Afentra Share Discussion Threads

[croasdalelfc] 08/7/2024 10:05

Behind paywall: hTTps://www.pemedianetwork.com/petroleum-economist/articles/corporate-finance/2024/expanded-afentra-eyes-fresh-growth/?oly_enc_id=7576E3115145D6R

[billy two cocks] 07/7/2024 10:17

Excellent MT. Thank you.

[cardinal3] 06/7/2024 21:00

Thanks MT. Appreciated.

[mount teide] 06/7/2024 10:27

C3 - good morning and thanks.

Midas / Mail

'The Angolan war was long and bloody and, even though peace was declared in 2002, many still associate the country with hardship and corruption. Not Paul McDade. Formerly chief executive of FTSE 250 group Tullow Oil, McDade now runs Africa energy business Afentra – and he has focused to date on Angola.

Oil accounts for some 40 per cent of the nation's economy and, until recently, state-owned firms monopolised the industry. But under president Joao Lourenco, a privatisation programme has been initiated, and Afentra has been a key beneficiary.

Founded in 2021, the group has spent the past three years working closely with local and international operators, acquiring assets that they no longer want or need.

Today, Afentra has a 30 per cent stake in a huge offshore oilfield in Angola and has taken steps to increase production and improve working practices.

Daily barrels of oil have risen from 17,000 to 23,000. And there are high hopes of reaching 30,000 by 2027 and more than 40,000 over the next six years, by raising production from existing wells and adding new ones across the site, known as Block 3/05.

McDade and his team have an environmental agenda too, with plans to divert the gas that comes off the oil wells to a nearby gas pipe, so it can be used productively rather than polluting the atmosphere.

Afentra has also been selected as a preferred bidder for onshore assets which once produced thousands of barrels of oil a day but have been dormant for years.

Operating in Africa is not for beginners. But McDade is seasoned and he has shown officials, energy groups and investors that he is a man of his word and knows what he is doing.

Block 3/05 is a case in point. The deal involved acquiring stakes from a Croatian oil company, a joint venture between BP and Italian energy giant ENI, and Angola's national oil group.

Securing agreements from all sides took time, but canny deal-making has reduced the ultimate cost from $117million (£93million) to little more than $10million (£7.9million).

More transactions are likely, as McDade scours the west coast of Africa for prospective sites.

Afentra is committed to improving efficiency too – not just financially but environmentally – by introducing up to date extraction methods and cutting back on polluting practices, such as gas flaring.

Midas verdict: Afentra shares have more than doubled from 25p to 53p since Midas recommended the stock in May 2023. Hungry investors may choose to sell half their stock now and bank profits. Longer-term, however, there should be plenty of firepower left in this business.'

'Longer-term, however, there should be plenty of firepower left in this business.'

I agree, not least since in its young life under the new management, Afentra has only just completed making its first investments - all in a very attractively priced outstanding, large, mid life producing asset in Angola with huge, low cost, production development and reserve recovery upside potential.

Subsequent to these investments , according to the public pronouncements of the Afentra management the company is still in its infancy with respect to its organic and inorganic growth development.

My most successful investments in the O&G sector have been in high quality, early stage, undervalued companies with strong growth prospects run by management with a previous track record of success in the industry. Without exception, i ran my original investment and averaged up as the investment case continued to strengthen.......... selling half on the fourth floor of Afentra' 35 storey block of flats under construction, instead of averaging up on pullbacks, would have been a serious error and far reduced the final return.


AIMHO/DYOR

[cardinal3] 06/7/2024 08:16

Morning all and continued thanks to MT for insights.

I see the Mail online has an update behind its M+ section where I'm not registered (I get enough spam in my inbox without that) and wondered if anyone has a 'cut n paste' of that article that could be shared with us?

[dragon35] 05/7/2024 15:19

Decent volume above the 50ma so some life coming back into this one.

[mount teide] 04/7/2024 15:52

Closing auction - 199k at full 54p Ask price.....50 DMA back in the rear view mirror, where it belongs considering the value currently on offer at $87.50 Brent!

AIMHO/DYOR

[return_of_the_apeman] 04/7/2024 07:31

Fwiw, have been adding over the last couple of days, technical indicators have now turned

Gla

[linz22] 03/7/2024 18:17

'Economically naive in the extreme', is one possibility for the flawed policy towards energy provision and security.

Sinister, or downright malevolent, is another..

[mount teide] 03/7/2024 16:46

mrn - welcome, good to hear the posts have been of help.

Angolan O&G Industry - With respect to O&G equity investment it's certainly helpful to have Angola's downside protection of a 'Flood Tide'(highly competitive fiscal and operational terms, and long license extensions for mature assets), and the upside potential of a 'Strong Tail Wind'(high quality mid/late life assets being divested by IOC's and NOC's at very competitive prices) behind you!

Essential if you wish to attract high quality second phase operators looking to minimise shareholder risk and maximise investment return.

Infuriatingly, the UK's third rate political and institutional class seem determined to destroy what is left of our once world leading offshore O&G industry. It is a policy that is economically naive in the extreme and putting our energy security during the transition phase to clean energy at huge risk, as New Zealand and Australia are already finding out.

AIMHO/DYOR

[taurusthebear] 03/7/2024 13:42

Expect more of them starting from tomorrow.

[noramping] 03/7/2024 09:05

MrN, exactly right , we as country still use and need oil yet we put up barriers to get to local resources.

[mrnumpty] 03/7/2024 08:57

Mount Teide . Many thanks for your informative comments here . Last year the share price dropped from about 39.25p to 35.2p ( 10.2% drop ) , which is slightly less than the current drop from about 59p to about 52p ( 11% ) . I did well in previous years with small North Sea producers such as Nautical Petroleum and Dana but , with taxes at 75% there ( under the Tories ! ) , it’s baffling why anyone bothers to invest there now . Venezuela was once prosperous , but look at it now ! Happy to have my money in Angola , where the oil industry is wanted and appreciated .

[onedayrodders] 02/7/2024 09:10

Every dollar makes a massive impact to cashflow

[mount teide] 01/7/2024 20:54

You get a helluva lot for your money when buying large mid life O&G assets in Angola with a backdated effective economic date in a rising oil price environment!

UK - Rosebank Field - First Oil expected 2026 - (Gross Figures)
336m - P2 Reserves
69,000 bopd - Estimated Peak Production
$8.2 bn - Project Cost (Source: Energy Voice)

Equinor has a $1.5bn price tag for a farm out of 20% of the asset - the buyer would then have a further outlay of over US$2 billion before first oil.

At least a 75% UK tax rate until 2029.


Angola - Block 3/05 + 3/05A (Gross Figures)

Block Licence End Date: December 2040
108m bbls - 3/05 - P2 Reserves
43m bbls - 3/05 - 2C Resources
62m bbls - 3/05A - 2C Resources

23,000 bopd - Current production
40,000 bopd - 2028 production target

3.5bn bbls - STOIIP 3/05 + 3/05A
1.3bn bbls - Produced from 3/05 to date / 42% recovery rate (target >50%/+250m bbls)
2.5m bbls - Produced from 3/05A to date / 1% recovery rate(target > 30%/+90m bbls)

Afentra will have likely paid a net circa $9.7m (after sale of oil inventory but before modest outstanding contingencies) for 30% of Block 3/05 and 21.33% of Block 3/05A.

3/05 - Updated Fiscal Terms from 1/1/2024 improve contractors’ cost oil limit from 65% to 75%, and the contractors’ profit oil share from 30% to 40%. As a result Afentra's net NPV at a 10% discount rate increased from US$214.5 MM to US$254.9 MM.

3/05A - Fiscal Terms for Marginal Field

[onedayrodders] 01/7/2024 14:43

yes a little bit of a mystery fatfish but largely irrelevant to progress

[mount teide] 01/7/2024 12:55

Where the successful execution of a management's low cost growth strategy continues to strengthen the investment case of a stock(as with AET) - it points to pullbacks as the optimum time to buy(as there is usually decent liquidity generated by momentum traders locking in profit), rather than potentially chasing the price up for often small volume, when the shareprice resumes moving north.

The chart from last September highlights well the ten opportunities that have since occurred, when it was possible to buy on a pullback, that each had a bottom at or above the 50 DMA.

The RSI is currently at its lowest point since September 2023, while the share price is sitting on the 50 DMA - a chart buy signal if ever there was one for investors like me that like to average up as the investment case strengthens. The strategy has delivered well here to date - I've averaged up 5 times in the 20's, 30's and 40's,

AIMHO/DYOR

[fatfish] 01/7/2024 12:11

At this moment it would appear, Not.
The DOW might differ, we will see.

[onedayrodders] 01/7/2024 11:58

It should capture investors who don't know the story or Afentra

[fatfish] 01/7/2024 11:52

Well, the story really doesn't tell you anything you didn't already know.
Where did you expect the share price to go. ??

[taurusthebear] 01/7/2024 09:29

Midas is touchy. :0)

[onedayrodders] 01/7/2024 08:11

Give it until end of this week... the daily mail readers also hesitate for the same reasons

[oilinvestoral] 01/7/2024 07:30

It's give you a chance to make your planned top up. Easier than you think ... eh?