Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
@chilting
Oil is similar to any commodity (apart from the fact that the market is "slightly" bigger then others)
Take lithium for instance, a lot of resources, both public and private, is put into research to find better batteries, that dont need any litium at al. What reduce the risk when it comes to Enq is not that it is into oil, it is, amongst other things, the fact that the valuation will be attractive even with lower price on the commodity
Thanks Chilting,
I wish you the same:-)
2 year Hedge on at $80, drill bit turning next year, refinance bonds and sanction BBK by end 2022 of POO has behaved.
Pelle
I hope it all works out for you, all the time and effort you have put in here, not to mention your investment - you certainly deserve success and that elusive dividend.
Chilting,
Brent doesn’t need continue rise.
Even 50-60 oil will make a lot money.
I was looking at EV/EBITDA valuations and seems US they talk about 6-10 multiple and I saw some other page with multiple 3.
But Enquest trending towards 1.5. That’s crazy.
About production, think Enq should flatten growth ambitions. Do some drilling and buy something small if opportunity is there like GE.
GE deal is exceptional, it will add close to 1m/day FCF.
Enq will finish net debt end year around 1b that almost 300m debt reduction + adding GE.
With these high FCF Enquest can easy mitigate production one way or other.
I hope and don’t think they will go for something big 1-2b investment. Then share it with others.
Enquest could now hedge and secure 700m FCF 2022.
I would put priorities
1. Reduce debt
2. Drill
3. Dividend
There more then enough money each pot
Pelle
Yes, that's true, assuming Brent continues to rise in price.
With the growth companies I invest in their fate is largely in their own hands - with oil companies, that is not the case, because as we have seen with Enquest, Kraken's peak production has so far come at a time when the oil price has been low, so there is no control on revenue, let alone a dividend.
So, there is a double gamble when investing in oil - company and Brent - so maybe, although the rewards can be considerable, oil should only be a small part of an investors portfolio.
Chilting, then you will not have many shares left in a year or so when it’s time to have as many as possible.
mrc
All my investments are long term, mainly in growth companies or recovery plays - mostly 5 years plus and I just top slice profit on the spikes.
My only failure in this regard - apart from a few that went pear shaped - has been Enquest.
So, I have come to the conclusion that short term is best here.
if, however, it becomes obvious that Brent is going to have a purple period - as it does at the moment - I will continue to hold or even top slice.
Chilting - for most people trading is gambling.
If as you say the world is so unpredictable then you are going to miss out on a rise just as often as a fall. Or you are going to sell with a loss. At least with a long term investment the dividends even things out, and you can buy in over a long period so you don’t get spiked.
Your strategy sounds much riskier to me.
Hi Chilting - the fear is irrational IMHO. The west will not allow swings between $20 and $200. It may mean long term contracts, more storage - basically the market will sort it out. There are ways of mitigating extreme volatility and it is in the interests of buyers and sellers to do so.
It would take a miracle fuel to destroy oil demand to the point where it stays at $20 for any length of time. For me the only chance of hitting these targets is To deal with the carbon using CCUS! Another potential revenue stream for ENQ!
All right mrc - in 5 years time Brent will be valued at between maybe $20 and $140 - how can you base an investment decision on that? - its just a gamble - far better to dip in and out when you can see a trend rather than staying in long term looking for a pot of gold at the end of the rainbow.
No chilting, that is your view. The article certainly doesn’t make that assertion.
The oil industry will find balance, but it might not be the same model as historically of huge investments developing with debt. AIMVHO. Even at $100 oil I can’t see everyone diving in with both feet.
I see it as a great long term investment for those seeking returns.
Basically the FT article says that holding oil shares is simply a gamble based on Brent reacting to supply and demand fluctuations - but this has always been the case.
However, the list of variables is now so long that it has become impossible to predict with any certainty at all how the balance of supply and demand will pan out.
So the inevitable conclusion is that oil shares are simply a short term trade.
Pelle,
Oil production is traditionally defensive sector. I guess we don’t appeal to the type of investor that we used to.
Good news is if we are all correct then we will see great returns over the next couple of decades.
Equinor still involved with Bressay. Maybe they will be interested in a broader development.
To do it properly would be a couple of billion IMHO. Maybe a couple of fixed wellhead / water injection / heating platforms and keep kraken for floating storage. Power the platforms from shore or renewables, and export gas to kraken for the turbines to keep ESG mob happy.
Lol. But its fine buy other sectors that 50 times more expensive and your certain about the future in 5-10 years.
About BBK, what’s the cost?
I hope Enquest don’t focus only on growth but return money. Share this project with others.
For some reason I can read FT articles if I access them via google search!
Anyway for those that don’t have access, it notes the disconnect between bullish oil forecasts and oil equities. Suggests it is due to long term uncertainty on supply /demand. Could be huge gluts or supply crunches in 5 or 10 years time. Oil traders make money either way so not much bothered.
My view...Longer term hedging might help us, though it hasn’t done much for TLW. For us, if we can hedge 3 years at $80 then we are debt free with low cost production, and enough cash to take a longer term gamble and start developing BBK.
https://www.ft.com/content/4acd0a91-f7b9-4c10-bbd8-d15f1cce76f0