Member Info for Wigwammer

In which case you should be feeling more positive. I wonder what multiple of the current price will be realised if they pull it off. ”The Company has already announced its first processing contract with Ural Oil and Gas who will deliver 500 million cubic metres of raw gas per annum. In addition, the Company is in discussions with other parties potentially interested in supplying raw gas to completely fill the spare capacity. Whilst the outcome of these discussions is uncertain and details of such negotiations are commercially sensitive and confidential, a successful outcome would lead to securing materially transformative, stable long-term revenues.“

Unfortunately your short call at 8p was a feckin disaster :)

Nickel_Investor
Posted in: NOG
Posts: 4,588
Price: 8.00
No Opinion
RE: Going bust because of the debt11 Oct 2019 08:06
It’s a case of getting out , grabbing what you can salvage before the inevitable

Need to correct a few misconceptions here. The naive PE is low but the cash conversion is appalling at sub 50%. The net income line bobs around all over the place, exactly what you’d expect from high fixed cost capital intensive cyclical. The div yield is high for now - but the company has recent history of smashing it by 75%. Nobody with experience values a cyclical using div yield because it can be cut in a blink of an eye. Some individual who can’t use a calculator claimed it trades below book -even including the substantial intangibles it doesn’t trade below book. The most robust measure here is ev:sales, which at 1x for a heavy cyclical is neither here nor there. Thanks for mentioning NOG nickel, up 100%+ there by doing the opposite of what you suggested at the lows. Good luck with fxpo people - you may well need it :)

Need to correct a few misconceptions here. The naive PE is low but the cash conversion is appalling at sub 50%. The net income line bobs around all over the place, exactly what you’d expect from high fixed cost capital intensive cyclical. The doc yield is high for now - but the company has recent history of smashing it by 75%. Nobody with experience values a cyclical using div yield because it can be cut in a blink of an eye. Some individual who can’t use a calculator claimed it trades below book -even including the substantial intangibles it doesn’t trade below book. The most robust measure here is ev:sales, which at 1x for a heavy cyclical is neither here nor there. Thanks for mentioning NOG nickel, up 100%+ there by doing the opposite of what you suggested at the lows. Good luck with fxpo people - you may well need it :)

Thanks for conceding that you made an 8p sell call here and that you sold out of EUA at 1p. Whoops and whoops. Strange that nickel pickle claims to have closed his (alleged) short - why would he do that if he was so sure where this is heading? Great weekend one and all. Come on the lions :)

Fxpo management cut the div by 75% in 2015 after top line fell 40% from peak. It’s a volatile and high fixed cost business which regularly and unexpectedly dumps on holders. Long term it goes nowhere and short term is susceptible to economic correction. 1x ev:sales is not attractive for this uncertainty. Caution urged. ATB.

I see people are calling Nickel a fantasist over on the EUA board. He sold his position at a penny, then later claims he sold at 4p. Take whatever he says with a giant pinch of salt. ATB :)

Nickel Investor closed here at a penny. See below. Don’t believe the BS :)

Nickel_Investor
Posted in: EUA
Posts: 4,588
Price: 1.03
No Opinion
Closed for 72% gain
25 Oct 2019 12:27

When you’re circa 200% offside on a call you’ve lost the debate :)

Nickel_Investor
Posted in: NOG
Posts: 4,588
Price: 8.00
No Opinion
RE: Going bust because of the debt11 Oct 2019 08:06
It’s a case of getting out , grabbing what you can salvage before the inevitable

Thank you for conceding that the production facts I present are true, and contradict your initial post. Your new opinion is that the company has only six months to get debt down - a view you don’t substantiate with anything at all. ATB :)

To repeat - your point is misleading. There was a large step down in production in 2017/18 of 22%. So far this year production is is down 8.5% yoy. The target decline in Q4 is lower again at 3.9%. These are facts. The suggestion that you warned about TCG and work in administration is neither here nor there to me - I didn’t own TCG and have been listening to similar warnings about NOG since the shares were at 6p. It has been profitable to take the opposite view. Hope that helps :)

That’s not what the production stats suggest. They suggest that a hurricane is now becoming a gentler decline, and hopefully at some point will turn positive, with some drill success.. Please see my previous posts from yesterday. ATB

FD states in Q1 conference call that UOG processing agreement alone could contribute $50m in FCF pa. To put this in context, the interest costs on debt for 2018 were $49.4m ie this deal alone covers the cost of debt. Processing to start in 2020... “And then on UOG, if I can just address the economics on UOG agreements. There are both -- there are 2 things. One is to treat their condensate, where it's very simple, we'll get paid $8 a barrel on that condensate. So they send through the -- through our gas treatment unit starting in Q4 of 2020. And then we will be purchasing a stream of Ural Gas, which is essentially us purchasing the LPG and dry gas from them. And this is done on a formula which is all the small details are confidential. But in order to give you an idea, they have 8 wells that they've drilled, which will come online and should produce, according to Wood Mackenzie, around 15,000 BOEs per day with a similar split of liquids and gas as Nostrum has from its gas condensate reservoirs. If you take those -- if you take that production and you put it through assuming the $8 per barrel of condensate treatment for your processing fee and you then assume our current prices for sales gas and LPG, then you will generate to Nostrum on a per annum basis approximately $50 million of additional free cash flow.

Further to my earlier point ANO - working through the sales volume forecast of 27k boepd for FY19, suggests a Q4 yoy volume decline of just 3.9%. The amelioration of decline may explain some of the price strength today.

Thanks ANO. I see your forecasts are based on straight lining a 30% pa production decline into perpetuity. The production decline in 2017/18 was circa 22%. The 2018/19 decline expected to be much smaller at 8.5%. Can I suggest that in light of this, the production assumptions behind your summary require reflection. ATB

A fully funded 18 month drilling campaign ahead, with the potential for exponential revaluations from the shares in the event of drilling success. That’s where this story is heading. ATB :)

Market is saying one thing, nickel is saying another. I’ll leave it to readers to work out who has probably got it right :)

Seems the market isn’t buying the bears story. I wonder what they’re missing :)

2020 vs 2022 makes a massive difference. They have time and funds. For the rest of 2019 and next year they have a sizeable drilling campaign ahead, backed by schlumberger. What do you think will happen to the shares if they get a decent result? In that event, no one will care much about the berenberg price target, and debt concerns will be little more than fear in the rear view mirror, that some will profit from and others won’t. ATB

What 2020 bonds, Geordie? Perhaps you mean 2022. If I believed every berenberg target on nog over time I would be a very poor man :)