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Mr.kioto,
They announced the amount as £0.56 per share in the announcement.
If you receive dividends in another currency like $'s then they will probably announce the exchange rate that is going to apply at a later date.
Given the exchange rate is close to $1.25 to the £ currently then if it were today the rate would be approximately $0.70 per share.
LOTM
**Dollar amount per share
So its confirmed that 100 million will be returned in October. How come they did not confirm the actually dollar amount? Does anyone know what this comes out to per share ?
Formerlyeasyp,
Well you bought back-in at a price for cash & net receivables only & you'll shortly get £0.56 a share of that cash back very soon.
The Egypt business and all the possible contingent payments are for free.
Personally I regard this as a massive cash-cow going forward, the dividends are going to be significant.
LOTM
One of the reasons I just bought back into CNE this morning.
Thought post India $1bn the company was a huge disappointment and still not convinced investing in Egypt was a great move but clearly the management are taking steps to generate some shareholder returns so back on board with 3,000 shares via HL.
Yes there's meant to be a special dividend of $100M coming.
Most likely in the 4th Quarter of this year. I'm sure they'll be more information on it in the half-year announcement tomorrow.
LOTM
Anyone upto date with this?
Wasn't there rumour of special divi (again) later this year (2023)?
I think there were certain conditions that had to be met but can't for the life of me remembering any of it.
Cheers in advance
JT
Sorry I've made an error in the cost calculations I need to re-do the calculation later as I've assigned all costs to oil & some need to go to the nat gas side of things :( :( :(
LOTM
Just topped up another 5,250 shares at 155.17p but deal is not showing on the LSE unlike the last one, so either its being held back or it occurred on one of the other platforms.
LOTM
Even with the health profit margin we're currently enjoying of rough $40 a barrel ($89+ for Egypt oil - $49.83 of OPEX, deferred payment & G&A) & gradually increasing production, that level of income will no-where near cover the amount of money being invested in the ground this year in Egypt ($120M).
2024 will be the inflection point.
If production starts the year at roughly 7,000 bopd & the oil price maintains its current level. Then we should be seeing a healthy margin of over $50 a barrel ( $88 - ($13.00 + $9.60 +$13.45) )
That equates to over $350,000 net per day.
If development capital is set around $80M for 2024, that equates to $6.66M a month or roughly $220,000 per day. Even if they went as high as $120M again that still comes in at roughly $330,000 per day.
So we would be doing better than break-even from day 1 & as production continues to increase gradually during the rest of the year, we would be able to bank more & more cash daily (assuming the oil price was constant which it won't be).
Even taking the daily margin at $20,000 that works out at $7.3M for the year, then add in the nat gas for another $3.5M & you're looking at over $10M that can be distributed in dividends. By then we should be down to under 110M shares in issue so close to a dividend of $0.10 per share, plus the distribution from the Waldorf assets in late March which is likely to be in the region of $50M. Lets say they use $20M for additional share buy-backs & pay out the other $30M. That would mean a total dividend for 2024 of close to $0.40 a share !!!
LOTM
Mr.kioto
That depends on whether the big institutions want it to trade freely or are still building there positions in the company.
What the company has said about production levels for the rest of 2023 & beyond.
As well as the news on the $100M dividend & when the share buy-back is going to re-start.
LOTM
So where is the current break-even point for Capricorn if we leave nat gas production to make that tiny profit per day ?
OPEX is $13.00 per barrel.
The extra deferred consideration payment to Shell of $25M that will need to be paid in Q1 2024 for the Egypt assets.
So you can say its just over $2M per month, or on a per barrel basis its $11.41 ($25M / 2.19M) assuming production for the year averages the 6,000 bopd they projected.
Please note production is very much biased to the 2nd half of the year so if you split the $25M in 2 & assign $12.5M to each half of the year & then divide that by the production for that half year my estimate is that the cost was around $13.80 in the 1st half.
G&A cost next
Total is expected to be around $70M for 2023 falling to just $35M next year (which is something people really need to grasp going forward).
Again you can either assign it per month $5.83M or by a barrel $31.96 (ouch) & again if you want to weight it to the production profile it was probably around $38.80 in the 1st half of the year.
Just as an aside looking ahead if we were to say production was 6,000 bopd in Jan 2024 (the average expected for 2023) then the G&A cost for that month works out at just $15.68 per barrel & if its 7,000 which is where I expect it to be if not higher then the figure falls to $13.45 per barrel.
So for the 1st half of 2023 we're looking at costs of $13.00 + $13.80 + $38.80 = $65.60 per barrel.
For the year as a whole $13.00 + $11.41 + $31.96 = $56.37 per barrel
For the 2nd half of 2023 approximately $13.00 + $9.70 + $27.13 = $49.83 per barrel
As you can clearly see there isn't a lot of profit margin between $77.75 (the average price of our Egypt oil in the 1st half of 2023) & our costs of $65.60 per barrel.
And that's before you write of the cost of the Mexico well $30M (which wipes out another $13.50+) or take account of the $120M of drilling in Egypt for 2023.
LOTM
Any chance share price will jump after the call?
I wasn't intending to buy any more shares, especially ahead of the half year results & webcast on Thursday.
However given the silly price they were just offering I just bought another 6,750 shares at 158.98p
Maybe someone isn't watching the price of oil & the direction its being going for the past 6 weeks!
$$$$$$$ in the bank daily
LOTM
Well so far in Sept the price of Brent oil has averaged roughly $90 a barrel which means the company is receiving roughly $88 a barrel in Egypt.
We should be producing a net amount north of 5,500 bopd by this stage, possibly getting close to 6,000 net bopd. However I'll use the lower number for now.
So revenue earned over the last 10 days is $4.84M (10*88*5500) less OPEX of $0.715M
(10 x $6 per barrel to be safe x 2.1685 (the ratio of our share of production compared to the WI costs that we need to cover).
Therefore we've made over $4M in those 10 days with only really G&A costs to come of that figure in cash term & an allowance for Amort & Depreciation of the asset from "finding" it cost.
In oil terms our true OPEX costs are around $13 per barrel & we are currently making around $400,000 a day net.
The Nat Gas terms seem to be slightly different as the cost ratio works out at 2.6992 (call it 2.7) on the figures the company presentations give.
So on production of 7300 boepd we're getting revenue of around $118,500 a day (5.6*$2.90*7300) with OPEX costs of $108,405 ($5.5*7300*2.7). A mere $10,000 a day profit unless the price of gas is index linked to inflation since last year.
Certainly not worth the effort in monetary terms that's for sure, but they do get some liquids production with the gas & some gas will be used for power production etc.
That explains precisely why they are targeting liquids production.
LOTM
HarrierResearch,
So I've basically got the 2nd half of this year kind of neutral, with that $140M of expenditure matched with around the same sort of level of cash inflow from Egypt.
Now some might think that's not a great outcome, but there failing to see the turnaround that will occur in 2024. When that $340M of expenditure is immediately cut by $90M ($35M from G&A, $30M non Egypt exploration & $25M share buy-back).
On top of that your production levels are much higher than they are now, so I'd expect next years exploration, development & production expenditure to be lower, maybe in the $80-100M range. So that would be another $20 - 40M to take off this years expenditure number. While at the same time revenue from Egypt is far higher, especially in the 1st half of 2024 than it was this year. Plus we'll be getting a healthy payment from Waldorf as well.
LOTM
Hi HarrierResearch,
Lets see, $25M to Shell for the max earn-out on the Egypt assets, $13M for the share buy-back, $40M G&A expenses, given that they will likely have to front load some of the severance payoffs to staff, $30M for the Mexico well, $60M for D&P drilling in Egypt ( half the expected amount for the year there) & finally $35M in OPEX costs.
I've got the 2nd half at $140M (assuming they spend the other $12M+ on the share buy-back during that period) which doesn't include the next special payment to shareholders.
LOTM
How did you come to your estimate of $203m for expenses for the half year? That seems outrageously high, even as an estimate of annual expenses.
I've been crunching some numbers ahead of the half year report.
There estimate for 2023 production in Egypt is for an average of 6,000 bopd & 7,021 boe in nat gas.
The 2022 actual numbers were 5,028 bopd & 7,941 boe in nat gas.
Given production was on a decline throughout 2022, that decline would have continued probably until the start of the 2nd quarter when the 1st of the new development wells would probably have come online, which would have stabilised the rate before it started to increase as more & more wells are added in.
Therefore I don't think oil production will have averaged above 4,750 bopd during the 1st half of the year. Or around 860,000 BO in total.
Average price of Brent for the 1st half was $79.75 & therefore the realised price in Egypt is thus around $77.75
So gross oil revenue for the 1st half should be around $66.5M with an additional $12M from nat gas.
I've estimated total outgoings to be a hefty sum of around $203M for the 1st half plus the $449M that was paid as a special dividend to shareholders.
So we should be looking at a net cash balance of around $157M assuming receivables due $97M & overdue amounts of $66M are roughly unchanged from the end of December.
I am being conservative in the above numbers so hopefully the actual results top these numbers.
Right now we should be entering a fantastic scenario where rising production and increasing oil prices are really increasing daily revenue substantially.
Oil revenue in the 1st half was around $360,000 gross per day on average. Today its probably around $460,000 & if the price of oil remained constant it would be north of $560,000 in late December (possibly close to $600,000 even).
All of which makes a massive difference to the bottom line.
LOTM
Share Register has now been updated on the company website to the positions as of 25th August 2023.
We knew about the drop in the Madison holding through an earlier "holdings announcement".
What we didn't know is that Irenic Capital reduced its holding between 11th & 25th August by 912,716 shares.
The other noticeable change is that ABRDN no longer hold above 3% of the company, they previous held 4,543,990 shares (3.18%) we have no way of knowing whether they sold all of it or part of it.
BoA (Merrill Lynch) appear on the list now but only for 5,118,047 shares which is a far cry from there current voting right holding of over 15M shares.
Goldman Sach's holding was just 11.9M shares at that time compared to 17.5M currently.
LOTM
The mid year earnings meeting has been pushed back until the 14th. Lets hope for good numbers, and final re-assurance of another dividend.... baby !
Another dividend with consolidation would leave us exactly where we are today. I hope an event comes by in early next year that increases the stock price. Like a sale .
Now Bank of America (Merrill Lynch) has revealed that it to has added 0.6M to its last declared voting position.
So Goldman Sach's is no1 for voting rights & BoA no2.
We still don't know who's reduced there holdings for everything to match up, but clearly something is going on when 2 of the biggest Investment banks in the world are aggressively increasing there positions here.
LOTM
Bought another 1500 at 169.958p but its not showing up on the LSE, that's the last 3 trades I've done Barclay's must have done them through another vendor.
Anyway I'm expecting some interesting movements this afternoon now that the USA is back from Labour Day.
LOTM
So it was Goldman Sach's who were the big buyers on 31st August increasing there holding by another 2.605M
I'm sure there will be other holding notices due to be released soon as that stock has to have come from somewhere else.
If it wasn't from any of the existing top 11 shareholders then there holding of CNE has just increased from 109.638M shares or 76.8% to 112.243M or 78.6%
Which means the free float is down to just 30.6M shares.
Hopefully the company website will be updated soon with a list of the major shareholders as at 31/08/23 rather than 11/08/23
Goldman Sach's clearly see value here.
LOTM
From EnQuest's announcement from 05/09/23 relating to the half year to 30/06/23
Kraken
Average production of 13,082 Boepd (18,556 Boepd gross) (2022: 19,527 Boepd net; 27,698 Boepd gross) reflected an efficient return to service of the FPSO following the anomalous failure of hydraulic submersible pump ('HSP') transformer units during May. Working alongside the vessel owner, Bumi Armada, the EnQuest asset team limited the impact on production, resuming production on a single train basis on 12 June and then reaching 80-90% production capacity through the refurbishment and reinstatement of a transformer unit in July. On 7 August, a further transformer unit was brought back into service, following a rebuild, returning Kraken to full production. New transformer units were proactively ordered from the manufacturer and are due for delivery in September, providing further resilience to production capacity.
The Group reacted quickly to mitigate production losses by executing maintenance work, originally planned for the third quarter shutdown during two periods of single train operations. No further planned maintenance outages are anticipated during 2023.
In light of the direct impact of the EPL on the Group's available cash flow and the indirect contribution to underlying inflationary pressures through incentivisation of industry-wide investment within a defined timeline, the Group took the decision to delay its plans to progress the Kraken drilling programme. However, near-field drilling and subsea tie-back opportunities continue to be assessed, with interpretation of 3D seismic data ongoing to access the significant opportunity in terms of main field side-track drilling opportunities, along with further drilling within the Pembroke and Maureen sands, with c.33 Mmboe of 2C resources available at Kraken. Until drilling resumes, Kraken production will be subject to natural field decline.
--------------------
So most of the down time was when oil prices were at there low point of the year & full production has been restored going into rising oil prices.
LOTM