Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Just to back up my comments on MM's. Today we've seen 86k buys and 110k sells yet the bid has dropped from 24.12 at close yesterday to 23.42 just now, a 3% drop on £5k of excess sells. There may be a background seller but if there is the trades are not yet being reported. This behaviour is not an issue for me as a longer-term holder and may even be due to interested parties wanting to keep the sp down in advance of the 7E transaction closing aloong with the issue of c$20m of new shares (this figure is for memory). Time for patience.
On re-reading yesterday's RNS what I particularly like is the way that management have explained their thought processes in a logical way. I wondered why they hadn't acquired the available 4th seismic data set amongst other things and they explained that convincingly. Whoever has written this RNS has addressed concerns that some have had on over-confidence of management and lack of rational decision-making. There is still risk of course but I am more convinced of the quality of i3E management which is an important factor.
Div I agree totally and have topped up this week. The only concern for me just now is behavi9our of MM's who have taken every opportunity this week to suppress the sp - they must be short and can see a rise coming.
INterpreting that section of the RNS - it says to me that they have confirmed that there is oil in this location but not as much as they thought so still should increase overall potential reserves once data is analysed and integrated.
MM's doing a good job of gradually forcing the sp down in little or no volume. The market exists for their benefit not ours. I wonder if the FCA would be interested in any manipulation going on here? I expect not but AIM again showing it is not easy for PI's to access a fair market.
Interesting patterns of trading today - some big sells offset by a high volume of buys. At 930 I make it approx an excess of 500k buys over sells. I t appears that there may be a larger seller (maybe a PI who wought in the teens?) taking profits. Still a lot of suppressed upward momentum on the SAVP sp despite MM's trying to keep a lid on it. Compared to Friday last week we have only 1 outstanding condition prior to deal closure for 7E - a better placfe than last week and yet the sp is down despite excess buying. I think there is some short-term downward pressure here but it's looking strong for the next few weeks and months.
Just listened to VOX podcast and happy with what I heard. 7E to close, mainly procedural, possible incremental short-term debt required but available, sweet spot for both sides of business to grow in coming months. I thought AK tried to suppress a laugh when saying over the next 6 months we'll have 'commenced the work on our EPS in Niger' - I think the news on this is imminent - only weeks away. SP drop today in my view was manipulated by MM's causing PI's to sell then a strong recovery in the 2nd half of the day. I disclose that I am a holder (no surprise) and topped up this morning. I'm expecting positive things this year from SAVP. You can sense that they are keen to start the next phase of SAVP's existence as soon as cash flow allows following 7E completion. Not long now. Main risk is timeline (ie patience required) but the outcomes are looking de-risked to a large extent.
I've gone through and estimated buys v sells today as the early day trades to me looked like they had been forced by MM's to push the sp down. My analysis shows buys and sells broadly breaking even over the day. There could of course be some unreported trades to come to justify a sp drop of over 2p but far more likely is that MM's have dropped the sp to try to get as many cheap shares as they can as they have been running short in recenjt weeks. If my view is correct the upward pressure will return over the next week or 2, with or without news. This remains an outstanding investment opportunity right now imho.
A lot of scaremongering going on this morning. Worth reading the bit at the end of the Interims signed by a major accountancy firm -
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 2.
Use of our report
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Glasgow
27 September 2019
Going concern is stated as ongoing and we know cash is tight just now - that is significantly reassuring - gross market over-reaction.
There is no doubt MM's have gone short recently given the buying and have now crashed the sp to get shares at a lower price. This dents PI confidence. I can't believe how much this drop has ben overdone. I have bought more this morning. This is already de-risked with Presidential sign-off! Some patience required. Don't let the MM's take your hard-earned cash.
As an accountant I've read a few of these. No concerns here. Key points are the use of 'reasoanble and strong expectation' and the fact that the going concern basis continues to be adopted. Some less well-informed investors may wobble but no concerns from me. Timing is always uncertain n such significnt transactions.
Given signficant recent trading volumes the comments of any 1 individual on a BB are not going to materially affect the sp. I do not like confirmation bias and welcome views from all angles as part of a healthy an informed debate. The issue here is as I have said before that the outcome will be binary - either commercially extractable or not and we won't know that until the drilling is done. Asses the facts and take a position (or not) and stay calm is my approach.
Backwoodsman I am grappling with similar issues. The problem with any drilling is that is won't be 72% successful or 43% or 87%. It will be commercially viable or it won't be - 100% or 0. Yes, the quantity recoverable may vary but whether the CoS is 72% or some other figure doesn't remove the risk of a 0 outcome. I am invested here as I think the 100% outcome is highly attractive but more importantly if the 2 drills fail (which is less likely than 1 or 2 of them succeeding) there is still value in the discovered oil reserves in Liberator. The OGA report does highlight some issues in North Sea exploration but we are a few years further down the line. I think risk appetite is key. If you don't like binary outcomes it's better to focus on other companies (including O&G) that are already producing and have lower risk (and lower potential reward).
Perhaps some more experienced O&G investor could clarify for me what the appraisal well at Serenity actually means? My understanding of appraisal well is that it is drilled to understand the potential of a hydrocarbon reservoir. How does i3E know there is a hydrocarbon reservoir there if it hasn't yet been drilled? How much certainty can there be about this? Is the company saying that they are 100% certain that oil is there but not sure if it is yet commercial? I'm not sure either how this compares with the geological CoS quoted of 70%. Any enlightenment appreciated.
I think that means that we will get the results from Coho-1 ahead of TD at Cascadura, perhaps any time from mid-October onwards. I topped up yesterday - can't believe that we are noty seeing a rise in sp given that production could be double current levels within only 6-9 months.
It's worth comparing potential upside and downside at the moment when the sp is under pressure. There is no doubt in my mind that short-term holders/traders jumped in to fill the gap when Miton/LO sold their initial 10%. No company have survive a loss of 10% of its longer-term holdings without being put under presure. New buyers/holders traker time to arrive and with the relatively poor PR of the company, it's hard to attract buyers in volume. However, the downside risk here is limited. As others have mentioned on this Board, there are proven reserves in Liberator which have a value. Even if both drills come up with nothing, oil will come out of the ground - maybe delayed, maybe with a placing or more debt, but it will happen. Maximum downside? Maybe 50% of the current sp in the short-term? Upside potential however is significantly more than this. There is plenty of datsa out there to look at and come to a view on but given the lower sp the upside is now more than double at least even on modest drilling results at either well. Best to ignore the herd, make your own risk assessment and then sit back and wait for results in a few weeks. If LO sell a few more it won't affect where we will end up in a month or 2 - just gives a lower entry point for those wh ohave funds (not me, I'm already invested to the right level for my risk appetite).
Helpful reminder from Pro_S2009 on ADVFN on Serenity's prospects from the company. Replace 'xx' with 'tt' for link.
hxxps://i3.energy/wp-content/uploads/2018/12/20181212-i3-Energy-Prospex.pdf
Interesting auction at end of day with 150k changing hands at 24.3p. Things are simmering nicely with iminent news likey to provide a positive sp catalyst.
I missed this when I read it last Friday but on re-read see that the answer on senior debt facility was that it remains dependent on Liberator results (as expected) but also that it 'will be sized in accordancew with well results and ....mapping'. To my mind that means, as BBN said a few days back, that the senior debt facility is coming and that it is only a question of size. Worst case scenario is 1 well, more likely 2 wells (with a possible 3rd to be added later). The oil is there, the debt will be there. The market (and Market Makers) has over-reacted to the well result due to poor comms by the BoD in advance of what it was for.
I wonder if there will be news of a dividend/buy-back in the interims?