The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Gervais comments weren't really too flattering. He asking people to this stock as a marginal holding for exposure to commodities in case they pick up at some point. I suppose people who bought at 5p are still in the money, while collecting a hefty dividend at this yield. And they are the ones who matter. Not you and I.
WH Ireland is assuming cash costs of $13.31 for 2024. Average for 40 Canadian peers is $20.
A best in class player in the same basin is Peyto, which apparently has a cash cost of $8, and is about 70% hedged (higher gas weighting however).
https://twitter.com/BubleQe/status/1701763019527827792/photo/1
GGG: " I'm only familiar with a couple of the others in the top 10 and I wouldn't go near them with a barge pole"
What's the difference that 'makes a difference' in this case?
Https://pbs.twimg.com/media/GD-9N5Ha8AAzdVj?format=png&name=900x900
Canuck, are you invested here?
Yes, been here for 18 months. It's my largest position. Haven't sold a pfenny. Getting an ulcer.
Well, at least I3 gets to keep their lights on then.
Sorry. Re: Hedge funds.
they don't even have a benchmark. They aim to make money whether the coin toss is heads/tail. Obviously, if that's the outcome one hopes for, the strategy follows, and most hedge funds end up giving you an ulcer.
" I don't understand your hedge fund comment at all
Sack the CEO"
A hedge fund aims to generate absolute returns relative to a benchmark. Heads you win, tails you win. Good luck with that, but that's what they are doing with their current strategy.
I didn't say "sack the CEO". I said keep only one of the execs on the board. There's too much management representation in such a small board.
" I asked you what strategy you think i3e should be following."
How about starting with being an E&P company and not a hedge fund for starters. Then get out either the CEO or the President from the board, and then review the management incentives. Then THEY can do strategy.
"Increase the window to when i3e pivoted to Canada (just over 3 years ago) and it tells another story i.e. a company with zero revenue, zero production, zero reserves and over $30m in debt - compare that to what i3e is today."
Indeed I have. And you know what I see? I see Polus getting paid twice over in equity (likely average cost 5p), insisting on getting a double digit dividend yield on the 20% stake of the company it owns (increasing its dividend take by another 10% exposure via CFDs), while perennially advertising that stake for sale, creating a massive overhang for the share price.
It just tells me the board doesn't work for me and the 80% of the shareholders, but works for Polus.
Of course, it is my fault for not realizing that this a private equity play masquerading as 'public', which means I won't see the fast returns of public equity investing.
I've seen this kind of scheming before, but boy do they hide this well.
Be that as it may, if you have more than 5 year horizon, you should be OK with this name.
Operationally it is fine.
That $14 is not what I3 gets however. It's only a gauge of how much demand for product there is in the hub. I3 gets paid on the monthly futures contract, which should see a nice bump from the low of $1.50 of December.
Yes you iz.
Strategy is big. If it is wrong from inception, the organization and the stock price will not go anywhere. Yes, I understand they have made no secret of the 'total return with do no drill but buy when the price is low' strategy, but when it does not work, an organization and its board has to be nimble enough to do a proper analysis (see Gear as an example) and course correct.
I am not seeing any return, forget about the 'total' part.
Https://zerogcos.substack.com/p/update-on-zero-gcos-companies-1
i3 Energy
It has announced today a dividend of 0.25p/sh (annualized yield of 10% at current share price).
The natural gas price in Canada has recovered in January and the AECO price is now in the C$2-2.25/GJ range. This comes after a challenging December when prices stayed below C$2/GJ for most of the month. The WCS-WTI differential is again above US$20/bbl, which reduces the netback from its oil production (22%).
In Q3 2023, i3's gas production was 44% and its liquid production was reduced due to some apportionment issues, and resolving these problems might take several months. Undoubtedly, the low natural gas and oil prices in Canada are impacting the company's profitability. We'll soon know the extent of the impact on the Q4 results.
The company planned the drilling and completion of 3 wells in Q4 2023 for a cost of US$6 million. These wells will begin producing after year-end. In the UK, the company announced a revision of the plans for Serenity now that the licence of the adjacent Tain field has been relinquished by its former licencees and it has become available.
In light of the situation, it seems that the strategy hasn't changed, Serenity is still on the table and the dividend remains a priority, despite its extensive undeveloped acreage in Canada, some of which is oil-rich. We believe the company isn’t appealing until it undergoes significant changes to its current strategy. We will stop following the company until the ‘shake-up’ that we were expecting materializes.
"I see AECO averaging somewhere between CAD$2-2.50 and WTI USD$70-75."
Gotta pump those numbers up. Those are rookie numbers.
"At these levels i3e has t/o / merger written all over it."
Hope you get to buy it back at 10p. As for the hoped merger: Harold Hamm bought the stake of Continental he didn't own for a mere 20% premium, so a t/o won't do much for you.
Sure: I3 wants to note "the value uplift potential of smaller oil and gas producers".
Eric Nuttall disagrees.
Now that the macro oil price is so out of favor, speculative net length is almost at a 10 year low we find ourselves in a 'stock-pickers' market, rather than 'throw a dart' market that it was in 2022. I doubt many will pick I3, so am unclear what "value uplift" I3 is thinking about. Who exactly is going to 'grant' said value. Nobody trades this thing in Canada.
They are just keeping the lights on, and paying a forced dividend.
Don't know what I3 PR is thinking about here. Eric Nuttall basically threw in the towel yesterday. And he's only one of two specialists remaining in the oil equitiy investing.
"There are too many small/mid cap energy companies in Canada that are irrelevant to institutional investors. With very few dedicated energy funds left and challenged sentiment, size and scale matter. Consolidation/merger-of-equals could be one of the larger themes for 2024."
"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. "
We may not know, but Trafigura knows.