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Squif, I am not into UK politics but I liked GKB description of corbyn. Says it all! Think Venezuela with less sunshine. Our ex prime minister Carl Bildt didnt like Boris Jeltsin, sorry Johnson . Carl said about Boris in 2016, I wish it was a joke!
Its all become a joke international with politics, we have an prime minister now who is educated welder. We pay 30+30+ % tax on income and we get less and less service slowly each year. Ex CEO Leif Östling Scania chalange it, and said What do I get for the money? Not much!
Yeah - the polls are a dangerous guide but I agree. Nevertheless, I think this is a potential risk that is priced into the oilies given their tax credits. Don't want to see comrade corbyn take away that present.
I agree with what you write, P. And I did acknowledge this after the CMD - their forecasting and guidance needs to get a lot better than what they're currently managing to put out. The market/sell-side still doesn't trust Enquest to deleverage meaningfully with oil in the high 50s/low 60s, and that's still their base investment thesis. It's a different 'ball-game' once oil is in the mid to high 60s, as that's when we see some confidence return to the markets around Enquest. ;-)
Jesus E, the dark side recruited you:-) ? Analysts I think that is whats killing this investment case a bit, a lack of guidance. We could not even get last two months, and in Feb/March we get a range for 2020. In my opinion its not even enough with 1 year horizon to build a investment case . Because most will assume production will fall after that just like the analyst predict peak year we just passed 2019.
I am sure AB wants to conntinue growth at slower level next 3 years. Not decline! Or stay flat at current high level production. Why not build case around this at CMD more clearly, we want to be here in 2023 with x amount yearly capex.
I really can't see a scenario where Corbyn gets a free run with his wrecking ball policies, assuming that he somehow cobbles together a majority and that 'majority' thought goes against what polls are currently saying. But then, the polls were wrong in 2017 too..
Come on Pelle - this aint going to be taken over period. There is a reason why AB has over 10% and you have spelt that out. Now I think as long as Boris can squeak in and get brexit done that might add the additional boost to the sp. Just need to avoid comrade corbyn
Hello P - year end debt - I'd go with what Enq forecast a couple of weeks and bet that we'll end up between $1450 to $1500 mill. I'd like to see RCF paid down below $500 mill (from $535 mill on 31/10) and I strongly believe that would happen (think divs ;-). Nah, that just gives them options around how to distribute FCF should higher prices materialise next year and stay there. Production - with Kraken firing and Scolty/Crathes compensating for Heather/THistle, could get to close to 69K for the entire year.
Next year - I suppose the mid point of the guidance will be hiked closer to 69kboepd - something like 66kboepd to 72kboepd range. They should be brave and put out debt reduction targets for 2020 - just like PMO and others do. This is important - they're way too cautious on this front, IMO.
Shalers can bring back the rigs pretty quickly - trust me. ;-) But, they'll want to see WTI in the mid 60s for a while before they make the move, IMO. I don't buy the story about Tier 2 beyond that bad behind Tier 1 areas. Deloitte put out a research note a month or so ago refuting that notion. I wouldn't count on that.
Hi Tom, My head is too tired now for read those laws specially in english, but I saw something about 90% there. What I learned or belived in Sweden is that a 10% holding can block a complete take over. And bider often says this is the deal if we get more then 90% acceptance.
400 mill Mcap with 600 mill FCF and 3b tax free profits. Sounds like a few out there could be interested, dont think even 60p would be enough. Several of my holding before not in oil sector but undervalued for longtime ,FCF and unappriciated by market ended up with take over. No one was as extreme as this.
Evening E, I doubt shalers can react that fast and with a montain of debt they will still need to prioritize debt. And each year passing I would assume the drill prospects gets worse and worse. Its my general feeling or hope about it, but I know your much more in detail on it.
Whats your take on production now Nov/Dec and year end debt? And FCF 2020?
Pelle. This is an important point. I think by having >10% AB has power of minority to block a compulsory takeover per section 979 of the companies act 2006. http://www.legislation.gov.uk/ukpga/2006/46/section/979. I need to brush up on the Takeover Code but would that just mean AB has the right not to sell a buyer his shares if the majority of shareholders accept an offer or that he can outright block any offer. I suppose it depends on the articles of the shareholders agreement. It would be good to find this out.
P - I doubt that we'd get to the $75 to $80. Shale will be back pumping like crazy and bring oil down soon enough. They may just about be disciplined enough at $65 WTI/$70 Brent - anything more sustained over a few months will bring those monkeys back.. Circa $65 - $70 is plenty for us - Enquest needs to up it's game and do good hedging for 2020 though.