Ophir Energy Share Discussion Threads

[ashkv] 13/9/2018 20:32

Sophia "The 27,500 does not seem like a rock solid number or do you have a different understanding of this?"

Ashkv -- > The 27.5k bpd number is based on assuming that Santos acquisition closed on 1 Jan 2018

Sophia "Our pre-budget estimate of forecast 2019 capital expenditure is $175 million. Commitment exploration expenditure is forecast at $50 million and in line with our objective to only pursue selective exploration, steps will be taken to minimise and reduce this exposure where we can. Maintenance and sanctioned development capital expenditure, including Bualuang Phase 4 development, is forecast at $100 million"."

Ashkv -- > I couldn't find this in the H1 Results Notice. Also the H1 presentation clearly states otherwise. Per Ophir t t

Sophia: "a) capex of 80-100M per year"

Ashkv -- > Capex forecast is outlined in the H1 results. Drilling Capex to be curtailed / farmed out. At max $85m over 5 years. Rest of Capex to increase production or high probability wells in existing fields with short payback (less than 2 years on investment with IRR in the 40%+ range)

Sophia "b) possible investment of up to 150M in Fortuna"

Ashkv -- > Depends on the final deal and if Fortuna culminates than we are off to the races.

Sophia -- > c) "Longer-term, outstanding financial commitments to host governments for exploration total $85 million, to be discharged in a five-plus years' programme".

Ashkv -- > $13m of this in H2 2018,and the rest over 5 years and likely lower as Ophir looking to farm in partners as they did recently with Kosmos energy for Equitoral Guinea license.

Sophia: "Do you guys exclude a rights issue?"

Ashkv -- > Why would there be a rights issue when the still have $200mn of borrowing capacity. And are now generating $200mn+ P.A. of Free Cash Flow. Per the Webcast CFO stated the $125mn borrowing for Santos was available in very short order and their is capacity for another $400-$500m in debt. Though not required per CFO as at max they consider a ceiling of 3 to 3.5x EBITDA as tops. Presently post Santos it is in the 1x + area

Sonia: Of 25-27Mboed, can anye tell me how much is oil?

Ashkv -- > About 70%+ from my analysis. Though need to reconfirm.

Sonia: It seems an interesting case, but I see that the word FCF or cashflow from operations might be used in a "light" way.

Ashkv -- > Could you elaborate? I am not convinced you are genuinely reviewing Ophir
as you appear more keen to thrash the firm.

Check out H1 Results Presentation - all your questions are answered.

[nigelpm] 13/9/2018 18:22

My view on that is they are close to getting a deal done but aren't going to promise anything due to previous setbacks.

[ohisay] 13/9/2018 17:28

I've been looking on here/elsewhere all day but havent seen anybody close to understanding/presenting an interpretation of the specific way the strategic update was textually constructed as regards Fortuna.
It seems to me they are only going in one direction - suffice to say anybody buying here is on a one way ticket IMV subject to Golar going in the direction they have already indicated as a strategic option and getting some support from the Chinese who effectively hold all the good cards .

[badger60] 13/9/2018 17:27

May well look to buy back in sub 20pps Nige.......Fair value with all the debt that now needs servicing along with the inept management, can't be more than £100mio mkt cap...or 15 pps

[nigelpm] 13/9/2018 17:10

Even the local guru Nige beliefs the balance sheet is pie in the sky

ha - not quite - in fact I said nothing of the sort!

[jotoha2] 13/9/2018 17:04

Even the local guru Nige beliefs the balance sheet is pie in the sky , so what are the assets worth , back of cig packet I would say £300 million max , so 20/30p is going to be very realistic once all the bad news is out . A quick fire sale is required here to at least limit the financial damage to the major holders , otherwise it's a slow decline into penny share status .

Dreadfull day here , of to the Ritz for some cake.

[romeike] 13/9/2018 16:39

Fortuna is already entirely discounted at the 40-50p range. Despite press reports I am not sure EG will strip the license quite so quickly, and the "pivot to Asia" may have as much to do with getting funding for Fortuna as cutting costs. I'll be interested to see if they relocate to a Chinese city.

Sub 30p makes a total nonsense of the balance sheet. Get real.

[alamaison5] 13/9/2018 16:24

alamaison5
13 Sep '18 - 11:08 - 4651 of 4682 Edit
0 0 0
32p next stop. So no profit next year either. Ouch no 2...

sophia1982
13 Sep '18 - 12:34 - 4668 of 4682
I am trying hard, but honestlly I cannot clearly see a path to real FREE cash flow generation.

ME NEITHER. THE MONEY WILL BE SPENT ON RIGS, STAFF, APPRAISAL...
ALSO, THE OIL FIELDS WHICH ARE ALREADY "TIRED" WILL NEED BIG SPENDING...
32p or nothing!

[arteespresso] 13/9/2018 16:16

Fortuna is already expected as a gonner I'm assuming. Anything to the contrary is a bonus.

[ed 123] 13/9/2018 16:02

Ta, Jotoha2. :-)

You may be right. We'll see.

[jotoha2] 13/9/2018 15:50

Best of luck with your 38p , Once Fortuna is confirmed as gone , then 30p , and we can all move on to brighter prospects , but not here !

[ed 123] 13/9/2018 15:25

Nick Cooper is gone and there is now a direction of lower risk, less expensive exploration and more production. In line with the new strategy, the Zama success in Gulf of Mexico may enable Ophir to farm down for some free carry? Big exploration costs should be ending here.

Fwiw, I bought some today. I'm assuming that Fortuna licence will expire and the remainder of its value will be written down. If and when that happens, there'll likely be another nudge down in the share price, but maybe not a lot (being an expected event - priced in?) and possibly from a slightly higher level than today?

Negative? The seller(s) remain active, even at this level (38p), and sentiment is poor.

Taking a 12 month view, Fortuna gone, added production from Santos deal, progress on Mexico exploration, possibility of another deal? Enough to change sentiment?

It could go lower from here but I've taken the view that Ophir's assets without Fortuna are enough to support my c.38p buying.

[general george] 13/9/2018 14:59

Jeez, that must have been a hell of a loss......

[jotoha2] 13/9/2018 13:51

Because like everybody here including the Insti , there has been no profits for anyone , unless of course you managed to trade a couple of pence here and there , he wants retribution , and I want to see these dodgy Directors gone !

[nigelpm] 13/9/2018 13:30

why are you still posting badger? There are thousands of stocks in the market you could look at - why are you obsessed with a "loser"?

[jotoha2] 13/9/2018 13:25

Lets hope you are right 55p or 30p happy with both .

[ileeman] 13/9/2018 13:03

Added more on the back of the results. Great forward statements post aquisition, markets forward thinking.

It will get priced in once seller finished in next couple weeks. Oil on highs.

[badger60] 13/9/2018 13:02

Yep....This company has survived on smoke and mirrors, and lies and soundbite information to its shareholders ....while the management have rewarded themselves outrageously for their inept destruction of shareholders value. Their forward projections and promises have NEVER materialised, and in the meantime they have frittered away $3.1 BN in 6 years buying, and then closing down tissues of expensive non performing assets.

[nigelpm] 13/9/2018 12:55

Looking back again. Jotoha is obviously a big fan of Mike and The Mechanics - can't blame him for that.

[jotoha2] 13/9/2018 12:38

Look at the share price , that tells you the true story , leave your dreaming for the bedroom.

[jotoha2] 13/9/2018 12:37

Booth has 375,000 shares , do you really think that is a lot when he is pulling in over a £ million , and has assisted in destroying any value there was in this company , yes blown £3.1 billion in 4 years , no wonder he looked nervous this morning , reminds me of that other guy at Sterling Energy , destroyed the company and blew all the cash in a few years , and you guy's rate this BOD , amazing .

[sophia1982] 13/9/2018 12:34

Disclaimer: I am neither long nor short.

There is a certain gap between the presentation and the 1H report.
I have already highlighted that total CAPEX are much higher (look at the 2019 forecast included in the report).

In their definition of Operating CF they exclude interest expense.

I am trying hard, but honestlly I cannot clearly see a path to real FREE cash flow generation.

[romeike] 13/9/2018 12:31

Don't mind Jotoha2 - don't believe the bs about no holding, he is the epitome of a stale bull and is sat on a considerable loss, why else would he feel the need to post a negative response to every titbit of news or every positive post.

[arteespresso] 13/9/2018 12:28

Joto, no matter what happens, you'll find a slant to make it look negative. I'm sure if they'd bought a million shares you'd have a negative answer for that. Wipe the slate clean, you have no shares in this company - the question is, would you buy the in now? If not, then sell up and bore some other BB. You are a contradiction in terms, just man up and get a grip!