In this episode of Yet Another Value Podcast, host Andrew Walker welcomes back Mordechai, head of Focus Capital Advisers, for his third appearance. They unpack what Mordechai calls the greatest acquisition of all time—Valeura Energy's buyout of Gulf of Thailand oil assets. The two deals, acquired at rock-bottom prices, now generate more than their cost in monthly free cash flow. Mordechai explains theasset's unusual geology, the long-tail economics of its reserves, and why the market still doesn't get it. They also cover decommissioning liabilities, NAV versus market cap, and how management might pull off more high-conviction deals in the future.
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[00:01:14]Introduction to Mordechai and his advisory work
[00:03:18]Overview of Valeura Energy and its asset transformation
[00:04:38]Initial acquisition of the Wassana oil field from bankruptcy
[00:07:06]Financials and economics of the Wassana deal
[00:08:37]Comparison of Thailand offshore to domestic offshore assets
[00:12:15] Uniquereserve dynamics in the Gulf of Thailand
[00:17:08] Secondacquisition: Mubadala's Gulf assets and deal terms
[00:20:00] Whythe Mubadala acquisition defies logic
[00:24:14]Background on how Valeura got such a favorable deal
[00:27:02] Whydeals done during peak 2022 oil prices still look brilliant
[00:30:50] Whythe market hasn’t fully caught on to Valeura’s upside
[00:33:49]Variance between reported reserves and economic field life
[00:39:13] Datashowing reserve replacement outpaces depletion
[00:42:56]Concession expiration and risks around renewal
[00:46:56] NAVanalysis and investor skepticism
[00:50:26]Updates on decommissioning costs and projections
[00:51:50]Operational improvements and field efficiencies
[00:53:04]Organic growth through field development and platform expansion
[00:57:32]Upcoming catalysts and appraisal-based expansion opportunities
Links:
Focus CapitalAdvisors: https://focuscapitaladvisers.com/home
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