3e keep executing especially as the dividend start moving significantly up and i3e start attracting a premium multiple.

"It had been thought that RSRUK would make a final investment decision on the project in Q2 2021 but that has yet to happen. RSRUK submitted the environmental statement for Tain last year – the field development plan has also been approved. The company is intending to reactivate the “B” drilling rig on the Piper platform, 120 miles north-east of Aberdeen, before drilling two infill production wells. They would be tied back to a new manifold 12 miles from the Bleo Holm FPSO through a new pipeline – topside modifications would also be required. RSRUK previously said rig reactivation was under way and due for completion in May. The new wells were expected to be drilled in summer or autumn this year."

So still on the Radar !

https://www.energyvoice.com/oilandgas/north-sea/341941/cambo-and-tain-projects-in-uk-to-bolster-global-subsea-orders-in-q3/#:~:text=Westwood%20Global%20Energy%20Group%20has%20tipped%20Siccar%20Point%E2%80%99s%20Cambo%20and%20Repsol%20Sinopec%20Resource%20UK%E2%80%99s%20(RSRUK)%20Tain%20projects%20as%20%E2%80%9Ckey%20upcoming%20subsea%20tree%20contract%20awards%20to%20watch%E2%80%9D%20in%20Q3%202021.

you made a very similar comment about a week ago - the SP is almost the same despite the Oil Price falling significantly over the same period.

I think Canada is actually holding back the SP - for whatever reason Canadian Oil Stocks are near 10 year lows relative to earnings yields despite strong fundamentals. Value will out at some point!

for i3e?

Harel,

Its possible - but with Management and Institutions bared from trading and not a hint of a rumour either here or on twitter - I don't think it was due to a leak. If it was a leak would they not be party to the placement also? I3e seems to be running a much tighter ship these days - just about all the good news has come out of the blue - your tarring them with an old brush ! I think you've been paying too much attention to Oilman Jim and Malcy !

There's good deals across the Energy Sector - no Sector is cheaper than Canada !

Another interesting dynamic was that the Institutions involved in the placement were prohibited from trading in the period prior to announcement of the placing. Its not certain how this impacted the share price but its quite possible that they would have sold a few shares into the spike i.e. the run up in SP might have been slower and less pronounced than if the institutions were allowed to trade freely.

Tomhuk,

My understanding is no - earnings and other adjustments will be rolled into the purchase price at the time of Contract Completion.

Vista man,

The September dividend (h1) will be based on the period January to end of June IE production of about 8800 boepd but the qualifying share count will have increased from about 800m to about 1.1B.

Seriously - as a quarterly dividend it’s nearly a 6% yield!

thanks Oakey - found it !

Choices, choices, choices - EMO or more i3e ?

which account - i'm with HL and still dont see it ?

Hasiba,

I agree we appear to be cheap , however, the adjustments to assets were so large that it is meaningless to compare PE ratios's even if you were to double i3e's - better comparison is CF or FCF. We have the comparisons to Canadian Peers as Ninepoint Capital often publish these numbers - I was wondering whether you have the same for the UK if you are tracking.

Comparing to Canadian peers - we are at the bottom end of valuations. The other point to note is that Canadian Oilers are close to 10 year lows with respect to CF and similarly valued or cheaper than Russian Oilers which have just about the lowest valuations world wide (again according to Ninepoint Capital). Eric Nuttal believes that Canada is due a re-rate so a double whammy for Companies like i3e.

Hasiba,

PE ratio does not mean too much for i3e at the moment - in the latest results, there were some large non-cash adjustments to assets almost solely due to Oil moving from record lows to $70 during the accounting period.

Better metrics are CF or better still FCF - how do we compare to the UK on these measures?

DOPW,

What are the missed dates you referred to ?

Some more news would be nice and its on its way !! With regards to the SP - the 6 month / 1 year chart look pretty healthy. If you ignore the 8-10 day spike , were trading pretty close to a 12-18 month high so I'm not sure what the panic is about.

Where's JAdam when you need him (or is it now Ron Bruce ?) - what do the charts look like ?