Member Info for tonynorstrom1

@Drjimjones “...i3 remains a designated foreign issuer and therefore follows UK-based regulatory reporting requirements. Our 2020 Annual Report is expected to be release near the end of May. We expect to become a Canadian issuer some time in the next 12 months, however."

Looks like the Doc has been in touch with i3E - I'm not sure how becoming a Canadian Issuer affects holders on the AIM.

Giltedge,

Doc has a sizeable holding - not sure he has 3% by himself. I know he has added a few more recently. Previously he said he and his "group" hold 3%. Regardless its a sizeable holding.

Kane,

After listening to the Podcast again - I think you and others were right - it was a little underwhelming especially from Majid.

I3e are obviously aware of Investor feelings about the dividend etc. Reading between the lines, I believe they are trying to set the slate clean, start being a little bit more measured with their forecasts / plans and ensure that they deliver on them.

The underwhelming production update and near term target I think was foreseen when they acquired Toscana / Gain. If you look at the options vesting criteria - 30% vest if production closes out at above 9000 boepd at the end of July 2021 (i.e. they planned for the field decline and necessary time required to replace production loss with drilling programs and/ or acquisition of producing assets). It was always going to take some time to integrate 3 companies, access production options and at the same time allow for weather windows.

Good news is that it now looks like i3e have a plan in place and we should start to see replenishment of production loss from June/July and expansion of new production by the end of the year / early nest year. Production is currently 8850 - allowing for further field decline (-420 boepd) , Noel and 2 wells from the farm in (+650 boepd) production should close out at just over 9000 boepd by the end of the year. The pace of drilling should increase and I would expect with i3e's new mantra of under promise and over deliver - we are likely to see upside surprises to the plan. Remember Noel came out of the blue and there's still over 7 months until the end of the year to pull off additional deals and or implement a more ambitious drilling program.

Onwards and upwards - slowly.

Plus I'm optimistic about Serenity - under promise - over deliver !!

Freshair,

I understand the skepticism but in my opinion at a certain point, if the data/ progress agrees - you have to re-access and draw a line under past events .

The failure of liberator (which can happen to the best managed companies - success with the drill bit never guaranteed) had a lot of consequences including funding and I3E's future as a going concern. Since the Toscana and Gain Deals (which saved the Company) - things have looked muck more positive including a near doubling of the SP.

We have had a pandemic and subsequent oil price crash - so not a surprise at all that Serenity has not advanced for the last 18 months. The language over the last 6 months about Serenity has been much more measured with no dates promised and progress reported. The last update particularly i thought was encouraging - "confident of a successful outcome" which based on past failures I don't think Majid would have said if he thought the FO would not proceed.

So I think Serenity is going to happen, they now have FCF producing assets to work with , so I for one am giving I3E the benefit of the doubt until they prove me wrong.

GLA

GLA

Kane,

Did not get that at all Kane - I think it was very measured and very positive. A slight negative (and that is probably more to do with Investor expectation) is the slower than anticipated drilling programme of their Clearwater Acreage - this is primarily due to weather / ground conditions and also a closed window from Feb to July due to wildlife preservation. I would expect to hear some very positive news in that regard over the coming months ready for a significant program to start in the winter.

Confirmation that the drilling of the farmed in acreage will start in May and add in around 600 bopd of OIL over the next 6-12 months. This is very significant as Oil is by far the most profitable component of the production base and will disproportionally increase FCF.

Serenity was surprisingly not mentioned until in the closing remarks when Majid said:

"....we have multiple catalysts to grow the dividend and share price with Serenity and multiple catalysts in Canada that has a high probability of leading to strong growth in the dividend and share price....."

So very positive albeit a little slower than some expected and the prospect that Serenity is tantalizingly close.

Maestro,

i3e have historically issued Yearly reports in the 1st week of June - who knows they may surprise and issue before the end of May this time.

Selling - I'm not seeing any heavy selling or large sells, so unless there well informed PI's out there - it currently looks like a a very few of them have lost patience and are selling out - patience is key if you have identified a golden nugget - lets hot we have and are not polishing a t_rd !

I think the language is very positive on the Serenity update - "........we remain confident that we will achieve a successful outcome". Given their track record - I think they will be eager to under promise and over deliver - I read it as something happening sooner rather than later.

GGG,

Yearly results due by end of May and maybe some additional updates ! So you have 2 or 3 weeks to get in I think.

GGG,

I will just re-iterate for the benefit of others - ref attached graph posted by Eric Nuttal of Nine Point Energy on his twitter feed.

GXE is Gear Energy and is the cheapest on the EV/CF measure out of the shares he is tracking or at least showing on this graph.

My calculations show that i3e is even cheaper, has lower net debt and great exposure to Clearwater for a company of our size (Clearwater cound be transformational by itself) - and not forgetting Serenity which appears to be making progress.

https://twitter.com/eri****tall/status/1386662037175119880/photo/1

GGG,

Debt $40m. Net debt was not immediately apparent in the report but a news release accompanying the report put it at $35m so I guess cash or cash equivalents of $5m.

If I include the loss in hedging it makes i3e look even cheaper - but I'm not understanding the table on page 7 to estimate the losses or gains to income that may arise due to the hedging in the coming quarter so i've ignored as a one off cost. These hedges were put in place in April and some due for July so may or may note be better priced relative to i3e.

presumably the gas and chemical injection adds to the cost of extraction - what would the order of magnitude of these costs - $2/bbl, $3/bbl - more ?

regards

Bynari,

Great post and an example of the type of information many on here are looking for.

Great webinar which was well attended and highlighted the potential upgrade to prospective resources - applying the "buy on the rumour, sell on the news" principle, I'm not sure how much the pending resource update is going to move the needle in terms of SP unless of course the upgrade is truly massive and the market did truly think it a rumour.

The gold standard is still the flow test which was disappointing. However, the sampling and down whole scanning was extensive and sophisticated with what Industry Insiders are calling a great data set. Will this be able to add anything to the flow test results i.e. "the flow test results were disappointing due to oily potatoes, however, based on similar fields and the results of testing , we expect that flow rates of x could be achieved by doing y which will be investigated further during the next working window"

Any more insights would be appreciated.

I think were getting closer to a group hug - I think if Ddraig gets put in the sin bin for a couple more days, Scott tempers his passion a little - we're there.

Some great posts from bynari, cbaron, goldstinger and others. Anyone care to hazard a guess on where the SP might go once the updates come out this month?

Gilteddge,

I think you are quoting Metalmonkey correct ? The money set aside for Q1 indicates that the dividend is not 11% but nearer 6.5%. I think what he is saying is that with the workovers, price increases etc the dividend in the coming quarters could quite easily move to 11% based on todays SP.

I can see this happening or equally the dividend staying at 6.5% and the SP increasing to 15p !

One thing not mentioned is i3e's yearly report. As they are clearly following AIM rules and not TSX - it should be due before the end of May. This should fill in a lot of blanks and hopefully more good news !

Joesoap,

Good spot - I3e should have read $18.4m (cut and paste error). I will correct and also use EV instead MC in the calculations along with looking at the hedging again. Should result in a truer comparison and indicate i3e as even cheaper relatively.

The numbers below indicate that i3e are earning lower net operating income (NOI) as a percentage of revenue than Gain. Not completely sure why this is - Gear are just about the lowest cost producer in Canada, but i3e's NOI was also lower than predicted by the Mirabaud Model. I can only assume that realized Oil prices are lower than expected or OPEX is higher than expected. This means that FCF is also lower than would be predicted by the Mirabaud Report / Model after adjustments for strip pricing.

Good news is that the same calculations below indicate that if i3e was priced on the same NOI x R multiple - I3e should be trading on about 12.5p ( this ignores the Gain Hedging losses )

Numbers are rough and ready but I believe do indicate lower profitability than may have been predicted earlier - we will only know when we get a proper set of Company results.

Rough and ready calculation:

Gear Energy
Market Cap (MC) = $160M
5600 boepd (88% liquids)
Revenue (R) = $17.8m (quarter 1 see attached report)
NOI = $10.2m (quarter 1 - see notes below)
NOI/R = 57%
MC= 3.9 x NOI

i3E
Market Cap (MC) = $93M
8856 boepd (40.5% liquids)
Revenue (R) = $17.8m (quarter 1 see notes below)
NOI = $7.5m (quarter 1 )
NOI/R = 42%
MC= 3 x NOI

Notes
1) All values converted to USD
2) Revenue = Sales - Royalties (This is how Gear have reported)
3) Hedging loses ignored in Gears results to calculate NOI and for a like for like comparison.
4 ) I3E revenue calculated on WTI $58 (strip pricing) and divided by 4.

JAdam,

I said ROOT cause was the UPDATE not the PI's (IMO). If the update was a blow out - there would be more buyers than sellers surely ? The volume is not that heavy so not too much should be read into it either way but the largest trades are sells - so its probably a fair assumption that someone selling 800,000 shares has got their calculator out before selling.

JAdam,

Most here (including you I bet) are disappointed with the SP reaction. I'm not sure I agree with you that the root cause of the SP is down to PI's buying and selling - its down to the update imo. I've already highlighted where I thought the update matched or exceeded expectation and where I thought it was luke warm. One area that I didnt mention this time and it bugged me before and is still bugging me is the Net Operating Income / FCF. Is it where it should be ? I think it is worth checking since we're currently being valued largely as a multiple of FCF imo.

For starters - I think it might be worth comparing NOI as a percentage of revenue versus Gear Energy. This helps eliminate some unknowns. Gear Energy along with other Companies was identified by twitter followers as a peer company and appears on several Nine Point Capital presentations / graphs.

I will take a look at the numbers and post shortly.

Jollygoodya,

Have you tried to calculate a FCF from the net operating income and apply a current market multiple to come up with an estimated Market Cap ?

not seeing that Kane unless you have up to the second information. I'm seeing CAD 0.175 equivalent to about 9.8p