Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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It’s annoying that we are using Jefferies to handle the sale of GE after their damaging broker note a few months ago. If they can’t get that right why the hell are we giving them anything?
Hi Timebomb (18:35). The rebase was more to do with lowered debt, longer maturities and tidying up the balance sheet not moving out of the UK. He was suggesting that it is from here as a base we can have lift off. As a first step I would like to see some upgrades from analysts.
By the end of this month, and after they decide whether to buy or cancel shares.
When we get 'Transaction in own shares' RNS's then that will indicate the start of the buyback program
Did they on any call or presentation highlight when they were starting?
The free cash flow here does looks immense compared to the enterprise value, $300m reported last year. Clearly they can afford it!
The AB CNBC interview TTB referred to: https://cnb.cx/3U37F2G
Seems sensible when you consider the focus on Bressay and Bentley with Bowyer praising the Kraken as well able to handle a significant increase in production . More control
Now that Iran has proved it can and will hit Israel will a warhead. Even though only a few got through, it must be truly worrying for the Israel government. Which is why I expect Israel to strike inside Iran and hit their Uranium enrichment plants. Israel has to ensure its survival and one way to do this, is by destroying Iran's nuclear capability.
Iran no doubt will attack Israel again. Sadly, I think a war is beginning.
Will Russia be helping Iran, like the US does Israel ? I can't see Putin not sticking his nose in, maybe by the back door.
Worrying times.
Of course with hindsight it wasn’t as good a deal as it first appeared. At least Enquest didn’t give away all the upside like Waldorf did when buying Cairns stakes in Kraken and Catcher. The deal could have been a lot worse.
We’ve had 3 years of income from GE at annual average of $70, $100, and $82.5. I’m not convinced GE has been the financial failure that some think.
Anyway If we can swap the remaining reserves for a different field where we can add real value then that works for me.
Thanks Stevo, intriguing indeed. I recall GE being regaled as a smart move if not a coup on here.
Bewildering.
I am somewhat surprised by the proposed sale of GE. At the time of acquisition Enquest's 27% share represented 18m barrels of 2P and 10k BOPD production.
Given production has more than halved to 4.2k per day in 2023, 2P reserves will have also have fallen to say around 10-12m barrels. Enquest paid $375m including $50m earn out. EPL has reduced the value of 2P reserves by a little over 50% and production is also approximately half of anticipated volume. Enquest paid over $20 per barrel plus additional $50m. Current values of 2P in recent deals are below $10 per barrel and so I would say $100-120m would be upper end of deal values.
I recall GE had low ongoing costs of $20 per barrel. Accordingly at $80 oil GE will be generating $90m pa pre tax or $22.5m pa post tax for a full tax payer or $58m if using tax losses. Accordingly I am struggling to see why Enquest would sell $58m of FCF for any thing less than $250m. There is no way any buyer would pay this sort of price as they will want to benefit from the value of their tax losses (if they have them) - as Enquest would if buying producing assets.
Intrigued to se how this develops!
Maybe a move to us listing is the thing. I remember romaron saying IR said a re base is on the cards. Is that correct?
It must mean something coz physically we'll be ns 'based'.
Ab did an interview for cnbc last week. Nothing new but publicity.
U.K. engineering and oilfield services firm John Wood Group (OTCPK:WDGJF) (OTCPK:WDGJY) should either move its listing on the London Stock Exchange to the U.S. or consider a sale, activist investor Sparta Capital Management said Tuesday.
Wood's (OTCPK:WDGJF) (OTCPK:WDGJY) shares have fallen a third to all-time lows since Apollo Global Management abandoned its attempt to buy the company last year, but traded +1.5% in London following Sparta's letter to Wood's board.
Sparta founder Franck Tuil said he was "frustrated" by the stock's continued underperformance, and "if the U.K. public markets are unwilling or unable to engage in Wood's story, we believe you should undertake a strategic review and actively seek alternative solutions."
Tuil said it is "time to recognize that the next chapter of Wood's journey could be best supported by different owners," and urged the company to "explore the best way to maximize shareholder value, including a sale of the company."
Sparta said the company has begun a turnaround but the share price is struggling under the "U.K. mid-cap curse."
U.K. stocks have lagged the valuations of U.S. peers, causing frustration among executives and investors, including at Shell, whose CEO said recently the company has "a location that clearly seems to be undervalued."
Thanks Red Buffet. Blame me. I was sure it was AB but it was Craig around 36.00.
There are a lot of companies with tax losses and that I suppose is because the product [oil] doesn't change much and isn't like cassettes moving on to discs or a product just disappearing. Failures don't go completely to the wall but have some residual balance that doesn't dissipate into the ether as happens in other industries. I believe there is also delayed depreciation credits that play a role (above my pay grade). They could become worthless I suppose if oil production was immediately banned but that won't happen. Licenses don't seem to have an end date. That means that if you have survived the last decade in the NS you will have tax credits, It is complex but these credits are really only of value in a high spot price scenario and most companies have been treading water or losing money most recently.
Speculation on my part but I think that straight cash deals are fairly unlikely in the current climate. Lots of fancy financial engineering to be done around earn outs, vendor loans, etc - see Bressay deal / Magnus etc. At the end of the day as a holder you are putting faith in management to make good deals. At the point of investing in ENQ, I opted to back AB and team rather than the more strongly capitalised dividend paying Serica largely due to this.
Nearly all UKCS operators seem to have large tax losses on their balance sheets - perhaps there is something in that, for NS O&G investors to recognise - ie nobody is making any money here(!?)
To be honest I didn't notice AB mention the GE drilling results in the presentation. At the retail presentation on investormeetco Craig Baxter described the four well campaign at GE - first well successful, second well a failure, third well sitting currently above reservoir and a water injector still to come on stream. Subsequent comment that they would rather be operator than suffer due to other operators work. Both of these in Q&A typed up on InvestorMeetCo.
Take production, life of GE field and a punt at future Brent prices, cost per barrel and complete a net present value calculation. Then simply work out what might be attractive in terms of price to ENQ whilst leaving enough for any buyer to make a relatively risk free profit over and above the return of their capital.
Perhaps upwards/circa $200m for ENQ?
The trouble is you then have to factor EPL into the equation, so you really need a buyer with tax losses.
M - I think the other news is important. Mitch Flegg and Neil McCulloch are board members of OEUK. Serica have an investors presentation on 24th April. MF was quite outspoken about EPL in the past. Things are getting very interesting.
Timebomb. Good point. Politics are never very far away.
Maybe it's like the swedish delisting and the canadian thing? Maybe some regulation requires no cnooc partnership.. before a merger or something is possible.
All very interesting but I'm struggling to locate exactly what and when AB mentioned them. Has the webcast been sanitised?
Might be AB trying to distance EnQuest from CNOOC. It doesn't hurt to say the product is good but the execution is terrible. The asset will always have a value. Look at Rhum. BP exited and Serica took a huge punt. The US waiver surprised me but the value of the gas field was never in question.
GE has been a bit of a disaster, it's unlikely we will get back anything like what we paid imo but I think it's a good move. It's not a distressed sell so you never know. Whatever happens it's interesting times to be a holder and the future looks bright
Wouldn't this be one of the reasons why ENQ wants to ditch the GE-stake?
https://www.energyvoice.com/oilandgas/north-sea/551646/the-threat-alone-is-something-security-experts-weigh-chinas-role-in-north-sea/
"Strain in the relationship between China and the UK has raised concerns about whether Chinese state-linked companies like CNOOC pose a potential threat to the UK’s energy security.
The UK and the EU have both taken recent actions against Chinese groups, ranging from accusations of cyberespionage to dominating energy supply chains. Against a backdrop of the Russian invasion in Ukraine, the role of foreign companies controlling energy infrastructure is coming under scrutiny. This is especially true for the UK, as the last decade has seen Chinese companies gain a larger presence in the North Sea."
"The issue is not a new one – politicians have warned that Chinese companies working in the North Sea pose a threat to the UK’s energy security. In 2023, chairman of the cross-party policy group Inter-Parliamentary Alliance on China (IPAC) Iain Duncan Smith said the government was “failing to take seriously” the energy security threat posed by the involvement of China-backed groups in the UK’s oil and gas sector."
Other news, probably not so important : Steve Bowyer is appointed to the OEUK-board
https://www.energyvoice.com/oilandgas/551724/oeuk-appoints-trio-of-north-sea-bosses-to-its-board/
Talking down CNOOC management of GE in the recent call a strange move if selling. Buyers aren’t stupid either - there’s likely to be clauses related to decomm etc as well
Occam's razor says you're right.