Member Info for ZENGAS

50p TYB ?

How will you justify a m/cap of £1 billion on the same old tried and tested routine ?

AssetCo: an undervalued asset manager rising to inflexion point

Like professional sport, asset management is a 'results orientated' game – that is currently polarising between low cost, index hugging trackers at one end vs specialist active fund managers at the other.

AssetCo (ASTO)

(Mrkcap £53.5m at 35p), led by accomplished industry veteran Martin Gilbert (Exec Chair and founder of Aberdeen Asset Mgt) falls squarely into the latter camp.

Indeed at the last count in Mar '23, its wholly owned Assets Under Management (AuM) had climbed to £3.2bn (£13.8bn incl. Parmenion’s £10.6bn) - after completing a series of acquisitions (e.g. River and Mercantile, Saracen, ReVera Capital, SVM Asset Management Limited and Ocean) since being created in Apr '21.

Sure this hard work hasn’t yet been reflected in the beaten-down share price. Albeit equally for canny risk tolerant investors, the undervaluation offers opportunity, especially as AssetCo appears to have reached an inflexion point.

In fact, despite being forecast by Panmure Gordon to be marginally loss making in FY '24 (y/e Sept) - ASTO is on track to become profitable (PBT £3.2m) and cash generative in FY '25 on sales of £18.8m. Plus, augmented by a bullet proof balance sheet (Mar '23 net cash of £20.6m, or 14p/share), the Board has ample firepower to pay a 1.3p dividend (£1.85m), whist similarly executing its 'Buy & Build' and organic growth strategies.

Ok, so putting all this together, how much is ASTO worth?

Well clearly it’s impossible to say precisely due to the rapidly expanding nature of the group. However, as an indication, Panmure Gordon & Singer Capital Markets both have BUY ratings on the stock with Target Prices of 97p and 130p respectively.

https://www.voxmarkets.co.uk/articles/assetco-an-undervalued-asset-manager-rising-to-inflexion-point-8a39c17/

SVM were bought over for around £11m last year by AssetCo. £9m in loan notes and under £2m in cash. It was founded and run by Colin McClean and Margaret Lawson. He became a director of AssetCo. They had about £550m under management last year and underwent a restructuring. Had a profit of under £150k to March 2022.

Margaret Lawson retired from SVM in Sptember 2023 and McClean i think stepping back earlier in the summer with Neil Veitch recently taking on the role at SVM as lead manager. Not sure what fund is which but one SVM fund was ranked at 184 out of 200 or therabouts not that long ago.

With a new manager in i'm not that surprised they'd restructure or put their own stamp on the fund holdings. The good thing is that someone has bought them and to me it's no reflection on the merits of LBE going forward given the 2 strategic deals with Japex and Topaz since May and September.

I had thought that just maybe the 1st Dec could have been Saves own internal hoped for date to publish the adm doc.

After a year, what is it that’s really holding it up and taking it closer to the 15th. What is there that hasn’t been concluded to date that can be done suddenly in the next 14 days to get an adm doc issued ? It was to be issued giving details of the conditions necessary to conclude the acquisition.

It’s baffling after so long that we know so little from the company. They string out the same standard responses but can’t say what exactly the P2 reserves or net production was/is and refer only on query, to the original RNS which gives a gross figure of production but no reserves.

No not at all Scotpak. It was merely pointing out that the adm doc should be able to come out whether S Sudan completion is imminent or not as in the case of Accugas.

Maybe it’s actually some of the work streams and the data on 64 different fields that’s needs to be agreed over and include in that document hence the delay ????

3 x 500k trades from 10.30am at 17.6p reported late out of just under 2 million total volume.

On the Save website media section.

Adm doc for Accugas acquisition released and resumption of trading in Dec 2017.

Completion November 2019.

Can’t find it at the minute but I had an old copy of S. Sudans PSCs . Just wondering if SSUdan can’t complete on an alternative deal with somebody else come the one year anniversary can Save say it completes? I wouldn’t like a similar situation as they announced on Exxon in Chad. I’d like to see clear closure and the government fully behind it.

Hi Cyb, I thought we just need to get the adm document out and then it’s possible to relist. Did this not happen with Accugas as well as the Chad acquisitions ? That’s my understanding but maybe I’ve misread it.

I went over todays Auctus analysis note with a 60p target - a mere m/cap of £34m compared to £10.5m now.

There's a range of per boe values for those in production to the existing discoveries and anything from the Norwegian exploration.

In total they have an unrisked price target of £1.09 which assumes a total of 11.9 mmboe net. Realistically including the production, they have roughly third+ of that now - and possibly more than half already subject to more verification of the numbers from the discoveries made.

The lowest price per boe used for Norway is $4.14 per boe.

There's nothing in the note for the blue sky potential of Kertang.

Kertang at 9 TCF estimated recoverable is about 1.5 billion boe of which they have 52.5% and an analog to Petronas 6 TCF Kaswari field coming on stream at 900 mmcf/d.

If they farm down to a minimum holding of 10% and carried, it would mean a target of 150 mmboe and at about $3/boe represents a value of about $450m/£350m to chase or £6/share if it came in on that methology/current shares in issue.

On a partial carry and say 15-20% retained and expanded to nearer 100m shares it could still be worth about £5 - £7/share again on that basis.

It's fully covered by 3D and threre are 2 adjacent prospects which are each about half the size and imo all 3 could be around 15 TCF recoverable so even much more value to play for.

All 3 prospects covered by £25m worth of 3D of 2900 km2 with over 6,000 km2 carried out across the 12,000 km2 block.

Compare that to UPL this am and at 3p last week = £35m m/cap and would be a starting value for LBE at 61p not to mention Norway or other upcoming deals.

Decent prize to play for and significantly underpinned and as ever dyor.

Over 51% of the shares held by Institutions (Axa 3.9%, Progressive Capital Partners 14.5%, Janus Henderson, 5.3%, Cannacord 3.8%, 2 others = HNWs etc) and directors.

No harm in keeping tabs on them and what they have to offer officemanager when the boxes are ticked.

Thanks RR, much appreciate the feedback and your efforts in getting responses from them.

This is the first time in any of the RNSs that i saw a farmout even mentioned (unless i've missed it and which i apologise in advance for) despite them announcing they went and looked at rigs first etc. You can't farm out something that hasn't been awarded yet.

Seperately, looking at rigs doesn't make drilling imminent. Especially so if they then seek a farmout. How long will a farmout process take and be approved ?

A rig can be looked at and i think its part of the announcements to keep investor interest high but until there's a farmout the rig company doesn't keep their rigs on hold. Until theres a definitive available drilling slot or they have one cold stacked or one coming off another job but it won't be certain. It's why i was surprised to see the farmout intention now slipped into todays RNS. A rig available now for the next 2-3 months mightn't become available again until later in the year but by the sounds of it their intention is to drill this coming year i assume subject to farmout or finance.

The cost of a well and services is still in the dark. There's no 3D and will a potential farminee commit on that basis or want more detailed coverage which ups the cost and potentially delays drilling until that's done ? A PSC will likely have a time period of drilling a well in the first up to 2 year period. The cash position isn't great but they can make small placings as before until a farmout happens or decide to go it alone subject to financing.

At the end of the day there could be enough net bl potential after a farmout at this m/cap and they must feel the PSC award is a forgone conclusion but sometimes i feel the cart is before the horse and comes on top of last months debacle in how they manage things.

The farm out process has been slipped in which they’ll need rather than a cash raise. It will be interesting to see how long that process may take and what they retain whenever the PSC is awarded.

It's a case of just waiting for value to unfold. At this price it's still overlooked by many and too cheap at todays £10.3m.

Meanwhile it's worth watching investor excitement on UPL .

No PSC yet for Sarawak SK334. No 3D which will be needed at some point. No estimate of recoverable resources. No other assets of strength and no production. Little to no cash and at todays 2.9p has a m/cap just shy of £35m.

LBE equivalent share price to match UPL is 60p if you were solely basing on the 12,000 KM2 SK2A for LBE versus UPL on SK344 which so far is only a share in a study.

Discoveries, 2P/2C and Production here and forged significant deals here and in the previous two companies Salamander and Faroe both sold for circa $900m each (EV) so for me this offers the lowest risk profile when shopping for value and upside and more deals in the pipeline.

Huge Kertang prospect and 2 others covered by 2,900 km2 3D with over 6,000km2 on the block and 9 TCF estimated recoverable from the main Kertang prospect alone. Upl haven't even issued a direct figure - plus of course no 3D.

250 now v up to 300 boepd which was then expected to double from the 5 wells.

In Q1 Statfjord Ost had gross production from 1 well of 5,200 boepd = 250 boepd to LBE JV.

Q1 Sygna field was producing a gross 1,300 boepd from 1 well = 60 boepd net to LBE JV.

The 5 new infill production wells were being drilled in Statford OST.

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Today -

The fourth of five new infill wells in Statfjord Øst has now been successfully drilled.

Overall, project execution is on track with the Statfjord Øst and Sygna fields expected to be fully on stream from all wells early in the new year.

Initial production for 2023 is estimated to be around 250 boepd net to Longboat JAPEX, which is slightly lower than anticipated mainly due to a delay in bringing the new wells on stream.

Production is expected to increase significantly early in 2024 when all wells will be brought on stream. Gas-lift installation is completed.

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So all new wells will be brought on stream ealy 2024.

If we are averaging 250 boepd - then the 1 well at Statford Ost must still be significantlty producing as there's only a reduction of 60 boepd from the overall 310 boepd in Q1 2023.

Will be interesting to see what the Statford Ost wells come on at.

Each well doing 1,000 boepd would be 48 boepd to the LBE JV.

Get any production numbers much higher ie compared to the one S/OST well producing 5,200 boepd in Q1 and it could be significant so not long to wait as we were getting 250 boepd in Q1 23 from this alone.

Also the effective date was 1/1/23 so should be a deduction to the headline price and there will be adjustments i expect re minimum production levels etc.

12/12/22 - "Full details on the conditions to completion of the Transaction will be set out in the AIM Admission Document."

The adm doc was to come in H1 so we would have been able to see surely what the completion conditions were.

Given that the adm doc is now 15th Dec or before which is 3 weeks or under- are the completion details going to be relevant this far on ? Have they been dealt with by now ?

As reagrds the flagged expected announcement of at least one further hydrocarbon deal this year - Petronas had invited bids for it's Chad, South Sudan, Gabon, The Gambia and Senegal assets valued at up to $3b so given we did not get Chad, is there any possibility that we could be looking at something else from them.

$1250m of that was for S.Sudan and $278m for Chad. That leaves about $1.5b for the rest of the $3b worth of assets that was reported for sale.

Petronas Chad at $278m had approx 11,000 bopd + 48 mmbo 2P + 38 mmbo 2C + the pipeline interest that generated $64m revenue giving $25m FCF.

If it wasn't for the fact that CASP carry out drilling services and are engaged in oil tradng their Khazak oil production wouldnt be profitable at the current production levels which has varied from 1,953 to 2,264 bopd.

Caspian Sunrise plc 31 October 2023

Operational update

"Shareholders are reminded that neither the UK nor the EU has imposed sanctions on oil produced in Kazakhstan and transported via the Russian pipeline network. Nevertheless, the sanctions on Russia continue to have a significant impact on the Group's current position.

The two month lag in receiving payment for oil sold internationally and the associated costs and taxes attributable to international sales mean, even with Brent at $90 per barrel, we remain better off selling to the traditional domestic market and the newer domestic mini-refinery market.

With domestic prices at approximately $32 per barrel and domestic mini-refinery prices at approximately $34 per barrel we estimate that the headline Brent price would need to be approximately $100 per barrel to make a switch to international sales worthwhile."

https://www.lse.co.uk/rns/CASP/operational-update-dz431lbf6vndsf4.html

25/9/23 Interims

"Accordingly, all the oil produced in the period under review was sold on either the domestic market or to local mini refineries at prices currently approximately $50-$60 per barrel lower than headline world prices.

The impact of the ongoing Russian sanctions on the Group's performance is clearly reflected in these results.

Nevertheless, with contributions from our new oil trading operations and from our drilling services operations and despite a 32% fall in headline revenue, we are reporting a marginal increase in profit after taxation."

https://www.lse.co.uk/rns/CASP/interim-results-for-six-months-ended-30-june-2023-twybxh48ufzmvrz.html

28/4/22 "Highly attractive asset economics with low breakeven oil price of $35/bbl"

19/7/22 "Attractive asset breakeven economics of $35/bbl"

Maurel and Prom not getting it easy either on getting deals over the line. Report in todays AI that Gabon govt is preparing to pre-empt on their $730m purchase of the Assala assets. Comes on the heels of not getting their takeover of Wentworths Tanzanian assets interest.

Let's see what happens here with regards to news in the next 5 weeks with a view to readmission.