Member Info for tonynorstrom1

From the Sage:

https://www.reddit.com/r/PantheonResourcesPANR/comments/neal2f/how_do_contingent_resources_relate_to_proved/

There may be upside to contingent reserves!!

I'm assuming that you were referring to a certain gentlemen doing a Comparative Analysis of PANR v 88e. Referring to attached table and correcting for todays RNS - I don't think he was too far out of the ball park.

https://www.reddit.com/r/PantheonResourcesPANR/comments/my6u18/panr_valuation_based_on_oil_searcharmstrong_deal/

Jay Cheatham :

"...........I have often said good, big oil fields get bigger over time. As a reminder, the original estimate for oil in place at Prudhoe Bay was 10 billion barrels of oil, with three billion barrels recoverable. Current estimates predict that Prudhoe Bay will actually recover more than 15 billion barrels, or more than the original OIP estimate."

so we me may see the 6 billion barrels yet !

The upgrade is positive and looks like they may be able to add to Contingent Resources which would be a step forward. The markets reaction though indicates that more may have been expected.

With respect - you did mention PANR's Recoverable Oil and in then the next sentence Prudhoe Bay's OIP. Why not a OIP V OIP comparison?

GGG,

That's what I'm saying. A couple of things in our favour:

1) i3e's debt is very low compared to the Canadian peers I've looked at and I believe to Canadian peers in general from what I've read.

2) We have two transformational catalysts for a Company of our size (North Sea & Clearwater) which as you allude too should demand i3e a better rating. I think we will get this re-rating once the market gets more confidence and visibility into the potential of clearwater. Serenity will speak for itself if and when it happens.

3) Dividends I'm not sure about yet - many of our peers cancelled the dividend during the downturn and im pretty sure will be conservative with both resuming a dividend and the level until debt is brought down. I3e I think should compare very favourably on this front. We will probably hear more on this from in the coming months as i3e's PR is able to kick off.

Clearwater again is virtually all Oil. Graham mentioned it briefly in the last podcast - i3e only produce about 1400 bopd Oil out of a total of a 8800 boepd yet Oil produces over 40% of the revenue / FCF. These 9 wells that should start spuding from this months will significantly increase FCF and therefore SP. The additional drilling program that they referenced for later in the year I think could be transformational - they have about $19m in cash to kick start something meaningful.

Onwards and upwards !

Your not comparing like with like i.e. why are you comparing Recoverable v OIP ?

GGG,

Based on the market Cap and SP at time of report - see page 1, top right hand corner

8.3p and $83.3M

Did you see my explanation on NOI / EBITDA. As a further note and probably what causes confusion - if you look an income statement of a UK Oiler - Pharos Energy Being an example:

Gross Profit = Revenue - Cost of Sales
Operating Profit = Gross Profit - SG&A

Therefore at first sight - you might expect Net Operation Income to be net of G&A, but it is not. I understand that this is typical of many Canadian Oilers - they use some non-GAAP accounting terms and therefore have to define what they mean in a report.

gla

Final thoughts:

The Annual Report due end of May /Early June is going to fill in some gaps like cash on hand, but its not going to tell us everything as it cut off is end of December and so will only gives us 6 or so months view of the Canadian Assets. In addition post period notes are restricted to what has already been reported via RNS - so dont expect anything new.

Cost are something to look at going forward particularly Opex and G&A - i3e has merged 3 Companies and has retained employees from each one including Senior employes who a costed under G&A- do they have an optimum mix for a combined Company? I would encourage shareholder to compare with similar Companies and see how they stack up - these numbers are easy to find on any Companies Income Statement. Higher costs mean less profits / cash flow, lower dividends and lower SP.

Looking at these numbers and seeing how the forecast has changed from the original Mirabaud report in September to Now

.................Sept........Nov.......May
OPEX.......$36.3m..$36.7m...$44.9
G&A.........$7.1m....$7.1m.....$8.5

GLA

My take away:

Assuming now that the latest Tennyson report paints a more accurate picture than their previous efforts (and I think it does as theirs numbers match more closely with NOI reported by i3e) then I believe that their producing assets (production) is valued more in line with peers. Tennyson report 2021 FCF yield at 16.6% which appears very slightly above the mean on some graphs from Nine Point Capital of Canadian Producers that I have shared here.

The real potential lies in Serenity and its undeveloped Canadian Acreage. Serenity is either going to happen or not happen - if it does then there will be a significant bump to the SP. Clearwater is already happening and has the potential in terms of reserves and production to match Serenity and it can be done from FCF without the need for upfront heavy investment.

They added no additional value for Serenity in the report and did not touch Clearwater in terms of valuation. So I think we are going to see a re-rate in the SP, it just going to take a little longer until i3e show some evidence of progress developing their Canadian Acreage.

I did forward the links to the research on Clearwater provided by Metal Monkey and Doc to the brokers for reference - so they should have no excuses for including a valuation in their next reports.

GLA

Again comparing November report to latest:

May Valuation :

1) 2PDP Reserves (Base) = 4.8p
2) 2P Reserves = 11.6p (1+2) 2PDP + 2P = 16.4p (Core)
3) Serenity = 4.8p (1+2+3) = 21.2p

November Valuation

1) 2PDP Reserves (Core) = 6p
2) 2P Reserves = 9.4p 2PDP + 2P = 15.4p
3) Serenity = 4.8p (1+2+3 = 20.4p)

Very little difference in the overall valuations despite the increase in the POO - all they have done now is taken the target price as 2) whereas previously they set at the mid point between 1) & 2)

Reason very little difference in calculated values is that NAV is calculated from cash flows which they have ****ed up for the reasons given earlier. Also worth noting that they kept Serenity at 4.8p despite increase in POO. WHI I think attributed 9.9p

DDHammer,

Paying out dividends (subject to creditor approval) was part of their promise to shareholders and written into the re-admission document as part of the Toscana and Gain Transactions.

Development of the North Sea Assets requires a large capital investment and is too large for i3e alone. I3e's policy for quite some time has been to develop these assets via a farmout to reduce the stain on their balance sheet. Again how they go about this development will be subject to creditor approval.

Again comparing the November Tennyson Report (formally Mirabaud) with the latest report you will notice that despite the rise in oil prices (Brent $45 to $60) - Tennyson only forecast a modest increase in Revenue but a significant fall in Net Operating Income and free cash flow.

This in because they used incorrect production numbers in their earlier report along with increasing forecasted costs (opex, G&A & Finance)

Revenue forecast increased from $73.4m to $75.5 = +$2.1m
Cost forecast INCREASED (opex + G&A) = +$9.6

i.e. REDUCTION in forecast Cash Flow of -$7.5m.

Investors including Institutions, Investment Magazines etc will use broker notes to help do their value analysis. It goes without saying that the latest report will lead to a lower valuation than the earlier reports.

GGG,

The only number that I3e have given is NOI (Net Operating Income) and they have defined what it means. Refer to last RNS:

NOI = (Revenue - Royalties - Opex - transportation - processing) = $31m

Comparing with the Tennyson Report and referring to the notes in the report along with the previous two Tennyson Reports (Mirabaud). Tennyson have rolled in royalties, processing & transport into the Operating Costs. You'll further see that the only other cost identified in their simplified report between Revenue and EBITDA is G&A (General and Administrative Costs). Therefore to get to NOI from the Tennyson report:

NOI = EBITDA + G&A = $22.4m + $8.5m = $30.9m

Because of the large discrepancy between NOI reported in the earlier Tennyson (Maribaud) reports and that reported by i3e - I queried with I3e whether they had defined NOI correctly - they confirmed they had.

So in conclusion the number for NOI in the latest Tennyson report and i3e match pretty closely.

Goldstinger,

Good post. Interesting thread on the Reddit / Pantheon board. Someone asked the question what the worst case scenario with various replies:

"Worst case is zero, best case is £12 plus"

https://www.reddit.com/r/PantheonResourcesPANR/comments/nbknbl/worst_bear_case_for_panr/

Joe,

I don't have a better explanation - it is confusing as they compute FCF of $13.8m which would at 30% imply an H1 dividend of $2m and not $3.4.

I have sent and email to seek clarification and will share if I get a response - please don't hold your breath.

Gilteddge,

Having compared this report with their previous report, the numbers are all over the place so my assumption is that it is a mistake. H1 dividend is about 0.32p (not 0.34) which equates to about a 7.7% dividend.

Comparing reports - you notice the following just looking at year 2021 projections:

OPEX increased from $36.7($11.1/boe) to $44.9m($13.7/boe)
SG&A increased from $7.1m to $8.5m
Finance costs $5.4m to $6.4m
Free Cash Flow decreased from $17.2m to $13.8m (remember also Brent $45 to $60)
FCF yield decreased from 46.3% to 16.6% (share price has doubled but still a decrease)

So no longer as cheap on a cash flow multiple basis as they were - not because of the share price appreciation, but because they completely underestimated costs in their previous report and also used incorrect production numbers.

Remember that many of these Analysts moved across from Mirabaud to Tennyson so essentially as far as I know, the same guys making the report .

Put this report side by side with the November report and compare the numbers - it looks like a different report - different number for SG&A, Oil Production, OPEX. Needs some further study but initial impression is you better running your own numbers than paying attention to Mirabaud / Tennyson.

This is why I think Companies like i3e are in the sweet spot:

1) US Shale - best days are probably behind them.
2) Mega Projects take up to a decade to bring online from a discovery - who's going to invest billions of dollars for a payback so far into the future.
3) Middle East Oil excess capacity set to disappear.
4) i3e has Clearwater - reserves in the same order as Serenity (possibly) or more and can be brought into production incrementally from FCF without the need for heavy upfront investment. Payback in the order or 1-2 years or less and i3e is about to start drilling.
4) And dare I say S______!

https://financialpost.com/commodities/energy/oil-gas/peak-demand-more-like-a-supply-crisis-propelling-oil-to-us100

Doorstop,

We'll find out shortly. Good move imo to top up this morning. Would have done so myself if I had spare funds.

Well this is the conundrum - what is market / fair value. 2020 started at about 16p, went as low as about 8p, spent a lot of time in the +/- 15p range before running up to 42p prior to the flow test result. I'm not sure how relevant the 200 day moving average is to a stock like this be were sitting approximately there after a disappointing flow test .

Market is anticipating some positive results including a resource upgrade - what upgrade would constitute a disappointment to the market and what will it take to move the needle north ? To be or not to be - that is the question.