Member Info for tonynorstrom1

Https://themarketherald.ca/i3-energy-building-oil-and-gas-assets-at-good-valuations-in-canada-and-the-uk-north-sea-2023-05-11/

Nothing really new - but good to see i3e actively promoting in Canada. Would be good to see them on a Podcast with Shubham Garg - go on Majid - give him a call and set it up !

I see that Repsol is buying out Sinopec - transaction to be complete by eoy. Not sure how it affects Tain / Serenity if at all.

No - that is not what I meant - Serenity was a "cheap" well and could not have been used as a producer even had the well struck oil. This is what Simon Oddie (ex-ceo of EOG) said. The planned Inishkea well on the otherhand could be turned into a producer or atleast this is what they have costed. Well Designs / materials are slightly different.

Confusing times in the Oil Market - despite most analysts expecting further draw downs - API have just reported a surplus. Lets see what the EIA report later today - I’ve noticed many times where they will report the opposite despite having nearly identical data sources.

I've not kept an eye on PTAL - Will gladly give you my opinion if you tell me what you think has changed.

I still think i3e is hard to beat overall but another name I would throw out here and Shubham Gargs top pick is Surge Energy - check out his latest pod cast with the CEO.

Were 9 days into the OPEC production cuts so significant draws are expected in Oil Inventories and probably a price bump ! Look for the API report later today.

Just a couple of other snippets on the planned well at Inishkea:

1) With the Serenity Well - the rig was already mobilised at the Blake Field next door so there was a significant saving in mobilisation costs. With Inishkea, the costing assumes a mobilisation from the port at Invergordon which is 10 days sailing time each way - so significantly more expensive.

2) The good news - unlike Serenity, this planned well could be turned into a producer.

Https://twitter.com/DerAchsenZeit/status/1655560868481073155?s=20

The comments are almost as interesting at the profile picture !

Https://www.youtube.com/watch?v=4FETu7AXM0c

i3e mentioned a couple of times throughout the video - another good watch.

That’s a good question - why don’t you email them and ask. I like the direct style but you may have to edit a little if you expect an answer. Will Holland is responding to emails - just got a response from him on the estimated well cost.

good job for emailing the Company. Always better to try to establish the facts rather than start baseless rumours and unnecessarily spook fellow posters.

Was there anything else of interest in the Companies email response back to you?

https://www.gasnetworks.ie/corporate/news/active-news-articles/gas-demand-mar23/

Posted by Bobbybee on the Europa BB - clearly highlights why Wind (and I suppose Solar) will not completely replace Natgas anytime soon without any massive innovations in Energy Storage.

"I dont buy your theory" was a bit more diplomatic than what I really thought and it was the same phrase that you used so I didnt think you would mind.

"re Secondly, well that makes no sense, as I do not think that they are sitting on that much cash. They have to pay up or default at the end of May, not December."

Have you run any numbers - most of the Capex is spent in Q3 and the net debt figure is a projected figure at the end of Q4. If you back out the Capex and calculate the net debt at the end of May - I dont see a major problem.

I've already told you why I think they haven't published the results yet - many Companies haven't and they have until the end of June to file as per the regulations - so, as a holder in i3e I felt no need to start any dramatic rumours at this stage. I'm a firm believer in that if you shoot yourself in the foot - you're probably going to blow your toe off !

I dont buy your theory on the loan notes :

1) First of all its a post period event - hence should not impact the release of results for an accounting period ending 31 December 2022 even if this is true.

2) Secondly - I dont believe it to be the case, the net debt you have quoted is assuming the full Capex Budget. If they were running into issues with the Loan Notes - I would expect them to suspend the Capex Budget from May onwards and save about £35m to help cover the loan notes.

3) Although they have not said anything - I would assume that they have arrangements for alternate credit facilities if so required.

Well that's interesting Danger Mouse - largely because I don't understand what you are saying. 6 basis points is 6/100 of 1% or am I not understanding what you have said ?

Well the chief geologist should know. This is what it says about Inishkea on the EOG Website:

"Water depths are comparatively shallow (400-600m) and do not require harsh environment sixth generation drillships therefore drill costs are lower. We have recently conducted a drill cost estimate for a well on the Inishkea prospect and dry hole cost including mob and demob is £37million."

The water depth at Serenity is about 100m so a fair bit shallower, not sure about the sea conditions being much worse than the North Sea but you would have to assume the Geologist knows what he's talking about. Serenity was drilled down to about 5600ft below sea level - not seen a figure for how deep the Inishkea prospect is but Corrib is about 10,000 ft below sea level. Does seem a lot but costs do rise significantly as drill depth increases. Rig time alone is probably double at least then I imagine material costs (casing, cement, drilling mud etc) could be 3 or 4 times that of Serenity if not more.

Not sure why you are listening to the video if you dont rate his commentary. He did give some justification i.e the relatively high costs of building and running projects in Alaska compared to some other regions.

He also referenced a project in Alsaka and highlighting the cost relative to buying a Company in Canada which would give you a similar order of magnitude of reserves and production at a discounted cost - MEG Energy I think he was referring to with well over 50 years of 2P reserves and production of over 100,000 boepd. So he doesnt just pull numbers out of thin air - his has reference data. Canada is not a bad reference to use in Comparing metrics - not to dissimilar in climate, remoteness of some sites and also seasonal drilling in some locations.

no surprise really - the SP is merely mirroring yesterdays fall in the Oil Price. Good news for EOG is that gas prices are still elevated which cannot do any harm to the prospects for Inishkea.

I dont think there will be many surprises in the full year results but it will be interesting to see what hedges they have in place. They hedge on a rolling basis so probably more than 11% & 6% in Q3/Q4.

The things i'll be looking out for in the final results:

1) Hedging / Hedging Losses / Gains
2) Tax
3) Decommissioning Liabilities - Personally as a long term holder, I would like to see them bring these down. Some companies have a program / goal for every well they drill, they decommission 2. This in my opinion is what i3e should be doing. They have offloaded 60 plus inactive wells to Axiom Energy so perhaps they are on track with this.
4) SG&A costs - i3e's are pretty high compared to Canadian Peers. Majid said that they had reduced them - lets see how he has done.

Interesting question as to where the SP would go if a farm in were to be announced - I could see it easily doubling or tripling. I dont see it getting too stupid because even EOG peg a sucessfull drill at a 30% chance of success.

I find it interesting though that they classify it as a "low risk drill" - I'm not sure I would classify a $40m drill as low risk if it has a 30% COS.

Even more interesting is what the SP would be if they did find Gas - obviously depends on the Farm Out terms and also the actual drill result but it could be 20x or more from here.