statement and status quo From a German forum: statement and status quo
I always see my investments pragmatically/fundamentally. Of course, the following always applies: No risk no chance.
If
- the plans are kept as they are,
- the wells meet the expectations,
- the gas price does not collapse extremely,
- the political environment does not change for the worse
then I expect at least a tenbagger in 2023/24.
And I'm willing to risk my money for that.
It's always the same: If the share price falls, people look for answers as to why the investment is sooo bad, if the share price rises, everything is rosy. So the price determines the respective sentiment of the stock.
The fundamentals, on the other hand, are more important to me:
- MC is currently only 86 MioUS$ (according to Eqinvest, the average MC BEFORE the start of drilling is about 500 Mio US$) i.e. of course not that we now shoot up rocket-like, but should only illustrate the glaring undervaluation. Just for comparison: ReconAfrica is currently at MC 620 MioUS$, but has no proven reserves yet.
- Everything is ok with the company.
- Production costs are just about 1US$/mcf !
- Financed through to connect all gas reserves to existing pipeline
- Just short of producing gas and feeding it into the Turkish pipeline system.
- SASB drilling program phase A includes 7 proven gas wells and runs until approx. mid 2023
- followed by Phase B with drilling of 10 suspected gas wells (-> identified via 3D Seismic)
- followed by phase C with exploration wells
- Cash flow from phase A is sufficient to finance the drilling program in phase 2.
- Cash flow from Phase A projected at approx. 200M US$/year (at current gas price)
- Gas prices at a very high level, may well rise further.
- Bluesky exploration potential of further giant gas fields in the black sea
- Potential to bring up to 1tcf gas field in Bulgaria into production.
- According to CEO Art Halleran, the assets alone (completed large natural gas plant and pipeline infrastructure) have a replacement value of US$500 million. Once the first gas well is connected, that will be added to the balance sheet as an asset.
- The infrastructure (pipelines, onshore processing/storage facility) is maintained and fully operational. Gas flow to the public grid is prepared and will be accepted immediately.
- He and his JV partner TPAO currently see no polit. Risks that would jeopardize the drilling program and/or subsequent production.
- He is FOR subsequent dividend payments AND share buybacks! When the company reaches a certain size and revenues/profits, it is in his interest to also create shareholder value and incentives through dividend payments. This would then also attract certain institutional investors.
- He is quite relaxed about the current share price development. He is convinced that if TCF "delivers", this will also be reflected in the share price. After all, he has shares himself and holds them because he is convinced of the company. The short-term investors who want to make quick profits will soon be out and the long-term investors will follow the expected price increase.
FinFree tried to quantify Trillion's current potential in his July 22 video.
(Note: FinFree very conservatively assumed 9US$/mcf. Turkish spot price is currently 629 TRY = US$34.76/mcf Ergo a quadrupling! The calculated possible multiples would thus increase significantly).
- Worst case: 3-bagger
- Base Case: 12.9-bagger (his preferred scenario)
- Best case: 18.8-bagger
His calculations are based only on the data available to date and only on the current Phase A and B drilling campaign in the SASB gas field. With the money raised, Trillion plans to explore other potential gas fields and possibly develop the proven Vraneno gas field in Bulgaria.
Risks
- No opportunities without risks!
- Drillrig GSP Uranus sinks during the crossing
- Drillrig GSP Uranus sinks during mobilization voyages to individual gas wells
- Turkish gas prices are dropping extremely ( I read somewhere the average for the last few years was around 9US$/mcf, and that was before Putin's war. And even at 9US$/mcf Trillion is earning itself silly).
- Political risks (state-owned TPAO has a 51% stake, ergo cash flow similar to Trillion. Expropriation would blacklist Turkey and have huge negative consequences for the country).
I write the risks extra to it, because I know that there are always individual people who want to make others responsible for their own decisions and also failures, instead of standing to it themselves. Everyone is free to decide where/how and how much he invests !
Translated with www.DeepL.com/Translator (free version)