I3 Energy Investors - I3E

I3 Energy Investors - I3E

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Stock Name Stock Symbol Market Stock Type
I3 Energy Plc I3E London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-0.20 -1.79% 10.95 16:35:10
Open Price Low Price High Price Close Price Previous Close
11.15 10.75 11.15 10.95 11.15
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the abbot: Reading back over the last couple of weeks of posts on various boards I note many concerns, but one seems to stand out which relates the upcoming general meeting and concern surrounding the resolutions. In relation to shares, I can see that resolution 1 relates to allotting of the shares as opposed to resolution 3 which allows the Company to issue the equity shares associated with the Placing and the Primary Bid process. I'm sure that no one has issue here, it seems the Resolution that is concerning many is Resolution 4. Resolution 4 would allow i3 to issue up to 1/3 of its outstanding equity without further shareholder approval. I have heard a lot of concern as regards this and how it allows the directors to dilute us again etc. What I have not read from anyone though is that this resolution seems to be totally standard allowance since i3 listed in 2017. Looking on i3's website shareholder documents the first circular, 07 February 2018 has on page 9 "to allot on a non pre-emptive basis up to a further 12,986,637 new Ordinary Shares (which will represent approximately 33 per cent. of the Enlarged Issued Ordinary Share Capital) going forward, should the Board consider this to be in the best interests of the Company." This seems to be the same as resolution 4, albeit different number of shares and it discusses 33% instead of 1/3. In the 29 March 2019 GM also on page 9 of the Shareholder Circular - the same 1/3 allotment of shares for the same reasoning exists. and in the Notice of Annual General Meeting 2020 the same resolution exists. Indeed, as far as I can see this resolution has existed for each and every year. Additionally, if i3 wished to conduct any transaction requiring greater than 1/3 shares then they would have to seek shareholder approval which may indeed be academic as roughly 60% of the company is owned by just 4 institutional investors anyway. Either way, I have no issue with this resolution. I do not see the company doing anything that is not accretive and / or in the company's (therefore shareholders) best interest. Thus far they seem to have pulled of some cracking deals and (irrespective of the share price which will no doubt find its correct value when the company is weighed correctly). I am off the opinion that unless you are looking to flip or trade your shares, then you have to look to what brings greater future value and in this respect, I did not wish to tie the hands of the Board that are looking out for the future of the company.
pretax2: Bouncing off support from the previous high in May. I assume the MM have sufficient stock to supply investors who will be reinvesting their dividends on Aug 6th.
cashandcard: Fandangle, That's a bit harsh. I'm in both - Kist and Andrew certainly have a stronger cohort of shareholders, ii's and retail alike - hence the KIST premium. People are paying those sums because they have calculated their money is safe with Andrew Austin, who is CEO and owns 17% of KIST stock. Andrew Austins performance at RRE means he gets free pass on KIST and its acceptance just 'is' amongst investors. Why are we surprised; the market rewards good performers and punishes failures.......twas ever thus! Because of i3e's previous failures at Liberator and the doomed farmout process a few years ago, they must 'become' accepted first. Of course the past here hangs over it like a dark cloud, but that will clear at some point if they continue to make progress. Once they get going with the dividend policy (0.0016 is the first of 3 this FY) then a rerate is in order. The Managers could learn a thing or two from AA and put some real skin in the game here. Cash
cashandcard: Ed, pretax,I hear you. The Divi marks a step change in strategy and hopefully a better future. The previous boss, his near total failure that led this from over £1 to just pennies in the pandemic Vis why some are perhaps still reluctant. I'll be frank, I'm here for the Divi, it would take some epic failure for that to go wrong. You see, it's investor and market perception of I3E over last 3years. Until investors see those dividends in their accounts, they will not be able to fully shake off the past as that is all they have to go by.Let's hope there are no hiccups now and they follow through on plan like Andrew Austin does on his.Cash
billyrayvalentine: "i3 Energy Strategic Acquisition and Successful £40m Placing i3 Energy has raised £40m via a placing of 363.7m shares at 11p (a 3% discount to the 15-day average closing price; announced yesterday). In connection with the placing, the company has secured a $US 53.7m strategic acquisition in central Alberta, Canada. The acquired assets are producing circa 8,418 boe/d (51% liquids) and are expected to generate circa $US 31m of cash flow (in the field, excluding any incremental corporate costs). We see the acquisition and the related placing as positive from every perspective, inclusive of all possible valuation metrics and strategically. We believe the successful placing and acquisition positions i3 Energy to grow convincingly into a mid-cap, high-growth energy company. We believe that i3 Energy will continue to re-rate over the course of 2021 as the company solidifies its standing as a premium Canadian oil & gas company. We base this opinion on i) i3 Energy’s extraordinary track record of making value accretive deals ii) the robust cash flow being generated by the company iii) the exposure i3 Energy provides to strengthening commodity prices and iv) the depth and quality of i3 Energy’s drilling inventory, which we anticipate will be further defined over 2021. We see i3 Energy on a very convincing trajectory of shareholder value creation and anticipate that to be reflected in its forward looking share price dynamics. Accretive: Based on our analysis, shareholders have materially gained in wealth through the company’s acquisition and successful equity placing. Step-change in Canadian markets: We cannot understate the importance of successfully securing a high-impact acquisition from Cenovus in the heartland of the Canadian oil patch. Cenovus (CVE; TSX & NASDAQ; Market Cap $US 18 billion) is a recognised senior oil producer with a significant North American presence. The deal will be noted in North American oil & gas markets and, we believe, will raise the profile of i3 Energy as a preferred acquirer – potentially favouring entry into further value accretive deal flow. Funding: Based on the company’s successful track record and the value it has created to date for shareholders, we are not surprised by the support shown to i3 Energy by the institutional investors who participated in the placing (the company’s last placing of £29m was priced at 5p and closed on 11 August 2020). Nevertheless, we believe it is critical to appreciate that, based on our observations, capital scarcity remains a dominant theme in North American oil & gas markets. We believe i3 Energy’s proven ability to raise funding sets it apart from the pack and makes i3 Energy a preferred counterparty for potential vendors. Although we believe the mantra “cash is king” remains true across the commodity cycle, it takes on a literal accuracy in a winner-takes-all context where the number of motivated sellers is grossly imbalanced relative to the limited number of funded acquirers. Scaling up: We see only positive benefits from increased scale for i3 Energy. An increased market cap and cash flow base will only add institutional appeal to the investment opportunity. At the operational level, we believe that scale will bring efficiency gains. The significant increase to i3 Energy’s cashflow resulting from the acquisition will allow the company to plan more extensive drilling programs. Importantly, we believe that i3 Energy is entering an operational scale where efficient debt finance starts to become available in Canada. Taking a mid-term view, we see a lot of scope for prudently levered debt funding to turbo charge growth. Low-decline production: The acquisition will increase i3 Energy’s production by circa 8,418 boe/d of low decline, stable production. Pro forma the acquisition i3 Energy’s production of circa 18,470 boe/d will consist of oil 19%, NGLs 28% and natural gas 53%. Synergies: i3 Energy anticipates increasing the acquired asset’s cash flow by up to 20% via synergies – a considerable uplift that would add further to the attractiveness of the acquisition. Low break-evens: The company estimates that its pro forma breakeven commodity price equates to $11.05/boe (exclusive of royalties) – low by any standards. Drilling locations: The acquisition adds circa 143 net drilling locations to i3 Energy’s drilling inventory. We anticipate i3 Energy’s drilling/development strategy will take shape over the near-term. The more drilling locations available to the company, the higher the requisite economic thresholds will be for well locations to warrant capital allocations for drilling. We believe that i3 Energy has a breadth of locations across its core regions and that the acquisition adds further to the company’s growth potential via drilling. Workovers: In respect of the company’s two major Canadian acquisitions, to date, we have been surprised by the gains made by i3 Energy through low-cost workovers, suggesting the acquired assets were low-priorities and starved of even modest capital allocations. We therefore believe it is highly noteworthy that i3 Energy has identified a total of 80 wells as targets for reactivations/workovers. Acquisition Metrics: Based on i3 Energy’s estimates, next twelve month’s cash flow was acquired for 1.73x, production was acquired for $6,381/boe/d and 2P reserves were acquired for $0.68/boe. We believe that it is a reflection of the peculiarity of this commodity price cycle that bottom of the cycle acquisition metrics can be achieved even as many commentators foresee a mid-term energy supply crisis. Overlap: The acquired assets directly overlap with i3 Energy’s existing production base in Central Alberta (one of i3 Energy’s core areas of operation from which it is producing circa 3,090 boe/d). As a result of the transaction, the company anticipates material scope to both reduce unit operating costs and to increase third-party tariffs. The acquisition of largely operated production (83%), a network of 1,140km of operated pipelines and key processing facilities strengthens i3 Energy’s strategic presence in the area. Valuation: We recently placed our 24.5p fair value estimate for i3 Energy under review for an upward revision. We remind investors that 15.7p of our fair value estimate related to the company’s Canadian operations. i3 Energy’s strategic acquisition adds further impetus for us to increase our fair value estimate. Conditional: The placing and the acquisition are conditional on shareholder approvals and other customary conditions."
alistair4444: 7th July 2021 i3 Energy to expand Canadian production as it agrees on asset acquisition The company continues to build and grow material and diversified production business, highlighted chief executive Majid Shafiq. i3 Energy PLC - i3 Energy to expand Canadian production as it agrees to asset acquisition i3 Energy Plc (LON:I3E, TSX:ITE) has inked a C$65mln deal to expand its footprint in Central Alberta, acquiring assets producing around 8,400 barrels of oil equivalent per day from Cenovus Energy Inc. As well as strong free cash flow, the deal is expected to deliver extensive operational synergies, predictable low-decline production, and a large reserve base with multi-year development inventory. It is raising £40mln to support the transaction, via a share placing and a retail offer via the Primary Bid platform. After an accelerated bookbuild process, the company confirmed that it will issue 363.7mln new shares at a price of 11p per share, marking just a 3% discount to the 15-day average closing price. "We continue to execute on our business plan which is to build and grow a material and diversified production business through the most efficient deployment of capital, whether that is through exploitation of opportunities within the company's existing portfolio or through accretive acquisitions such as this one,” said chief executive Majid Shafiq. Ryan Heath, president of the i3 Energy Canada subsidiary, added: “i3 Canada is extremely pleased to have entered into the acquisition from a top-tier veteran participant of the Western Canadian Sedimentary Basin. “The inherent synergies of the transaction, being immediately evident and robust, will most certainly expand with time to further enhance field efficiencies and cash flow throughout our central Alberta core area, to the benefit of the company and its stakeholders." As part of the transaction, i3 has entered an escrow agreement with Cenovus. It is paying C$65mln (US$53.7mln) in cash for the package of assets. The acquired assets include production of around 8,400 boepd, of which 51% is oil and natural gas liquids (NGLs), and, 79.5mln barrels of proved and probable (2P) reserves valued at US$193mln. Along with an inventory that comprises 140 future drilling locations plus 80 potential well reactivation opportunities. Altogether the inventory spans some 212,000 acres. Also included are some 1,140 kilometres of pipelines and key processing facilities. In conjunction with the existing i3 portfolio in Canada it means that production is expected to grow by around 84%, to 18,470 boepd, which will see net operating income rise 70% to around US$75mln per year. The placing will see new shares sold to institutional investors, with the process run by brokers Tennyson Securities, WH Ireland and Canaccord Genuity. It is not underwritten. At the same time retail investors will be able to buy new shares at the same level as the placing price, via Primary Bid. I3 noted that the acquisition and the equity raising will be subject to shareholder approval, at a general meeting slated to take place on July 28....extract - Proactive Investors article today.
mirabeau: Price sold off at 2.30pm yesterday. I reckon the Canadians knew of this before UK investors did. Great company though, and this placing to buy great, cash producing assets is a real positive
pretax2: Well Canada is defo in control of the i3e share price action. So there’s a consolidation and investors head for the chill-out tent, enjoy a lazy breather before the next rally.
xtrmntr: Investors looking for a way to play the current strength in oil prices should snap up i3Energy (I3E:AIM). It is buying up conventional oil and gas assets in North America cheaply and plans to pay dividends from the resulting cash flow.The company's strategy echoes the one pursued successfully by former AIM peer Diversified Gas & Oil (DGOC), which is now a FTSE 250 company. While Diversified is much larger and focused on the Appalachian region, i3 is active in Canada.The approach is refreshingly straightforward and i3 plans to pay a special dividend of £1.17 million in late July and dole out a first half dividend in September encompassing up to 30% of that period's free cash flow.The company is hedging its production to protect the revenue stream underpinning the dividend. Based on 2022 forecasts from broker Tennyson Securities the shares offer a prospective dividend yield of 5.9%.The firm began acquiring assets when prices were extremely depressed in the wake of the pandemic in 2020. As a result, these transactions were completed at an average of just one times a year's worth of net operating income – which CEO Majid Shafiq explains to Shares compares with a more typical level of four times.Having invested at such low prices the economics on the barrels it produces will be highly attractive and the assets picked up, generating 9,000 barrels of oil equivalent per day of production and encompassing 53 million proven and probable reserves, are so far performing better than expected.While the cost of transactions is gradually returning to more normal levels, i3 still sees M&A opportunities and it also has the option of investing in drilling to boost output from its existing portfolio having identified hundreds of potential well locations.This gives it flexibility in the event of future volatility in commodity prices, buying assets cheaply when these markets are depressed and investing for organic growth when prices and therefore the costs of deals are more elevated.As well as the lower risk Canadian business, the company also has the 100%-operated Serenity oil discovery in the North Sea. It hopes to bring in a partner in the second half of the year to help fund the costs of proving up the find.
spurs90: Summary: I3 Energy is a UNICORN. I honestly don’t think I’ll ever find this kind of windfall stock ever again in the oil/gas sector in Canada. I mean that sincerely, I begin my career investing in the oil sector 25 years ago, so I don’t say that lightly. Thankfully for the reader, i3 went silently public on the TSX big board in a reverse takeover of Toscana during the worst oil crash in history. A time when fear made investors and Institutions sell cashflow generating assets at pennies on the dollar which i3 bought at historic multi-decade lows. The assets they bought are currently producing 2x the purchase price based on current strip pricing and offer decades of upside. They also will persevere the capital while JV’s are being shopped around for their highly profitable large oil discoveries in the North Sea. The Clearwater Acreage alone is now worth more than the whole companies Enterprise Value and that’s just one piece of a very large economical asset pool. There are many catalysts to reprice this stock 5-10x higher to an industry multiple. 1) Dividend announce in the next 3 weeks 2)First Q 2021 filling in April as a TSX public company when lazy investors will be able to see the value laid out for them on Sedar 3) JV in the North Sea That will unlock potential 4x their current production and billions in FCF over the proceeding decades 4) internally growing production in Canada from FCF, starting at a base of 10’000 boe/d it doesn’t take much capital to double production and FCF 5) macro environment set-up for higher oil and gas pricing due to US restrictions on drilling in the shale plays in the USA, restrictions on access to capital, the +decade long underinvestment in new production globally, OPEC+ restricting oil production, global depletion of 6-7% a year = we need to add 6-7 million barrels of production globally just to run in place, Canada’s NG export capacity under construction will enable 20% of all NG currently produced to be exported driving up prices…. to name a few…. Debt light, FCF 2021 is +2x net debt High-Quality Asset Heavy High Liquids Production High-Quality FCF Low-Cost Producer Only JR. with jurisdictional Asset Diversity (Canada and UK) Leverage to international Brent Oil Market Policy to payout 20-30% of FCF in dividends to shareholders completely unknown to North American investors NAV of +$900 Million USD, trades at a massive discount to every multiple used to evaluate Oil and Gas Companies in Canada Pays a healthy dividend that will grow WCS oil and EDM. SWEET are at/near 7 year highs in Canadian Currency CLEARWATER, CLEARWATER, CLEARWATER, IRR’s over 350% UPSIDE TO MASSIVE OIL DISCOVERY, NORTH SEA, UK already +600 million barrels possible and up to 300 million barrels recoverable Announcement of a Reserve Backed Lending Facility to acquire more Producing Assets / Take out the remainder of Term loan / accelerate Clearwater Development Dividend increase in Q2
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