- 05 Mar 2009 08:50
Anyone else in ?
On board this morning for the first time...(small time)
I've probably paid a bit more than I should've done and one should never buy first thing in the morning when it's probably marked up high to begin with!
But, let's see how it goes..the story is compelling and the rewards could be high, even though it's been tipped by TW ! (Article below..TW tip usually the K o'D!)
Good luck all!
Buy Leni Gas & Oil at 2.125p
Argues Tom Winnifrith of t1ps.com
Tom Winnifrith publishes 20 t1ps a year on www.t1ps.com. To access the website for as little as 73 a year click HERE
Having reached the giddy heights of $147 per barrel in July 2008, with analysts then forecasting $200, oil has since plunged to sub-$40 and some reckon we will see $25. Perhaps that will be the case in the short-term, who knows? One thing that is certain is that at sub-$40, most oil fields that have been developed in recent years will not be economically viable. The outcome, which is already being observed, will be a continued scale back in production until such time that basic market economics prevail and the price is pushed up as demand begins to outweigh supply. I anticipate a return to $60 oil sooner rather than later, which would inevitably see oil stock valuations emerge from the ruins as investors flock back to get a piece of profitable, cash generating producers. AIM-listed Leni Gas & Oil (LGO) will be one of these, but even at current oil prices, its growing cash flow streams derived from a well-diversified portfolio of producing assets represent an enticing investment of amplifying appeal, which will leave its current market cap looking extremely daft. With oil stocks hated by investors driven by sentiment not fact now is the time to gorge greedily on stocks such as Leni.
The company's primary strategic approach is to identify projects and businesses within the oil and gas sector that may contain a development premium which can be unlocked through a combination of financial, commercial, and technical expertise. This is where Leni's highly-skilled and experienced management team comes into play, assisted by a network of independent experts to evaluate investments to ensure development success.
Across its portfolio, Leni is currently producing the net equivalent of around 715 boepd from target recoverable reserves of 36.6 million boe at an average estimated operating cost of $10 per barrel.
US Gulf of Mexico - Leni has a 29% interest in Byron Energy, having acquired rights on Eugene Island blocks 172, 183, and 184. The company's interest in Eugene Island equates to an effective working interest of approximately 8%. New production wells were completed in the second half of 2008, with gross volumes of more than 5000 boepd. Additional rights include six oil and gas assets in varying stages of appraisal and development drilling. Planned for 2009 are development drilling, new production completions and assessment of exploitation potential, prior to development in 2010.
Spain - Leni's 100% owned Ayoluengo Oilfield (yes it was once owned by Northern!) is the largest in Spain with STOIIP of 110 mmbbls. Production is up to 260 boepd and continues to increase through improved well productivity programmes. A major development programme has been initiated to increase total field recovery to 30% through secondary recovery and in-fill drilling targets. The company is targeting production to previous plateau levels of 2,500 bopd and it should be heading that way by the end of this year with steady month on month increases. Leni also has an 85% stake in Halo Acreage Exploration & Development, which has total resources of 12.8 mmboe with a focus on high potential developments.
Trinidad - A well stimulation and production enhancement programme is underway at the company's 50% owned Icacos Oilfield, to lift current production from 30 bopd to around 150 bpd. Full re-interpretation and surveys are underway to identify step change production potential. Also, at Leni's 50% owned Icacos Deep Prospect, significant oil & gas discoveries have been made in the halo vicinity. High API oil has been identified, indicating a deep oil system. Seismic and area re-interpretation are planned.
Hungary - The PenZszlek Gas Field, in which the company has a 7.27% interest, has remaining GIIP potential of 22bcf with identified undeveloped discoveries. Production commenced in August 2008 at 4 mmscfd and a 3D seismic was executed at the end of 2008 to validate undeveloped prospects and accelerate incremental production. Elsewhere, at the Zala Basin Gas Play, in which Leni also has a 7.27% interest, multiple tight gas reservoirs exist on the border with Slovenia, with well stimulation and re-completion set to increase recovery.
Malta - The company has a 10% interest in a high potential exploration play with a highly prospective oil & gas basin. Four prospects and five leads have been identified with gross mean 2P STOIIP of 5.7 billion barrels and recoverable reserves of 1.484 billion barrels. A PSC has been signed with the Maltese Government to drill a 2500m well by July 2011. A second study phase is currently being undertaken to increase the chance of success with selected drilling locations.
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During January 2009, monthly production increased by 150% to 20,020 boe. Dividing it up into the company's operating regions: In Spain, production net to Leni, was 7,125 barrels, which was up by almost 10% on the previous month and more than 120% higher than historical plateau production. Oil sales reached a record of 6,935 barrels, representing an increase of more than 100% on historical monthly sales. In Trinidad, the Icacos Oilfield produced 900 barrels during the month, with net production attributable to Leni totalling 450 boe. The rapid progress is signified by highlighting that the oilfield was only pumping around 35 bpd in early 2008. Meanwhile, in Hungary, the PenZszlek gas field produced 1.67 million cubic feet of gas net to Leni during the month, with net production of 279 boe. This was down on the previous month, as the gas field was shut-in due to the failure of a compressor at the downstream gas processing facility. In the GoM, the company's interests held by Byron Energy currently produce approximately 5,000 boepd gross from the Eugene Island Field, with Leni's effective net working interest equating to a net monthly production totalling 12,000 boe.
The numbers demonstrate the success of the company's production schedule step change, reflecting the full benefits of its GoM interest and its Spanish enhancement programme. Having delivering significant month-on-month production increases and achieving record oil sales, Leni is in a commanding position with regards to its full-year targets, and of course, generating expanding and sustainable streams of operating cash flow.
Executive Chairman, David Lenigas, has 25 years' experience in the natural resources industry, covering oil and gas, coal, precious and base metals. He is currently the Executive Chairman of Lonrho, Lonrho Mining, Lonzim, and Templar Minerals, as well as a Director of Vatukoula and GCM Resources. Lenigas is also the Chairman of the Audit and Remuneration committees.
Operations Director, Fraser Pritchard, has 20 years' oil & gas experience from most oil & gas provinces and international and state energy companies. He maintains a focus on securing investment for, and managing junior E&Ps from start-up into sustainable operations.
Finance Director, Donald Strang, has 15 years' experience in financial management predominantly within the natural resources sector. He is currently a Non-Executive Director of Lonrho and Vatukoula, and was previously the Chief Financial Officer and Company Secretary for GCM Resources and BDI Mining Corp. He has also held senior financial positions with Ernst and Young and several publicly listed Australian Resource companies.
Executive Director, Jeremy Edelman, has 20 years' corporate finance experience coordinating acquisitions in the natural resources sector. He has previously held directorships in listed companies in both the UK and Australia, with a focus on resource exploration and development, including investment companies established with the specific objective of investing in oil and gas projects.
*The value of investments can go down as well as up. Past performance is no guarantee of future success. Investing in equities can lose you part or all of your capital. The tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the recommendations contained here should seek independent advice. Investments in smaller company shares, by their nature, can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares.
In the twelve months to 31st August 2008, the company recorded revenues of 1.91 million and posted a pre-tax loss of 40,000, mainly attributable to a non-cash item of 0.55 million relating to share options. It is worth mentioning that pre-tax operating profits from Spain alone amounted to 0.87 million. The basic and diluted loss per share equated to 0.01p, compared to a loss per share of 0.14p in the previous twelve month period. The balance sheet showed net cash of 1.85 million and net assets of 23.05 million, which consisted of intangibles valued at 20.23 million.
Leni is currently producing around 21,000 boe per month. With low operating costs of around $10 a barrel at present, the company enjoys a very healthy margin. The oil price weakness will not last indefinitely, and in the meantime Leni continues to drive down its operating costs, which are estimated to be trimmed to around $5 a barrel by the end of 2009. Meanwhile, production is rapidly being ramped up across the company's primary prospects, notably in Spain and the Gulf of Mexico. Assuming this acceleration continues according to plan, the company would - on a self financing basis - be looking to produce at 5,500 boepd by the end of the year, generating sizable and sustainable cash flows just the sort of thing investors are crying out for as the economy continues to reverberate from the profound effects of the financial meltdown and the extreme uncertainty it has bred.
At 5,500 boepd, Leni would be looking at c. 2 million boe per annum. Assuming a conservative average oil price of $45/bbl in 2009, and estimated average operating costs of $10/bbl, the company would be booking operational cash flow of $70 million (48 million) on an annualised basis. On a more bullish (and practical) outlook, taking crude at $60/bbl, annualised cash flow would be c. $100 million (70 million) and it is my strong belief that $60 is where crude should be.
Knocking off 4 million for central costs (far too high) and a 30% tax rate this is a company that should on my $60 scenario be throwing off 46 million a year on an annualised basis. Even at $35 oil this company should throw off 22 million.
At 2.125p Leni is valued at just under 13 million. My initial base case target price is three times cashflow at $35 oil plus net cash with the exploration assets in for free - that is to say 68 million or 11.1p per share. My long term target price uses $60 oil and the same formula and is therefore 140 million or 23p per share. I said that oil stocks are loathed and that is why Leni shares are so cheap. Now is the time to be buying. Leni Gas & Oil is a "buy" at 2.125p and at up to 6p with a base case target price of 11.1p.
Spread: 2p - 2.25p (11.8%)
- 05 Mar 2009 08:56
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- 09 Mar 2009 09:08
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from Sat's daily mail:
"LENI GAS & OIL: WH Ireland says buy at 2 5/8p. Debt-free and cash generative. Deserves a premium rating"
Bit of selling going on this morning but this is one to watch for sure.!
- 01 Apr 2009 09:52
- 4 of 222
SP moving up nicely this morning.. looks encouraging (imo)
Anyone else in ?
- 18 Aug 2009 10:56
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July production figures should be out soon, the company is looking for a return to near full capacity after the June set back.
- 18 Aug 2009 11:00
- 6 of 222
Buyers in and sp just notched up, so July figs could be good.
- 18 Aug 2009 11:11
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Let's hope so... fingers cossed!
- 24 Aug 2009 11:05
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2517George, are you expecting the July figures this week ?, seems to be a bit more selling going on today than last week.
- 24 Aug 2009 11:18
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lelael, the last 3 monthly updates were 20/7, 09/6 and 15/5 so while it's not definitely this week it should not be very long. There appears to be no specific day for the releases either as the last 3 months have been a monday, tuesday and a friday.
- 24 Aug 2009 11:51
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Thanks, new to this one, difficult to know which one to choose, but as you said if they have resolved a few issues here it should push on a bit with the update.
- 26 Aug 2009 09:00
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no update yet but moving up again this morning.
- 26 Aug 2009 12:04
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UPDATE rns out now, looking good.
- 26 Aug 2009 12:17
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Yep, now 130% up on my original buy... will continue to hold.. it's looking good (imho)
- 26 Aug 2009 12:25
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Wel done skyhigh, holding for now.
- 26 Aug 2009 12:31
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Yes they have several fingers in different pies, and who knows may be 1 or other could be significant, here's hoping.
- 14 Sep 2009 00:22
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Just a reminder, here's a chance to meet and chat to DLG himself!
Last week's event had a record attendance, and this event could well exceed that and registration may have to be closed EARLY, so anyone wishing to attend should register ASAP!
These events are well worth attending, in a marvellous setting, and a chance to meet other private investors, as well as the CEO's.
Nearest tubes are Green Park, 5 minutes walk, or Bond Street, 7 minutes.
Proactive Investors One2One Forums
The directors of Leni Gas & Oil (AIM: LGO), Exco Resources (ASX: EXS) and Exeter Resource Corporation (TSX-V: XRC) will be presenting:
Thursday the 17th September 2009
Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB
The presentations will start at 6:00pm and finish at approx 7:30pm. After the presentations are complete the directors will also be available to take questions during a free canapand wine reception. Details on the presenting companies can be found below.
Register Here - http://www.proactiveinvestors.co.uk/register/event_details/56
If you have any problems registering or queries please email email@example.com
Leni Gas & Oil (AIM:LGO)
Leni Gas and Oil plc has a strategy to identify and acquire projects and businesses within the oil and gas sector that contain a development premium which can be unlocked through a combination of financial, commercial, and technical expertise. Since listing it has established a portfolio of proven reserves and producing assets in low risk countries with significant development and enhancement potential and increased acquisition production levels by fivefold during the first year of operation. It operates a portfolio of production expansion assets in the US Gulf of Mexico, Spain, Trinidad, Hungary and Malta with significant play upside using similar operating approaches to leverage technologies and proven production enhancement techniques.
Exco Resources (ASX:EXS)
Exco Resources Ltd (EXS) is an Australian focused ASX listed mining company that has been operating for over ten years. Exco focuses on resource and project development through its team of experienced geologists, engineers and commercial specialists. The Company has a dual focus on developing both the White Dam Gold Project in South Australia, and the Cloncurry Copper Project (CCP) in north-west Queensland.
Exeter Resource Corporation (TSX-V:XRC)
Exeter Resource Corporation (Exeter) is an exploration-stage company. The Company is engaged in the business of acquisition, exploration and development of mineral properties located in Argentina and Chile. The Company’s principal properties are the Cerro Moro property in Santa Cruz Province, Argentina; the Caspiche property in northern Chile, and the Don Sixto property in Mendoza Province, Argentina. The Company has four wholly owned subsidiaries: Cognito Limited (Cognito), Estelar Resources Limited (Estelar), Sociedad Contractual Minera Eton Chile (Eton Chile) and Eton Mining Corp. (Eton). Cognito and Estelar conduct the Company’s business in Argentina. Eton Chile conducts the Company’s business in C
- 15 Sep 2009 09:56
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More good news... It's looking good!
LENI GAS & OIL Plc
('LGO' or 'The Company')
15, September 2009
Hungary - Penzlek Development Update
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company today announces that PetroHungaria kft (LGO 7.27%) has completed the testing of the Pen-105 gas well in the Penzlek Development Area of Eastern Hungary. The gas rates achieved and the reserves associated with Pen-105 were substantially higher than pre-drill estimates
The Pen-105 well which was an appraisal of the Pen-12 discovery was drilled to a total depth of 1,487m and has now been completed in the tuffaceous Miocene reservoirs as a production well. Three intervals were tested in the target formation, such that 9 metres of reservoir were perforated. All three zones flowed gas (two with condensate), with no formation water. The productive reservoir found is substantially thicker than at the Pen-12 discovery well and mean resources have increased from the pre-drill estimate of 1.46 bcf. The mean recoverable reserves shall be announced in due course within an updated resources restatement.
The pipeline has been planned with an application for a construction permit submitted and approval is expected by the end of November. Production from the well is due to commence in early 2010. The Pen-105 well is located approximately 6 kilometres west south west of the current Pen-104 gas production well.
David Lenigas, Executive Chairman, commented:
'LGO are very pleased with the successful appraisal of Pen-105 and the higher than expected reserve and flow rates. This is another significant step forward for the expansion of LGO's gas development in east Hungary and we look forward to production commencing early next year.'
- 17 Sep 2009 16:17
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Presentations this evening, would appreciate info from anyone attending, location is too far from Cornwall.
- 17 Sep 2009 21:45
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I'd have called in and said hello had i known george, toured in cornwall this summer.
- 18 Sep 2009 09:16
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Sorry about the weather.
- 17 Nov 2009 13:56
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