Member Info for tonynorstrom1

It was mentioned on the Europa BB but not picked up on here from yesterdays RNS:

The Company continues to evaluate development options for the Serenity discovery in consultation with its partner and the North Sea Transition Authority. There is NO CAPITAL BUDGET associated with this work in 2024.

what does this mean:

1) They dont expect to pick up the Tain Licence this year ?

2) They plan to pick up Tain and sell off Tain plus Serenity without an approved FDP. We've previously been told that they need to reach FDP stage before the licence is worth anything which would mean they would need a budget.

3) Drop the licence if they do not pick up Tain?

A reminder to posters here to sign up to the "Investor Meet Company" podcast if you want to ask questions. The platform allows you to submit questions in advance.

It was a good spot Jmort but I suspect it is a typo. If it was intended - I would have expected them to cover this under "highlights"

Stas20,

CAD 2.21 /mcf CAD 3.18 /mcf - These are the numbers that WHI use in their forecasts for 2024 & 2025

For a bit of context, the actuals in April and YTD are CAD 1.47/mcf and CAD 2.23/mcf (AECO)

In my own spreadsheet which I Update monthly with actuals and a reforecast for the remainder of the year – I come up with CAD 2.37 for 2024

So, in short, as things sit right now – WHI’s numbers look reasonable Imo but could change significantly in either direction. May is typically the weakest month but I’m using the same number as for April and progressively strengthening month by month until I get to CAD 3.17/mcf in December (CAD 3.00/GJ).

Its anyone’s guess where gas will be in December – will Canada still be oversupplied with record storage and production or will demand increase with Oil sands and LNG Canada boosting prices significantly higher? My pricing assumptions are based on the later.

If you go to their November 2023 Presentation - they have a pie chart that gives the production break down for the different areas. For Central Alberta:

55% Gas

27% NGL's

18% Oil & Condensate

This is an average well an of course this varies across the acreage with some wells having a higher gas weighting and some a higher liquid weighting.

They describe Alberta acreage as Liquids Rich Gas with EMERGING OIL. So it seems in the last year or so they have found areas with much high Oil Weightings so even though they appear to be targetting Central Alberta - I would imagine their looking at Liquids Rich wells.

I had spoken to Graham Heath about this before when WHI had screwed up a few reports particularly the numbers for SG&A where if they had spoken to i3e they could have plugged much more accurate numbers into their models.

Of course WHI do have access to i3e and i'm sure talk from time to time - but as far as Oil & Gas prices and other assumptions - i3e leave them to make their own projections.

I agree Vista except for the economics of the wells - if gas prices more to where they think they might - the Central Alberta Gas wells have vary favourable economics particularly if they have high liquids weighting.

I think its interesting that there is only a couple of wells slated for Clearwater - these are nearly 100% Oil - a question for the upcoming meeting me thinks.

Also your assumption on the price used for gas is incorrect - for some reason WHI use Henry hub as the bench mark presumably because they think it is a more visable number for investors - but if you actualy go into the tables and look at "realized prices" - you can see that they use the correct CAD AECO pricing in their number crunching

I think its nonsense because it actually confuses investors . They use to quote Brent as the bench marl for oil but thankfully have changed to WTI but even WTI is not stictly correct - it would be better if they stuck to the applicable bench marks which are WCS & Edmonton Light Sweet.

Stas,

There's no doubt that the projected increase in gas price is having a significant impact on their valuation but its not all of it. Its also got to do with the significant capital program and associated production and better Oil & NGL prices and better liquidity due to the refinancing.

whilst gas is 52% of production - its only about 14% of revenue in April and even in December where I have plugged in CAD 3.00 for AECO - its still only 21% of revenue. So their valuation is underpinned by more than just a projected increase in AECO.

"Gas futures in alberta are below $2 for the remainder of 2024, I don't know how they project it to be $2.5 for the whole year. The guidance doesn't make any sense and it looks like it will be lowered/worsened already in Q2"

For anyone that runs the numbers - the guidance makes sense and if anything is on the conservative side - of course it all depends on oil & gas prices. WHI seem to think the same.

I see production towards the top end of guidance and NOI being in excess of $80m. They have already confirmed their intention to maintain the diviend at current levels and ye production of around 21,000 boepd with them set to ramp up Montney development in 2025.

Market reaction is overdone imo and on the back of this RNS - WHI have actually increased their valuation because they have run and understand the numbers,

"or the numbers"

9:21

Agree with the post except for "communication error". The RBL is part of resources available to the company - dont confuse communication error with not understanding the RNS of the numbers.

The new debt facility is part of "existing Company resources". When they paid off the trafigura loan from the proceeds of the recent asset sale - remaining cash was maybe around $4m. So if their going to be able to fund a $50m capex program - then obviously they need to tap into the debt facility.

I'll have to take another look at the numbers and compare to my spread sheet - but my initial reaction is that i3e's numbers are pretty conservative. This appears to be a contrast to the previous CFO - who's numbers were often found to be too optimistic.

The reaction to the RNS is overdone in opinion but the numbers (production, NOI & net debt) were clearly not what many were expecting. On top of this, there was an expectation that there might be a significant acquisition or other transaction which was not announced today.

Stas - those NOI projections for 2023 were issued in December 2022 when gas was trading at nearly CAD 5.00 / GJ. Gas is closer to 1/4 of that number now and 2023 NOI actually closed out at around $93m.

On top of the lower than expected pricing - they have only drilled 3 wells in the last 12 months - so average production has also fallen.

Lower pricing, lower production, lower NOI.

That is exactly right Serif - intercompany billing is industry standard for Companies that have different operating units and used for charging time and expenses that may be incurred in one unit for work or services provided to another. For example if Europa UK Engineering personnel perform geotechnical studies on Antler projects which is what they have done.

I've never heard of it being used to "reward executives in a concealed way". Its certainly not designed for that purpose and if it is concealed then it is almost certainly not above board. Its purely an accounting procedure for allocating and tracking costs.

IBB,

I agree - probably a good deal for the purchaser but clearly a good deal for I3E. Just another example of good execution by the team.

Let’s see what the Capex Update looks like.

I dont think David Hobbs has ever said "no dilution" - from my recollection he has always spoken about "minimizing dilution for existing shareholders"

One things for certain - we wont get an announcement tomorrow unless i've forgotten what day it is ?

Banditputin1 - you are a cretin and of no value to this BB or indeed the 88E BB - just think about that - zero value !

Good technical analysis stas - i'm not an expert as you know in fact I know very little about it but I think this type of analysis works better with a Company in a more predictable operational phase where you dont ordinarily expect any block buster news - say a Walmart for example or an AVIVA. All this analysis goes out the window if PANR were to drop another excellent resource update or substantive news on funding correct ?

When are you going to post a technical update on i3e ?

"flawed" before someone points out I cannot spell, let alone do calculations !