JTCOD post Here is a nice post from today from JTCod courtesy of ADVFNT
The good thing Fido is that all the share price has done so far is regain lost ground. Like you I think it still bears no real reflection to the current standing of the company assets or short term prospects let alone the benefits that will likely come as a result of the relationship with their new partners. The Tajik deal proved emphatically that the valuation was wrong.
I was talking to another shareholder at lunch today and 2 things came up:
1) When Total talked of the assets in Tajikistan in a recent interview, they talked of supplying China with Gas from Bokhtar and laying the infrastructure ahead of time as though it were a foregone conclusion that they will deliver the gas. This from a leading player in the sector who I would expect would normally be conservative with their public statements. I wonder if they already know the result of the Gazprom drill. I say this not as a cheap stab at bigging up the prospects but because I visited the stans recently and part of the visit was to view an oil field and the oil men there already knew of a new discovery that morning in a neighbouring country by an unrelated company. This discovery was made by a public company and yet it took 17 days to notify the market. The Total exec just seemed mighty confident in that interview.
2) There is good probability (imo) that TPL will deliver more than $200m T/O for 2014 from Kazak assets alone if Gas prices on the new pipeline materialise along the lines of management guidance and Doris continues to deliver. More to the point though is the free cashflow from this revenue will be considerable as the required capex to achieve this outcome should be quite minimal.
TPL is valued at £150m right now. Given the nature, geography, geology and potential for the Tajik assets, the security of two super majors as partners and the potential for price increases and ramping up of gas production and revenues from 11 successful shallow gas wells already completed in Kazakstan plus the potential and infrastructure capacity related to Doris I wonder how many people would really be surprised to see a £500m market cap for this company within 12 mths. I won't be.