Member Info for Wigwammer

So they’re anticipating $40m ebitda just in the second half, enough to cover ANNUAL interest payments, capex and tax combined. So $80m annualised ebitda currently, which we can expect will rise again in 2022 as higher oil/gas prices and lack of capacity feed into day rates. By way of benchmark - they were making $120m+ at the operating level back in 2015 and 2016, in a materially lower oil price environment and arguably more competitive capacity available . ATB

Probably just a bloke trying to enjoy his investments. It’s not exactly a board rammed with unbridled optimism, is it?! These boards have changed so much in recent years. Bring back the times when - for better or worse - people could get a little joy from commenting optimistically about the things they are invested in, without the boring reminders that their ticket isn’t definitely a winner.

Malaysian benchmark price averaging around 10% above H1 in H2. Given roughly $160m annualised sales run rate in half 1, and high gross margin likely on incremental price increase, should bode well for cash generation in H2. ATB

Thanks sea7. But what about the cash position?

I don’t see the sense in anyone taking this company over until we see the results of Part B. And while the delays to reporting these results may be frustrating, it is entirely within the norm for companies operating in this sector, and particularly during a pandemic. In short, it’s a bit of a waste of time speculating on anything - or blaming management - until we get the Part B results and have a better steer on the value of the primary asset. Hopefully, we will be seeing those results soon - the latest guidance was late summer/autumn.

Hypothetical question. If the price of palm oil were to rise another 30-50%, what would be the effect in usd on the bottom line?

Thanks nobull, yes I agree the market needs to see tangible debt reduction before any sustainable rerate, but I think events are coalescing that make that event increasingly likely - the main ones being the favourable pricing environment confirmed by the return to profitability and the confidence evident in the outlook statement. Interesting I think to look at the share price chart pre and post March last year. It seems the stock took a gigantic covid hit, which has yet to unwind - despite the market increasingly pricing in recovery pretty much everywhere else. Given what we are seeing in the fundamentals here, a reversion not only to £1+ but perhaps well beyond - given the specific fundamentals here have strengthened beyond where we were in early 2020 - may be warranted. Seems to be a background seller currently - hope they don’t know more than I do! ATB

Total speculative gossip, but Perhaps there was an offer for all/part of the company when CH was CEO, which would have secured LD’s financial future. But Redmile did not want it. So instead they agreed to secure her financially by buying her shares off her, and locking her in with options and the CEO spot. The exchange has taken place because an attractive value crystallising event was on offer, but Redmile see the potential for a lot more.

Apologies. All the figures below should be in usd.

Morning nobull, new here and probably naive, but interested in your view. With EBITDA running potentially well above $60m usd this year, interest costs of around £25m, capex running around $10m annualised, surely the company is self financing at least at this juncture? In the first half net debt fell $15m, with the potential to do substantially more over the coming periods. So it seems to me - and happy to be corrected - that they are on the right path to start materially reducing the debt, for the first time in years. I agree - resolution of the coal loans would be another material and positive kicker. With the equity valuation such a slip of the total assets here, it shouldn’t take much to start moving the needle in the right direction. There have been several PMDR purchases of the ords over the last year, which encourages me to think that resurrecting the shares is a priority for them. With a shareholder base including M&G, UBS and other established institutions plus a full London listing, there should be broader pressure to do so. Do you believe the current price upcycle is going to be temporary?

To repeat - even BNP’s conservative estimate of discounted FCF gets to 21p, or double the current share price. ATB

BNP’s target valuation is between 21-38p.. ie the NPV of their forward estimates of free cash flow are at least double the current valuation. The posters who repeatedly suggest BNP anticipate a free cash implosion are clearly manipulating the true intention of the author. The consensus scepticism is highly encouraging. ATB :)

It has got this far because Merck and Pfizer have put their weight behind the lead product. Nobody with a brain cell is going to believe you know more than them - but I’m sure that won’t stop you believing it :)

Interesting that the announcement of the Oxford Finance capital and acceptance of the ESMO posters was within days of each other.

So the trappy cynics have to concede the historic spend is inflated by pipeline costs that aren’t likely to continue at anything like the same level going forward, and that’s the inflated figure thats been driving their forward estimates. Quite an omission given their painstaking and objective search for truth and light.. Regarding BNP’s forward FCF estimates, we already know the NPV of that, 21-38p, or a target valuation at least double where we are now. What else might the cynics be getting wrong..

Well done, LC. If only the trappy cynics read the note properly, rather than misleading private investors with poorly researched tripe …
“The below is what I found most interesting - per BNP it would appear that all the pipelines etc that are required to get gas from well to plant/distribution have been front ended and the pure "exploration costs" will be much less in 2022

Per BNP Projections ->

2021 2022
Purchase of Property Plant&Equipment(PP&E) -$16.4Mn -$3.2Mn
Expl & evaluation expenditure -$11.6Mn -$14.2Mn
Total -$28Mn -$17.4Mn

It is clear now that SDX management have front loaded extraordinay pipeline expenses etc and barring unforessen expenses - cash should accrue very rapidly..”

I think the growth investors who purchased at multiples of the current price - confidently backing their crystal ball about future growth - need to take a breather and reflect on where they went wrong. There are a number of unknowns here which may well fall in favour of the shareholders, and I for one will not be relying on the tarnished crystal ball gazers for future guidance. The one irrefutable fact is the market valuation is a lot lower than it was reflecting a pessimistic consensus. I suspect things are not quite as bad or irreversible as the doomsayers suggest. IMO. GLA

Littlened is right - in fact, the mid price moved up today from 10.25 to 10.5. The only reason it appears to have fallen is the UT last night was at 10.5.

Waha own around 4m quids worth, and they can’t dump it on the open market even if they wanted to. They are certainly not finished with SDX and like the rest of us will want a decent price for their holding.

Agree littlened, though I think you mean more sellers than buyers. Looks like capitulation to me. Disappointed growth investors throwing the towel in - despite any rational assemblage of the facts suggesting this is materially undervalued .. ATB