Sebastian Krog

Everyone is talking about oil. Nobody is looking at Colombia. 2.6-3.2x EBITDA. Below $32k per flowing barrel. A presidential election in May that could reprice the entire sector. PS: If you're wondering why the thumbnail is a layered cake, read the article. Link in comment

@taobanker Colombian E&Ps are generally very attractive imo

@SebKrog was having the same thought

my conspiracy theory guy said buy $ec

@tryingtoinvestt @HortzVan @david_katunaric No, never owned it

@SebKrog @HortzVan @david_katunaric Do you still have Pax Global? I think they just suspended their dividend! Stock down about 11%

I realize that you didn't come for this type of content, but there's so much pessimism around China atm that I'm considering returning🇨🇳 Doing a small trade this time(🤡), waiting for less-negative sentiment with a stop-loss( $KWEBB probably) I have no fundamental view on any of the companies there since Idk how to discount (geo)political risk I'll let you know if I pull the trigger Any thoughts?

I wrote about the stocks in more detail here: treasure-hunting.co/p/the-cheapest… Disc: I am long GeoPark

The natural winners are net energy exporting countries. Like Colombia, Brazil, Argentina and Venezuela. On top of the natural tailwind of higher commodity prices and the worsening perception of the US and EU, money has almost nowhere to go except Asia or LATAM. Apart from China, Asia will also be a loser from higher commodity prices — leaving LATAM as the remaining destination. Now, on top of that, you have elections in Brazil and Colombia this year. I want to focus on Colombia because I know the country better. After the legislative elections, Paloma Valencia emerged as the candidate for the center-right. In the first poll after the primaries, she runs near-even against left-wing candidate Iván Cepeda in a potential second round. Why does that matter? Because a center-right candidate would allow exploration and fracking again. It would remove the ~7yr reserve life treadmill most E&Ps are on. On top of that, their neighbour Venezuela just "opened" up, with investments now possible there. Colombian oil producers could invest next door, many abandoned fields to grab and expand production further. A stronger neighbour will also be good for the overall Colombian economy, potentially even triggering the return of Venezuelan refugees. For example, Colombia is in talks to restart their shared pipeline with Venezuela. This didn't go unnoticed. Parex agreed to acquire Frontera's E&P assets, making them the biggest independent oil producer in Colombia. And even more notably, Jaime Gilinski — one of Colombia's richest men, whose family built their wealth across businesses in Colombia, Venezuela and abroad — bought ~20% of GeoPark (via PIPE and open market). He's not an oil guy. With most stocks still trading far below their ATH and futures pricing Brent above $75/bbl through 2029, the setup is very asymmetric imo.

@Jesper_M_Olsen Congrats!

Getting close to 1000% $VIST #OOTT #I❤️🛢️

@CambriaCreek Thank you!

@SebKrog Thank you, great idea btw, congrats so far!

Frontera Energy $FEC.TO $FECCF just filed their Q4 results and I believe they will sell the remaining infrastructure asset, likely within the next 6-12 months Back in 2015, their majority owner, the Catalyst Group just raised money for their latest fund, Fund V. Usually these distressed debt funds have a lifespan of ten years before they aim to return the assets to their shareholders. More than ten years have passed now since the inception of their fund. I think they’re trying to cash out the assets where they can. Frontera being one of them. They have tried to sell the company as a conglomerate back in 2023 and did not succeed. Further they initiated strategic alternatives for the Infrastructure asset in 2024. Why I Think This Happens in the Next 9–12 Months - Instead of spinning off the infrastructure business, they sold the E&P asset to Parex - Just Filed Q4 2025 results without an earnings call. They have always held one. - In 2024 they put out a press release with EBITDA guidance for their LNG project. This year? No press release for their Regasification project with Ecopetrol. Let alone EBITDA guidance. - Ecopetrol issued their own press release on the same project: "Ecopetrol successfully closes the submission of binding offers in the process of marketing imported natural gas through Puerto Bahía for 2026" — Frontera gave it two paragraphs buried in their Q4 results The language gap is telling. Ecopetrol: "up to 370 GBTUD over a seven-year period." Frontera: "Initial 126 MMcfd, increasing to at least 300 MMcfd by 2029" - Frontera buries the take-or-pay in their MD&A with "subject to certain conditions precedent" - Frontera calls it a "Potential LNG Regasification Project with Significant Growth Opportunities" in their headline of their Q4 results. “Potential”, on a signed take-or-pay deal. That sounds like downplaying. Overall, all this actions, to me, read like a company that does not plan to be public much longer. I actually believe they may already have a buyer. Macquarie already owns the debt of the ODL pipeline. The cash sweep agreement means they’re already getting paid. They would naturally be the most aligned buyer if the cash sweep goes back to their own pockets. It would also fit, given the fact they just raised US$8 billion. Other usual suspects would be infrastructure funds like Brookfield that have been investing into Colombia recently. Notably, SierraCol was recently sold to Philippine's Prime Infrastructure. Disc: Not investment advice, I may be wrong do your own DD, I own shares of Frontera Energy.

@CambriaCreek US$365M EV or ~US$ 213M market cap

@SebKrog I read your write up. What's the implied value of the stub now ?

@Nesjamag @finphysnerd No

@SebKrog @finphysnerd Isn't it late for that though?

I have a nervous gut feeling about the oil stuff. While stocks seem to be happy with the situation for now, long dated oil futures keep creeping higher. If oil stays high things could get nasty. What are people's best cheap hedges at the moment?

@insiwest 2 reasons: 1) noise around Parex offer and Frontera deal 2) 70% hedged so not that much upside from short-term high prices.

@SebKrog Geopark is the weakest of them all. Why? Just unknown?

Happy Latin American E&P day to those who celebrate

@leevalueroach You don’t need to buy things that look broken in order to beat the market

Unpopular opinion: 99% of retail investors will never beat the market because they cannot stomach buying things that look broken. Deep value is a psychological game, not a math game. Most people fail the psych test before they even open a balance sheet

We just published the 8th issue of our weekly earnings brief. Our mission is simple: we distill the most important small-cap earnings releases into a curated, high-signal format delivered straight to your inbox every Monday morning: $FTK, $CPH.TO, $CCLD, and others.

I really enjoyed reading this chapter from Freeman‘s new book. I had basically used that strategy without knowing it in 2024. Looking forward to read the whole book. microcapclub.com/analyzing-the-…

@SFarringtonBKC and what if not?

If we get some resolution on Hormuz, this market is going to rip faces off

Everyone is talking about oil. Nobody is looking at Colombia. 2.6-3.2x EBITDA. Below $32k per flowing barrel. A presidential election in May that could reprice the entire sector. PS: If you're wondering why the thumbnail is a layered cake, read the article. Link in comment

Good list. I am long some of them