Member Info for tonynorstrom1

Drjimjones,

Great research and series of posts:

1) I dont know whether you have had a chance to look at the Mirabaud Broker reports found on I3E's website. I have made a CF model based on their spread sheet and adjusted for POO - have you had a chance to look at this ? Based on this and other information in the re-admission document-the approximate production mix is 58% Gas, 17% oil & 25% NGL's / Condensates. In the recent past - NGL's and Condensates have also been at prices at a massive discount to WTI although the discount appears to have narrowed over the last few months. Have you priced in the NGL / Condensate mix in your cashflow?

2) There is and updated graph on @i3e twitter showing the metrics for what the author says are peer group companies (Gear Energy, Tamarack, Surge Energy etc). Metrics are EV/2P and EV/ Flowing Barrels. Nearly all the Companies mentioned have a significantly higher Oil Mix (More Oil, Less Gass). What are your thought on these metrics - should they be adjusted to compare companies with significantly different product mixes.

3) If you looked at the Mirabaud report - are these projections inline with I3E's last RNS ref operating income.

great posts and look forward to any thoughts if you have the time.

Drjimjones,

In your opinion are there other aquisitions out there in Canada on decently purchase metrics (which I3E say they are pursuing). Or should they be focusing on developing their existing acreage.

cheers

Someone needs to get this article to - Small Cap Picks - he will make sure it gets advertised. He would probably also add a zero and call it a 50 bagger !

MrBart,

Great post - thanks for sharing. A lot to unpack and understand.

Fastfood,

I dont intend to sell out at this level - however, I noticed that the offer price was temporarily below the bid price and I wanted to see if I could make the trade i.e. sell out and buy back at a lower level which I did. I agree that now is a risky time to trade with more news imminent. Anyway - good luck and lets hope we see the value we think there is.

Fastfood,

Not only a Philosopher but now the voice of reason - a man of many talents ! Anyway whilst you were meditating - I just pulled of a bit of arbitrage to cover the cost of another 4 pack of Magners. The two transactions below were mine - but interestingly - the "buy" was actually a sell and the "sell" a buy. No wonder everyone is confused with the reporting of the trades.

09-Mar-21 16:20:02 8.23 100,000 Buy* 8,230
09-Mar-21 16:19:06 8.20 100,000 Sell* 8,200

Fastfood,

There was no lip - I asked an innocent question to understand the relevance of the post. Kane clarified that it was nothing more than to highlight that deals were being made in the North Sea. If it came across differently - then my apologies to Kane.

I've said this before - the psychology on these boards is fascinating - had I responded to Kanes post and said great, this puts a valuation on I3E of 12p a share. No one would have batted and eyelid, Id've have got half a dozen likes and there would be a follow up discussion on whether it should be actually 14 or 16p a share. You post something that is not in line with the prevalent view and it is thought of as negative, de-ramping or told to go take a break and unscramble your head !

I think it was Carl Icahn that said that he only paid proper attention to Contrarian Views - with the reasoning that he would learn nothing from someone telling him what he thought he already knew. However, a contrarian view gave him the opportunity to re-test his thinking. I dont understand why some take such offence at a post offering a Contrarian View.

Also a lot of time spent here talking about value and then looking at Companies that couldn't be more different from I3E. Logically you would think it easier to select a number of Companies that were as close a match as possible and try to factor in the differences to come up with a "current market value / estimate". Just sayin - but everyone is of course free to post whatever they like whilst hopefully being respectful.

fu_king hell - I regret waking you up now !

GGG,

My comments on Bybrook are as things stand now - i.e. our current SP at 8.2p and prior to any FO (the status of which by the way has not changed much in over 2 years though I agree - recent updates have been more promising).

You comments on valuation are presumptuous and are merely your opinion as is the case for my comments above.

"But this offer would have to be upward of 20p for them to consider it" - this is an opinion and probably incorrect. As per the admission document, the minimum price they have to pay in a "Mandatory Bid" is the maximum price they paid for shares in the previous 12 months. This is probably 5p. The bid price is of course is subject to Shareholder approval, but with Institutions holding 65% at 5p, its anyones guess what it will take for them to approve an offer. I dont know what it would take but If I was a gambling man, with our SP at 8.2p, I would stake money on an offer being considerably less than 20p. Now if we got a FO and the SP were to significantly rerate - then you would have to revisit that calculation.

And no - I'm not kidding !

GGG,

I think you have misunderstood the question:

"It goes to show what a f/o could be worth just on announcement". The thread was about Zennor and my question was how does this deal relate to the value of a potential farmout of Serenity - imo very little directly other than assets in the North Sea have a potential value which was known anyway.

"I'm not sure why you don't think there will be an immediate jump...?" - To clarify - i'm of the opinion that there will be an immediate jump somewhere in the 2-4p range on announcement of a FO. Maybe a little less if the terms dont meet expectation and maybe a little more if they exceed. I dont think there will be an immediate jump of 15p on a successful drill at Serenity - there will obviously be a jump but imo the full value will be acquired over time.

who knows what will happen - I dont think Management will be looking for a split or selling off the NS assets - I think they they see more potential in developing the assets - both the NS and Canada.

I think a danger though is the Bybrook - with their holding including warrants - they could decide to cash in if the right offer comes in.

Also if they were to excercise warrants and make a bid for the Company. Hypothetically if they were to offer 10p say, if the other Institutions are on board - they have 65% of the vote, not to mention other recent investors who got in close to 5p. 100% on your money in 6 months would be pretty handsome. It would not matter what the PI's think the value of I3E is.

"It goes to show what a f/o could be worth just on announcement" - how so ?

I'm somewhat aligned to the rest of what you have said although I dont think the rise will be as sudden or as sharp as you think. Also with the current POO - I think we have a chance of retaining more than 30-35% of the asset.

I agree with Kane that this demonstrates deals are happening in the North Sea which you would assume bodes well for I3E.

As far as looking at the deal and trying to extrapolate what that means for I3E in terms or valuation - that is quite tricky. Some of the posts below highlight the headline production only. However, if you look into Zennor a little deeper, you will find that they have interests in +/- 20 assets / licences covering Production, Development, Appraisal & Exploration.

Kane,

What is the relevance to I3E - or is this just for general interest?

imo - not. The volume is only about 10m as we speak. When the RNS came out I think volume was about 30M if I remember correctly. Any substantive leak and the volume will be 20 -30m or more.

Also the SP has not kept up with the POO. We should be around 10p just based on the increase in the POO from the start of the year. I think the SP is just catching up with Oil.

GGG,

I am familiar with RRE - their de-commissioning liability was an eye popping $1.2 B if I remember correctly. The're market cap of approx GBP 250M was less than the cash in the bank.

Someone mentioned SQZ a day or two back. Seems like this might be a good metric to compare I3E against - Serica is about 80% gas I believe.

Has anyone compared the respective EV / Flowing barrel ratio's. Aside from the North Sea Assets - what other factors would affect I3E's valuation relative to SQZ ?

JAdam,

You are correct - I have mixed up Mirabaud with WHI - it is indeed Mirabaud that have ascribed a risked valuation to the North Sea Assets of 4.9p which is what I was referring to.

It is worth reminding ourselves of the resource definitions you have referred to below. Serenity which is classified as 3C which means:

"Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable owing to one or more contingencies."

You have quoted the "high" estimates for the valuation which is a P10 estimate meaning "There should be at least a 10% probability (P10) that the quantities actually recovered will equal or exceed the estimate"

Prospective Resources are valued lower than Contingent Resources and are defined as "are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects." Again the valuations you have quoted are based on a P10.

I'm just highlighting that the North Sea assets are not a slam dunk and market obviously agrees at the current time. Hopefully we take a step forward in the coming weeks.

Tomhuk2000,

I took the Cashflow multiple from the Surge Energy update which was 5.3 x forward cashflow so it would exclude Serenity. How much it adds to the SP now obviously depends on how good the deal is and the time to first oil.

When its a producing asset - it could add 20-25p or more to I3E but that is a minimum 2 years down the line assuming it happens. Right now its a risked valuation based on oil in the ground and estimated 2C reserves. I think WHI assign a current value at around 4.9p per share. My guess is it will add a couple of pence to the SP maybe more if the terms and timing are better than expected and then incrementally more as the find is developed. Hopefully we will find out soon enough.

There's no time line on it - but you would expect one sooner rather than later. As someone already mentioned - it should'nt take long to update a spread sheet. I would think there is a chance we may see one this coming week. Probably WH Ireland first and then possibly one from Tennyson a little later. I think I3E's last RNS will provide a reference point and an opportunity for the Brokers to fine tune their estimates.