Member Info for TroytoTiber

I think you’ve got your answer there Bismarck witht that 15.01hrs trade. It’s a big lump of stock given how little trade there is usually in GEEC. No bad news that I can see so just suspect that it’s more likely someone has run out of patience. It’s what makes a market so for those who think that the investment thesis is still intact, then it’s even cheaper to get in thanks to that seller.

Worth remembering the recent lows of around 8p at the height of the covid induced lock downs and possibility of a vaccine only just emerging. Things were grim then and the outlook was very uncertain. We now have:
Indian economic growth firing again
Higher expectations for longer term gas prices
More evidence of commitment to increase gas share of Indian energy mix and more favourable regulatory landscape of gas exploration and production
Restart of the construction of pipeline to Kolkata
A company that has remained cashflow positive throughout
And as highlighted in your earlier message Bismarck a very compelling valuation that seems to discount a lot of bad news already.
I’m
Still very confident that the shares are significantly mispriced and that with a few more months - maybe 12 to 24 tops - we will have news of increased reserves, offtake agreement with pipeline owner GAIL, financing for substantial roll out of new wells in place and production ramping steeply! As always though just my thoughts so don’t anyone take it as investment advice

Agreed Bismarck - big financing required and will take a lot of skill to not leak to much value to new investors. I think it’s very likely that the finance can be found over the course of the next few years. The cashflow from production will fund capex after a few years. It’s really just the first $300m or maybe a bit more needed over the next year or two for new wells. My money is on farm in with Essar or ONGC and a slab of debt. Little geec negotiating with those mega companies though for good farm in terms is a big question mark as you highlight. Only £18m mkt cap though so I’d assume that even in a very bad deal geec hangs on to many multiples of that.

Thanks for your message Jonhas. Good to hear and I still remain confident that patience will be rewarded with geec. When management own 2/3rds of the company, communication by the company with the remaining 1/3rd unfortunately is low priority. I’m sure all investors here find this frustrating and it can test patience. As you say though things look well set up for geec now for 2023 and I’m hopeful for news on shale drilling plans soon. No point in extracting the gas though until they can sell it all so pipeline completion to Kolkata is critical.

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/021723-interview-india-to-surpass-2030-natural-gas-share-target-amid-firm-demand-says-geecl-ceo

Prashant Modi (CEO) has recently only gone to media to talk about the enormous opportunity for GEEC just before issuing an RNS to update on progress. The interview with S&P Global on 17th Feb not only sets out a very strong backdrop for gas in India, which we know already, but he also re-iterates the very large roll-out programme for GEEC in terms of wells to be drilled on the Raniganj site. Nothing new but wondering if we are about to get an update on the shale test well drilling programme. With an upper estimate of over 8trn cubic feet of gas in place within the shale these test wells could be highly significant for the company and its valuation.

Cautious investors wont invest on a big IF like this but for those prepared to take on more risk a positive outcome on these test wells will most likely make the teens share price a thing of the past. Just the view of a long-term holder whose patience is being tested so DYOR.

Some good contextual info here

https://www.hellenicshippingnews.com/indias-gas-consumption-target-faces-risks/

Helpful context to understanding the complex evolution of gas growth within India’s energy mix.
For geec though I think this piece is supportive with positive comments on the near term completion of the urja ganga pipeline and City gas distribution growth near to medium term looking good.

Clearly though the volatility of international gas prices has hampered demand growth in india, capacity utilisation of gas infrastructure and therefore further capital expenditure on required infrastructure to get gas to energy mix targets.

More in an attempt to break the long periods of silence that have become a familiar hallmark of GEEC management, have had a look for any new snippets that might indicate any changes to timeframes for selling gas to Kolkata.

GAIL, the Indian gas infrastructure company issued an update in august last year that gives a june 2023 completion timeline for the pipeline to Kolkata. https://www.livemint.com/companies/company-results/gail-q1-net-profit-up-91-at-rs-2-915-crore-11659626586752.html

Reading the transcript of the latest GAIL financial results and the response to a question about the pipeline and capex for H2 it seems that the majority of H2 capex will be the Haldia pipeline and particularly referenced the delayed bits (which to be fair is all of it).

So it still looks like this is the year for commissioning of the Haldia branch. I live in total hope and probably no rationality on this. It’s india after all and nothing anyone says there in business should ever be taken with anything other than huge dose of caution. https://gailonline.com/pdf/InvestorsZone/EarningsCallTranscript041122.pdf

They also targeted the shale gas test drilling before end of March 2023 so this should be imminent. 74 days until the end of March - you’d think they would know by now if they had booked in some teams to drill the wells. Maybe they just don’t want to tell us or maybe they haven’t got anything booked in!

I’ve said it many times before, if we get good news on both these issues then 2023 will be hugely important for the share price and perceived value of the business.

At the moment though market couldn’t care at all and virtually no good news is priced in. The upside is huge if the ‘if’s come in.

Happy new year and here’s to GEEC’s break through in 2023.

Recent study conclusions focused on 'plastic rain' should be a huge boost for d2w demand. Estimates for the quantity of plastic micro-particles that fall from the atmosphere every year are alarming - 74 metric tonnes per year!

https://www.sciencealert.com/plastic-rain-is-a-now-a-thing-and-weve-underestimated-just-how-heavy-it-is

Add to this that it is also estimated that humans on average consume up to possibly 1 credit worth of plastic every week in the form of micro and nano particles of plastic circulating in the air we breath and the food we eat.

Symphony has carried out studies to demonstrate that its d2w additive overcomes the problem of microplastics in the open environment and has made reasonable attempts to highlight these. While the case for human harm linked to microplastics is not proven yet, you would hope that governments would want to take a more cautious approach and minimise the risk until we know more information on the health implications - especially as d2w is a very low cost solution requiring no redesign of existing plastic manufacture infrastructure.

https://edition.cnn.com/2022/10/31/us/microplastic-credit-card-per-week/index.html

Company has commented that :
'In the presence of oxygen, the catalyst accelerates the natural oxidation process and reduces the
molecular weight of the polymer at a rapid rate, to the point where it is no longer a plastic and has
become a waxy substance which can be bio-assimilated by bacteria and fungi in the natural
environment. The process continues until the material has biodegraded to nothing more than CO2,
water, and humus. It does not leave fragments of petro-polymers in the soil, and it does not contain
heavy metals'.

“The degradation process is not only a fragmentation, but is an entire change of the material from a high molecular
weight polymer, to monomeric and oligomeric fragments, and from hydrocarbon molecules to oxygen containing molecules which can be bioassimilated.”

The recent CoP15 negotiations have concluded, setting out a new framework of targets for the decade to 2030. Within these, target 7 explicitly highlights 'preventing, reducing and working towards eliminating plastic pollution'.
Over 190 governments from around the world have agreed the new global biodiversity targets, and they could all very easily make an immediate and significant contribution to target 7 on plastics by mandating use of technologies like d2w.

This may seem like a huge open goal for SYM to shoot at. Sadly though vested interests are powerful and will fight against change that harms existing business as usual. The new framework for biodiversity is not legally binding on the nations that signed it today and so in reality we probably wont see much progress on the targets overall.

The hope has to be though that for relatively easy to implement actions like reducing microplastic pollution governments will move quickly and across the board.

One aspect that frustrates me about GEEC is that they have not made progress in securing an offtake agreement with GAIL. The upside of waiting is that they can now maybe lock in a much higher price for any offtake signed in the next few months given the guidance in the interim results of expectations for substantially higher realised gas prices for cbm in the market.

So with the benefit of any doubt given to the management for this master stroke of strategic thinking, we can now read the more energised wording in the interim results to get on with expanding production and the explicit reference of farm in as a source of finance as possibly hinting that the management have started some initial conversations.

So who might be in the frame? Essar Oil and Gas operate the raniganj east field adjacent to geec’s raniganj south and have a very significant balance sheet at their disposal.

Essar is already connected to the Urja Ganga pipeline, which is connected to the national grid since May 2021. The company has an agreement with Gail to supply the CBM through the gas pipeline.

Given the drilling synergies that must be significant between the two companies my money would be on a farm in with Essar and maybe also an overseas technical partner to bring shale gas specialism to this opportunity.

While such a move would dilute the massive upside potential for the share price of geec, it would also expedite the roll out of hundreds of new wells. Once largely complete and derailed I also wouldn’t be surprised if Essar then buy out geec and other shareholders (from farm in).

Essar are moving on this now and so if I’m right an announcement won’t be far off. Geec can’t finance their ambition from debt despite the strong balance sheet. It just isn’t big enough. They could issue a significant amount of new equity and combine with a London main market listing. I wonder though if that would get away at a high enough price for management to accept the dilution. So maybe the more attractive option is the farm in where synergies and a better understanding of the true value of the raniganj asset that Essar would bring is the option that lands?

As always time will tell but the tone and wording of the last update imply that we are not far away now in my opinion. Vital to DYOR though

Outlook is most important with GEEC with a potential highly transformative step up in reserves, production, sales and cash inflow. Negatives are that the numbers themselves were nothing to dwell on (but it isnt about the current numbers) and the fact that no update on the date for shale exploration drilling or the pipeline to Kolkata was given.

Positives are that pricing outlook for 2023 and 2024 are significantly higher than current prices and that company has re-iterated the additional CBM wells that can be drilled on top of the 144 remaining from the original drill plan for Raniganj South. There is also more firm talk of finance options (debt, equity and farm in) which indicates maybe that we are much closer to news on financing the huge growth opportunity. The higher pricing outlook has brought higher confidence to push ahead with drilling more wells (supported i guess by the progress of the kolkata pipeline).

I was hoping for a date for the shale exploration drilling but clearly this is still a little way off. The statement seems to imply that the focus for more immediate expansion is CBM. 2023 is indicated as the year that the CBM drilling campaign will resume so either way next year is an exciting year for production and reserves increases.

A bit longer to wait i suspect. i still have a high degree of confidence that GEEC will re-rate strongly during financial year 2023/24

Suspect that the 100k share trade was a sale that executed first thing this morning and was booked out around midday. That would have dropped the bid / ask resulting in the follow up 45k trade being executed at 16.1p as market makers tried to absorb the stock.

Suggests someone wanting to exit a position quickly and realise cash. Could be for a whole host of reasons especially in this economic environment. Suspect that a lot of people who have some investments are needing to cash some in to cover rising household costs etc.

2 weeks to go until interim results and I don’t see any reason why these shouldn’t be in line with expectations and hopefully have some positive news on pipeline construction and shale gas well drilling timetable.

Excellent in price Bismarck! Hopefully the interim results early Nov will give enough info for the re rate to begin. Exciting times ahead.

Agree that the share price and £20m odd mkt cap is really not asking for very much from geec in terms of profits and cashflow, compared to what could be achieved in the next two years. Significant possible uplift in reserves from shale, and offtake agreement with GAIL and growing demand in india for gas as a transition fuel but also now a strategically important fuel after Putins antics.
Good time to buy when share prices discount a lot of bad news already obviously and I think that is then case here with geec. Just my opinion though.
There is a significant liquidity discount with geec which is justified as it’s hard to build and sell a large position. India is also a high risk jurisdiction - so investors will have to apply a large discount rate to value the cash flows here properly.
With news of progress on reserves, production, sales and pricing though, all of which we should get in the next 12 months, the forecasts will be uplifted significantly as you say and the discount rate should fall as the investment case is clearer = big re rate in my view.

Think they reported something like $1.6m for 2022 on July 8th. SP Angel cover Geec and their research and forecasts are open to public. Can’t remember what they have published but easy to check. Arden also cover geec but I don’t think their forecasts are available directly. Market Screener worth checking also for forecasts as usually quite good at picking up revisions.
Substantial revisions to 2024 numbers of geec secure offtake with GAIL and open taps to sell all thur can from existing wells. Then add in longer term kicker of new wells and possible shale gas reserves commercialised for 2025 and beyond.
Hope that helps a bit bismarck!

Had hoped for some news by now on the initial drilling campaign to test for shale gas commerciality.

The company is not known for its efforts to communicate with shareholders so we will only hear of these plans when they are about to start.

Imagine that they will wait until the interim
results update in November to tell us the timeframe and the drilling should be imminent by then. Their last announcement did state that drilling was planned for this calendar (I think) year.

Movement from resources to reserves of anything like the mid case for shale volumes will mark a significant upward move in the share price imo and this news could begin in only a few weeks from now.

Otherwise it’s all quiet on the gas pipeline as far as I can see.

Hopefully some good news to come here in an otherwise bleak looking autumn and winter for folk living in Europe!

Agree. It’s a great update from Indus. A stock that is more overlooked than GEEC. While price controls don’t apply to CBM - so GEEC has much more control on pricing - the rising regulated price cap is good to see. Should stimulate more gas production in india and help open up new demand. It also underpins GEECs current $10 btu pricing. There’s a good chance that the cap rises again later this year, underpinned both indi and geec further.
https://wap.business-standard.com/article-amp/companies/reliance-expects-gas-price-to-rise-in-oct-wants-removal-of-ceiling-prices-122072400273_1.html

Realise that I am significantly overusing the word significant!

This stock is massively off investors radar. The cash flow potential of Indus is significant and no where near reflected in the share price. Todays news is a significant boost to the investment case, yet one trade only - one hour into trading post an excellent rns.
GEEC is another Indian gas producer that is significantly undervalued and overlooked by investors.
Gas demand rising in india, prices rising and both companies sitting on large gas reserves and very significant resources.

I’ve no idea why having held over the last months, maybe years, that an investor would get out now- dragging the price down against themselves. just as geec is about to embark on exploration drilling that could transform reserves and at a time when new markets for gas in India are opening up AND the current price discounts quite a bit of bad news already.
Then again, I’m probably missing something important!

Completely agree ctw!

Frustrating as it is to read this update I don’t think it’s a case of back to the old sym. We haven’t left the current sym behind yet. We’re still in the transition phase to a growth company with global market opportunities and a large institutional investor with access to much more info than us is continuing to build a significant shareholding. Many individual investors seem to a time horizon of weeks so will be frustrated but patience will be rewarded here in my view. Still worth accumulating shares at this level.