David Paul, Managing Director of VectorVest in the UK joined us to talk through stock picking fundamentals, technical analysis and more. Watch the full video here.
I was so busy focusing on jolly roger and his Parrot - I missed your posts - you've touched on a number of valid point - well put.
Clearly not everyone one is convinced - my suggestion is for PI's to step up and vote - there's 5 resolutions. #1 is the current Deal, # 2 looks like authority to issue more shares in future, im a little confused about resolutions 3 & 4 but number 5 is the authority to buy back up to 100m shares. Plenty of options to vote for - seems like most here would favour a buy back at some point, some may also approve of current deal but have reservations about additional shares in which case you could vote for 1 & 5 and reject the rest. Point is you should vote - pointless coming on here and complaining and then failing to register your vote.
Previous response was a little flippant / tongue in cheek - but I think just about all the questions have been asked and answers provided - it come down to what you are accept and what you dont.
If you really believe there are questions that have been asked and left unanswered - I would be more than happy to give it a stab - let me know.
I respect your opinion and you may be correct - imo you are not - but you maybe. Touching on a couple of your points:
1) In what respect do you think i3e has sold PI's down the river - can you be specific. There are metrics to say this is not the case. If your talking about SP, then the yes - the the current situation is a little disappointing. However, i3e's job is not to manage the SP - their job is to stabilize and grow the business and accrue value to shareholders over the medium to long term - the SP will follow if they do the right things. If you look at GGG as an example - he has already said he would be looking to cash out a significant portion of his holding at 20p, in fact he sold shares at 16p. If this was the sole measure of success - i3e could quite easily manipulate the news flow allowing GGG to sell off his holding and the rest of the shareholders would be left saying - wtf! Do you think he would be complaining then ?
2) "A loan would have stabilized the SP" - you don't know this at all - you are guessing, GGG is guessing. I mentioned Hurricane the other day as an example - not for one minute do I think we are in the same boat as hurricane - I think we are much better than that - however, some SH's there are looking at their cash (its significant), their production (its significant) and their FCF (its significant) and are thinking how can we not be a going concern. Well the answer is that they have not run the numbers. Shockingly HUR need oil at $80-$85 to be able to operate as they are or otherwise they have to restructure the debt.
GGG is talking about "good debt" and "bad debt" - in my humble opinion he's guessing again - its no bad thing in the current environment to have a relatively low debt load.
good luck and please vote on the resolutions. If you hold your shares though an online broker - you need to vote soon - it takes a little while for the votes to get through to i3e.
If your going to quote Graham - you might want to consider quoting him correctly ! He did not exactly say the underlying value was 21p - to be more accurate what he was saying that given the market was pricing at i3e at 16p only a few days earlier, then on the same basis (post deal)the market should be pricing at 21p. I think Graham actually believes the shares are worth more than 21p.
Genuine question : what is it precisely that you feel is a bad deal for PI's
1) Fall in SP
2) Dilution of existing assets such as Serenity
3) The fact that most PI's not given a chance to buy in at 11p ?
4) i3e have paid to much for the new assets?
Are you going to vote on the resolutions - I think you should. I sent an email off to Hargreaves this morning.
Interesting graphic although slightly misleading. When thy present value metrics against flowing barrels or 2P reserves - you need to know if the production is Oil Rich or Gas Rich otherwise the comparison is not apples with apples. Nostrum Oil for eaxmple produces about 38% Oil / Condensate v about 19% for i3e.
Has anyone read the shareholder circular with regards the placing. In addition to the 360m shares in the placing and primary bid, resolution 2 looks likes it gives them authority to issue a further 360m shares at sometime in the future.
Any idea what they are trying to achieve with special resolutions 3 & 4 ?
Resolution 5 is seeking approval to buy back up to just over 100m of its shares.
My final top up today at 11.6p - lets see !
Next news - not sure - could be one of:
2) Farm In to Simonette
3) Spud at Wapiti
4) Drill Results at Marten Hills
5) Perhaps a debt Deal and another Drill Program
6) Or an operational update covering any of the above plus work overs
A lot of catalysts to get the SP moving north !
This will my last post to you on this topic as I'm sure that many will agree that the discussion has gone past the point of being useful:
"Integrity" - please look up the word in the dictionary - it mean "dishonest". I have never ever accused the BOD of acting dishonestly or of lying or resorted to calling them crooks - I don't believe this. I strongly object to you saying otherwise - please don't draw me into this discussion.
As for as what is said here making a difference - it certainly can if the narrative is picked up and gains momentum on other platforms - I recall something being said a year or so back on twitter about oil price and applicable benchmark pricing in relation to the Gain Acquisition - i3e had to put out emails to investors to quash the rumours. The're not likely to do that here - but keep it up and you might get a letter from their lawyer !
Lets hope there's some more good news shortly so the discussion can move on constructively !
"Do me a favor, don't start repeating................." - do shareholders here a favour - sell up if you're not happy and move on !
I hold a different opinion to you and you should respect that - you don't have to agree with it but you should respect it and stop trying to ram your opinion everyones throat. Some of your arguments don't even make sense anymore - if you think you've been "fu_cked" - do the sensible think for yourself and sell up and buy into something you believe in ............and do the right thing by fellow shareholders here and sell up and stop bashing i3e.
You are correct but it does not really alter the point I was making - which was the issue of new equity - had this been discussed openly a month ago - SP is likely to have gone down as it has and the placing price would have been lower. We can argue about whether it should have been equity or debt - open minded posters can look at the arguments and make their own judgment.
About whether you are a SH or not - you seem to be making a concerted effort to talk down i3e. I agree that
there are two many options for a start (imo) and the vesting criteria are poor. However, you are making it out to be worse than it is - they are not new options as you seem to be keen to stress but are pre-existing options that could have been issued several months ago - I provided you the link or reference.
Again I agree with your comment on some Companies such as Kistos and the treatment of options of lack of in the case of Kistos. The CEO has done very well for shareholders in his previous company Rockrose and his stance with regards to options is admirable but it is by no means the norm and does not demonstrate i3e's lack of integrity.
and this by the way is why I think all things considered , i3e might not have handled the rights issue all too badly. Imagine if we had been discussing a rights issue one month back and then trying to raise the funds - what will the offer price have been then ?
Serious question - are you a shareholder ?
I did not take it at whinging at all - I took it as highlighting the value creation of the deal and assuring investors that in their opinion - the market has got it wrong and the disconnect will be righted shortly.
Whenever there is a rights issue or talk of a rights issue - the share price nearly always reacts negatively in the short term - no great powers of prediction there. You cannot always run an business worrying about how a decision impacts the SP today, tomorrow or even next month - you've got to be looking further ahead than that .
I was thinking of you and GGG:
You don't get to cherry pick the parts of the deal you like and discard the bits you don't.
Probably only GGG remembers this and possibly JAdams - around February when i3e for the first time revealed any kind of financial metric post Gain / Toscanna ( from memory they reported Net Operating Income (NOI) of $27m). It was evident that people here had not done any kind of sense check on the numbers or if they had they didn't say anything - in fact a few people said great numbers.
I didnt want to say too much at the time but the numbers were not all that great imo - certainly not in comparison to the broker report (Mirabaud). I quietly asked had anyone run the numbers themselves and GGG came back and said that the FCF was a little lower than expected but still decent numbers . I didn't think that ] - I thought FCF was significantly lower than expected. When updated broker reports came out and also the year end results this proved to be correct and highlighted that costs were indeed too high relative to i3e's scale.
This latest deal dramatically improves scale and I've run the numbers again - this time round it tells me something different:
1) i3e are being conservative with their numbers and we could well see upward revisions.
2) Realized pricing is lower than it should be - I think because the production is hedged. This also means there could be potential upside as the hedges expire. I could be wrong here as it could also be to do with what benchmark the newly acquired production is pegged to. Either way - the numbers are still good.
3) Thirdly i3e's shares are worth more post deal than they were before i.e exiting shareholder have benefitted with the caveat that we still have to see this reflected in the SP.
onwards an upwards!
A disappointing series of posts in the sense you don't seem to acknowledge the possibility you could actually be wrong. But at least people with an open mind can see both sides of this argument and make a judgement for themselves.
I agree with JAdam that this donkey has been thrashed to death and time to move on - I was hoping there would be some real news this morning so that we could start the discussion on something else.
The only thing I would add is that I don't think we have been diluted in effect. If I was to use an analogy - Imagine you have a housing development and Investor # 1 puts in £100,000 to build one house. Investor # 2 comes along and puts in some more money (doesnt matter the amount) and the developer builds a second house. So now Investor # 1 has been diluted in the sense that before he was the only investor and now there are two, however, he still owns effectively one house. Only our deal is better than that - due to market vagaries - the developer managed to build not one but one and a half new houses with investors #2's money i.e. investor #1 now owns effectively 1 1/4 houses without adding any more money.
That's what I think we have with this deal. The house price has actually gone down slightly in the process since the market is not always rational - but prices will go up again !!
It is a cracking deal. I'm not sure what you mean by funding South Simonette on their own - through FCF ? If I was a betting man - I think we may well now see i3e take on a little debt to accelerate its development options. At South Simonette and at $4m - $8 million a well - i3e have already said they are looking for a partner to Invest.