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Latino Good point. Plenty of trolls and new posters over the day couple of days. Best for all PI's to stick to the facts. RNS wording is approved by nomads. It wasn't the greatest yesterdya but still Majid said he was 'pleased.' Hold firm or sell out.
BWM and Garyn I think you are both forgetting that Lib Phase 1 already has sufficient NPV to go ahead no matter the result of this drill and that junior debt is in place. It may be that a lesser senior debt facility is required but Lib Phase 1 is highly likely to happen no matter the result of this drill. I think the BoD will gain very good value from the information from this drill whatever the wireline log shows. It wil create more certainty for what can come out of next year's drilling of Phase 1.
No need to scare holders with idle speculation. Just to repeat - Lib Phase 1 is not dependent on the wireline log results. It may put a dent on recoverable oil across Lib Phase 1 and result in a review of well locations though.
Worth taking a step back here in my view to look at the bigger picture. I welcome any challenge to my views as a chance to learn and understand this company better.
SP movements yesterday and today have been almost entirely focussed on the A2 RNS. This is a very small part of the potential recoverable resources that i3E has 100% ownership of. Liberator Phase 1 project economics per the 4 Nov slide presented by Majid are c$360m post-tax (NPV10). This is for all of Liberator East. We don't know the result of A2 - it's 50/50 or more likely a smaller value of recoverable oil than the company anticipated. I am going by memory here but the 23mmbls in Lib East was split over 3 or 4 wells say 5-7mmbls each. Taking the worst case scenario of no recoverable oil at A2 we may find that is now 16-17mmbls. I'm not sure what the NPV10 is for that but we know that 1 well alone has a positive NPV10 and is fundable from previous comments made by the company. So somewhere between say $100m and $250m NPV10 - this is a broad range as I don't know the answer to this but it is a decent figure on its own.
On Lib West, at 459mmbls STOIPP and mid-case recoverable 168mmbls - approx $1.5bn NPV10 per 4 Nov slides. Some risk to recovery here although migration not seen as a major risk by the company.
On Serenity, at 197mmbls STOIIP, equates to c70mmbls recoverable at 35%, a fairly conservative figure. Not sure what that means for NPV10 - given nearby FPSO and tie in to Tain it will be an attractive figure, likely in the hundreds of millions of dollars. I am looking forward to the company releasing more information on Serenity shortly following analysis of drill results. The company has also indicated that volumes are likely more than this (maybe much more).
Overall - Lib East - maybe 16mmbls
Lib West - 168mmbls
Serenity - 70mmbls
Overall NPV10 - over $2bn if all goes to plan. Current mcap c£20-33m(diluted). A big gap here.
Add all of this up and you get a very large figure. Of course the company has to secure funding for this and for Lib East initially, the weakest of the prospects. Do you really think that lenders will reject the opportunity to make this kind of return? Maybe there will be a slightly less favourable interest rate for i3E but this is Majid's area of expertise and contact, with around 3 years of discussion already on the RBL and junior debt.
The road to success is a rocky one but reviewing these figures I do not see this company as likely to go bust or agree to a very poor deal on Serenity with RRE/Repsol. The focus is far too much on the current drill and other elements of value in the company are being ignored by the market.
It's really tough to hold firm in these situations but that is what I am doing. This is not a get rich quick stock, althought from the last 2 days trading many have seen it that way. This is a pension builder.
These are my own views. Do your research carefully and invest with certainty and confidence once you
Ophidian
Catching up on all posts today as I missed most of it unfortunately. You called it right just before RNS. I think what we got was an RNS that basically says nothing - there may or may not be commercial oil.
What reassures me considerably is something I haven't seen discussed much if at all today and that is that recoverable oil from Serenity has likely been considerably understated. I appreciate that i3E plan to use Liberator East to fund Serenity and Lib West so need a reasonable result here or at next drill. However they have already said they can run with 1 production well next year - the risk of failure here is being grossly exaggerated. Although Serenity may be a distance away, a drill or 2 could add significant recoverable quantities of oil and oil that can be extracted a lot more easily than most new 'discoveries'.
I suspect tomorrow will be volatile whether the MM's decide to spike up or down start (they'll certainly do one or other). If they have stock to shift the sp may jump up but I am not guessing what winding path the sp will leave tomorrow.
Be careful all of what you read here. I've looked at a few posters who just appeared today and read what they posted elsewhere on LSE as well as their past success rates. No names but interestingly one apparently plausible poster seemed to get just about every prediction wrong. That told me something. GLA
Phoebus It has felt to me like the MM's are trying to stock up on shares in advance of a push up over the next week. Apart from the current tree shake they have put a floor under the sp last week and have wanted to buy as far as I can see. No doubt though there are also placing moves going on. Perhaps conflicting MM approaches puching both ways?
As well as A2 results I am expecting an update based on additional information from the Serenity drill, which could also see an increase in potential oil from that field. This may be combined with A2 or separate but we have a fair bit of newsflow to come not just A2. The management team have done a great job of derisking the strategy here but pushing back the RBL decision, securing breathing space on funding and adding A4 as either a backstop to A2 or upside. This is not for selling on A2 in my view - quite a bit further to go.
O&W Ever had that feeling when you know a name but it won't come out? It wasn't Jessie Livermore but can't force my brain to tell me! A google search doesn't help so he can't be that famous.
NicetoMichu Thanks for your excellent post. I too have been thinking about AK's comments on it being retail PI's. Whilst technically he may be correct he should look at the trading in the weeks running up to 7E closure and strong PI buying. Larger market players have access to teams with more expertise than I have and PI's I suspect have been played here. This can happen in the short-term. Sometimes best to invest, keep researching and wait. Can't recall the name but a famous New York investor said that when asked his advice was 99% of the time to do nothing. AIM has become a bit frantic and it is harder and harder to do nothing. Quick profits over a period of a few weeks just are not a sensible approach to investing. GLA
Thanks for the link to the podcast - missed it live. Interesting to hear a bit about Fortune's background and to hear the narrative - again consistent with what has come before. This is just a great slow-burner of a success waiting to happen, a company taking the right decisions and methodically building a sound long-term business.
Thanks NicetoMichu and Kalan. All views welcome. Most posters are holders so we can be rose-tinted. On AIM market generally I compared AIM all-share performance to FTSE All Share today and interestingly although AIM has underperformed by c10% over the last year it is close to parity over 1 and 3 months and 3 years and better over 5 years. Are we in a cyclical pattern or is AIM in terminal decline? Too early to say but flat over last 3 months could turn positive with a more risk-on atmosphere say post US-China trade deal (if it comes).
O&W I can't believe for a minute that there is nothing ready to kick off. A steady newsflow was what we were promised. AK is not responsible for the market reaction being negative. As shareideas says could be an II divesting for good reason. We know the value is there and I remember as I'm sure many do the 12p days - that was hell. This is not - this is short-term frustration that we know will be resolved. I've held firm today and was too slow for the 22.3 buy trades that I tried to get - autos beat me to it!
I am also calm about today's trading. We saw net sells yesterday of approx 1.3m and the sp didn't move much, then a 500k trade today which seemed to mark the end of MM's wanting to buy shares. The selling continued today (very few buys) and so the MM's have dropped the sp - they don't want to carry any more shares - they presumably have accumulated a few for the uptick which will come. Short-term expectation I think has been the issue for PI's, with significant buying in the run-up to 7E closure (but not significant sp appreciation) when many thought the sp would leap up - I also thought we were heading for the 30s. We still are but just not this week. Mcap over £200m and FCF from now, approx £120m pa - with a simple operating model and plenty opportunity for growth. This is a stick-on investment. I really feel for those PI's who had to sell today as funds may have been needed. Others, like myself, just need to remain patient. It won't be long before we see the sp jumping up. Best time to buy is when you feel emotionally bashed like today. I am sure we will have newsflow pre-Xmas which will be positive. Sentiment changes so quickly just now especially in O&G sector, which is still expected to grow by 2%pa + for the next decade.
MM's have decided to follow Canadian lead and maybe our seller is done? Similar buying volume to another recent day where the sp didn't move but I'm not complaining. Still quite a way to go to fair value. Paul set out newsflow clearly in the interviews this week - Casca TD in c 2weeks with Coho full gas test results to follow - this will solidify initial results from Monday. Loking positive for next month or 2.
I suspect that most PI's have taken positions in advance of the next drill results so volume appears to be low. I have a small niggle in the back of my mind that we could see a Serenity focussed RNS on co-operation with Tain operators/owners at any time although more likely after drill results than before. The calm before the storm here?
Good views on current sp - it is certainly out of sync in the UK compared to Canada. On RSP there is a significant quantity of stock available despite approx 450k more real buys than sells today (based on my manual analysis). Yesterday was broadly neutral. Seems like the sp is lower than it should be - perhaps a buy being filled as suggested. I topped up this morning. As I've mentioned before O&G sentiment remains very poor but there is getting to be a real value mismatch here. Anyone buying now and prepared to wait a few months will do well.