Member Info for tonynorstrom1

GGG,

Did you manage to top up yet?

Shareinthis,

Well stick with your bindweeds - I think a little more patience will be rewarded here.

https://markets.ft.com/data/announce/detail?dockey=600-202105041939CANADANWCANADAPR_C5487-1

An interesting little article on Tamarack that touches on several areas of interest to i3e including:

1) Drilling Costs and Drilling Programs at Clearwater
2) Waterflood Program yielding 91% growth ! i3e have 3 Projects going so will be interesting to see what these yields.
3) Anegada

also some useful definitions at the end - netback, adjusted funds flow etc

"The Data is The Data. The Math is the Math." - Dr Jim Jones 2021

Mace66,

Obviously as you alluded to, know one can correctly predict what the SP will be tomorrow let alone next month - unless you have inside information. With regard to the high teens prediction - I wont put a timeline on it, but it could happen fairly quickly. Ignoring Serenity and just looking at Simonette for example:

I3E have already stated in an RNS that the additional 720 boepd will add 16% to the NOI which I have seen myself by plugging the numbers into a spread sheet. The RNS also stated that some wells in this area have initial production rates of up to 700 boepd. You can see that it wouldn't take many of these type of wells to increase the NOI by 50% and hence theoretically the SP by 50%.

One thing some people forget and Graham brought it up in the Interview - i3e has a stable production base now that covers the daily running costs of the business including G&A, finance charges etc. With these additional wells, once opex is covered, all the rest of the revenue drops to the bottom line i.e. profit/cashflow/dividends so two or three wells at 700 boepd could quite easily lift the SP by 5-6p.

justfencing,

I think you got two pretty good answers with a little bit of thought process behind them.

Your response makes me think it was a waste of time as far as you were concerned. The "Doc" has a saying which is pretty good - "you've got to know what you own".

There's always a chance i've got this wrong and end up wandering off into the sunset with my tail between my legs (like Bigbitnow) - but as things sit now - I'm pretty comfortable with what I own and expect a decent return in the very near future.

GGG,

I'm not in yet - I topped up my holdings in i3e and EMO yesterday.

I'm still trying to figure out what NCCL does and how they will make there money. I think I read somewhere that they expect to get a sizeable equity stake in the power plant - how is a $10m M/C company going to get a sizeable equity stake - how are they going to do this - what do they bring to the table ? You mentioned that the Power Plant is at the heart of who they are and Ive read similar verbage in the presentations - but I still don't know what they do ?

Can you point me to something.

cheers

Mace66 / cmcc4395,

Well a lot of things have happened - but I agree they now need to start showing the fruits of all these developments via dividends and upgrades in free cash flow. I truly believe that this is about to start - over 1300 boepd of production will be added in the coming month or so comprising:

Noel..........................500 boepd
Clearwater................150 bopd
South Simonette......720 boepd

This adds over $7.5m to Net Operating Income and about 2.5p to the SP. I dont think this is baked into the share price yet - like you I think the market is waiting for delivery which we will start seeing in the coming weeks - this gets us past 10p in the coming weeks.

Other potential catalysts in the very near term:

1) Dividend
2) Secondary Recovery - I think were likely to here more about this over the coming weeks with an upgrade to production.
3).............and all the other things that have been covered on this BB- Serenity, potential additional aquisitions / farm-ins, additional drilling plans for Clearwater, upgrades to reserves etc.

Talking about farm-ins - what's the likelihood that i3e get someone to farm into Clearwater with them. Split the production 50/50 - get the third party to pay say 60% of the cost and provide an advance payment and get a 40 - 50 well program going to target 6000 - 8000 boepd ?

Mace66,

Can anyone answer or are you looking for something from TSSZ?

GGG,

Just skimped though a couple of presentations and reports and trying to figure out who NCCL are and what they do. Can you help me out with a couple of questions:

1) What is their connection with the Power Plant i.e. what's there business model and how do they earn their money? Who owns there plant.

2) You mentioned a solar project coming in line next month - I read that the revenue is $3m over the lifetime of the project. Its not going to pay for much ! How long before they are cash - flow positive and what do they need to achieve to generate FCF.

3) How much cash do they have and will they need to raise again?

3) How many employees do they have ?

regards

Ddraig,

It is quite evident from your responses that you do pay attention to what Scott is saying because you recognize he is pretty knowledgeable -this is good for you as will likely learn something ! I'm assuming by your presence on the "other board" (name were not allowed to mention here) that you have recognized the value and have bought in - dare I say after Scott bringing the facts / investment thesis to you attention: i.e.:

1) More oil
2) better location / costs
3) SoA land
4) upcoming flow test

gla

GGG,

What's the magic with 9p - if you believe it is worth 14p now say - wouldn't you buy at 10P ? I've just sold my small holding in BIDS and put it into i3e - also just sold a Slater Fund and will do the same once the funds are available.

Excellent Interview. A few takeaways:

1) Simonette Acreage capable of producing up to 26,000 boepd (which we knew yesterday) and Clearwater is the best Acreage in their portfolio ! How much are they going to target in Clearwater !!!!

2) Still looking at acquisitions. Given the potential of drilling their own acreage - dont be surprised to see other great deals.

3) Some opportunities within the portfolio to materially grow production using secondary recovery techniques - already working on 3 projects !

4) and Serenity:

a) "we remain really confident we are going to get a deal across the line"
b) "we can only announce it once its finalized....we did announce an LOI a couple of years ago and the counterparty reneged on the deal so we dont want to announce an LOI again so we will announce a farm-out once its done"
c) "We are very close to a deal and were very confident we will get it done"
d) "But we can't say we've got it don until we've got it done. And once we get it done we will be moving forward with Serenity!"

Given that Majid has been pretty conservative in his interviews todate - I dont know how more emphatic he can be about "getting it done" without saying he's "got it done" - it sound like a done deal to me. Putting 2 and 2 together and coming up with 5 - the deal is pending Respol signing of on the Tain FID.

I am more confident now than an time in the past that i3E is going to re-rate north. They've shown us the financials now that has weighed a little on the SP due to the relatively high costs. It should not have been a surprise really due to the acquisition and integration of 2 companies.

The needle should start moving once the market starts to see evidence of these plans actually brought into action i.e. adding to production and cash flow.

https://www.youtube.com/watch?v=7TVk3WtGPgg

The full report can be found on their Website. A few interesting things that are not covered in the press report. On the farm out in the risk section for example:

"The Group is considering multiple field development approaches and will proceed in accordance with a strategy continent on the results of the future appraisal drilling programme."

Also includes:
a) a graph showing the strip pricing - useful if your trying to check i3e's forecasts.
b) a graph showing production numbers by month - September for example was 6,905 boepd !

And perhaps why the share price reaction is not as pronounced after all this good news as some of us may have expected:

"i3 transformed itself into an oil and gas production company via complex asset and funding transactions concluded in late 2020. These were costly as the Company tried to balance frugality with timing and deal risk. Post completion, the simultaneous integration of numerous businesses – i3 UK, Toscana, and Gain’s portfolio and staff – increased costs and expenses on a one-time basis.

With the portfolios and teams now integrated, we EXPECT TO BRING FUTURE COSTS BACK IN LINE with our peers in each jurisdiction. "

As well as all these deals - they will need to ensure that costs are appropriate for a Company of this size - particularly the big cost - Opex & G&A.

Did anyone notice we had a President of i3e Canada - was this announced ?

Material Strategic Acquisition and 2020 Financial Results:

"i3 Energy announced it has executed a strategic acquisition in its core Simonette area. As a
result of the acquisition, i3 Energy will double its position in the Lower Montney light oil
play and become operator of its asset in the South Simonette area. It already operates the
North Simonette acreage. The acquisition results from the exercise of a right of first refusal.
The cost of exercising the right of first refusal (acquisition cost) amounts to $US 4.2M. We
increase our fair value estimate of the company’s Canadian operations to 15.7p from 14.4p.
Inclusive of our fair value estimate of the company’s North Sea assets, we increase our fair
value estimate for i3 Energy to 25.4p from 24.3p. We expect the acquisition will add
significantly to production and cash flow. The acquisition is extremely positive and price
material in our opinion. The company’s 2020 financial results confirmed our expectations"

"Conclusions: In our opinion, i3 Energy is applying a dual strategy of i) acquiring
production and cash flow on extremely attractive terms and ii) acquiring extensive land
positions that have potential to deliver extremely attractive returns from drilling new
wells. We see i3 Energy navigating successfully in the heartland of Canada’s most
promising oil plays. We believe that i3 Energy has already acquired “company maker
assets” and expect to see the company increasingly deploying its cash flow to develop
its assets combined with its land/corporate acquisition strategy. As the company
transforms into a driller/developer, we see scope for successful developments to
transform i3 Energy into a premium company relative to Canadian peers on the basis
that i3 Energy’s acreage has potential to deliver above-average growth and profitability.
We see scope for a material upward rerating of i3 Energy over the course of 2021.
Today’s news is positive and price material."

A lot of talk a few months ago on what the fully diluted share count is (outstanding options and warrants) - and I can understand the confusion / discussion. I'm not sure that the Company has been as clear and transparent as they could have been. Referring to the results:

"On 10 January, the Company issued options over a total of 13,166,358 ordinary shares to key staff that joined its Canadian subsidiary, i3 Energy Canada Ltd., following the acquisition of Gain's oil & gas assets...."

There was an RNS issued on the 11th January covering the above.

"On 10 January, the Company also issued options over a total of 75,184,252 ordinary shares as described in the Gain-related Readmission document released on 11 August 2020."

There was no RNS issued for these options - why ?? The wording in the re-admission document is:

"the Company also intends to make: i) awards.................".

So no awards made, only an intention to make, no mention of 75,184,252 specifically though they do mention two figures that add up to this value and no RNS !!!!
'

The relative lack of reaction makes me wonder whether I'm understanding what I'm reading. This announcement refers to acreage previously owned by Gain Energy and is separate from I3E's Clearwater Acreage (previously owned by Toscanna).

Aside from the additional 720 boepd of production (41% Oil) and nearly 5mmboe added to reserves:

South Simonette:
------------------------
1) Wells in the area have exhibited initial production rates of up to 740 bopd !!
2) More than 60 potential development wells identified!!!
3) If fully exploited could deliver over 16,000 boepd (high percentage oil)

North Simonette (already owned by i3E)
-----------------------
1) 38 well program already modelled by i3e with potential of over 10,000 boepd with further potential !!!
2) Existing infrastructure capable of processing 12,000 bopd liquids.

This is huge !!!!

This ignores Clearwater which by itself has enormous potential. I would expect further broker notes shortly with significant upgrades along with a continuous news flow over the next year or so as wells are spud and i3e taps into this vast potential.

Giltedge,

That's about 33p to 73p at 24 months. In order to get there - i3e need to add production. I have adjusted my spread sheet taking in the latest input from both Tennyson and i3e so I don't think it is to far out. Playing around with it and adding in production to see how this affects the SP starting at the current FCF multiple of about 4 and increasing modestly to 5. This is what I come up with:

(WTI $63 to $67, FCF X 4 to 5, adding 3000 bopd at clearwater total production 12,500 boepd)

this gives a target price of 23p to 32p

3000 bopd requires about 27 new wells at 150 bopd / well and $35m of capital. (7 additional wells to take care of depletion)

I3e currently have a 9 well program announced stretching into next year (4.5 wells net to i3e). So to get to the 23p to 33p range under this model will require some time and a significant increase in the scope of their drilling programs which I think will happen - but by how much and over what time?

One of the vesting criteria for employee options is to add 5000 boepd of production. If they managed this - this would get us into the 33-46p range. This is assuming they add all oil and not gas which they did with Noel to get them past the 9000 boepd required by to trigger the second tranche of options.

This excludes an upside due to Serenity.

Maestro,

They are the same team - the analyst's moved across from Mirabaud to Tennyson. Its a fair bet that the latest report is more accurate - they finally woke up and realized what they were reporting did not match what the Company were saying. I suspect that Tennyson are now on the conservative side and we are more likely to see surprises to the upside going forward.

What is true is that i3e have a healthy cash balance that is growing every day and could afford to drill a well every month purely from free cash flow. This is why I think we are likely to see more ambitious plans in the very near future.

I'm not sure what Majid brings to the table - but the teams deal making has been very good since Toscana last year and it looks like they may not be finished yet.