San Leon Energy Share Discussion Threads

[alaric7] 02/10/2020 22:09

well all things being equal, i reckon that was another reasonably good fun day.

[1kempton] 02/10/2020 11:39

Providence aiming to fast-track Barryroe oil and gas production

Irish exploration company aiming to fast-track production at its flagship Barryroe oil and gas field off the Cork coast

Chief executive Alan Linn said Providence’s ambition is to bring Barryroe to production stage as early as possible,

WEDNESDAY, SEPTEMBER 30, 2020 - 11:01 AM

Irish exploration company Providence Resources is aiming to fast-track production at its flagship Barryroe oil and gas field off the Cork coast and is confident of having development partners for the project formally in place within the month.

Chief executive Alan Linn said Providence’s ambition is to bring Barryroe to production stage as early as possible, saying that is what the field needs. He said the company now favoured drilling a number of production wells instead of further appraisal test wells.

Essentially, Barryroe could reach production within 18 months, but gaining Government approval, and meeting regulatory standards — including an environmental impact assessment and rig approval — could still heavily delay work. Mr Linn said Providence’s already agreed Barryroe farm-out deal — which will see a consortium including Norwegian company SpotOn Energy and oilfield services giant Schlumberger buy control of and develop the project — should be formally completed by the end of October.

He said he is confident the Government will approve that deal and the production plan, on the grounds of Barryroe being “a project of national importance” at a time when Ireland is importing 100% of its oil and nearly 70% of its gas requirements.

“Energy security is essential for a strong economy,” Mr Linn said, adding that Barryroe can make “a significant contribution” to the Irish economy and deliver direct long-term financial benefits and employment to Cork. It is expected that the new consortium will take a 50% stake in Barryroe, with the remainder split between Providence and junior partner Lansdowne Oil and Gas.

Mr Linn said Providence is now fully-funded up to July of next year, following its emergency €3m cash raise in April, and has no need to tap shareholders for more funds.

An exercising of warrants by investors earlier this week raised a further €540,000 for the company. If all remaining warrants from April’s share sale are exercised by investors Providence could realise a further €23.5m in funding. Providence posted a €9.2m loss for the first half of this year; up from a loss of €5.5m for the same period last year and driven by financing expenses. Cost-cutting moves helped reduce its first half operating losses from €5.3m to €1.1m.

[alaric7] 02/10/2020 07:11

www.proactiveinvestors.co.uk/companies/news/930230/san-leon-energys-powerful-cash-flow-isnt-properly-valued-in-share-price---broker-930230.html San Leon Energy’s powerful cash flow isn’t properly valued in share price - broker The company’s strategic move into Nigeria has been a great success story, says Allenby, which has initiated its coverage. San Leon Energy PLC’s (LON:SLE) powerful cash flow is a key factor in a valuation drawn up by Allenby Capital which sees some 222% upside to the current share price. The Nigeria-focussed oil and gas investor last week released first half results that illustrate a company with a strong financial position and outlook. It revealed that in 2020 to date, the company with investments in Nigerian oil assets received US$41.5mln from operators, via loan note repayments. Some US$88.7mln of future loan note payments remain under its loan arrangements. San Leon ended the half with US$35.6mln in cash and had US$22.6mln by mid-September following new investments. READ: San Leon interims confirm strong financial position The loan notes were the basis of San Leon’s investment in OML 18 (an operation bought out from Shell in 2015), with the operator paying a material coupon and providing the company with a 10.58% indirect interest in the underlying oil fields. Allenby, in a new note, described San Leon’s strategic move into Nigeria as “a great success story”, whilst noting that the more recent investments similarly focus on the acquisition of cash-flow. “The OML 18 move has been followed by two recent investments which again focus on near-term cash flow,” Allenby analyst Peter Dupont said. “These are the interests taken in the new ACOES export pipeline linking the core of the OML 18 operations with an offshore FSO and in the Oza field development project in the northern Niger Delta. High yield debt is a feature of both investments.” Dupont highlighted that currently San Leon shares are pricing an enterprise value of just £29mln, substantially less than the £371mln value estimated by Allenby. “We have adopted a hybrid sum-of-the parts approach to valuation,” Dupont said. “In the case of the current cash balance and the financial receivables relating to OML 18 and the ACOES pipeline, we have valued these items dollar for dollar. “Regarding the equity interests in OML 18 and Decklar, our valuation basis is price/boe multiplied by net reserves. We have used $3/boe and $1.5/boe for 2P reserves and 2C resources respectively. Our valuation overall is $482m or £371m, equivalent to 82p/share.” San Leon paid out US$35.3mln to shareholders in the first half of 2020 and in May it announced that a US$33.3mln special dividend would be paid - representing a dividend yield of about 30% at that time - and a US$2mln share repurchase programme was completed early in the reporting period

[ceteris paribus] 02/10/2020 06:40

Going to have some fun with SLE today when the market opens.

[echoridge] 29/9/2020 18:23

that's nice of them

[alaric7] 29/9/2020 15:34

allenby's research is very conservative, as it should be for now.it exposes our undervaluation clinically and provides some of the answers to the questions posed by bluerill in his excellent Fun with Numbers,IV on the other board.

[1kempton] 29/9/2020 15:34

From bluerill lse..

www.proactiveinvestors.co.uk/companies/news/930230/san-leon-energys-powerful-cash-flow-isnt-properly-valued-in-share-price---broker-930230.html

San Leon Energy’s powerful cash flow isn’t properly valued in share price - broker

The company’s strategic move into Nigeria has been a great success story, says Allenby, which has initiated its coverage.

San Leon Energy PLC’s (LON:SLE) powerful cash flow is a key factor in a valuation drawn up by Allenby Capital which sees some 222% upside to the current share price.

The Nigeria-focussed oil and gas investor last week released first half results that illustrate a company with a strong financial position and outlook.

It revealed that in 2020 to date, the company with investments in Nigerian oil assets received US$41.5mln from operators, via loan note repayments. Some US$88.7mln of future loan note payments remain under its loan arrangements.

San Leon ended the half with US$35.6mln in cash and had US$22.6mln by mid-September following new investments.

READ: San Leon interims confirm strong financial position

The loan notes were the basis of San Leon’s investment in OML 18 (an operation bought out from Shell in 2015), with the operator paying a material coupon and providing the company with a 10.58% indirect interest in the underlying oil fields.

Allenby, in a new note, described San Leon’s strategic move into Nigeria as “a great success story”, whilst noting that the more recent investments similarly focus on the acquisition of cash-flow.

“The OML 18 move has been followed by two recent investments which again focus on near-term cash flow,” Allenby analyst Peter Dupont said.

“These are the interests taken in the new ACOES export pipeline linking the core of the OML 18 operations with an offshore FSO and in the Oza field development project in the northern Niger Delta. High yield debt is a feature of both investments.”

Dupont highlighted that currently San Leon shares are pricing an enterprise value of just £29mln, substantially less than the £371mln value estimated by Allenby.

“We have adopted a hybrid sum-of-the parts approach to valuation,” Dupont said. “In the case of the current cash balance and the financial receivables relating to OML 18 and the ACOES pipeline, we have valued these items dollar for dollar.

“Regarding the equity interests in OML 18 and Decklar, our valuation basis is price/boe multiplied by net reserves. We have used $3/boe and $1.5/boe for 2P reserves and 2C resources respectively. Our valuation overall is $482m or £371m, equivalent to 82p/share.”

San Leon paid out US$35.3mln to shareholders in the first half of 2020 and in May it announced that a US$33.3mln special dividend would be paid - representing a dividend yield of about 30% at that time - and a US$2mln share repurchase programme was completed early in the reporting period

[1kempton] 29/9/2020 10:54

Wow 82p!!

www.allenbycapital.com/research.html

Today on their website

Valuation: We have adopted a hybrid sum-of-the parts approach to valuation. In the case
of the current cash balance and the financial receivables relating to OML 18 and the ACOES
pipeline, we have valued these items dollar for dollar. Regarding the equity interests in
OML 18 and Decklar, our valuation basis is price/boe multiplied by net reserves. We have
used $3/boe and $1.5/boe for 2P reserves and 2C resources respectively. Our valuation
overall is $482m or £371m, equivalent to *82p/share*.

[witheco] 28/9/2020 16:45

Turned out nice again I see

[alaric7] 26/9/2020 07:44

topping up your shorts - how do you go about that? The only thing you are is ninepence short of a shilling, ha ha ha.

[1kempton] 25/9/2020 21:09

From malcys blog today..

San Leon Energy

Interims from San Leon today but the most important figure and cash and equivalents at 30th June were $35.6m, at the 18th September $22.6m. (Not including $6.8m held in escrow for Oza transaction)

During the year to date the company has received $41.5m in relation to payments due to San Leon under the Loan Notes. In addition the Company is scheduled to continue to be repaid against the Loan Notes, the balance of which is currently US$88.7 million, on a cash receipts basis.

During the year there was a share repurchase of $2m and a special dividend of $33.3m was paid in May giving a historic yield of some 30%. At that time, 7th May, CEO Oisin Fanning bought 98m shares taking his interest to 24%.

Since the balance sheet date the company has done the ELI deal ($15m loan and 10% interest) and is waiting on completion of the OZA deal with Decklar Petroleum (which is a $7.5m loan and 15% interest) play.

San Leon has a strategy which is proving incredibly rewarding for shareholders, the lending of money is a highly effective and profitable use of capital whereby the company get all their money back and keep a very profitable interest in the company into the bargain. Where else might you lend $175m, get $190m back and still have $100m to come?

As for the country risk often associated with Nigeria it is worth noting that it has always been political risk not geological risk. Lending here is protecting shareholders and the lending is investment, not trying to raise money on the street.

I have been looking at SLE again in recent months, I have had several interviews with CEO Oisin Fanning, one on Core Finance and will be doing another one soon. I am convinced that the model works and the historic yield of 30% looks like it will be the same for next year, after all the money continues to come in and opportunities are not dying out.

I may be wrong but this does look like a simple risk and reward which is tilted heavily towards the investor. I have assessed country risk which is no higher than most comparable others and we know that Nigeria is seeing inbound investment for oil and gas projects including the marginal field bid round which seems to be attracting attention. This is all about the risk and when you have a 30% yield on your side the company is protecting shareholders by using its capital so efficiently, a no brainer, yes it probably is…

[echoridge] 25/9/2020 20:10

I really wish there was even the tiniest chance that you actually are short the shares instead of a clueless avatar who thinks 'top up more shorts' is a thing. At least jabba was clinically ill; you're just sad

[ceteris paribus] 25/9/2020 19:27

After taking profits the other day, will be topping up more shorts tomorrow for some further sliding ahead.

[plasybryn] 25/9/2020 17:31

What a great interview with Jak. The Co. should be valued 2 or 3 times its current market cap. and similar mega payouts next year. Love it. And Broker Notes due out.

[1kempton] 25/9/2020 15:52

hxxps://www.share-talk.com/oisin-fanning-ceo-of-san-leon-energy-sle-l-interim-results-podcast/#gs.h3c4zv

[1kempton] 25/9/2020 15:52

hxxps://www.share-talk.com/oisin-fanning-ceo-of-san-leon-energy-sle-l-interim-results-podcast/#gs.h3c4zv

[witheco] 25/9/2020 08:09

Yep, if I could have a dollar for every tomorrowism that gets mentioned on these bb my take home would be equivalent to Fannys.

[witheco] 25/9/2020 08:06

Not impressive enough by the looks of it.