Member Info for tonynorstrom1

My impression has been that although the price has drifted lower over the last couple of weeks , there has been no meaningfull selling but I dont have access to the data to take a look.

JAdam,

Are you able to filter and pull up a list of all buys and sells of say 200,000 and more over the last two week.

regards

GGG,

Like you I think that i3e are going to try to be conservative with their forecasting which rules out option 1. Option 2 - after 3 iterations of their report - I don't see Tennyson being that far out with the G&A. Hopefully the Annual Report will fill in some of the gaps.

I went back to look at what WHI said about the dividend - I couldn't see anything where they commented on size of the yield. They did confirm that their estimate for NOI is inline with I3E.

I don't know whether you have kept an eye on one of Doc's other picks on the TSX - EMO. I have read some of his research - its an interesting stock and a compelling story. He started building his position from the beginning of April from what I can see with a pretty hefty steak. SP has gone from about 22c to 75c. He thinks it could be a 20 bagger !

I should not say that I cannot explain and then go on to explain. What I should have said is that I cannot satisfactorily explain why, but a possible explanation is .............

Other explanations are :

1) I3E have forecast a dividend at significantly higher Oil and Gas prices than the Tennyson model - I don't think this is likely.
2) G&A and Maintenance Capex are about $6m less that Tennyson forecast - I don't think this is likely
3) Full year dividend will be around £3.5m rather than the £1.16 x 4 = £4.6m - Hope I'm wrong but this is what the numbers are indicating.

GGG,

You previously asked a question about how EBITDA relates to NOI and I responded. From this formula you can calculate an approximate value for NOI i.e. NOI = EBITDA + G&A and hence you can calculate what Tennyson have for NOI. Its an approximation because we are using an estimated value for G&A. This indicates that Tennyson & I3E's figures for NOI match.

Given that they match at NOI level, I cannot explain why they do not more closely match at FCF level. One explanation is that the money set aside is not 20% to 30% of Q1 FCF, but a contribution to the yearly Dividend which is set at 20 to 30% of FCF.

Joesoap,

Good post / questions.

The burden of the NS assets is already covered in the financial models to a certain extent - i.e. costs are reflected in the G&A and finance and similar charges. The open question is whether they have been modelled accurately - we will get some answers in the up coming Annual Report but probably only a clearer picture in the interim report due in September.

If they don't get Serenity Farmed out soon - maybe there's a case for telling Majid to get himself a wooly hat and glooves - shut down the UK office and send him over to Canada !

GGG,

Excellent post.

My model /forecast is based on the Tennyson Report and cross checked against the Net Operating Income Provided by the Company in the 5th May update. As I mentioned previously this number appears to match (i3e v Tennyson). Note that the Tennyson report was run at $60 Brent (WTI $57 approx) with the hedges in place. i3e will have run at strip pricing (futures) and presumably actuals up to the cut-off date. The basis of the forecast is therefore pretty similar in my estimation.

You have calculated a range for the FCF on the assumption that the money set aside for the Q1 dividend is 20-30% of FCF.
Take a look at forecast FCF reported by Tennyson for 2021 (page 4 about half way down the page) and remember that this is in USD . Comments ?

Wed 21:26

What are you doing on our board ?

GGG,

Not sure what your trying to say - the SP multiple is determined by the market and not necessarily any one projection. My numbers could be right and the market is just not valuing i3E where it should or alternatively my projections are too high and the market is correct.

To your other points:

1) I'm still of the opinion that Q1 dividend is already priced in along with the next dividend. I don't think were going to see much of a reaction going ex-dividend.

2) With regards to production and "not producing anything significant soon" . I think this depends on your definition of "significant" and "soon". The recent RNS stated to the effect: "agreement to spud 1st two wells by November 2021 and balance 4 wells by March 2022". Later the RNS goes on to say: "first well expected to spud in May". I'm not sure what the constraints are but I think that there is a possibility of 9 wells spuding this year which would be significant and soon.

I'm not sure what the constraints are and this is not what the Management have put in writing , but I think it could happen - JMO !

GGG,

I have looked at some - one thing you have to note is the proportion of Oil - to use Graham speak - they have more torque towards Oil Prices. Gas prices have been static by comparison.

I know I'm preaching to the converted, but we need to add oil to the mix and why Clearwater could be truly transformational. As you already calculated - each well (75 bopd) in the farm-in will add about 0.5p to the SP. If / when they drill all 9 wells - this should add a minimum 5p to the current SP.

When I3E drills its own acreage it will add about 1p to the SP for each well (150 bopd). 10 wells = +10p .
I imagine reserves will be added also which should increase our multiple.

"The Company remains committed to encouraging Shareholder engagement on the business of the
General Meeting. As such, in addition to voting by proxy, Shareholders can submit questions to the
Board in advance of the General Meeting by emailing such questions to i3energy@camarco.co.uk
by no later than 11 a.m. (BST) on 1 June 2021. The Board will consider all questions received and
provide a response to those that directly relate to the matters of the General Meeting"

Please email in your questions - the more the better. You cannot complain about lack of communication and not send in a question !! They have to be related to the matters in hand - some suggestions:

1) The circular talks about Share buybacks - does i3e intend to re-purchase its shares this year and if so, why is this money not being put into drilling clearwater.

2) Are there any other repercussions of eliminating the Share Premium Account other than eliminating the retained losses?

3) Does this resolution impact tax liabilities on future profits?

4) .............

Eric Nuttals latest estimates run @WTI = $70

On the same measures - I calculate i3E at 2.3 & 4.1 years respectively i.e. approximately 30% cheaper than the median company. If we were trading at the median - i3e would be about 11p.

(this ignores Serenity & Clearwater)

https://twitter.com/eri****tall/status/1394634738221072389/photo/1

Bwana,

We lets see what they do. The other thing with buybacks which I alluded to but not stressed - they dont grow the pie - they just give you a slightly bigger slice. The big profits I think will come from scale i.e. growing production (growing the pie).

That's why I think initially they wont do it or otherwise it will be on a small scale. The other thing is whether the Management have long term or short term view i.e. whether they are interested in sticking around and building scale, or whether there looking at cashing out options an moving on elsewhere.

Fastfood,

So you're saying that you are not convinced the shares are that cheap since Majid has not bought many if any shares from his own cash and also that i3e have better things to do with the cash ?

Bwana,

I was about to say two golden rules for buybacks:

1) Share should be undervalued by the market
2) You should have nothing better to do with the cash

If you meet these two requirements - then buybacks is a sound and profit enhancing strategy on a p/share basis.

Fastfood,

Why not - they've mentioned doing it in the past and buybacks are mentioned in latest RNS? Two golden rules for buybacks:

Bwana,

Do i3e have shareholder approval to buyback its own shares? I recall someone on here saying they had authorization to purchase up to 20% of their outstanding stock but I cannot find anything. I'm guessing its not the case as buybacks are subject to the same restrictions /approvals as dividends. Perhaps the resolutions for the upcoming shareholder meeting will address this.

I doubt that they will use debt to fund buy backs and would the note holders approve this even if they wanted to ? I think they will fund out of cash flow if they do it, however, it looks like they have a plenty of options to spend their cash such as drilling programs and potential additional farm- ins so any buyback is likely to be small imo. But it would be a good message to send to the market

Bridedogg1,

If you go to the investor section of the I3E website and take a look at the WH Ireland Report - it answers all your questions.

Natbrat300,

Dividend - Tennyson Report forecasts payout early next month. I don't think they will be too far out. Process is :

1)Issue Circular to SH
2) Shareholder Meeting / Vote
3) Court Application / Approval
4) Payout.

I think the circular will be issued this week, followed by a vote within a couple of weeks and then application/court and approval a couple of weeks after that. So possibly middle to end of next month.

Giltedge,

To be fair to Doc - he had a 6-8 month and a 24 Month Target Price. His 24 month target was CAD 1.25 (72p).