Ophir Energy Share Discussion Threads

[pineapple1] 12/7/2017 08:35

Nigel.....yes i know. I do not touch Oil companies with high debt levels which is why i,m only currently in SQZ ,TRIN and OPHR.
The likes of ENQ,TLW and PMO i avoid and am prepared to miss the gains that highly geared players make if oil recovers strongly..........

[pineapple1] 12/7/2017 08:32

Nigel.....milk and honey may be an exageration on my part but you certainly seem bullish on the Fortuna FLNG project which is of course your opinion.

[nigelpm] 12/7/2017 08:27

PMO looks like a basket case to me - have you seen the debt position? My word - that's finished if oil prices don't return as you believe.

[nigelpm] 12/7/2017 08:26

Where did I say "heading to the land of milk and honey"?

I'm as concerned as you are but have more confidence in future oil and gas prices.

If I didn't I wouldn't have any investments in the sector.

[pineapple1] 12/7/2017 08:21

Ed.....This project, the expenditure so far and the investment required /potential returns looks poor value for share holders to me. I,ve been consistent on this for some time whereas Nigel seems to believe we are heading to the proverbial land of milk and honey.
imho

PMO investors must be pleased this morning.....

[ed 123] 12/7/2017 08:16

The important part (ie. for Ophir's future) concerns Fortuna. The critical part of that is the offtake agreements. What prices will be agreed?

The LNG offtake prices will determine the closing out (and final cost) of the debt facility. Then, when those are announced it will be possible for holders to calculate a ball park of the return they might get. Remember, equity holders are last in line. With big borrowings, it will be a geared play.

There's also significant execution risk.

For (would be) holders, it's a question of, "How lucky to you feel?"

[pineapple1] 12/7/2017 08:15

Lets see if it holds. I,m glad some here still think this good value.I,ve sold some into the rise, I'll keep the remainder as i'm always open to surprise recoveries although not to hopeful in this case.....

[nigelpm] 12/7/2017 08:08

Hope someone made some money out of hammering it down to 69p anyway!

[zcaprd7] 12/7/2017 08:06

Yes, certainly didn't the deserve the drops over the last few days though...

[pineapple1] 12/7/2017 08:01

What so you thought i was implying they were spending it on hookers and blow..

Gas prices will remain low for an eternity........

[nigelpm] 12/7/2017 07:57

Well your post didn't show much understanding of that point I must be honest.

[nigelpm] 12/7/2017 07:56

The fundamental problem right now is Oil and LNG prices are rock bottom - the timing might actually work here if the oil price recovers.

[pineapple1] 12/7/2017 07:56

I know that.........
Spending money on a project thats marginal at best is not a good idea in my book.
imho

[nigelpm] 12/7/2017 07:55

That's capex pineapple - the idea being you spend to develop assets that provide cash flow in future.

In a nutshell that's how E&P works.

[pineapple1] 12/7/2017 07:52

Cutting costs after blowing through $77m in the last 12m. They'll be out of cash within 2-3yrs at this rate. What have they to show for it ,and they start cutting costs now......lol.
"Nothing to get exceited about".......well you're right there

[nigelpm] 12/7/2017 07:45

Nothing too serious in there.

Production from Salamander assets not performing as well in H1.

Lots of cost cutting as expected.

Fortuna still on track.

Nothing to get excited about though either.

Very boring share but sometimes that's not a bad thing.

[nigelpm] 11/7/2017 17:16

I will be most upset if insiders have got a hold of this over the last few days.

[nigelpm] 11/7/2017 16:39

Many thanks - hadn't thought to check the obvious place - cheers.

[sawney] 11/7/2017 16:00

What trading update is that? I wasn't aware one was scheduled.

[nigelpm] 11/7/2017 13:30

Thanks for posting but I suspect it's a case of Garbage in - Garbage out. FCF won't look pretty given the development opportunities.

[ed 123] 11/7/2017 13:08

Thanks, Pineapple1. :-)

That's what I was seeking in my post 3025. I've wondered for a while whether there would ultimately be any value for Ophir shareholders if management hung onto some of the gas assets and committed to development.

All easy with hindsight but they should have sold out completely and returned the £5(?) per share to shareholders.

I don't doubt the sincerity of the people at the top in Ophir but they are oil people. If private investors had been in control there would have been a different outcome, imo.

[pineapple1] 11/7/2017 12:47

DISCOUNTED CASH FLOW (FREE CASH FLOW TO EQUITY)

The calculations below outline how an intrinsic value for Ophir Energy is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast
2017 2018 2019 2020 2021
Levered FCF (USD, Millions) $-55.92 $-107.99 $-94.82 $52.77 $90.00
Source Analyst x4 Analyst x5 Analyst x2 Analyst x2 Analyst x1
Present Value
Discounted (@ 17.6%) $-47.57 $-78.13 $-58.35 $27.62 $40.07
Present value of next 5 years cash flows:
$-116

Terminal Value
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $90 × (1 + 1.2%) ÷ (17.57% – 1.2%)

Terminal value based on the Perpetuity Method where growth (g) = 1.2%:
$555

Present value of terminal value:
$247

Equity Value
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value

Value = Total value / Shares Outstanding ($131 / 751)

Value per share (USD): $0.17

Exchange rate USD/GBP = 0.776
Value per share (GBP): £0.14

Current discount (share price of £0.745): -451%

Extract from and Credit to the website below. Worth signing up and running a few through...

[nigelpm] 11/7/2017 12:41

Looks like tomorrows trading update may not be what we were hoping for!

What trading update is that? I wasn't aware one was scheduled.

[nigelpm] 11/7/2017 12:33

10p - can't wait to hear the justification for that!

[zcaprd7] 11/7/2017 11:30

Seems harsh. Not much volume?