NXS - Nexus Energy

[golfmos123]

I have been watching this one over the last few months also. Do you have a set re-entry price?

Gav

Thanks Gav,
Have been away for a few days. Still haven't reentered NXS yet, with current volatility waiting for around 110. All announcements on current drilling are positive too, so am slighly cautious on missing a possible bounce as well. But 110 or thereabouts it is.

 

[Miner]

I bought NXS today at a low price hoping market will revive next week. One of my colleauges ex stock analyst also bought the same. I followed him as he does a lot of research, unders oil industry like any thing and done some research. I was afraid to ask his reasonings however/

Any one has latest info research on NXS. I probably played a blind today and do not know if it would be a dud

 

[Knobby22]

I bought NXS today at a low price hoping market will revive next week. One of my colleauges ex stock analyst also bought the same. I followed him as he does a lot of research, unders oil industry like any thing and done some research. I was afraid to ask his reasonings however/

Any one has latest info research on NXS. I probably played a blind today and do not know if it would be a dud

I adore Nexus and have bought a lot of them and reckon the stock is very cheap at present. They have the cash and they have the resources to develop. They also have Scandanavian partners that have bought in and are not incredibly wealthy for nothing.

Whether now is the perfect time to buy is unknown. There is a chance that that the oil price could temporarily fall lower if demand drops due to a world recession.

 

[jman2007]

I adore Nexus and have bought a lot of them and reckon the stock is very cheap at present. They have the cash and they have the resources to develop.

They may have cash, but they have no cashflow and also have significant liability. Don't forget that their total current short-term and long-term borrowings via debt financing to test, develop and progress Longtom and Crux are in the range of $200M.

A relatively high-risk O&G play in the current economic climate, but does look to be a little oversold. Then again, many aspiring O&G plays could argue a similar point I suppose.

jman

 

[Knobby22]

They may have cash, but they have no cashflow and also have significant liability. Don't forget that their total current short-term and long-term borrowings via debt financing to test, develop and progress Longtom and Crux are in the range of $200M.

A relatively high-risk O&G play in the current economic climate, but does look to be a little oversold. Then again, many aspiring O&G plays could argue a similar point I suppose.

jman

Good points jman and its good to get your viewpoint.
They have got $240 million in cash and still have the money to come in for selling their stake in Anzon. They do have some cashflow though it is a pittance when compared to the costs needed to develop the oil fields.

It's true that the debt is over $200 million and is expensive and $80 million of it will need to be negotiated later this year in the presently terrible markets. So I agree there is some risk if problems occur with the development but so far the company management have been pretty good at ensuring the company goes forward on a good footing. To me it looks a very good investment.

 

[jman2007]

Good points jman and its good to get your viewpoint.
They have got $240 million in cash and still have the money to come in for selling their stake in Anzon. They do have some cashflow though it is a pittance when compared to the costs needed to develop the oil fields.

It's true that the debt is over $200 million and is expensive and $80 million of it will need to be negotiated later this year in the presently terrible markets. So I agree there is some risk if problems occur with the development but so far the company management have been pretty good at ensuring the company goes forward on a good footing. To me it looks a very good investment.

I think NXS are looking to simply cut their losses with AZA and try and put the whole saga behind them. I saw in the financials that NXS's stake in AZA was partly funded by a $40M credit facility, which is due to expire on the 22nd Oct. From what I can work out, their stake in AZA was built from a combination of on-market purchases (26.8M shares @ $1.70) and a 1:1 swap of 13.6M NXS shares for AZA shares. As NXS have accpeted ROC's terms, it would seem that this investment has deprecciated by the best part of $30-40M(?).

I guess the key with any new company is their ability to deliver and execute projects on time. The delay in processing gas from Longtom will be fairly bitter pill to swallow for all parties. It basically looks like Santos, the owner of the on-shore gas processing plant didn't have the necessary environmental approvals in place... you have to wonder what the combined Santos/Nexus enviro depts were doing at the time.... get up with the play people In all fairness though, it doesn't look like it ws entirely NXS's fault, but a delay is still a delay.

One prospect we have heard very little about recently is Echuca Shoals, I thought NXS were once extremely condifent with this one? The Fossetmaker-1 well delineated an amount of gas equating to around 2Tcf... I'm no expert, but it doesn't sound like a huge volume to me . The Garfish-1 results don't sound like they set exactly set the world on fire either, has this effectively but a lid on potential expansions to Longtom for the time being?

A difficult time for NXS, I really can't see the price going anywhere for a while tbh, I think realsitically we should be happy for it to hold above $1 for the time being.

jman

 

[Knobby22]

I think NXS are looking to simply cut their losses with AZA and try and put the whole saga behind them. I saw in the financials that NXS's stake in AZA was partly funded by a $40M credit facility, which is due to expire on the 22nd Oct. From what I can work out, their stake in AZA was built from a combination of on-market purchases (26.8M shares @ $1.70) and a 1:1 swap of 13.6M NXS shares for AZA shares. As NXS have accpeted ROC's terms, it would seem that this investment has deprecciated by the best part of $30-40M(?).

I guess the key with any new company is their ability to deliver and execute projects on time. The delay in processing gas from Longtom will be fairly bitter pill to swallow for all parties. It basically looks like Santos, the owner of the on-shore gas processing plant didn't have the necessary environmental approvals in place... you have to wonder what the combined Santos/Nexus enviro depts were doing at the time.... get up with the play people In all fairness though, it doesn't look like it ws entirely NXS's fault, but a delay is still a delay.

One prospect we have heard very little about recently is Echuca Shoals, I thought NXS were once extremely condifent with this one? The Fossetmaker-1 well delineated an amount of gas equating to around 2Tcf... I'm no expert, but it doesn't sound like a huge volume to me . The Garfish-1 results don't sound like they set exactly set the world on fire either, has this effectively but a lid on potential expansions to Longtom for the time being?

A difficult time for NXS, I really can't see the price going anywhere for a while tbh, I think realsitically we should be happy for it to hold above $1 for the time being.

jman

Santos have always been pretty badly managed.

I agree, some of the blue sky has disappeared, not to mention the condensate tax.

The price range you suggest seems right to me at present.
I will be very interested in the speeches made at the Annual meeting.

 

[jman2007]

A difficult time for NXS, I really can't see the price going anywhere for a while tbh, I think realistically we should be happy for it to hold above $1 for the time being. jman

Getting closer to that pyschological mark of $1, not good for NXS considering the importance of the farm-in details yet to be disclosed.

jman

 

[Knobby22]

And the deal fell through as you warned jman.

I sold some went they went below $1. Should have sold more.

 

[mrgroundwork]

84c

wow, never thought i would see sub $1 let alone mid 80's...

NXS has a ridiculous ratio of reserves to enterprise value... problem is will they have enough cash to bring them into production??? with this deal falling through and the current economic conditions, it appears the market is pricing the stock for a large amount of funding risk...

if you have the balls and believe they will get the funding eventually somehow, then this is a great opportunity to buy in...

 

[jman2007]

And the deal fell through as you warned jman.

I sold some went they went below $1. Should have sold more.

Yes, this is a crushing blow Knobby either way you look at it. I have held on to my NXS shares through thick and thin, but am now questioning the wisdom of this . Crux will have probably have to be re-rated again in terms of financial and technical risk. Tchacos and DB (Tchacos especially) sound rather bullish re their "Global Search leaving no stone un-turned" approach in finding another farm-in partner, but you have to ask yourself how serious anyone would be in parting with around $300M in the current market meltdown.

At best, I think we may have to consider a reshuffling of the Crux production timetable, at worst this may throw into doubt the entire viability of the Crux project. Scary times indeed.

Damn it!

jman

 

[Knobby22]

Yes, this is a crushing blow Knobby either way you look at it. I have held on to my NXS shares through thick and thin, but am now questioning the wisdom of this . Crux will have probably have to be re-rated again in terms of financial and technical risk. Tchacos and DB (Tchacos especially) sound rather bullish re their "Global Search leaving no stone un-turned" approach in finding another farm-in partner, but you have to ask yourself how serious anyone would be in parting with around $300M in the current market meltdown.

At best, I think we may have to consider a reshuffling of the Crux production timetable, at worst this may throw into doubt the entire viability of the Crux project. Scary times indeed.

Damn it!

jman

I'm a long term holder too. Any way you look at it, they will have to part with a bigger percentage of the project in these times to get the $300m. Bugger.

 

[Miner]

An open query to NXS researchers : with a price tumbling down and closing at 49 cents today what do you think the behaviour of this company ?

Apparently a colleauge of mine who was an ex analyst bought it at more than $1 has added up his holding constantly as it goes through. I bought some today and pondering if it will go down tomorrow with DJ movement.

No tip here but to understand the dynamics with the falling petrol price and the future of such fly by night operators- any critic or expert comment please ?

 

[jackson8]

apart from the day to day turmoil that the whole market faces

nexus have large potentiol but they dont have the cashflow to support developement of their project thus they will need to rely on selling an interest in the crux liquids project to fund ongoing costs

also even after funding issues are resolved actual production could be 3-4 years away and i think that holders have bailed out under present circumstances and the time factor involved with actually getting the project up and running

only my interpretation of what i have read lately from their announcements

 

[jman2007]

apart from the day to day turmoil that the whole market faces

nexus have large potentiol but they dont have the cashflow to support developement of their project thus they will need to rely on selling an interest in the crux liquids project to fund ongoing costs

also even after funding issues are resolved actual production could be 3-4 years away and i think that holders have bailed out under present circumstances and the time factor involved with actually getting the project up and running

They will be in production before 3-4 years

Longtom should be up and running by this time next year. Crux is another story, yet is also the potential cash cow for the company.

Don't forget that Tchacos has also recieved a margin call and has been forced to sell a rather large parcel of shares at around 55c, further depressing the price.

We need another few weeks of relative stability in the markets to get an idea of what the future has in store for NXS.

 

[YOUNG_TRADER]

It made for a good bounce trade on monday from 32c to 50c

First and only purchase/trade in NXS ever, hopefully not the last, so much value everywhere I look

For the last 3yrs I recall alot of analysts likening NXS to the next WPL

 

[chops_a_must]

It made for a good bounce trade on monday from 32c to 50c

First and only purchase/trade in NXS ever, hopefully not the last, so much value everywhere I look

For the last 3yrs I recall alot of analysts likening NXS to the next WPL

Unfortunately they are probably 6 months late when it comes to their financial position. Which is real kick in the ****.

Had they been 6 months ahead, you would be laughing.

Instead, I favour some on the east coast that are already in profit... so at least they are ticking over...

 

[jman2007]

Unfortunately they are probably 6 months late when it comes to their financial position. Which is real kick in the ****.

Had they been 6 months ahead, you would be laughing.

Instead, I favour some on the east coast that are already in profit... so at least they are ticking over...

Their $40M credit facility that was used to partly fund their acquisition of their AZA shares expires on the 22nd Oct. They will need to negotiate with the Bank of Scotland (Australia) to extend this margin loan facility to the 22nd of Nov. I don't know how I feel about this debt overhang, actually not that good.

New substansial holder notice released today too, Indus Capital Partners who I know absolutely nothing about, probably another Hedge Fund unfortunately. Whoever was selling today was very keen to liquidate their position at any cost, and conversely the sell orders were taken up very quickly as well, another insto with a bit more common sense perhaps?

Yeah I know what you mean about the East-Coasters Chops, hard to go past QGC and AOE atm.

This aint no stock for the faint-hearted atm...

jman

 

[Knobby22]

Well, I've bought back the shares I sold and bought some extra.
Price has risen too quickly and too many directors are buying.

I think the credit facility has been resolved.

 

[tech/a]

Thanks to all those who bought strongly today.
Had a nice day trade. 49c to 58c
"Buy the rumor sell the fact"