The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
"The board NEED to start RNS positive news imo and can't rely on quarterly updates."
Umm...this company does not deign to report quarterly.
Implication: significant upside to many Canadian E&Ps trading at a substantial discount to the valuation implied by this deal. A ramping up of M&A activity could be a tailwind for small cap publicly traded oil & gas equities, which continue to trade at a discount to their liquidation values. These companies may have the opportunity to unlock significant value through dispositions like this one.
https://bisoninterests.com/content/f/recent-canadian-oil-and-gas-transaction-violates-the-narrative
Judging from the response the company gave to the Athabasca sale (Murray Oil sold the other side of the same play for far more), I'd say it is looking increasingly likely they crystallize Simonette as it costs $10M/hole, keep delineating Clearwater, and chug along the 'DeRp Basin' as they have proven synergies there.
Sadly, like I said, the price to get to Canada was paying the loan through the dividend, the expectations that come with being a dividend payer, and now a massive share overhang that can cap the price.
"...as well as purporting to provide the magical answers on how to unlock i3e's hidden value"
At least there is an attempt made at understanding the problem. If you can't or won't grow production of the assets you just bought, perhaps its time to let them go.
Not much that I can add to this. Polus gamed us good.
"Since 2021, they haven’t created any significant value, they have completed the unsuccessful appraisal of Serenity and continue drilling in Canada at a slow pace. The use of funds for paying a dividend when it is necessary for drilling in the existing acreage could explain this."
Jolly, in general terms you are correct, but the price here is an indicator where the commodity is the cycle. So, I need to locate "peak or not peak".
"@WCSB - the price of oil has nothing to do with it"
What a preposterous thing to say when it comes to M&A
"As for the tweet from i3e, sorry I don't agree that's good PR. Good PR is getting your story amongst a lot of potential new investors. It's all about reach. The only people who follow i3e are shareholders and perhaps a few industry insiders. Majid needs to get out there and start doing interviews. "
I agree. To make matters worse, Cannacord Genuity was picked as the Canadian partner to increase Canadian trading to greater than the 10% of the total volume we are observing today. The dearth of deals out of WCSB has hit Cannacord hard and they are laying off 75 people. Let's hope that guy covers I3 keeps his job, but this does not bode well.
Majid was an investment banker himself...he better get on the horn.
"Fairplay to you Stas, as oil prices in 2010 were $79"
$79 in 2010 is equivalent to $110 today
"WCSB no comment on the 167% premium I stated below"
Not worth commenting when you're comparing apples to oranges. YourGene is a biotech. Oil and Gas never gets such lofty valuations. I offered a comparable, Harold Hamm's purchase of the stake he did not own of Continental Resources.
See comments from Smead Capital in the article.
https://www.reuters.com/markets/deals/continental-resources-be-bought-by-founder-hamms-family-deal-worth-27-bln-2022-10-17/
"So bottom line is potentially our Simonette acreage is quite valuable."
Thanks Tnord.
Again, the difference between price and value is maddening. Perhaps management will need to concern itself with 'price' as well as 'value' at this juncture. Seems to me they haven't been too concerned with price. I mean why should they be? People got shares at 0.01. The problem is, apparently I am not 'people'.
" I can say is they sold those assets at far higher multiples than any of the other deals done in the past 12 months".
No, they did not. They sold 3K boe/d of production with ZERO 2P reserves for $54K EV/$boe/d
Similar transactions ranged from $30K to $64. Above average to be sure, but not top dollar.
https://pbs.twimg.com/media/F2cF3NmWcAALZBC?format=jpg&name=large
Stas, I gave you a comparable transaction done recently (last 6 months or so).
Care to do the same to back up your assertion?
"For a t/o I think it will need to be at least 25p to get all the major IIs on board. I can't see them saying no at this level. A cheeky bid of 22p would likely get thrown out by the bod and not even communicated to the market."
Nobody pays more than a 30% premium from where the current share price is at (see Harold Hamm's purchase of the 20% stake of his own company he didn't already own) . That 'cheeky' bid is a 70% premium to current share price. The ball now is squarely on I3 courts. They have to get the share price up. Then the bids may follow.
It would appear they can get 100% of the current market cap if they sold off 20% of production.
Unreal!
Looking like it would cost more than $300M to get Jason Dranschuk paid if Athabasca asset sale serves as a comparison.
Athabasca ($ATH.TO) sold 3K boe/d of Montney/Duvernay assets, 45% liquids for $160M or $54K/flowing barrel.
John Festival is on both boards, but mercifully the purchaser was a private party, otherwise we'd have been diluted to oblivion.
https://twitter.com/garquake/status/1686323139909668864?s=20
Yes, it does look like Sneaksy Rishi gave us a lift this morning.
So, either Londinium is expecting further 'dil', or the trust in this company is permantly impaired.
https://twitter.com/Gugo907/status/1684362286671200256
It's the latter.
"What your opinion on tamarack taking us out "
Dude, this company is a 'consolidator'. It wants get bigger, not gobbled up.