Following the previous occasion the Chart RSI hit 30 the share price increased from 35p to 60p(+71%). The time before that from 27p to 39p(+45%).
The share price was at 52p for the RSI's latest visit to 30 this week. |
Can you elaborate on how you know they presenting or doing whatever in London? |
Most of the higher volume transactions today (18k to 51k) look to be sells - suspect a few may have pivoted from Afentra into Arrow after today's news.
Held seven figure positions in AET for 1.5 years and AXL for 2.5 years - from a fundamental perspective, would find it very challenging to choose between the two as the most likely to deliver the strongest capital growth over the next 2-3 years. |
 UK O&G Industry - Beware of unintended consequences!
Labour's proposed policy to increase the total tax take to 78% and end the deductibility of Capex, is very likely to lead to the complete collapse of exploration activity and most production development.
The financial distress of most small/mid cap UK focused E&P companies is a near certainty, with many likely to fail(who would want to buy their 'assets'?), thereby increasing the risk of a very substantial minority of the North Sea O&G sector's astronomical decommissioning costs becoming the responsibility of the taxpayer.
What a contrast to the forward thinking governments of Angola and Malaysia - who this decade have made their O&G industries some of the most competitive in the world to attract foreign investment - with predictable results: a tsunami of new investment to enable the natural divestment of mid/late stage assets from NOC's and the Majors to second phase small/mid cap's with a proven track record of safely operating these type of assets. |
2 day roadshow in the City next week. FWIW. |
D35 - thanks for your thoughts. Very familiar with TXP as an early stage value/growth investment - bought the first 1.0m of a 2.4m position in TXP at an average of 7.5p, immediately following the London IPO, when the company was so unloved it was possible for poster Zengas and myself to repeatedly buy in transaction sizes up to 250,000 shares without moving the shareprice.
At that time, there were only three posts on the Advfn thread during a two month period and two were mine. Some nine months later the company raised a relatively large sum of money compared to the market cap at a shareprice of 11p.....to organically grow production/P2 reserves. It proved an extremely effective use of the cash compared to paying out dividends or buying back shares, as the stock was changing hands some two years later for circa 23 times our initial buying price.
If CEO McDade were to significantly veer from following a strategy other than identifying and buying attractively priced, high quality second phase O&G assets with material reinvestment and efficiency improvement potential to maximise reserves recovery, I would look to sell down my holding.
However, McDade clearly believes Afentra has an opportunity to replicate the success of Tullow, Talisman and Apache in the North Sea 20 years ago, not least because fortuitously Afentra has the tail wind of the recovery stage of a new oil market cycle, a strong post pandemic recovery in demand, and a major programme of disinvestment of high quality assets that are no longer material to oil majors and NOC's in a number of mature O&G basins around the world.
The holy grail is to find a lowly valued second phase O&G company with low producing costs, strong cash flow generating assets and highly material organic and inorganic development potential, run by an experienced management in a high growth, high energy price mature market, thinly contested for high quality assets being vacated by oil majors and NOC's, due to owners and Governments willing only to consider companies with management capable of demonstrating a previous track record of managing O&G assets to the highest operational and safety standards.
Should the company also benefit from a regional Government offering industry leading fiscal terms, long license extensions to attract new investment to maximise recovery from large mature fields, and a drilling/oil service sector still largely beaten down by the ravages of a long recession, together with a location in a region with mostly benign sea and weather conditions enabling shallow water offshore field production development and maintenance work to be carried out year round, that would be the icing on the cake.
On the balance of probabilities, over a 2-3 year view, I consider the risk/reward of an investment in Afentra today as good as any O&G company in my portfolio.
AIMHO/DYOR |
Dragon could well be right here. It has taken a chunk of time to get the last big deal done and we could now drift with the price of oil awaiting another deal.
However, equally there could be a steady flow of news relating to workover of wells and generally cheap and effective well interventions. The expectation of such moves could easily keep the price marching upwards.
I suspect deals may well come more frequently over the next year or two. Looks very nicely positioned. |
dragon3518 Jun '24 - 15:51 - 334 of 334 (Filtered) |
I have been here nearly three years and whilst I am happy with the steps taken I am questioning whether to keep holding or not. I was hoping for more of an RRE round two so patience is sadly wearing thin hence looking for inspiration from others! |
Or just have a bit of patience Dragon and let the market get the share price to 80 and let AET spend the cashflow on growth capex and acquisitions? |
Buy backs are usually high return RRE was a good example. Cash deployed effectively - as AA kept saying they were the best value oiler on the market so why not buy back your own shares. Surely this is worth 80p plus then buying back at 55p is good business? |
some posters are sooooo transparent |
dragon
feel free to move on, some of us didn't wait until June to buy
You can leave us to suffer, but do remember to pop back in 6 months to gloat (or not)
;o) |
d35 - with the greatest respect you could be mistaken for a trader who sold out on the pullback from 60p and is now looking for a cheaper re-entry point.
Share buy backs? AET is a high growth company in the early stages of its development, with a laser like focus on investing its fast growing cash flow into high return organic and inorganic growth projects, NOT relatively low return dividends and buy backs. |
Great info. But I do not see any share buybacks short term so the issue I have is that we are using capex to invest in growth and the growth is linked to oil price changes. The capex takes time to make a step change in production. Without a new acquisition then what excitement value is there here right now? You hold the shares for 12 months and hope production improves but if oil price goes south you are back where you started with no cash growth. I am merely trying to work out what the buy case is here apart from hoping for an acquisition. Basically what is going to propel the share price to 60p 70p etc. it's currently on a X multiple compared to industry average of Y etc etc? |
Great post MT |
d33 - 'Whilst the cashflow etc are great here the current issue is that all the cashflow is going back into work overs etc for the future'
Some food for thought:
2023 Capex was $3/bbl - and included 30 LWI's - with an average payback time of 8 weeks at $75 Brent, together with work that delivered a doubling of the field water injection rate.
Circa 6,500 bopd = 2.37m bbls/yr - suggesting the net 2023 Capex spend will have been around $7.1m - which is 14% of the $50m sustaining production cash flow forecast at asset level @ $75/bbl Brent.
However, Brent averaged $82.49/bbl in 2023 - so a potential further $17.25m of cash flow at the asset level will have been generated by the higher average oil price - this additional sum ALONE is 2.24 times the 2023 Capex cost. |
Whilst the cashflow etc are great here the current issue is that all the cashflow is going back into work overs etc for the future and another deal may not happen for months so us investors are left holding the risk on oil price while waiting. I think this is why people are selling a few to balance risk. Nothing wrong with the company but you are now holding waiting for 2025 or the random event of a new acquisition before the next bit of excitement all the while checking the oil price regularly. If oil stays strong then next year will be massive here but I wonder if short term it's a bit dull. |
Rollover day tomorrow for June contracts for a lot of sbet companies, no surprise that a lot of bids get hammered and you can be sure the spreads at end of tomorrow will be wide!! |
RSI is back to a level last seen when the shareprice was in the mid thirties back in January ....... it's been achieved on modest transaction volume.....driven mostly by AT trades. Suspect the 50 day moving average around 52p will likely mark the bottom. |
AIM tends to lose 50% of most recent 'spike' (50-60p) so we are right about that point now |
someuwin17 Jun '24 - 08:41 - 317 of 318
0 5 0
New Tennyson note out.
"We reiterate our BUY recommendation with a raised target price of 80p/shr (vs 75p)"
"We would add that our analysis excludes the potential for further acquisitions which are expected to be a key value driver going forward."
I take it that is about Afentra of course as my top up at just over 60p looking a bit sick, I did expect 55p to be a low, alas , it appears it is going lower. |
Yes, falling back into buy big territory these days.. |
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