Afentra Share Discussion Threads

[zengas] 11/5/2023 10:11

No longer follow i3E sunbed. Not sure Cashcard but that could be the case.

Panoro were only a minor producer in 2020 before buying the assets for up to $140m including contingency payments in early 21.


Panoro

3/5/23 Trading statement

£241m m/cap $27m net debt. 6320 bopd Q1 2023. (Current 8,500 bopd)35 mmbo 2P.

3 analysts with an average 68% target higher than current valuation which is £400m m/cap if achieved.

If AET get a 2nd deal by year end /Q1-2 next year and have parity on production to Panoro's exit expectation for year end, i can see AET being easily worth Panoro's current valuation if no dilution on the 220.5m shares in issue.

If oil stays $70/b+ it could grow quite rapidly on a 12-18 month time frame even on a modest acquisition.

So overall heartened to see word of further acquisitions on the cards here yesterday.

With the current acquisitions practically paid for, there should be decent leverage for paying down the next assets quite quickly above $70/b.

[mount teide] 10/5/2023 22:41

Strongly suspect Angola will remain Afentra's principal acquisition target.

Angola has over 300 discovered O&G fields, but to date less than half have been developed.

This was the principal reason why the Government materially improved the Fiscal terms recently, to attract new investment & extend existing licences to avoid the assets becoming 'stranded'. It's had some very impressive early commercial success - with Exxon, who are increasingly vacating the rest of Africa, signing up for some large offshore blocks.

The Angolans are actively seeking more oil & gas investors and with Afentra having built a commercial relationship with the divesting National state-owned oil company, Sonangol, its likely to give us first user advantage/'insider' access there to a material pipeline of future mature production acquisition opportunities from the National Oil Company with limited competition from the independent sector.

AIMHO/DYOR

[cashandcard] 10/5/2023 21:18

Zengas,I recall an interview with director or CFO where they stated their oil is sold in two batches a year around prevailing price or some mechanism along those lines - is this still the case?CashPS, Good to see you here

[sunbed44] 10/5/2023 20:30

Z / off topic (so sorry to others) but are you in i3E and what do you think of it? I won't post OT on here again as am not a fan of boards getting clogged up with stuff not relevant to the BB of the stock in question.

[sunbed44] 10/5/2023 17:27

Z / fab info and I bow to your research ' knowledge and praise you for sharing with the board.

[zengas] 10/5/2023 16:30

Sunbed I think both have tremendous growth potential. Saves gas business alone is huge given it's infrastructure. I think there'll be further acquisitions beyond those currently and like i say it's how they fall in terms of announcing/completion when weighing up the entire risk profile rather than 1-2 deals in isolation.

Save doesn't intend to pay major dividends ($10m to start and i can see that delayed for now possibly due to Chad) as they direct funds into growing a renewables division which should add significant value in its own right.

A $10m dividend from say a 10k bopd production profile for AET would be a very decent return if the shares in issue stay at 220.5m - would be about 13% at these levels. So could be good value from a dividend if it gets closer say to $20m in say 2 years. I sold down ENQ2 bonds and IPF to build a better position in AET in terms of potential value for capital growth and dividend but happy to hold both SAVE/AET.

I posted here on 3/4/23 (637) re Panoro

Panoro Energy's m/cap = £233m
Net debt $46.8m
It's African 2P = 35.8 mmboe. Production = 7,000 bopd.

Their quarterly dividend is $3m ($12m/yr $70/b oil)

Also " Panoro intends to pay out a USD 20 million core dividend in 2023 on a quarterly basis in cash weighted towards H2 and subject to average oil price realisation remaining above USD 80 per barrel"

"If they too were to introduce a similar sized $12m dividend in the next year - 18 months it would be a yield of over 20% at these levels or 4.3% if the share price equalled 100p and a m/cap of £220m which would still be lower than Panoro"

[sunbed44] 10/5/2023 16:09

TY Z / from AET & SAVE which do you prefer?

[mount teide] 10/5/2023 16:02

stockhunter - 'surprising strength seeing as oil price plummets'

Only a trader would view it that way.

Whereas an investor would know that the oil price is currently above the average level in Q4/2021 when the O&G industry broke its all time record for generating FCF; previously set in 2013 when Brent averaged $111/bbl or $148 after adjustment for inflation.

[zengas] 10/5/2023 15:47

As for walking before they can run, it might interest you to know Sunbed that AET have been looking at bigger deals than these, it's how they land in any particular order is one point. They were after blocks in Chad with potential to ramp up to 85k bopd. They've already said they want production in the tens of thousands of barrels per day.

With the exception of not building out a renewables division, AETs strategy is very similar to Save by acquiring assets.

AETs suspension lasted 10 months from 8/10/21 to 10/8/22 on these deals.

Save started with Agadem Niger then it's first purchase which is now a significant gas business in Nigeria. An acquisition in Chad has run into difficulty with the government which has gone to arbitration. South Sudan acquisition pending but the problem lies in the neighbouring country. An agreed sale on hold (AI report) of lesser assets to Save by ENI all the way over in Tunisia.

AET with Odewayne Somaliland next to Somalia/ Ethiopia/Djibouti.
Now Angola offshore close to the DRC so when looking at it's current areas of interest they could land a deal anywhere and who knows what may be announced after saying possible deals this year which is in the next 6 months running into 2024.

It all depends what assets are available and at what cost and worth looking at what they've also been interested in, in the African news coverage. So imo don't kid yourself that they won't venture into areas that are higher risk if the terms are right and have a good geographical spread because this is why the price and value reflects that.

AI 7/7/21 "The brand-new oil company Afentra, founded at the start of the year by Paul McDade, has been scouring Africa for its first investment opportunity. According to our sources, McDade, his head of operations Ian Cloke - a fellow former Tullow Oil executive - and the company financial director Anastasia Deulina are currently in talks with the British teams of US private equity firm Warburg Pincus . The topic of their discussion is the purchase of Chadian blocks H, Largeau III, DOC, and DOD."

Either way, if the next assets are greater than the current 2 in Angola in terms of production/reserves, i expect and am prepared for a second suspension period at any time which could be equally lengthy just like Save and indeed stretch to a third spell as they consolidate further.

[stockhunters] 10/5/2023 15:41

surprising strength seeing as oil price plummets

[sunbed44] 10/5/2023 12:08

Bought some more here today, I like what the company are doing here. And especially walking before they try to run as oppose to SAVE who are taking to too big and too risky deals. I really do like this and a good slot by the leader earlier on. Will be adding quite a few more when I take a decent chunk off the table from SAVE whenever they start to trade again.

[mount teide] 10/5/2023 10:46

Jung - thanks.

Interesting interview - a very positive outlook, with more acquisitions likely in 23/24.

[jungmana] 10/5/2023 09:51

hTTps://youtu.be/AiefvkQI7eY

[rimau1] 10/5/2023 09:17

On completion of Sonangol i don’t think there is a cheaper oil play on the market (AXL and Valeura are close). For $70m marketcap we are getting 2P of 28mmbl and 4500-5000bopd

[rimau1] 10/5/2023 08:19

Confirmed on track for 30th June closing.

[mount teide] 10/5/2023 08:03

INA Acquisition - Great news and a tremendous net price for such a high quality asset.

Sonangol Acquisition - With the Block 3/05 JV partners and the Angolan Oil & Gas regulator now having agreed the terms of the Block 3/05 licence extension, which extends the production sharing agreement to 31 December 2040 with improved fiscal terms that strengthen the economics of the permit, the process of ANPG obtaining the requisite governmental approvals for the licence extension should be a formality.

[dunderheed] 10/5/2023 07:45

This one's pretty big!!

[royalalbert] 10/5/2023 07:40

Now for the big one, June hopefully.

[jungmana] 10/5/2023 07:35

Happy days :-)

[alxo82] 09/5/2023 20:26

A paid article

[x54v] 09/5/2023 16:44

“Very pleased to have coverage initiated by finnCap, with a buy recommendation attached, as we progress towards completion of our first acquisitions in Angola.

finncap.com/research-porta…

#AET #Opportunity”

[onedayrodders] 09/5/2023 16:19

Building nicely again here

[mount teide] 09/5/2023 11:05

Interesting development in the Middle East - China is using Angolan and other African currencies to pay Iran for oil under a new 25 year supply deal, so that these countries, in turn, can service their loans to China!

'In a 25-Year Oil Supply Agreement China has signed with Iran, China is guaranteed oil and gas prices at least 30% lower than the relevant oil pricing benchmarks. However, since the Russian invasion of Ukraine in February 2022, China has been demanding an extra discount on Iranian oil to the 30% discount at which it can currently also buy Russian oil, according to an EU energy security source.

“On average, the Chinese discount for Iranian crude oil to the international benchmark over the last 12 months has been around 44%.” he said.

"From 11 November 2022 - China has been paying Iran in non-convertible Yuan, that is Yuan that can only be used inside China and/or spent buying Chinese goods,” he added.

“Whilst Yuan is the key instrument in payment, China is also using the currencies of Angola, Zambia and Kenya to pay Iran, and China is doing this as a means to induce Iran to buy goods from these countries so that these countries, in turn, can service their loans to China,” he concluded.'

Simon Watkins - O&G Sector Analyst