Afentra Share Discussion Threads

[pnetol] 19/7/2024 07:22

Mount Teide,Many thanks for sharing your views, I also hold AET and see them as a great long term hold

[fatfish] 18/7/2024 17:36

Arrow Exp(AEX)

Ah I see you corrected it in your last post. :-)

[mount teide] 18/7/2024 14:42

Hi lauders - TXP - giving the management until the end of the year to demonstrate they have turned the corner.

Think AET and AXL represent outstanding value and that both have the fundamentals at the current stage of the commodity and shipping market cycle to do very well for shareholders over the next 18 months to 2 years. Likewise my high quality shipping sector stocks.

AIMHO/DYOR

[lauders] 18/7/2024 14:27

You were wise to take some funds off the table re: TXP MT. Been disappointing there, but PERHAPS the tie-up with Trinity will get the company back on track. The BOD have to regain their credibility over the next year or two. AXL have gone the opposite direction! Guess which one I hold LOL!

Lucky that AET have been doing well. I hope that will continue.

[mount teide] 18/7/2024 14:21

1 Year Portfolio Performance

+51.6% - Capital Growth
+38.8% - Mean S/P Increase
+23.2% - S&P 500
+10.5% - FTSE 100

+80.8% - Mean Increase of Top 5 Holdings:
+130% - Afentra (O&G - second phase)
+101% - Valeura (O&G second phase)
+79% - Scorpio Tankers (Shipping - Oil Sector)
+57% - Clarkson (World's leading Shipbroker)
+40% - Star Bulk Carriers (Shipping - Dry Bulk Sector)

Two worst performing holdings:
-7% - Jadestone (O&G - second phase)
-48% - Touchstone (O&G - E&P)

New Investments: after researching many stocks was unable to find any with superior fundamentals( value/downside protection/growth potential), to stocks already held - and so elected to materially add(circa 25% of existing holding) to three current stocks - Scorpio Tankers(STNG), Afentra(AET) and Clarkson(CKN).

Arrow Exp(AEX) would have easily made one of the three stocks above, if I had not materially increased the family holding to 4.0m last year - the maximum I feel comfortable with, despite the outstanding prospects, for a South American based company in a country with a socialist president.

Outlook

Shipping: The re-routing of commercial shipping away from the Red Sea onto considerably longer round trip routes(+7,000 miles) between Europe and the Middle East, SE Asia, East Africa, Australia & NZ, has seen demand for shipping surge by over 10%, and the deployment from lay-up of ALL spare capacity across the three largest shipping sectors, Dry Bulk, Tankers and Containership, pushing spot market charter rates and FCF generation in the oil tanker and dry bulk shipping sectors close to decade highs.

The industry is currently planning for the Red Sea disruption to extend well into 2025 - a development that will strongly support spot market rates and FCF generation for the foreseeable future.

Oil: With Opec+ recently announcing their intention to continue managing production to keep the price of oil within their preferred range of $80-$95/bbl to at least the end of 2025, the future looks bright for a now leaned down, recession conditioned global O&G industry which reported earlier this decade more than double its all time record FCF at an average $75 oil.

With NOC's and IOC's divesting from a number of mature O&G basins around the world, a long pipeline of attractively priced mid/late life acquisition opportunities is increasingly coming to market, for the small number of high quality second phase O&G companies currently operating in these basins to feast on during the remainder of the decade.

The mean holding period for the stocks in my portfolio is currently 5 years and 4 months.

AIMHO/DYOR

[mount teide] 15/7/2024 10:53

Grant of Non-Executive Director Share Options, and

Executive Director - Long Term Incentives Plan (LTIP) Award

'Afentra plc ('Afentra' or the 'Company') (AIM: AET), the upstream oil and gas company focused on acquiring production and development assets in Africa, has conditionally granted, under the Executive Directors Long-Term Incentive Scheme, new ordinary shares in the Company in the form of nil-cost share options and has granted options over new ordinary shares to its Non-Executive Directors at an exercise price of 57.40 pence per Ordinary Shares.'

[apotheki] 10/7/2024 15:33

Hybridan Small Cap Feast: 10/07/2024

Afentra 57.80p £130.27m (AET.L)

The upstream oil and gas company focused on acquiring production and development assets in Africa have provided an operations and financial update for the 6 months ending 30 June 2024. Notably, the Company completed the Azule Acquisition in May 2024 for a net consideration of $28.4m, inheriting a crude oil stock of 480,000 barrels and driving commercial progress with a pre-tax revenue of $75.9m for 1H 2024 and cash resources of $13.8m. The strong liquidity position is expected to maintain steady operational improvement and provide a platform for further growth.

[mount teide] 10/7/2024 11:10

O/T

UK O&G Sector versus Maturing O&G Basins of the World where IOC's and NOC's are now divesting mid/late life assets?

The impact of the Tory's usury windfall tax on the UK O&G industry and threat, since realised, of an incoming socialist Labour Government'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.

Beware of unintended consequences - 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 sizeable proportion of the North Sea O&G sector's 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.


Shareprice performance since Arrow Exploration's London listing in October 2021

Production entirely outside UK Tax Regime:
+ 855% - Valeura Energy
+ 365% - Afentra
+ 364% - Arrow Exploration

Material Production within UK O&G Tax Regime
-23% - Harbour Energy
-41% - Serica Energy
-48% - Enquest
-66% - Kistos

Top three are focused on regions of world where government objectives include maximising O&G output at producing fields, by granting license extensions and favourable fiscal terms to investors, enabling cost recovery regardless of infill well results.

With respect to O&G equity investment it's certainly helpful to have this 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.


You get a helluva lot for your money when buying large mid life O&G assets in the maturing O&G basins of the world like Angola and Malaysia, 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



In addition to that already announced, the Angolan O&G regulator is planning new legislation in H2/2024, with respect to further contract and fiscal incentives to encourage the reactivation of production and drive operational efficiency in assets previously suspended due to low oil prices.

'Marginal Projects: Many oil and gas activities in development areas were suspended when deemed not economically viable. The Government's intent is to encourage the reactivation of these activities within development areas.

Legislation will enhance the oil and gas business environment, providing new guidance on oil and gas operations and processes that include streamlining of work programs.

The Government also plans to implement contract and fiscal incentives that will promote operational efficiency in mature and marginal fields.'

[dragon35] 10/7/2024 10:53

Key is using the FCF in the best and most value accretive way for shareholders. If they have screened lots of deals and nothing is hitting their criteria then I would like a proportion to go on share buybacks to clean up the cap table.

[mount teide] 10/7/2024 10:51

Global upstream oil and gas capex is expected to grow by $24 billion this year, surpassing $600 billion for the first time in a decade. Annual investment will need to grow by another $135 billion, or 22%, to $738 billion by 2030 to ensure adequate supply.


Growing Demand to Increase Upstream Oil & Gas Investment Needs 22% by 2030 - International Energy Forum - June 2024

'Annual upstream oil and gas capital expenditures will need to rise by 22 percent by 2030 to ensure adequate supplies due to growing demand and cost inflation, according to a new report by the International Energy Forum and S&P Global Commodity Insights.

A cumulative $4.3 trillion in new investments will be needed between 2025 and 2030, according to the "Upstream Oil and Gas Investment Outlook" report published today. The growing capital expenditure (capex) needs are based on an outlook that sees demand for oil rising from 103 million barrels per day (bpd)in 2023 to nearly 110 million bpd by 2030.

"More investment in new oil and gas supply is needed to meet growing demand and maintain energy market stability, which is the foundation of global economic and social wellbeing," said Joseph McMonigle, Secretary General of the IEF. "Well-supplied and stable energy markets are critical to making progress on climate, because the alternative is high prices and volatility, which undermines public support for the transition as we have seen in the past two years."

The report found that global upstream oil and gas capex is expected to grow by $24 billion this year, surpassing $600 billion for the first time in a decade. Annual investment will need to grow by another $135 billion, or 22 percent, to $738 billion by 2030 to ensure adequate supply, the report says.

Roger Diwan, Vice-President at S&P Global Commodity Insights, said that "expected production declines and future demand growth will require re-investing existing cash flows even as the transition proceeds."

More than 60 percent of the projected increase in upstream capex between now and 2030 would be focused in the Americas, according to the report, co-authored by Allyson Cutright, Senior Energy Market Analyst at the IEF, Roger Diwan, and Karim Fawaz, Director of the Energy Advisory Service at S&P Global Commodity Insights.

While the United States and Canada are expected to be the largest drivers of capex growth to 2030, Latin America plays an increasingly significant role in non-OPEC supply growth, particularly for conventional crude, with large expansions in Brazil and Guyana.

The report noted significant uncertainty around the trajectory for global oil and gas demand and the pace of the energy transition to net zero CO2 emissions.

"Base-case forecasts from consensus-leading organizations diverge by as much as 7 million bpd for 2030 and this gap widens to 27 million bpd when more ambitious climate scenarios are included," the report says.

However, increased capital expenditure in upstream oil and gas supports energy security and the energy transition, the report says.

"A just, orderly and equitable transition requires a foundation of energy security," it says. "The past two years have demonstrated the consequences of 'disorderly' transitions: price shocks, shortages, disruptions, political backlash, bitter divisions and conflict." '

[extrader] 10/7/2024 09:20

?
KO19 signed 5th July....
Only RNS'd now, or did I miss something?
TIA

[croasdalelfc] 10/7/2024 07:48

I take a rough estimate of 35%FCF on $102m revenue for June and August liftings - that FCF effectively goes to cash. Some folk are using 40% FCF as Brent is higher than forecast

[mount teide] 10/7/2024 07:26

Very encouraging operational and financial update.

Production Maintenance and Development

Water Injection - recommencing water injection and raising it to an average of 33,000 bwpd in 2023 was instrumental to delivering an increase in production of circa 4-5,000 bopd.

The target set for 2024 was 60,000 bwpd - for peak injection rates to hit the year end target level by April 2024 is an outstanding achievement......and bodes well that the 150,000 bwpd long term target (50% of the equipment capacity) is well within reach.

LWI's - 15 LWI's were completed delivering an overall 2,500 bopd increase to field potential, a further campaign of up to 20 LWI's commenced at the end of June. Well on schedule to meet the year end target - with a payback of less than 8 weeks @ $75 Brent.

[return_of_the_apeman] 10/7/2024 06:53

Ah yes - apologies my figure is off - thanks for correcting

[tim000] 10/7/2024 06:49

Oil revenues aren’t net backs, but will be net cash after the next lifting is sold.

[return_of_the_apeman] 10/7/2024 06:45

So will have about $55m with no debt next month

Current Mkt cap of circa. $166m shows the value on offer even without growth

[xxnjr] 10/7/2024 06:42

Net debt well under control here. Which is pleasing.

[tim000] 10/7/2024 06:30

And ca $65mn due from oil sales next month.

[palisz] 10/7/2024 06:12

Selected Balance Sheet Information as at 30 June 2024

- Cash resources of $13.8 million.

- Debt drawdowns: Reserve Based Lending Facility $47.3 million, Working Capital Facility $13.7 million.

- Net debt of $46.4 million.

- Net debt excludes the June crude oil sale of $37.6m, which is classified as a receivable as at 30 June 2024 (due to timing of cash receipt (July) post-period).

[palisz] 10/7/2024 06:12

Crude oil realisations and hedging

- The Company sold in aggregate 900,000 bbls of crude in the first 6 months across two lifting in February and June.

- The average sales price realised inclusive of the Brent premium differential for 1H 2024 sales was $84.3/bbl.

- Pre-tax revenue of $75.9 million for 1H 2024.

- Crude oil entitlement stock at 30 June 2024, post June lifting, ~570,000 bbls.

- The Company expects to sell its next cargo of crude oil (~790,000 bbls) in August 2024 and has placed hedges to provide a $80/bbl floor for 70% of the August cargo.

[palisz] 10/7/2024 06:11

Afentra plc ('Afentra' or the 'Company') (AIM: AET), the upstream oil and gas company focused on acquiring production and development assets in Africa, provides the following update for the 6 months ending 30 June 2024:

[mount teide] 09/7/2024 07:56

Angolan O&G Industry's Incremental Production Initiative set to be approved by President in H2/2024.

Aligning with National objectives to maximise output at producing fields, the initiative also grants license extensions and favourable fiscal terms to investors, thereby covering cost recovery regardless of well results.

Incremental production to Boost Output in Angolan Offshore Blocks - Energy Capital & Power 8th July 2024

[mount teide] 08/7/2024 16:10

Strong finish - Closing auction: 48k at 56p (well above the 55.6p Ask price going into the close)

[ggrantsu] 08/7/2024 13:57

sorry guys, wrong board!!

[ggrantsu] 08/7/2024 13:48

starting to get real traction now...retail report at cannacord was a sector initiation with card the most preferred pick out of entire report.

the thing to note from both cannacord and berenberg is the margin of safety on offer...think berenberg's downside case still got us to 125p...in line with peel (who just do not like card; I contest strongly their 'moonpig eats lunch' thesis is absolute garbage - as does berenberg and cannacord).

i was getting frustrated with share price but in particular the berenberg report (which is 57 pages long) went a long way to reassuring me that this is just fundamentally massively mispriced.