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Nostrum made a Net Loss of £120m in 2018. Predicted to make £22m profit in 2019. Hasn't made a profit since 2014 (£156m profit).
Has small Market Cap (£41.9m) but an Enterprise Value of £823.9m because it has just ovet £1 billion of debt.
Net profit for last six years with 2 years estimates.
2013 2014 2015 2016 2017 2018 2019E 2020E
219....146....-94....-83.....-24...-120....22.1.....18
Will they have made £18m net profit this year? In 2017 they made a £24m loss yet share price was 519 at peak.
Who can give the best reason why this share should re-rate?
2017 (£24m loss)
Jan 426p
Jun 519p
Dec 325p
2018 (£120m loss)
Jan 318p
Dec 110p
2019 (??)
Jan 104p
Oct 24pp
Without going into huge detail I dont think the attractiveness here is in profitability. Clearly this company though has value somewhere otherwise the IIs would not presently be buying .Previously there were bad results plus a duster and IIs selling down as cinfudence was eroded. Even more ridiculous Standard Life selling in single figures. As you know the shorters also had their hooks in here. There are no shorts open now.
There is A large £1B debt and the exec are looking into this with a view to creating value for shareholders
The debt is manageable presently as there is plenty of cash in situ
Some of the exec bought in the region of 245p.
I understand that the net assets are worth in excess of £300M but I haven't checked this but IMO £48M is a crazy capital value.
As you are aware some very large buys are going through so pressure is mounting.
Confidence is now returning and therefore the sp is rising inexorably back to higher levels
Some chartists are saying there is nothing to prevent this rising to 40/70p once we are through 25p!!
IMO This is a strong buy for a non AIM share with 8.5s being provided daily so any change in holding is seen pretty much immediately.
Have you bought in and if so at what price?
Well said btb - touching on director buys, the following were made by Mike Calvey as a Director of NOG
Date of the transaction
Purchase of 470,790 shares on 13 September 2018
Purchase of 1,067,210 shares on 14 September 2018
At a price of 249p and 247p respectively.
This was only a year ago.
From the half year report published on Aug 20th 2019
Financial:
· Revenue of US$174.2 million (H1 2018: US$191.5 million)
· Net operating cash flows of US$116.8 million (H1 2018: US$99.9 million)
· EBITDA of US$110.2 million (H1 2018: US$113.2 million)
· EBITDA margin of 63.3% (H1 2018: 59.1%)
· Closing cash for the period of US$120.8 million (Q1 2019: US$75.7 million)
· Total debt of US$1,132.9 million and net debt of US$1,012.0 million as at 30 June 2019
Kai-Uwe Kessel, Chief Executive Officer of Nostrum Oil & Gas, commented:
"Financially H1 2019 was strong with oil prices averaging US$66.20 per barrel and this meant we continued to generate operating cashflow in excess of our target and remain on course to end the year with over US$100m of cash. Operationally, we are moving ahead with testing the Frasnian section of well 41, which is the same horizon from which well 40 produces. The well needs further cleaning and a long-term test before we can confirm commerciality. On well 42, two reservoirs have been tested that confirmed gas-condensate saturation but without commercial flow.
Revenue, EBITDA and Profit for the Period
Revenue from sales of crude oil, stabilised condensate, LPG and dry gas over the period amounted to US$174.2 million for the reporting period, a decrease from the H1 2018 figure of US$191.5 million. This is mainly explained by a 7.1% decrease in the average Brent crude oil price during the period. EBITDA was US$110.2 million with an EBITDA margin of 63.3%. Profit for the period was US$6.1 million.
Revenue, EBITDA and Profit for the Period
Revenue from sales of crude oil, stabilised condensate, LPG and dry gas over the period amounted to US$174.2 million for the reporting period, a decrease from the H1 2018 figure of US$191.5 million. This is mainly explained by a 7.1% decrease in the average Brent crude oil price during the period. EBITDA was US$110.2 million with an EBITDA margin of 63.3%. Profit for the period was US$6.1 million.
Had to clarify the below as Geordieshores posted false information below regarding the company not turning a profit.
GTU3 continues to progress with hot commissioning now underway and final commissioning targeted for the end of Q3 2019. On the strategic front we are working towards bringing the acquisition of Positive Invest to shareholders whilst at the same time working on the strategic review of our business. Our primary focus remains on trying to find ways to grow production in the near term. We are working to update our own geological models and incorporate the two independent studies currently being worked on by Schlumberger and PM Lucas in the North East and West of the field into the model."
- We are due news on this front imminently!
H1 2019 Drilling
· As at 30 June 2019, the Company had 45 wells in production (18 oil wells and 27 gas-condensate wells).
· Drilling has been completed on the two wells in the Northern area, 41 & 42. Well 42 has encountered three horizons with gas shows during drilling. These are the Frasnian, Mullinski and Vorobyovski. The testing of the Vorobyovski and Mullinski reservoirs was completed confirming gas-condensate saturation but without commercial flow. The testing of the upper Frasnian reservoir is ongoing but based on initial results we do not expect commercial flow. During drilling of Well 41 gas shows were seen in four different reservoirs, namely the Frasnian, Mullinski, Ardatovski and Vorobyovski. A drill stem test (DST) conducted during drilling of the Frasnian confirmed similar reservoir pressure to well 40. Following testing of the lowermost horizon, the Vorobyovski, we encountered a small leak in the sliding sleeve door within the production tubing. This has caused a delay in testing the upper horizons. We are now moving ahead with testing the Frasnian section of well 41 which is the same horizon from which well 40 produces. Initial results show a flow of hydrocarbons but the cleaning up of the well and longer term testing will be required before we can provide more detailed information.
· Drilling is currently ongoing with two rigs in operation. One rig is drilling a side track into the Bashkirian oil reservoir and the other rig is drilling in the North targeting the Vorobyovski horizon (well 361).
2019 Drilling and sales volume guidance
· The location of additional wells in 2019 will be finalised once we have completed the evaluation of the first two Northern Wells.
· 2019 production guidance remains unchanged at 30,000 boepd, corresponding to sales volumes of 28,000 boepd.
So in the August update we were provide info specifically relating to Frasnian reservoir (the ‘duster’ from last week) where shareholders were clearly given info ‘based on initial results we do not expect cashflow’ - so the panic/shorters jumping on this to explain the drop and why this will fall back down is a non starter.
Reason for the drop is predominately to do with the institution selling down at any price they could, general market conditions and negative sentiment.
Sentiment is now returning, institutions are now buying back in with some heavy buying the past week.
Debt is more than manageable, with 2018 Q3 results showing a balance sheet above 100m available with the intention and statement to always have 100m available throughout 2019 - something which to date the company has achieved, with the half year report confirming this.
45 producing wells, drills being completed on multiple others. A 2 billion asset base. As of today were trading at a discount to our cash position.
The entire 400mmboe+ reserves relate to the north east and west areas where they are producing. They have both op cash and cash on the bsheet to develop these assets further.
- The drop was way over done, way way overdone. In reality this could and has carried a market cap equivalent to an SP of 100p+.
- I expect in the coming weeks this will rerate to a minimum of 70-100p with institutions adding, seller clearing and news due on multiple fronts coupled with the board stating on multiple occasions recently they are now looking to add value for shareholders in the near term (when we’re talking shareholders, they’re talking to the big players that have millions of shares tied up here - us smaller pi’s are just along for the ride and those that hold will be rewarded).
Strong buy and hold. GL holders.
The more research done into NOG the more i cant believe where the SP is at. This company is frighteningly big, for it to be valued with a mcap of around 50 million really is laughable.
BTB i have 150k shares here at an average of just below 18p - i’l look to add another 50k on Monday and more if i can free up funds.
DYOR and all will realise the nature of the beast we’re dealing with here. GL