The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
"Anyone here saying 'we're worth more' needs to look at the sp objectively and ask why given we haven't broken 15p when poo was in the 90's. ...Majid had a good go of things, but now needs to acknowledge the market will not value the company anywhere near what we could get from a PE bid. So he should put up the 'for sale' sign if genuinely working in the interests of shareholders."
Majid doesn't work for the shareholders. He works for the board. The board works for the shareholders, and they hired him. May be we need to look at the board itself. While John Festival is a marquee name in Calgary, I really starting to doubt what kind of game he's playing here with this board.
"Based on LSEG data, the enterprise value to EBITDA (earnings before interest, tax, depreciation and amortization) multiple of Canada's largest Montney producer, ARC Resources (ARX.TO), and seven of its peers averages 4.1, compared with 5.0 for Pioneer, the largest producer in the U.S. Permian basin, and its peers."
These multiples best of breed Canadians like ARC are getting today(4.1x) are an order of magnitude lower than the 5x WHI Ireland expects I3 to get. Even getting to ARC's multiple (which we won't) would mean a 40% upside from here.
"No new i3e operated drills to come on line this year"
Didn't they plan to blow their wad on 8 Clearwater wells? Why is your spreadsheet saying otherwise?
Time to do a "Gear", and hire Peters & Co to figure out what the hell is going on.
Quite an indictment from one of the best informed but cynical of the Canadian oil space.
https://x.com/WTIBull/status/1674520610326605826?s=20
"So on these metrics i3e would be trading at a little over double its current market cap or 26p"
May be the BOD should look into hiring Peters & Co to look into why it is constantly undervalued for the past 18 months.
Take a '2 year nap' you say?
Begs the question what I have been doing for the past 18 months.
" i3 should have ensured they covered the divi with fcf and greater hedging at the highs of the oil price last year. i think many thought it was already covered and was surprised at the extent of the cut. if they couldn't have afforded it, then they should have built in either a better margin of safety, or under promised."
That should have indeed been the case had I3 been set up to create rather than extract value. This is the third "kick at the can" for a certain shady group (hence the '3' in the name), and they've yet to prove they can actually create value.
See comps to Peyto's below.
https://pbs.twimg.com/media/F8kY654aEAEzjR-?format=png&name=small
TOURMALINE CONTINUES DEEP BASIN CONSOLIDATION STRATEGY WITH THE ACQUISITION OF BONAVISTA ENERGY CORPORATION, INCREASES BASE DIVIDEND AND DECLARES SPECIAL DIVIDEND
https://ceo.ca/@newswire/tourmaline-continues-deep-basin-consolidation-strategy
WW3 is about to break out, and this dog still slumbers.
Massive indictment on the Board and Management, and their lackeys.
TMX will benefit mostly the heavier producers like MEG etc, as it will narrow the discount between WTI and WCS. Sadly, we do not sell WCS.
Re: Exxon buying another Permian producer
The Americans have effectively run out of Tier 1 acreage in the Permian. Oil production is getting gassier. When they start looking at Canada for the first time in 20 years, then you can expect a 'multiple expansion' as they call it. Alas, I'd give it a couple more years until the Liberals are finally put down like a sick dog, and backtracking on ESG is in full force.
Here's an natty outlook from one of the best Canadian sell side shops (RBC via Michael Tran)
North American Natural Gas:
Our Henry Hub outlook increases to $2.60/mmBtu in 2023 (+3%) and is unchanged in 2024 at $3.50/mmBtu, driven largely by the impact of higher power demand on storage balances. Our long-term Henry Hub forecast is unchanged at $3.75/mmBtu, as we anticipate supply-demand balances driven by domestic demand and LNG exports.
Canadian AECO prices are reflected at C$2.84/mcf in 2023 and C$3.28/mcf in 2024.
Yeah, Repsol's days in Canada seem numbered as well. I'd rather have "woke capital" out than in. So, no skin off my back.
"Man what if things in Canada will change?"
As a Candian, I can tell you with some confidence, that the last barrel produced in the world will come from Canada.
Noticing "Camarco" mentioned in the RNS-es for the first time. Seems like they've hired a proper PR shop, and Tony can take a break.
For comparison: Gear is in way worse shape than I3. Low inventory, high asset retirement obligations and more.
Gear is not necessarily putting itself up for sale. Rather it wants to know 'why the hell is my share price so low, when I see way more value'. The market will speak via bids in 'data room'. They don't have to take them, but it may help them recalibrate their strategy.