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Poor old RBC, better give us a proper target and make some money back next week.
small top up at 18.77p , 10,568 shares
Certainly don't want an update like Tullow, ……. even RBC didn't see that one coming..
I've asked Mr Carlsberg to write the next Enquest operation update.. GL
Thing about CEOs in shale companies, is that the people under them think the same way.. I recall a conversation with my Cousin a few years back who is a fracking engineer in Texas.. I relayed my concern to him about all this extra production and the low prices.. he just said they would keep on fracking whatever happened and WTi $65 was a comfortable figure which was realistic.. Well things haven't turned out that way.. the war with OPEC hasn't been won.. but plenty of US workers kept their 6 figure salaries, whilst loosing quite a bit more on their share options.. Lies have been told about Tier 2 productivity rates to get funding from US banks but the circus is now coming to an end.. Perhaps another year to slowly see Tier 1 run down a bit more , but the original Shale business plan only worked if prices had stayed about $65. WTi.. now it might be WTi $70 with Tier 2 and beyond. which puts Enquest and Brent in a good position in 2020 to clear debt without chasing production.
Hitman - "Almost feel they lied to the bankers about production capabilities.. Tier2 and beyond can't be profitable if Tier 1 hasn't been.". The question is not so much about profitability - on the P&L, the vast majority of shale has been profitable over the past few years. The big problem for them is cash flows - can the required capex for simply sustaining production actually be lower than the cash generated from operations. This is now the key metric that Wall Street is looking at and has started rewarding companies that do so by pushing up their SPs. This message is now getting reinforced amongst the wider shale companies, and as a consequence if you look at the Q3 earnings reports, everyone projects that with golden headlines, well maybe not golden. Capex is being chopped, rigs are coming off and if WTI doesn't go up into the 60s soon enough, I think there will a YOY production fall in 2020, maybe towards the back-end of it.
OPEC can't be too unhappy with this price range for WTI, as that's forcing shale's hand here. We'll keep tracking what happens on the trade front.
https://www.cnbc.com/2019/11/13/opecs-barkindo-us-shale-oil-producers-are-concerned-about-slowdown.html
found this
https://finance.yahoo.com/news/enquest-plcs-lon-enq-ceo-060935455.html
Yes hitman enquest are so well placed moving forward one last top up coming and I will then have 77,500 shares at 18.4 ish
"Some CEOs don't seem to accept that the game has changed" .. I also think that applies to Shale , but the US banks are teaching them now. Almost feel they lied to the bankers about production capabilities.. Tier2 and beyond can't be profitable if Tier 1 hasn't been.
Enquest.. I hope they make the balance sheet much stronger.. ie even more debt repaid.. to lower levels . ie $500m, rather than $1b/$1.5b range.. only pick the best ongoing projects and avoid scraps./ new builds.
Hitman I believe its Trump that needs the deal more than the Chinese, China will not be bullied into anything, too late for that. Without a deal its going to start stinging the US economy next year and Trump knows it and when it starts affecting the Trump voters in the pocket they'll soon jump ship.
I still think 80k /day for Q4 might be optimistic, but possible.. 70K seems more sensible. Indeed apart from Kraken, I think Enquest may dial down some units and stay within guidance.. I've certainly understood from before they can tweak production here and there when they need to.. ie a bit extra before maintenance periods.
Trump sounds like he only wants to do a deal with China, so long as it's unfair to China.. so that doesn't bode well.. I saw a TV interview a few years back.. A lady went for a business meeting with Trump, negotiated a deal and left the meeting.. Shortly afterwards, Trump's team called her and said they wanted better terms .. almost unfair , or the deal was off.
The lady walked away from the deal.. I believe China will be experiencing the same thing.. As soon as things get close, Trump will change his mind and want even more.. It's weird to have a President interfere with Trade talks via Twitter. It doesn't build trust between both sides , hence why no progress is being made.
No sympathy for TLW still overpriced 3 fold with that debt, underreaction and lucky for those who hold really imo. Just shows what a fudged up ftse it is these days, maybe some players will want to recoup some losses over here and put us where we should be lol.
H2 estimated production now revised to 87kbopd, versus the guidance 89 to 93kbopd - that's a reason enough for the share to get slammed. ;-) And not to forget the 2.8 bill debt overhang.
TLW - Operational issues in Ghana and guided FCF in H2 lower than in H1. A 22% share wipeout is what it's currently at.
Tullow must have had a poor update ... blimey
This morning with the slight drop in the poo. This share is severely testing my patience now, but it wont be long until the market wakes up to this ridiculous valuation.