Shanta Gold's CEO explains the Q2 production shortfall and emphasises the cashflow strength of SGH. Watch the full video here.
Current Production = 18,000 (if you approve GGG)
South Simonette = 9,000 (assume i3e farm-out 50%)
Serenity = 10,000 (Majid said this was a 30,000 bopd project assume we retain 30%
Clearwater =5000 (i'm guessing i3e have not given any guidance)
North Simonette = 5000 (assume they farm out 50%)
Central Region = 5000 (guess)
Liberator and other Canadian Upside
57,000 +boepd !!! It will take time, money and oil prices to remain healthy but the oil is there all within grasp. I'm not saying at all that we will get to 57k but the potential is there and we should be significantly higher than 20k in the very near future.
...and here's another thing to consider - I've run the numbers and anyone that has done the same will know that my comment on being cash constrained with respect to funding large developments is correct. Sure they could have continued step by step with this incremental development and would have done quite nicely - but it would have taken time.
Lets say they did take on £40,000,000 in additional debt - now we would have nearly £65,000,000 in debt !!! Who's now going to lend us another £30,000,000 to fund Simonette or any other large development?
We're now in the situation that we have relatively low debt - much better FCF and an increased capacity to take on debt to fund these large drilling projects.
We were nearly bankrupt 12-18 months ago - we are no on the cusp of nearly 18,000 boepd and sure to close the year out at above 20,000 and a realistic prospect of being at 30,000 or more (who knows) within a few years - and Management are untrustworthy ???
Even if he did buy in - i'm sure he's not going to admit to it for a while - from my limited correspondence with him (until he barred me) - he seems like someone that is not willing to admit when they are wrong.
1) "I know the answer is of course they could have a debt facility" - you keep saying this and of course this is nonsense - YOU DONT KNOW. Its quite possible for example that that the note holders said no to more debt.
2) The second point is that even if it was possible - would it be prudent . I've already outlined a case to show that it might not have been.
3) This notion that the raise was heavily discounted is nonsense and someone with your experience and knowledge knows better. Let me use you as an example (but it applies to the vast majority of PI's including myself)
You put in about £200,000 @ about 5.5p per share
The new investors will be putting in £40,000,000 @ 11p per share
You, me and everyone else is going to benefit significantly from this investment - please explain how that is a raw deal for you and any other PI.
4) I don't think that I have ever questioned Management Integrity per se - certainly not recently. I have questioned from time to time whether certain deals have be fair to PI's but that's not at all the same thing as accusing them of being dishonest. There are many thing that may not be fair from YOUR PERSPECTIVE - it does not make them dishonest.
5) If you have very little trust in i3e's Management and their ability to deliver value to PI's including yourself - why would you even contemplate buying further shares (which I think you have stated that you intend doing). That would be stupid which you are not. Bashing i3e's Management in a company you hold 3.6m share in and intend to add further shares doesn't sound like a sound strategy either!
I was getting to you:
1) Options - 11th August RNS (third one down) para 26 - should answer your questions.
2) I have no problem with opposing views as long as they are fair, factual or based on reasonable argument.
3) When you told JAdam to "smell the coffee" - I thought that was disrespectful particularly as I thought your own comments were unfair and off base - this is what prompted me to reply.
4) With respect to telling you to close the door on the way out - unnecessarily provocative and I retract that comment. However part of the comment was genuine i.e. if you are that unhappy with the behaviour of i3e - why not take your investment to one of these other companies that you have identified. I hope you have done your own DD here and conclude to stay - but if you are unhappy - why would you not leave ?
5) When you question the integrity of Management on a public forum - its quite an accusation - and i think you need to have your ducks 100% in a row. Some people one here have gone too far in my humble opinion.
have a good weekend
I agree - the options vesting criteria are rubbish. Again apologies for any crosswords - I try to be respectful of all views and have no issue with opposing comments as long as they are based on fact or reasonable argument - I don't always get it right.
I may have made a further mistake i.e. that options may in fact be issued under the BOD's general authority to issue shares and SH may actually not have the opportunity to vote on them individually. Still I was annoyed because I believe the options were old news and people were jumping on the bandwagon to give management a further unnecessary bashing (imo).
I think that Management may have shown some deference to shareholders in that they met some of the vesting criteria some time ago and looks like they decided to hold off issuing then until they delivered SH some good news - that's what it looks like to me.
I think you will find they are the same options as referred to in the admissions document and also the 8th August RNS unless you think i3e are going to issue options twice for the SAME MILESTONES ???
If you have no confidence in i3e's Management and think you are being treated unfairly - why are you invested and why dont you take your money and go an invest elsewhere and close the door behind you on the way out ?
There's a narrative being perpetuated here by some that these options are yet another example of Managements poor behaviour and a further example of lack of integrity - this is my opinion is not correct and is disrespectful to Management ,undermines Management and our investment. My response to that was in the same tone. I thought you were you were participating in this narrative - I went back and took a look at a couple of your posts and I may have been mistaken in your case - so apologies for any comments you feel were disrespectful.
With respect to notifications and reading them - that's your responsibility, im sorry but that is just a fact - if you have left this with your broker and he's not informing you then this is something you need to take up with your broker - its not i3e's fault.
And the point remains - if there's investors have a problem with options - they need to take the trouble to vote on them - pointless complaining after the horse has bolted.
Its not a "fatuous statement" - its a bit like having a bank account - the onus is on you to run it properly. As far as notification is concerned - you have no excuse - the the RNS's appear at the top of this screen - if you don't bother to read them - who's fault is that ? I3e are not running a nursery although by reading this BB - some people might think so !
Go take a look at the planned options awards in the re-admissions document. I'm talking from memory here because I cannot be ar_ed going back and checking again (as appears to be the case with most on here). From memory there's a couple of things:
1) Conversion price was 5p so the 11p is a significant improvement
2) There are slightly different vesting criteria depending on whether you are i3e UK, i3e Canada or i3e corporate.
3) the 20,000 boepd by 2022 if that is what it is now was originally 9000 boepd close out by July 2021 - so again does not seem an overly ambitious target based on where we are at now but an improvement on 9000 by july 2021.
4) 1/3 on completion of Gain Energy was as before and if its at 11p then its an improvement on the 5p in the admissions document.
5) The "european production" is as pre previous target and as JAdam states - I think its reasonably ambitious and if it happens is likely to be well above 2500 bopd if its serenity. Interesting if they are now calling it European Production because previously it was North Sea - does that mean anything?
JAdam - well put and a lot more eloquently than me. I was genuinely interested to here what you thought as I know you had a sizeable holding as do I.
And yes I spoke or rather emailed i3e to understand why things were done the way they were and like you I still have confidence in i3e's Management.
And more importantly I think we have taken a big step forward that I am confident will be reflected in the SP shortly baring any unforeseen disaster.
Fairdealer - refer to my earlier comment to Hababo inlcuding why you have not complained earlier.
These were the options that were in the re-admission document (approved by you|) - compare vesting criteria and then ask yourself whether as an employee it would be fair to change the goal posts again. I don't have too much sympathy for management by the way as they are well paid and will undoubtedly look after themselves, however these options also include employees.
I think you have revealed your primary objection in your responses which is the price that II’s have been able to buy at and not necessarily the structure as you call it whatever you mean by this.
It’s not really an objection that stands up – go look at how they normally calculate a placing price and how they have done it here – IMO its pretty good. In fact go look as a reference at how they calculated our previous placement price at 5p !!
Secondly – you have revealed the number of share you hold and the approximate average price i.e. roughly 3.6m shares at 5.5p = £200,000.
II’s are plowing in £40,000,000 at 11p. How are you being shafted exactly or just about any other PI for that matter. You will benefit significantly from this investment and yet you claim to have been shafted. Pistol Pete said it best – wake up and smell the coffee!!
Send i3e an email – get the clarifications. Run the calculations yourself and see what you stand to get and take a look at the latest Vox Market Interview.
After getting the answers - look yourself in the mirror and ask have I been fair !
With respect - what your saying doesn't stack up. Have you reviewed the planned options in the re-admission document and compared vesting criteria - if not why not and why have you not objected earlier ? Same comment as to Pirate Pete - have you just woken up ?