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NeilHannon,
Nice of you to educate romaron about the Enquest bonds, why don't you educate him how to make a few £100s spreadbetting while your at it ? ( sarcasm on )He could learn a thing or two about making money out of Enquest from you. ( sarcasm off )
hitman1a, until I saw your post I hadn't attached too much significance to the 'Capital Market Day'. I was anticipating a trading update around that time. I now appreciate the difference.
I came aboard Enquest (cue piped whistles) in May with a 2019 target of 70K production (top end of guidance) and $65 oil. Both seemed realistic at the time, particularly as those production levels were being achieved inspite of dire early year Kraken production.
Six months on things don't look so rosy. The oil price is struggling to hold the bottom of my expectations for a $60-$70 range and early indications are that H2 production will come in well below the 68.5K H1 number. I expect full year production to hold within guidance 63K-70K but now understand why same again guidance was maintained at the Sept update when others expected a tightening in the upper range. Stuff happens, and in the oil industry it's usually bad: water injector problems on Dons; compressor issue on Heather; Kraken pipework repairs (albeit offset by postponed Q3 maintenance to 2020); water injection problems at Magnus; fire incident on Heather. We're three quarters into the year with one more to go.
On a positive note we await news on the Scolty/Crathes rework (if it is to 'replace' full year field declines with four months production then I have high expectations), and a higher oil price would float all boats. I don't want to read too much into the timing, but to romaron's point about a good news item at the CMD, moving the update to late Nov from early Dec means ENQ can update us on the Sept Scolty/Crathes production numbers before the OAG update 1st Dec.
At the interim stage my $200 FCF for the full year was at the bottom of published expectations on this board - one month on from the report I'm not inclined to raise it. The debt repayment profile is well known. I'm not as comfortable at $60 oil as some here. Also, I see 2020 production levels around 2019 levels and 2C resource has to be developed to maintain 2P numbers which means capex. I see the CMD as an opportunity for ENQ to get ahead of the game and that could be based on a restructuring of debt.
Just adding my dollop of speculation to the pot.
Hi hitman - didn't see your 11.58. Isn't the point of the CMD to meet new bankers/bond buyers and get the message out there that refinancing is coming up and competitive tenders are welcome. From a positive stance they may have delayed a presentation of this kind until all the ducks were in line. What is currently out there appears jaded and forgotten. A relaunch with a new Chairman is just what the doctor ordered.
Hi hitman - from memory there was something not long ago that involved credit markets which lets face it is the major problem with our current attraction to the market. I keep going back to our Retail Bond and the PMO RB. Obviously PMO have a higher rating and maybe that is to do with the PIK and the built in option to renew for another year. If you faced your money being in lock-up (Woodford?) or were offered dodgy promissory notes instead of cash you wouldn't be an aggressive buyer. The RB is a window to EnQuest and it needs sorting. I did once attend a Capital Markets day (Xcite). I wasn't invited but turned up and tried to lose myself among those that were. I was spotted and politely asked to leave. I asked if I could finish my coffee and when their backs were turned scooped up all available literature. It wasn't released to the retail investors and it drove the management mad as I fed bits into the message board through another poster. Another important point is to remember that we call ourselves private investors but to the companies we are retail investors and our importance is lower.
To have too many Capital market days can make a company look desperate and TBF they have been few and far between. You could easily make a case for few CMDs as we weren't in the best of financial health. Maybe this is more like a Prom. Expect some good news release the same day.
Be Lucky
There was another Capital Markets day on 15 Nov 2013.. again a general review but I found the following.:
On 31 October 2013, EnQuest established a new US $1.7 billion credit facility, underwritten by BNP Paribas and Scotiabank. The facility comprises a committed amount of $1.2 billion for six years. A further $500 million is available with the lenders’ consent and additional reserves. The facility is to be used for general purposes, it replaces the existing facility put in place in Q1 2012.
I've concluded that this year's should be positive without being wildly optimistic and might involve a replacement of the existing RCF facility, That allows the funding of more Magnus type deals next year without asking us for the money..
I never did like the old business of extending really late-life assets... they have to be more "getting on a bit" type deals, but "still have plenty of mileage left."
There was a Capital Markets Day on 8 Dec 2015, which was just a general review of the business..
Option 4.
Neil wants option 1, but what if it's option 2. Lower interest rates . funds available now for Magnus type deals without equity fund raising.. it's the only thing that makes sense, so long as the RCF bankers agree. At the end of the day it's only an overdraft.
It sort of repairs the equity side , if they can present it well and 99% of people don't get confused. Canaccord haven't seen the script yet.. but I bet our lawyers have.. all speculation.. but we all have learned by now that Enquest don't stand still.. I think they are going to put the engine room into bat.
It's certainly worth exploring the range of possibilities: First I've seen .. so they must have something to say..
1. More dilution to fund another Magnus type deal.. always a risk they need more funds or more projects to do.
2. A partial debt reorganisation.. lower interest rates for longer term.. perhaps another bond issue, to replace the RCF, so the immediate extra cashflow that would have been used for 2020 and 2021 debt repayments can be used for growth acquisitions. I think they anticipate reaching the comfort zone for net debt/ EBITDA in early 2020.
3. A share consolidation of some sort.
4. None of the above. just a nice chat for those that are interested, but we just got the 1H results not so long a go.
Option2 imv. GL.
Its best to filter the idiot Kraken - there is nothing worst than an ill-informed troll.
The CEO buying £2.5 Million at an average of circa 19p.
Again follow the money and not the unsubstantiated nonsense written by some on here.
Its volume that has been so poor recently - we haven't toped 4,000,000 since 24th September - very lacklustre.
The SP seems to have almost stagnated along with Brent - I think that the whole market is simply waiting for something to happen to get any sort of direction.
Hi KO
Agree and worst thing is that even the debt ratio guidance been poor.
Roughly like this
March, expect to be below 2 end year
May, expect to be below 2 end year
June, actual 1,8
Sept, expect to be below 2 end year
I’ve been saying this for years, I’ve moaned at IR as well, the market wants to know the company plain / strategy.
Just giving a indication of debt ratio by the end of the year is not a plan, the market wants to know when they can start returning a dividend, how are they going to replace declining reserves, can we flourish on $60 oil long term, will we start looking at other energy sources?
I hate being in the dark
indeed Pelle, these guys you mention have a duty now to project us loyal investors, yes buying stock is a good sign, but I feel they need to put ALOT WRONGS, RIGHT by being more vocal!!!
Time for AB update market of their far to pessimistic view near term and long term.
After AB, Helmut and chairman bought loads of shares during last 6 months they will now set things straight and get good return of investment.
Canaccord "broker note" for example if its true or not posted here?
who believes in opex full year 24/27 when it was 20 in H1?
who believes in prod full year 63k when it was 68,5k H1?
Of course if you pick the most negative outcome of every figure H2 dont look rosy, but outcome will be much better.
My view is that AB allowed this to happen and now its time for update in Nov.
Having regular contact with investors and analysts is important to a listed company. Many companies organise capital markets days, often off-season, to provide financial stakeholders the opportunity to meet management of the company, get more information on the company in general and usually a division in particular, or for instance an update on strategy. The company has the chance to show a broader perspective and also invite non-board members to give a presentation.
Guess we should email HQ and ask for an invite. I personally think it's a good thing , and gives them an opportunity to explain exceptional items , and expected numbers to hit Q2 2019.
Fills the void. And might get a positive re-rate.
Can’t wait:-)
https://www.enquest.com/investors/corporate-governance/financial-calendar