Enteq Technologies Share Discussion Threads

[1gw] 12/9/2024 19:37

"Several multi-day downhole runs have been completed, establishing a strong operational track record for the key elements of the system. These runs have successfully demonstrated the reliability of the downhole modules and validated the design improvements implemented after the U.S. testing. With SABER now accumulating hundreds of hours of downhole time, the tool’s durability and performance in challenging conditions have been clearly demonstrated, representing the culmination of all the optimisations and refinements from an extensive process."

Sounds good, but does this mean they have actually steered a well with SABER while drilling? Or have they been isolating bits of the SABER design and testing each one independently - and steering a well completely with the whole SABER tool is still the next stage? The use of "coming months" in the last sentence of the release is again disappointingly vague.

"Commercial operations are scheduled to commence in the coming months, in line with the customer’s operational programme."

[somerset lad] 12/9/2024 19:25

www.enteq.com/news-media/2024/09/successful-customer-testing-operations-in-australia/

[sebass] 12/9/2024 17:02

Pay above asking at 8p you can get some stock but you might not want to pay at that price

[mjneish] 12/9/2024 15:07

I've been trying to top up with some small sum of money (a few hundred quid) for ages and the order just won't go through. This is on IBKR. The order stays open all day and then gets cancelled. Same the next day, and so on.

Does anyone have any tips about how I could ensure that the order closes? Thank you.

[valuehurts] 02/9/2024 16:49

If we get confirmation of cash flow with customer take up I would expect quite a move from the shares. I doubt there's many weak hands who hold substantial blocks now. Should be a very exciting end of the year. If we get newsflow on Stockopedia etc this could be a thing of beauty.

[somerset lad] 02/9/2024 15:32

1gw, I will resist the temptation to have a second go at reverse engineering the numbers in note 10 because I might well get it wrong again (!) and, as someone commented earlier, the company's IP report doesn't add much: ultimately the value of the IP is the FCF the business generates and that will be a function of sales, not of a consultant writing a report.

Just watched the IMC again (back from holiday). Reading between the lines, it sounds like the reason that testing has taken so long in Australia is that the Houston team was working on the control system to ensure that it kept steady in the face of erratic rotation, but this has now been resolved (with the performance of the tool improved considerably). The shares seem to have sold off in recent months as investors inferred from the absence of news that the tool was not performing, but it has not recovered at all on news that the tests are close to completion. The AR says cash should be generated in Q3 calendar 2024 (so this month - presumably the $100k from the Queensland customer as you say) and on the IMC Andrew said the testing should complete in the "coming weeks".

[1gw] 02/9/2024 14:10

I was hoping you'd show me how the higher value worked.

But even $27m as a base value is encouraging relative to market cap. One question is how much technical risk remains - will SABER pass its (hopefully final) steering while drilling test in Australia?

Next big landmark, in the success case, is perhaps the receipt of the $100,000 from the Australian customer, as per the 12th Feb RNS, which presumably would signal the move from test to commercial operations and allow the market to start building in revenue on a much firmer basis, as well perhaps as helping to get one or two other potential customers across the line.

[somerset lad] 30/8/2024 21:55

1gw, thank you. My numbers were too high for the reasons you give.

[1gw] 30/8/2024 13:52

Somerset lad - can you expand on your analysis?

Looking at note 10, the starting point seems to be the following statement:

"There still remains a buffer of 53.0% over the net book value of the intangibles when using the lowest value point in the sensitivity analysis above"

Net book value is $8.328m, so from that I get a "lowest value point in the sensitivity analysis" of $12.7m.

If I assume the sensitivities were run independently, then this lowest value point should be by using the lower royalty rate of 5%, giving a lower valuation by 47.3%. So that would mean the base value was $12.7m/0.47 = $27m. If I assume their lowest value point was a combined sensitivity of downside royalty rate with downside discount rate then the base value would be higher.

However, there are still 4 scenarios for fleet size and capex.

You could argue that the $27m was the base value for the lowest-value scenario, but I don't think this is certain. You could also argue that since they were looking at an impairment analysis they took the highest value scenario on the basis that fleet size and capex were management decisions (albeit subject to being able to finance it), not external variables. So management would select the most favourable reasonable development scenario and then run the impairment analysis using downside sensitivities on the key variables (royalty rate and discount rate).

[novision] 30/8/2024 12:50

Well the impairment review says "Currently the SABER project is towards the end of the development phase and is forecast to be cash generating from Q3 of calendar year
2024."

So we should know soon enough whether or not the valuation is based on any kind of reality...

[p1nkfish] 30/8/2024 12:36

Cancelling the share premium can offer some balance sheet flexibility.
Might help with fleet build?

[somerset lad] 30/8/2024 11:41

Note 10 tells you that the central valuation from Enteq’s valuer is c $44m, the low case is c $18m and the high case is c $87m. [update: see posts 2230 and 2231 as these calculations give figures that are too high]

[p1nkfish] 30/8/2024 09:44

Last time I sat through such was PHD if I remember correctly. Can't remember the exact reason but was ultimately acquired. Made a very decent return after much volatility.

[rivaldo] 30/8/2024 09:27

Intriguing move today to cancel the share premium account to create reserves "to make distributions to shareholders in the future", i.e dividends.

A standard move for companies with positive prospects, with no negatives for shareholders, but not usually for a company in NTQ's current position. Hopefully a sign of strong confidence from current management (cynics might say a tad premature!) and that news to come will be significant...

[1gw] 28/8/2024 15:25

"On the cusp" then. Positive statements on industry engagement, pull from Australian customer, rate of cash burn, independent IP valuation.

Frustrating to hear that (as I understood it) they are only now (after around 4 months elapsed time and 600 hours of testing) progressing to actual steering while drilling for the Australian customer. But they seem very confident that this final phase of "pre-commercial" will progress smoothly, and they will therefore soon be commercial.

[p1nkfish] 28/8/2024 14:12

IP valuation a multiple of current market cap and multiple of r&d spend to date.

He didn't say what the valuation was but that's the base line. Increased valuation comes along with revenue and FCF in future.

So, base line is worth more than a current market cap times some.

[valuehurts] 28/8/2024 14:01

I got a good feeling about potential clients. Andrew didn't seem to realise the severe concerns that investors have about future client uptake. It came across as he really believes there will be a lot of demand and the fact that they are building out the fleet further confirms this. Seems like they are talking to major players regarding the technology and the potential of doing business together.

[valuehurts] 28/8/2024 13:56

Pretty good presentation I thought seems like everything is going in the right direction. The big question is the cash and a potential raise. I liked the unpolished aspect of it. They are an engineering team not an IR outfit and are obviously quite proud of the technology. Good to see that Andrew seemed to have taken his family on holiday to Queensland and managed to end up on a coal mine with a drill rig

[mjneish] 28/8/2024 11:58

The presentation has now been archived.

[pugugly] 28/8/2024 11:17

Hedged most of the critical questions (imo) Also some technical failures. Not sure if their problems or the links to IMC. Would appreciate your thought as recently averaged down.

[p1nkfish] 28/8/2024 10:45

What are peoples opinions post IMC?
Will have to watch later.

[pugugly] 28/8/2024 09:55

IMC Meeting starts in 4 minutes

[novision] 22/8/2024 09:28

Results presentation on on 28/8 at 1100. You can submit questions in advance if u sign up.

[valuehurts] 21/8/2024 22:12

Everyone needs more dough. It is just how they are planning on getting it.

[valuehurts] 21/8/2024 22:11

If they are granted options that excise at these levels I could see why they wouldn't want to push the stock up dramatically. I still need to dig into the incentive structure.