LON:EXI | Exillon Energy - The Highest Stockrank Of All

22nd Nov '16 by alan000@yahoo.com

6 comments 6259 reads

The Highest Ranked Stock on Stockopedia is currently Exillon Energy (EXI), with a QVM Rank of 99 (95 Quality, 96 Value, 77 Momentum). It is also well regarded by the algorithms of Magic Formula (A+) and a Piotroski F score of 8.

Taken at Face Value, the numbers on the Stockopedia page are as follows.

A Market Cap of £191m, but with net cash of £84m. Enterprise Value therefore £107m.
The Brokers Forecast on the Stocko page for net profit in 2016 is $37.7m (£30.4m) and for $57.6 (£46.5m) in 2017.
This implies a P/E of around 3 for next year, or closer to 2 if you adjust for the Cash.
The Broker forecasts a 2017 Divi of $0.176 which implies a yield of 12%.

Given its Ranking has been in the 97-99 range for several months, I am sure many subscribers have looked at this, but there is little of no discussion anywhere on it. I admit I understand little or nothing about Oil and Gas production, but fully recognise that if something looks too good to be true, then it usually is! I would appreciate somebody much more enlightened on the subject than I could add any insight, that the Stockopedia algorithm may have missed.

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Blissgull

22nd Nov '16

Indeed. According to Stockopedia the dividend yield is 788.2% this year and predicted to be 1,207% next year. Something for the programmers to investigate perhaps.

I did notice this in the latest results.

Our oil production decreased by 11% from 3.01 million to 2.69 million barrels equivalent to a decrease from 16,643 bpd to 14,807 bpd compared to 1H 2015, and 6% from 2.87 million to 2.69 million barrels equivalent to a decrease from 15,586 bpd to 14,807 bpd compared to 2H 2015.

The decrease in our production is reflecting the natural production decline curve due to the natural depletion.

So maybe they don't have that much left in the way of reserves and are dependent on finding new sources. There might also be a political risk.

One to look at in more detail.

edit.

Proved and probable reserves (2P) at 31 December 2014 were 506,457 Bbl million (31 December 2012: 520,470 Bbl million).

That sounds like plenty at current production rates of 6-7 million bbl a year.

" We declared no dividend for the year ended 31 December 2015 (2014: nil). It is the Directors’ current intention that we will not pay a dividend for the foreseeable future in order to conserve cash resources for future investments in the business."

DWit199

A p/e of 3 is seldom a good sign when evaluating a UK listed foreign company.

EDWARD FORT

28th Nov '16

There have been quite a lot of takeovers recently of companies listed on the LSE with valuable foreign assets that have begun to look too cheap because of the fall in the GBP.

The two I've benefitted from personally are MP Evans (a palm oil producer in Malaysia) and Lavendon (international crane hire) with mainly non-UK operations.

Exillon look to me like an example of the same thing. An enterprise value of £107m for a well-established company producing 15k bopd does look pretty cheap. Establishing those kind of reserves and that level of production from scratch would cost many times the current enterprise value. So it has to be a very tempting target for a rival company or for an oligarch with plenty of cash.

But you do have to ask yourself whether you want to direct exposure to small caps in Russia. And you have to know more about why production is falling pretty fast. I'd want to get advice from someone who knows more about this sector than me.

So it's not for everyone. But it's definitely going on my watchlist.

Edward Croft

Yes these Russian stocks do pop up now and then and I never like any of them ! Exillon's forecast Yield is a known data issue that we are working on, so don't rely on it. We've asked Thomson Reuters to investigate and hope to have it updated soon.

For reference, Ros Agro was a 99 ranked Russianstock when my my ownfather asked me about it. I said it looked a bit dicey. It then tripled in price. Now it's ranked47.

I've often mentioned that high ranking shares are naturally unpopular. Cheap, ugly, boring and at often at new highs... all quite psychologically off-putting traits. Maybe that's why they have outperformed as a group.

Carey Blunt

I was expecting Ed to mention it in his reply but I would say there is a potential place for a share like this in an overall well diversified basket of shares all of which have a high stockrank?
If you have 20 to 40 shares spread across all sectors excluding micro and very small caps and not concentrated on any one country then maybe Exillon Energy would be a suitable pick for the 2 or 3 shares you might have in the basket from the Energy sector as long as the other 1 or 2 were not also Russian.

unwise2

29th Nov '16

I have followed EXI for several years, even by Russian standards EXI is dirt cheap, regardless of which valuation metric you use. I can see two reasons the share price is so low, first despite having plenty of cash and 500m+ barrels of 2P reserves production has been dropping. I attended the AGM this year and questioned the chairman about it, the response was that since the oil price appeared to have stabilized EXI would increase drilling activity to ramp up production, so far nothing has happened on that front. The second reason is there are two large Russian shareholders, one owns just under 30% and the other owns 26.7%, no one knows if they are working together to control the company or not.

Exillon Energy - The Highest Stockrank of all

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Alan000@yahoo.com

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