Member Info for tonynorstrom1

Fastfood,

You could be right, the is what the President of i3 Canada (Ryan Heath) had to say :

"The recent increase in global oil prices has resulted in a significant increase in M&A activity in offsetting Montney acreage, as competitors seek to grow their exposure to this prolific play. In this environment i3 is very pleased to capture a near 100% operated and contiguous working interest in over 120 km2 of Montney acreage in Simonette which includes strategically located processing infrastructure. THIS IS NOW A VERY ATTRACTIVE PACKAGE."

The last sentence strikes me as a little odd - you might have expected him to say " this acreage has the potential to produce up to 30,000 boepd and i3e will be focusing on aggressively expanding production" instead he says " THIS IS NOW A VERY ATTRACTIVE PACKAGE." Are they planning to sell ?

I think they might - to tap into this potential and add say 15,000 boepd of production could take +/- $100M of Capex which they dont have. To fast track this, they would either have to take on debt, sell some acreage or perhaps do a farm-in.

All will be revealed in the coming months - I think they have lots of options !

Interesting article posted on the CEO website.

Toumaline paying around $1.2B in cash and acquired debt to buy Montney acreage. Admittedly the acreage, production and reserves are currently multiples higher than i3e's Simonette Acreage (Montney Basin). But it reinforces the potential that i3e highlighted (up to 30,000 boepd) and the fact that i3e have bought out the remaining interest and a fraction of its potential worth.

i3e have over 200,000 acres of undeveloped land - Im not sure that they fully know what they have yet !

https://ceo.ca/@newswire/tourmaline-continues-north-montney-consolidation-with

Alaric,

Have you not being paying attention to what the CEO has been saying ? I recall him saying that there are much better Companies our there (I think he means with cash, resources and expertise) at putting fields into production and drilling wells. PANR are still looking for funds to continue testing !

Rabito,

I stand corrected - I forgot about Alkaid. However there are issues with Alkaid also - why has it not been sold yet ?

Maestro,

The three companies trade on an EV/CF of between 2.5 to 4.0 both this year and forecasted for 2022.

If I plug in the know additions to production this year which is Noel, Simonette and 2 wells at Clearwater - I come up with about 2.4 for this year.

I think i3e'a advantage which WHI mentioned is their relatively low production base and significant acreage positions in both Simonette and Clearwater - i3e has significantly greater growth potential than many of its peers and looks set to be much cheaper on next years forecasts.

This ignore's the North Sea which is potentially company making by itself.

Scott,

Not everything you have stated is fact - some is supposition. Let me expand a little on what I stated previously:

1) PANR have no proven reserves. As you yourself have mentioned - Pikka has a lot more drilling data to "prove up" their resources which is very significant when it comes to selling assets. How long will it take PANR to acquire similar data at their current rate of progress?

2) Flow Test / Commerciality. I'm not sure how many flow tests that PIKKA have done, but I suspect from your reference to "long term flow tests" that they have done at least a couple. However, my point was that PANR have done one flow test which in terms of proving commerciality was a failure. Agreed that there were issues with the type of reservoir (oil wet) that may be overcome in future, but as it stands now - the results are disappointing.

3) Environmental / Demand Issues will impact all Oil Companies one way or another in the coming years. Being on State Land v Federal provides no guarantees. However, projects that are more advanced have less risk in general than those that are still years away from production. I think that this is just common sense. Development on Pikka has already started and is reportedly only a year or two away from producing 30,000 bopd. Where is PANR?

"The political stuff won't affect an asset sale in the next 1 - 5 years minimum" - This clearly is very questionable - politics and the green agenda can move very quickly and is unlikely to get any easier in the future - just look at the keystone pipeline, construction 95% complete, over $8B spent and cancelled overnight with a stroke of Joe Bidens pen.

I hold a few shares in PANR and favour it over 88E which I owned previously but I think there is considerable risk here and there are probably some better risk / reward plays out there - one of them is just about to start paying a dividend !

I wish all shareholders particularly long term holders good luck!

Some interesting stuff on Topaz Energy / Clearwater / Montney.

Does anyone think Topaz's CEO looks like Grahams younger cousin ? Certainly could take a leaf out of Topaz's book on cost control - nearly a $2B market cap and only 4 employees !

https://www.bnnbloomberg.ca/video/topaz-energy-bulks-up-royalty-assets-in-nebc-montney-and-marten-hills-clearwater~2218724

Justfencing,

Don't take the posts too seriously - debate is good and welcome I'm sure by most as long as everyone is respectful. I don't think we should be mocking each others knowledge - but nothing wrong in getting to the bottom of the facts.

BP is an interesting stock. I used to own it myself - a real dog in my opinion - the SP has gone nowhere in 20 years or more - I remember discussing it at lunch with a terminal manager in Yemen in about 2001. It was about £5 a share back then (£3.25 now). Even allowing for dividends its been a pretty poor investment. If I owned it now - I think I would probably sell and put into i3e.

The link you posted seems to confirm the 4.59% dividend which is what I pulled off yahoo, however I checked it myself - last year they paid 26c which would be roughly 5.5%.

there are a few reasons for the difference in valuation:

1) Proven reserves's
2) Flow Test / Commerciality.
3) Environmental / Future Demand

The Company has already responded to the question of buy-backs i.e. no plans for it in the near term. It makes sense for several reasons:

1) As I3e explained - they can buys assets in the market at lower cash flow multiples than i3e's own shares, hence more accretive to the SP so why would you do it !

2) I posted a few days ago i3e's estimated cash balance - whilst reasonably healthy, they don't have pots of money or indeed pots of free cash flow. The cash they do have needs to be plowed back into either drilling or acquisition of producing assets to gain scale. In a years or so, when they've gained scale and provided the oil price is still buoyant, they can look at buy backs.

3) Share buybacks do not provide any growth for the Company - only the earning per share.

I guess its possible but the assumption is that i3e would be looking for a carry though to first oil. As the development is likely to be $100m plus and as Longboat don't have deep pockets, there would have to be a second partner - Longboat / Equinor perhaps or Longboat / Repsol Sinopec.

Hopefully all will be revealed shortly.

Justfencing,

A couple of comments:

1) We are a dividend paying Company and 20-30% of free cash flow will be used to fund a dividend as a priority. That's official and agreed with the Companies major creditors. If you don't like this - you need to write to i3e's Management.

2) Supposing you were interested in a dividend- why would you go and buy shares in BP paying a 4.59% dividend yield when you could buy shares in i3e with a nearly 7% yield and likely to grow at a faster pace than that on offer at BP.

3) "Lets not get hung up on the Div- thats just a bonus". Well yes it is, a very nice bonus and one that is likely to grow significantly - particularly if the company 5x bags.

there's a difference between cash flow and free cash flow. The dividend is set at 20-30% of "free cash flow".

Cash Balance end December----------------$8,556,000
Free Cash Flow Generated to end June--$10,575,247
aCsh Spent
1 Noel -$1,000,000
2 Clear Water Acquisition -$300,000
3 Clear Water Farm-in -$2,000,000
4 South Simonette Aquisition -$4,200,000
5 South Simonette work over -$1,160,000
6 Dividend -$1,160,000
7 Miscellaneous -$1,000,000
Total Spent -$10,820,000
Estimated Cash Balance $9,311,247 (end of June)

Note the answer to Q5 - you cannot assume that the Q1 dividend is 20-30% of FCF. The calculation is yearly on a historical basis. i.e. notional dividend for the next quarter may be less (or more) depending upon the actual free cash flow.

The next dividend I assume will be around September around the time of the interim results. They could go to quarterly dividends if they they make Canada their primary listing as they would then be reporting results quarterly.

Kingivor,

I actually sent an email this morning to ask - and hey presto - questions now answered:

https://i3.energy/investor-relations/general-meeting-qa/

Sorry - I meant 1st June WHI report (page 4)

JAdam,

Did you happen to notice that the latest Tennyson report listed the fully diluted share count as 859.5m. This is an increase of 19.5m from their previous report. I'm assuming it is correct and is attributable to options - but I am not able to determine from the i3e reports.

regards

Nomadinvestor,

Graham did make that statement - however, his stated multiples seemed a fraction rich to me compared to graphs provided by Nine Point Capital which list the metrics of 12-15 companies. It should also be borne in mind that valuations of assets are normally higher than that of whole companies since you are generally buying without debt or other incumbrancers. That said - it appears that i3e is cheaper that many Canadian peers based on this metric. Perhaps if your in contact with i3e - you can ask for a list of the Companies he is referring to.

Justbe,

What is your target based on and why Christmas? If you believe what i3e say about Simonette and a potential 30,000 boepd of production you would be talking of an SP of well over £1.00 - and that's ignoring Clearwater and Serenity !

To drill the 150 so wells to get 30,000 will take $150m -$170m which is why it wont happen any time soon if at all - but it just demonstrates the potential ahead which makes 19p look like such a random target !

Investors are heavily focused on profits and free cash flow which is why I think i3e will need to add at least another 1000-1200 bopd oil production to start moving to the 15-19p range. This would be on top of the Noel and Simonette workovers which should come on stream in the next 4-8 weeks.

This would mean that i3e would have to scale up their current plans which I think they are working on. The aquistions of acreage in Clearwater and Simonette along with the Farm-in to a 9 well drill program were already meaningful. However, you will recall Graham referring to looking at deals to "really move the needle" - so i'm expecting them to announcing something significant in the not too distant future.