Member Info for tonynorstrom1

"If I was advising I would say go for BP, you'll sleep better."

In 2000 BP were trading at 650p - 24 years later they are trading at 460p and its a reasonable bet that in another 24 years they will be 460p or less. That's certainly the kind or performance that would make me sleep.

At around 10% i3e's dividend is twice that of BP's and it would not be out of the question for the share price to double from current levels something that BP's is almost certain not to.

So thanks, but no thanks on the advice !

As usual - cannot understand your point. Probably not the only one - can you kindly explain.

Also according to the boereport.com website - i3e's two pembina wells came on production 23rd Dec

No other new wells licenced yet which is interesting although data from the above wells demonstrates that they can spud within 2 weeks or less of licencing.

"they don't know the forecast 2024 divi payments and numbers backing it. They also don't know anything about how the company intends to use its debt. "

A nothing comment really:

1) First off i3e changed their dividend policy and stated that they were no longer basing it on forecast numbers and that moving forward (Q3 2023 onwards) that payments would be subject to a quarter end financial review i.e. rear facing. There's not many Companies that are able to guarantee their dividend and forecast into the future, particularly small Oilers. Secondly investors should have some confidence that the dividend remain at current levels or higher provided Oil and gas Prices don't go down - I 3e have stated that their aim is to pay a sustainable dividend - they also had WHI put out a "Car Crash Scenario" to illustrate at what kind of levels the dividend is sustainable at - what more can they do ??

2) Don't understand the comment on debt at all - i3e have stated repeatedly that their model is to drill when prices are high and to look for acquisitions when prices are low. I don't know of any company that announces acquisition targets in advance. Logic would suggest that if they don't see value in the market that they hold off and save cash until they do.

Https://twitter.com/i/spaces/1BdGYrLWVRLJX?s=20

link to the podcast by the Pine Cliff CEO I referred to earlier.

Interesting to hear what an expert on Gas / AECO thinks on demand / pricing. The whole podcast is worth a listen but for those that don't have the time:

1) at around 22 mins in he talks about LNG Canada

2) at around 25 minutes in he talks about a Conference he recently attended where the CEO of Petronas stated that gas will be flowing in the Coastal Link Pipeline in 2024. Petronas are one of the stake holders in LNG Canada.

3) At 27 mins in he talks about Oil Sands being the biggest user of Gas at 3 BCF / day and the effect of the trans mountain pipeline will have on Heavy Oil Production.

4) At 1 Hr 19m in is the reference to DEC.

Also in case anyone missed the link Agricore posted yesterday on i3e:

https://theoakbloke.substack.com/p/i3e-i3-energy

Agricore,

Thank you for the response and links to both articles. The article on DEC ARO’s will take a little time to get my head around and understand the analysis / numbers although I have briefly read the article.

However, initial response - You’re comparing financial ratios off the balance sheet and seem to be accepting the numbers as fact. The counter to the article is that the numbers are massively understated and although the substack piece does delve into the numbers – I’m not convinced the analysis is correct though I must admit I do not understand it sufficiently yet to have a fully informed opinion. Long term decommissioning liabilities and the ability to fund are very sensitive to the assumptions made on the inflation rate, oil & gas prices, discount rate and expected well life.

My skepticism on DEC’s numbers is based on them having 70,000 well bores (Active and Inactive) - they abandoned 200 wells last year (per their numbers) which represents about 0.28% of their well stock. They have a corporate decline rate of about 8.5%. This decline rate has very little to do with geology or well quality but more to do with the age of the wells – they’re old. Nothing wrong with that – it’s their business model and as long as its run well including funding ARO’s – then no problem.

As a comparison, I recently listened to a podcast given bythe CEO of Pine Cliff Energy (link below). For those that don’t know – Pine Cliff Energy is a Canadian Producer with about 22,000 boepd (85% Gas). Their business model is very similar to DEC – they primarily buy and operate legacy oil and gas wells which means they also have a low corporate decline rate (7%). Everything I have read about Pine Cliff indicates that they are a very well-run Company operating a conservative business model and unlike DEC are debt free. Quite coincidently he mentioned a North American Producer (not by name) but he was obviously talking about DEC– and commented that his Company had less than 1/10 the well bores that DEC have yet they retired 400 plus wells in the last year i.e. x20 times more than DEC on a prorated basis. I gathered from the CEO’s comment that he would agree that my use of the word “pitiful” to describe DEC’s decommissioning efforts would be close to the mark.

i3e follow the guidelines of Alberta’s Area-Based Closure program which recommends that producers abandon between 4 & 7% of their inactive well stock each year. i3e get grants towards the program which is audited. Based on these numbers – I3e are decommissioning 14 to 20 times the number of wells as DEC on a prorated basis. I3e have a corporate decline rate of less than 17% which is also low by Canadian standards due to the average age of the wells they operate.

The US simply do not have the same regulations in place so the danger of a US company being unable to fund its decommissioning liabilities are greater imo than Canada.

https://twitter.com/i/sp

Take a look at when the Q3 dividend was declared and paid (2nd & 27 October). Q3 was the first payment subject to the quarterly financial checks and it was declared 2 days after the Q3 end. Year end is always a little bit different, but I don't see any reason why the dividend could not be declared in the next day or so with payment before the end of the month.

With i3e having a healthy cash balance and current cash flow covering costs - I don' t see i3e delaying or cutting this quarters dividend. If I was making the decision - I would leave any thoughts about changing the dividend until Q1. (AECO has already taken a tick up above CAD 2.00 reportedly !)

I'll put a tenner on the dividend being declared tomorrow - but I have been wrong before !

It boils down to whether you think they have a handle on the decommissioning costs - my gut and the little bit of research i've done suggests they dont.

I did look at one of DEC's recent financial statements where they flagged they had decommissioned 140 wells in the last year as evidence of their commitment to ESG - a pitiful number in comparison to the number of wells they have on the books. As a reference - i3e reported they decommissioned 70 wells. i3e have a fraction of the number of active /inactive wells that DEC have and yet still have a decom liability of around $90m which in itself is a little high.

Anyway - good luck with your investment - my intention is not to bash DEC.

I posted the links on the 22nd December - just two articles out of few that are out there - I suspect you have seen them already. Also check out the liabilities on the balance sheet.

My understanding is that DEC have around 70,000 wells. Do a smell check of the Decom liabilities and plug in a cost per well - i've done it - its a bit of a guestimate, but I think the liabilities could be multiples of what they state on the balance sheet. But good luck on your investment.

DEC I3E

1 Week -3% +3%

1 Month +3% -8%

3 Month -22% -12%

6 Month -19% -33%

12 Month -54% -47%

"Meanwhile my dec & enog shares are racing ahead while i3e languishes in the gutter & publishes a 2022 esg report"

Are you sure ????? - whilst both have been pretty poor - i3e have out performed over 1 week, 3 months and 12 months.

DEC has a very tasty dividend (21% yield) - but there is reason. Anyone interested in DEC should research their decommissioning liabilities. There are a couple of eye opening articles on the net.

"WHI is contemplating whether a dividend is supported at all, which it is. But it foresees a 25% dividend cut."

Cannuck - As is usual with most of your posts - I’m struggling to make any sense of it. I looked at WHI's report again and unless I’m missing something - they run the "car crash scenario" at WTI $60, AECO CAD 2.73, Capex at $10m and with the CURRENT DIVIDEND i.e. no cut. So where are you seeing WHI forecast a 25% dividend cut?

With the current combination of Oil & Gas prices (WTI 72 & AECO CAD 1.75) - monthly cash flow is around $200,000 above the "Car Crash Scenario"

Since i3e have paid WHI to put out this report - logic tells me that the upcoming dividend is covered and providing Oil and Gas prices stay at or above current levels - then future dividends should be covered also. It’s quite possible that Gas could go lower and/ or i3e may change their pay-out policy / cash allocation priorities, however, the WHI report is very recent and one would assume be in some alignment with i3e's thinking.

On the subject of Gas – prices have been far weaker in North America than is typical for this time of year due to surging production, high storage levels and abnormally warm weather. So the back drop does not look great for gas prices in the coming months, however, its by no means certain that prices will crash and there are green shoots appearing on the horizon which may well be in 2024 and not 2025:

1) LNG Canada is due to commence START-UP this year, which means commencing taking in gas, cooldown and filling LNG tanks. Shipments are currently not scheduled until 2025 but start-up means it should be drawing gas from the grid in 2024.

2) See the attached report from page 20 onwards. These guys are some of the smartest people in the Natural Resources Sector and they are predicting a structural deficit in gas in the coming months (North America). That’s got to be good for prices assuming they are correct. Also worth a listen to the podcast with the Pine Cliff CEO that I posted a week or so back – he’s possibly a little biased but he thinks AECO is the place to be in 2024

https://4043042.fs1.hubspotusercontent-na1.net/hubfs/4043042/Content%20Offers/2023.Q3%20Commentary/2023.Q3%20GR%20Market%20Commentary.pdf

Why not now ? Whats are you suggesting - if anything the resport seems to be a little late.

Stas,

You need to remember that dividends and Capex are now subject to the quarter end financial ratio checks - so unless these are waved or partially waved - the time tables for dividend announcements have changed - the quarter end was only a few days ago so not late considering this.

The previous guidance was NOI in the range $90 to $95m. I think they are going to fall just short of this at around $88m

The other thing to remember is that the dividend / capex is based on the Q4 numbers (historical). WTI and AECO averaged about $78 & CAD 2.20 respectively during the quarter. I need to double check the financial ratios they use but I believe there should be no issues with the Q4 dividend (paid in January.

...and this one from 26 minutes onwards

https://moneylifeshow.libsyn.com/election-year-effects-will-stave-off-recession-until-2025?__hstc=214401352.67916fa54bc1f8c3c01507bd1dbb6ab6.1702117802803.1703745902197.1703837309437.5&__hssc=214401352.1.1703837309437&__hsfp=467677067&hsCtaTracking=32869ea4-0d9e-41e0-ba41-1be7054eefa1%7Cdb2a67eb-924f-4886-a30f-d3cc39c20dbd

Europa Oil and Gas

@Europaoilandgas

·

2h

.

@Tennyson_Secs has increased its Target price for #EOG to 4.97p following the announcement of our acquisition of a 42.9% interest in Antler Global, which owns an 80% stake in the EG-08 gas licence offshore Equatorial Guinea. This offers c. 5x upside from the current share price.

Worth a listen

https://twitter.com/i/spaces/1BdGYrLWVRLJX?s=20

Anyone investing in DEC should probably look into this:

https://finance.yahoo.com/news/diversified-energy-responds-market-reaction-144500270.html

https://www.ehn.org/abandoned-oil-and-gas-wells-2659296731.html

This is probably why:

https://finance.yahoo.com/news/diversified-energy-responds-market-reaction-144500270.html

I did look into DEC a while ago to figure out why they were so cheap - they have massive decommissioning liabilities. They talk about decommissioning 214 wells in 2022 but I read an article that stated they have over 70,000 wells.

Another good interview - David Hobbs currently has a lot of credibility with the market / investors and as Baxi has said is backing it up with sizeable share purchases.

Who else fast forwards Jay to hear what David Hobbs has to say !

After being told about the fantastic Management at Shanta Gold and the focus on shareholder returns as opposed to our "useless management" . Interesting to hear now what people think after the recent takeover bid !