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“Up to” is an interesting point. There seems to be a clear ceiling to the OO.
It does imply there was still some room for negotiation. Maybe even some agreement in principle to waive it or reduce depending on POO, hedging, or cash generation?
mrc. agree & would be a little disappointed if they have not managed to get the OO set aside, given it’s a rather paltry amount in the overall scheme of things & with Brent where it is !
Oxygen- things have changed with the POO. ENQ might have a bit of power to negotiate on the OO requirement, potentially by hedging further out?
It was always stated as /up to/ $50 million so it’s not set in stone IMHO.
It doesn’t make much sense to have an OO and the additional costs associated with it if we don’t need it.
Lol, AA can only make predictions one way. He is right sometimes at least but not a fool proof investing strategy predicting price drops in a rising market!! LMFAO.
Unless memory fails ( which often does ) thought AB stated during AGM that Banks wanted Equity holders to participate in GE Finance deal & as Leading Banks still involved here, that is probably still the case unless they have been sweetened !
Jan
As I said earlier you have to laugh ( otherwise you would cry )
I think this is the key point in the statement...
"Upon refinancing of the Group's existing high yield bonds..."
So we have agreed a new RBL, that is part 1 of the overall debt restructuring. Part 2 is refinancing the bonds. They expire in under 2 years and are expensive. Now that ENQ are on a more solid financial footing, it makes sense to reissue new bonds to replace the old ones, at a lower interest rate. The existing bondholders will need a sweetener to get them to sell and then the interest payments for the group will come down. The reference to 7 years is probably tied to the likely maturity date of the new bonds. To ensure that one or other can be paid down easily. Having two separate lending facilities is good - gives them flexibility and negotiating power if things go wrong. If the only have one then all the power is with the lenders and shareholders get wiped out, by having two options they can play them off against each other - we can pay the bonds and refinance with the bank, or pay the bank and refinance the bonds. A nice failsafe to have just in case.
The prospectus is still likely to include the OO in my opinion, just to give them as much headroom as possible for more asset purchases. The market for those is going to be hot in the coming years as majors sell off assets to meet their ESG commitments (45% drop by 2030 for Shell). Smaller groups like ENQ have not (yet) got the same obligations but only because they are under the radar compared to the majors. So selling assets by the majors to ENQ is a win / win.
In other words, looking good for more deals and growth in the coming years provided POO behaves itself.
JL
AA,
I think, my reply was very funny.
Yes I have a short memory, failing eyesight, short temper and Barretts esophagus. Plus a few others that are on my wife's list. Thank You.
No Opinion
RE: Looking to retest 20p14 Mar 2021 13:57
AA,
Now that's an interesting statement ! Just push it out there eh, or is there some thinking behind it ?
AA your 20p target price must be based on "Technicals" as the "Fundametals" have not changed.
Looking at the charts (technicals) I can't see 20p. If you go back to your charts you will see the current Elliot Wave is only partly complete. I would suggest this needs to "play out" before you see the "Big Middle Finger" directly rising up at you !
To remind you
Jan,
I guess it always starts from today, some people have short memories and chronic myopia.
AA,
You try to change the subject- we were talking about a rerate from today. When people do that it is because they are coming from a position of weakness.
Secondly, I do not recall you making any 20p prediction in the past .However it sounds good in a post doesn't it ! Sort of gives your post some credibility ! Shame you can't keep to the point in question ! Is a rerate going to begin from today AA, what's your view ?
Todays RNS may have evoked a degree of confidence in the market but much needed clarity is still required before we see a rerate. Presumably a prospectus means some sort of equity raise?
Meanwhile Brent continues to rise.
When Enquest do finally get their act together there could be a pot of gold at the end of the rainbow - its just that the rainbow has a habit of disappearing.
Jan, I can confirm AA is not a novice. Different type of investor though I think. More of an AIM / all on red man than a serious investor.
The SP has been on an upward trajectory since November 2020. From the chart I would say we are due a higher high sometime in the next couple of months. Lots of good news and clarity in the pipeline to drive it.
Hi Jan, thanks for calling me a novice when you know nothing about me,
I seem to recall when this was around 25p in early March I said this would retest 20p and you ridiculed and laughed,
Forgive me for asking but what has it been doing since then?
Let's put it down to the shade of glasses you wear.
AA, the refinancing is confirmed. Let the rerate begin.
If you are so experienced, which I very much doubt. Then you would have seen cases where the SP reacts days after an RNS.
And yes some cases you have a gradual rise for weeks. There are many types or rerate. I guess you only know the "rocket". Most novices only do !
Indeed Enquest have done this before , rising from 22p to 53p over 5 weeks from Dec to Feb .
One day there's a rise of a few percent and it's the start of a re rate
You have to laugh ( otherwise you would cry ) heard it so many times.
Really great news, just hope POO holds
Epip and you had a go at me for moaning about it lol
Apologies accepted
Pack it in E. You could see the frustration with Linda Cook at Harbour. They were prevented saying certain things because of the unpublished prospectus. We're in the same boat. At least give credit to EnQuest for giving us this much info.
just been speaking to K and he reminded me of the lack of liquidity in EnQuest. Volume still miserable but if somebody wanted to buy a lump they'd struggle and it would put dynamite under the price.
Excluding the $150 mill LCs, the refi component of the new RBL faciity is $600 mill. RCF was $350 mill at the end of Feb (don't know about additional payments between then and now) + Sculptor (likely around $30-35 mill + BP Vendor Circa $50 mill + GE acquisition of between $250 and $275 mill. The gap between the remainder RBL balance and GE Acquisition price could be plugged with cash on hand - it'll be good to see if the equity raise is indeed required - maybe it's a requirement of the new RBL facility.
P.S: I've given up on Enquest's ability to communicate clearly and concisely to the market. With Brent in the high 70s, maybe the market won't even care.
I’m not bothered about the $50 million raise, but don’t think it will be needed. $600 million should be enough to consolidate the debt and pay for GE along with FCF ytd.
Maybe The new hedging strategy is to appease the banks and avoid the raise?
Yeah, making 40-50m/month and after GE completion add another 20m/month
The turnover in the stock is really bizare for a company Making this much money ??
Great news, another tick in the box. Prospectus can’t be too far away now.