Final sp shows 7.695 rise.
This morning first thing I found it impossible to buy PPC on the HL platform.
Had to leave a 'fill or kill' order, which was only taken up at 11am.
There were very few sells today and mostly buys going through. The free share float is small at the best of times and share supply must have been very restrictive today after good news.
What will tomorrow bring?
More of the same perhaps and another steady sp rise?.
· Live gas field identified with potentially commercial gas flows achieved
· As a result of tests Estancia Vieja field to be reactivated
· Three wells tested at Estancia Vieja field; two of the wells produced median rates of approximately 200 and 250 boepd each at a 6mm choke plus associated condensate with the top rates achieved at larger choke sizes of 300 and 520 boepd respectively
· Pressure recovery tests were performed successfully indicating potential for good production
· Three further gas wells potentially available for testing later this year
· First gas production targeted for late H2 2018
· President booked minimal 2P gas reserves at Estancia Vieja which may be expected to increase at y/e 2018 as the field develops
Remember that Schroders have increased their investment in PPC to over 14% recently, giving Peter Levine and the PPC strategy a big 'thumbs up'. They are obviously very close to management to make that sort of investment and commitment and no doubt have a more informed and better researched position than PI's.
Re-read the February presentation on the PPC website and then overlay the increased reserves and production opportunity that was announced yesterday, and you have a very compelling investment case.
IMO we will see a strong upwards SP movement soon and it has already started,
"LSE:PPC:President has announced new, independent certified Argentine reserves with the Neuquen Basin 2P number increased by 66% to 8 million barrels of oil equivalent, giving total in country net reserves of 26.6 million barrels of oil ..."
50% rise certainly possible but they'll need to deliver significant news to bump the market cap up to a lofty £160m+. That's chunky.
If you want a decent 50% opportunity trade then I think you might have better luck with CERP.L as any upside / good news on that stock is likely to see the cap move up by 50% or more without looking expensive.
Both have risks but that's down to the investor. Plenty of stocks out there that have 50% or 100% growth opportunities ahead of them in a small period of time. High growth comes with high risk. PPC looks lower risk assuming PoO performes but can't see it growing faster than the likes of CERP or MATD. Will keep an eye on them and revisit in a couple of months time.
PS: If he wanted to, PL could cut debt - it's all/most all owed to him too I think so very flexible anyway - by half or more this year.. but I expect he'll put the profits towards an acquisition and /or a Paraguay drill instead though... and the debt is not a big number anyway.. also as the chairman of Amerisur pointed out recently the s/p premium for no debt that existed 2 years ago has gone away now anyway.
Good feedback Hub and Mike Thanks and the best BB are balanced ones imho.
I'm seeing WTI averaging around $60 this year which makes me bullish here. Also as production grows - and it will grow from existing assets and perhaps another purchase funded via operating profitability here too - then the cost per barrel will incrementally come down.. indeed the scope for bringing it down to the 'norm' means profitability can readily enough be increased further here.. and all that is tax free profitability for a good while forward here too.
Generally, I have a 15p target here in reasonably short order here and don't see that as unreasonable at all.. but I have been somewhat wrong - it has gone up meaningfully to even 10p though - so far and may of course continue to be somewhat wrong or fully wrong going forward.... These are the games we play..
As far as I can make out PPC is on a P/E of 7.8. Its likely to go down a bit as the year goes on if what PL says comes about. Thats undervalued somewhat but not criminally so IMHO. As HUB points out, it has debt and the OPEX is higher than the average but it has potential for deals and higher production if Paraguay comes good. Unfortunately potential is given little or no value these days. Look around and you can see lots of companies with great potential and low Mcaps. I think PPC should be higher but not in multibag territory atm.
Malcy really ought to flag up the $21m of debt and the high cost per barrel. Most companies out there are working on a much lower cost per barrel of $15pb in South America or $25pb at worst case.
PPC's cost per barrel is closer to $34pb. Should PoO slip back to mid $50's, they are net $14pb down a barrel which would change the picture entirely and brings debt reduction into the picture.
All in all, I think circa £100m market cap looks fair and is not criminally undervalued at all.
When debt reduces a little and production edges up to 3000bopd and or if PoO remains in the $60's, then yes, another leg up is warranted.
But history shows that Mr Levene and PPC have promised a great deal and delivered not a lot considering all the capital raises via equity placings and loans.
Finally, the IFC (International Finance Corporation) are well known for selling out their investment positions as tend to be short term investors.
PPC has promise but long way to go. Market is in no mood to price in 'optimism' on producers just yet.
President Energy (PPC) has announced record results in January with each of their concessions making good returns and contributing profits.
In the month the Argentine assets generated $1.3 million (£940,000) after opex, G&A and finance costs.
Positive cash generation was higher at $1.8 million due to continued utilisation of tax credits which I alluded to here a few weeks ago. This is likely to continue and PPC expects to pay no CT this year due to utilisation of tax losses carried forward.
Sales prices were $63.50 pb for Puesto Flores and $53.70 for Puesto Guardian last month and are running at around the same level this month.
At PG the concession is now making a significant contribution to overall profits in Argentina which should increase through Q1.
At the Neuquen Basin, work has commenced to test the long shut-in Estancia Vieja field which if it came in would be a massive bonus for the company.
It is worth noting that Vista Oil & Gas in its recent deal was struck at a significant premium to that paid by PPC.
Reports indicate that Vista paid $12.57 for 1P barrel of oil equivalent compared to PPC's $6.22 price in the Puesto Flores/Estancia Vieja and on a production basis Vista paid $25,480 per flowing barrel whereas PPC paid only $18,667, a healthy discount.
PPC continues to act as a consolidator of assets in Argentina and I wouldn't rule out another deal after this recent success which would provide more production growth with excellent net backs currently $33 per barrel.
Peter Levine says that the company is "making excellent progress in every concession in Argentina and also has free cash flow of $200,000 per month from Louisiana" accordingly President is in 'its strongest ever position'.
With change from 10p a share this is another share that is criminally undervalued and I'm sure patience will be rewarded by wise investors at this level.
Described by Malcay today by 'criminally undervalued' I see... that made me smile.. and I agree.. but it is what it is..
Also I'm pretty sure he'll have it in his 2018 bucket list .. which will be out soonish I expect .. ridiculously late as is in fact .. so hopefully that gets this more noticed.....
At least, off the back of the update, it went up a little today, for a change.. a ridiculously little imho but with Brent going well this evening hopefully the rally here continues tomorrow and indeed gets some momentum going generally..
I'm surprised too. I seem to remember, in an interview, that Mr Levine could not understand why the share price was so consistently low when he felt the assets alone made the company worth .50p per share.
Here's to dreaming
here and very disappointed that there is so little buying happening at these levels, towards mopping up the still regular selling... but such illiquid small caps are often volatile and often that volatility is not in a good way.. nature of the game betting on stocks like this, alas.. and this can of course go decently lower still .. but if/when the tide turns it can equally go up quickly too..
So i'm continuing to hold tight. (I'm kinda fully loaded here already ...would only consider adding more to bring down my average and that would require this going 8p ish and that is absolutely not what I want)
What Mr Levine can do, beyond strong recent progress, to get this going up is not an easy one for me.. buy more himself perhaps, but he's trying to get wider ownership involved here.. so drum up further institutional interest seems to be way to go.. and/or Paraguay drill go ahead perhaps..with farm in partner ideally.. but may need to do anothe drill themselves to have better chance of good farm in etc ... and or another good value Argentinian asset purchase.. but that's getting harder and harder to find such opportunities in this now very decent Poo price envirnoment, I expect. Any thoughts here welcome ?
I'm not going to sell any at these levels as I feel s/p too low now by most measures .. would sell a small amount at 11p plus if /w hen gets back there twoards diversifing away from this a bit.. one of my top 5 positions
Thanks for the correction on the Chinese pumps.
One thing we do agree on is the likeliness that PG is relatively disappointing. Hence all the focus on the new area.
However, no upside is again all relative. This share could easily test the 52 week high on good news flow which is approx 25 % upside.
''The five Chinese pumps intended to replace the old system have not yet been put in commission by the Chinese manufacturers, six of whose engineers having flown in from China are in the field attending to the pumps. With due application, the issues SHOULD be solved and the wells then able to deliver to their optimum. ''
Also from the Interims;
Whilst the 1,200bopd target of production from the Puesto Guardian Concession in Salta Province has NOT been achieved by the time of this Report (29th September) etc, etc
PG is probably at circa 600bopd, insted of 1200 bopd- 1800bopd
Why is there no mention of PG since the 29th September, they've had 4 'operational update' RNS's
I was around and holding this share back in 2011, when we had a raft of RNS's about how PG was going to produce xxxxbopd - didn't then, doesn't now.
- I wish you were right,
- I wish they'd have done what they intended to in 2011 (read the old RNS's from back then)
- I wish they'd have got an adequate rig for Paraguay and not fekkked up the drilling
- I wish they could resolve the court case with the 2 US Co's
- I wish they could find a farm-in partner for Paraguay
IMO the sp is going nowhere on 'Op' updates about 1200bopd, or 1800bopd or $2m/$3m monthly cash flow.
IMO sp will only shift on 6kbopd and huge cash positives or a household name farm in, a $10m+ settlement re: drilling legal case or say 3 more deals - plenty of investments out there.
I think you may be referring to this announcement last August? Which I thought had been completed; see below.
Argentinian production is currently limited by the significant ongoing infrastructure works at the Concession including installing five new surface pumps, photographs of two of which can now be seen on the Company's Twitter feed, lifting and cleaning out of existing downhole pumps, laying of production lines prior to hooking up new producing wells and the commissioning of two new water disposal wells to handle increased water generation arising from the new production wells. All these works are expected to be completed during September.
Which was followed by this one at the end of September...
The successful now completed workover program at the 35 year Puesto Guardian Concession, Salta Province continues to grow production with the well-stock having individually demonstrated capability to produce 1,200 bopd in aggregate.
So all done at PG for the time being and more focussed on the higher bopd attainable from PF.
Optimistically looking forward to the announcement due soon.
At this price recently (10.1) and the potential clarification of the current workover and bopd from PF, it would be a strong buy from me looking for a short term upside roughly around 25 %. Longer term who knows but your right that clearer communication of the farmout process might be helpful.
Impressive presentation indeed Dilbert and thanks for posting. Ironic that the s/p is down approx. 20% from their beginning Feb. graph s/p number. Even accepting that oil is off 10% that is surprising, disappointing and poor imho.
Illiquidity is a big factor here imho: regular small volumes of sells against little buying appetite in a down volatile market has a magnified effect; speculators trading on margin get auto stopped out by the likes of IG and on top other non margin stops also being taken out has us where we currently are. (still disappointed it didnt tick back up this when as US macro situation calms down.. plenty similar others of mine that gapped down have got at least some back.. this hasn't.. so far, at least)
More positively, recriprocally, illiquidity could mean a decent rally quickly turns into a significant one .. here's hoping !
I agree Southmead that this looks a good bet and indeed an even better one now after, understandable in the circumstances, weakness yesterday (although the fact its down again today when most all my others oilers are catching some of yesterday's losses back up is pretty surprising to me )
With - as you well point out - the little amount of these in 'free float' the s/p can absolutely go up quickly on good demand.. but I'm surprised that more demand has not being forthcoming already, not least when Schroders are buying more... that buying creating demand in itself and creating good noise that should encourage other demand.. but it hasn't so far, indeed it has found ongoing willing sellers.. so I'm more than a little disappointed with whats currently occurring here... hopefully a short term thing only ..
This is good news for President shareholders. A real demonstration of support and belief in President Energy and its investment progress and potential.
The shares are tightly held by only a few with a 28% free float. When the company reports in the short term, success with the current work overs, the SP will rise substantially and Schroders know this. Retail investors just won't be able to get on board. You see.
Here is an extract from the Share Register....
The company has been informed of the following holdings (which will also be included in the list of interests below).
PLLG Investments Ltd
Schroders Investment Management
International Finance Corporation
JP Morgan Asset Management Holdings Inc
"Latin American oil and gas play President Energy (PPC:AIM) is generating more cash than expected from its recently acquired Puesto Flores field in Argentina.
A combination of higher oil prices and a low-risk approach to expanding Argentinian production makes Presidents shares look an attractive investment proposition.
At 11p the shares are up nearly 60% since we flagged them in April 2017; and we think theyve got much further to travel.
President says Puesto Flores, acquired in September 2017 along with the neighbouring and currently shutdown Estancia Vieja field, is benefiting from a realised oil price upwards of $60 per barrel and the improving production profile.
In January President is expected to generate $4.5m from its share of output in Argentina.
The companys 2018 work programme, which is fully funded from existing resources and this cash flow, includes testing on Estancia Vieja, action to lift output from existing wells on Puesto Flores,and development/appraisal drilling in the second half of the year.
President chairman and chief executive Peter Levine comments: With all our concessions in Argentina and Louisiana making profitable contributions we continue to focus on growth in shareholder value both organically and through the right acquisitions whilst maintaining our core emphasis on positive cash and margins."
Modest 2018 earnings fc of $14.6m and a PE of 9.3 on revenue of $47.5m suggests plenty of scope for a re-rating. I reckon a lot of sellers were cleared out yesterday so I remain optimistic of SP growth in the coming weeks. SP could move very quickly given limited chart resistance below 16p. Certainly one to watch.
Agree that the update this morning was a very strong one, but very dissapointed that the s/p did not tick up considerably more today.
With that update and the prices PPC have been making in Jan - $64 approx pb - this s/p should now be considerably higher imho eg 13-14 p range.
And 'IF' WTI averages above $60 thru rest of Jan and all Feb. then I expect this to move on up very decently one way or other in coming weeks eg 15p-17p range doable by end Feb. imho
Also stocks such as these can really motor in short order off the back of range break outs or new Institutional money etc ...so ppc could go up for eg say 25% on a given DAY off the back of monemutem begetting more momentun ( aka the herd arriving )
No wonder there was a significant rise in the sp yesterday. People mustve got wind of todays ops update which has exceeded expectations. PPC is now hugely cash generative with a fully funded and exciting work programme for 2018.
True blue, you are, NtM. ;-))))
This has been undervalued for as long as I remember. So now theyre getting on top of things financially and productionwise I expect the recent rise to continue as production builds.
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