Henrik Profile picture
May 2 9 tweets 5 min read
Valeura Energy $VEl #VLU is a deep value case that is likely to re-rate. Before the recent acquisition $VLE had cash on hand 40m$ which is equivalent of 0.58CAD/share and a huge deep tight gas asset in Turkey. In this thread I will explain why I am buying $VLE shares. Image
Here is an overview of the transaction. $VLE acquire Thai oil asset from bankrupt KrisEnergy for $3.1m initial payment. The Wassana oilfield is expected to produce 3000 bopd after reactivation, field was shut-in during 2020 oil-crash. After reactivation 9m$ quarterly CF expected. Image
The Tax losses are the key for the transaction which make $VEL keep ~62% of profit. Assuming 100$ oil sell price -> 62$ CF. 2P case 4m barrels. Acquisition and Capex cost: 3+2+9.2+30m for 5 infill wells -> 11$/barrel. So we look 50$ net profit per barrel. 4m barrels -> 200m$ Image
The webcast on the following link is very good to get further info. I think $VEL will growth further in Thailand and a 40m$ Mcap seems way to cheap given strong cash position and growth perspective. Would not be surprised if $VEL can grow to 10k bopd. #VLU
$VLE are also looking for a new Farm-in partner for the huge Deep Tight Gas asset. Former partner Equinor ditch the project during the low gas price times. European gas prices have increased a lot in the last year and interest for the asset has picked up again. #VLU Image
Just looking at the $VEL assets and the cash in hand. To me a 100-200% re-rate would still make this look rather low priced. Auctus Advisors gave $VEL #VLU target price of 2.09CAD which is roughly 200% upside from here. Image
Graph looks very good, break-out on high volume. Zoom out and you understand what can happen if a new farm-in partner for Turkey get announced. #VLU $VEL ImageImage
New interview out today with CEO $VLE #VLU $VEL.TO directorstalkinterviews.com/valeura-energy…
$VEL buying interest remain strong but could come a dip to buy. #VLU trading also to resume at some point that can create volatile but have not seen a date for this. Image

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More from @Henrik115

Feb 2
I have been buying some MaHa Energy lately. After TIE-4 it looks likely MaHa will reach plateau production on TIE 5k bopd for many years. TIE field got high netbacks (>50$ atm), that gives >90m$ operational CF. Add some production from US and Tartaruga and it gets better. (1/4)
The stronger production from TIE and high oil price will in my view get MaHa 2022 results to outperform previous years results by 200-300% and trade EV/EBITDA<2. Oman field will also enable future growth and MaHa could reach 10k bopd in 2023/2024. (2/4)
Maha Energy share price have performed very poorly in last 1.5 years compared to other oil companies. This is in my view driven by that the company did not previously deliver on the production growth and that investor expectations were too high (over-valued). (3/4)
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