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Gkb,
You need to Listen to the podcast re ops update/ deal.
Gkb47,
You said - "For me Golden Eagle just makes up for the production that went CoP this year. "
Although what you said is true, it does make up for lost production elswhere. You seem to not be able to see any other
benefits of the deal. Even though Enquest stated that the deal enabled refinancing of our debt and "cleaned-up" the balance sheet. I think that we will find overall it will also save us some money on percentage interest we pay on some of our current debt.
In addition it substantialy lowered our costs to produce the same production. Therefore improving our profitability and fcf on the same 60k bpd. Finally it also improves the standing of AB and Enquest to "Do" and "make" deals for the future.
As for todays Eagle deal . You quoted a figure of 17.5m for the year to Enquest . That's great as it works out exactly the right amount to fund an extra 1p on any dividend that ENQ may pay in the future !
All the best
JAN
Hi gkb47,
Thank you for all the calculations. When I read and posted about Eagle's development back in 2019, I wrote that the projected production figures and reserves that would be extracted that ENQ had made public available were for the P50 case, not for the P90 case. So, we have to factor that in the expected profit calculation. W/ some probability you might have a micro Alma/Galia event. Companies w/ little debt can take worse gambles that companies w/ more debt. Only AB knows how hard capital is hard to come by and what interest he has to pay to get it. To me it does not make sense, but ...
as I write, all I want to know is the roadmap.
Not $350M, but $375M (as of now Brent is above the strike price and moving up to $112 in due course) to take an interest in the Golden Eagle, with the reserves and daily production as described by Suncor. Excellent deal? The majority here think so.
ATB
gkb47
Any further capex to first oil for Enquest is now zero. it's a fully carry. So spend zero and get $17.5m/annum , if that's the number. Production will decline after 1 year , just like all other wells.
GKB, please call AB
One question this does raise is what is the future of the GKA hub?
Mallard would have been the likely tie-in point, this will probably move to Cook as that is part of the Anasuria cluster.
Does this mean GKA has a shorten life if it no longer possible to take an eagle tariff? Has anyone ever seen a proposed GKA COP date?
It's not $30m.. costs are covered only to first. oil..
Thereafter our 15% working interest incurs opex and capex maintenance imv .
Twalbyoff, if its 30m FCF to Enq its great.
Sounds like this is also a way to put faster speed on using those tax credits Enq have
Northern - I’m surprised Ian just didn’t reply with ‘ You Plank’
Might as well of and fully justified, I’m embarrassed
Krakenoil, id take a few sleeping tablets as well and come back in a few days lol email to I.R classic gla monkey
Jan/Kraken - come join me on the dunce bus! There's Benny Hill music on repeat and AB has paid for a clown to entertain us. Although the captain did say we'd be allowed back in the LTH cabin on accounts of good behaviour.
So I got confused between Eagle and Golden Eagle developments. Starting again...
1. So the Eagle development is currently a non-producing field that would have required cash to deliver first oil
2. The cost of getting to first oil around $50m - this is off the back of us being 'carried' $7.5M for remaining 15% stake
3. On completion would have delivered around 8.5k of oil and 3m cubic of gas per day
4. Now ignoring the gas part for now (someone better than me can quantify) the oil would have delivered FCF of around $90M of FCF during the year based on 8.5k production and break-even of 30 - though I suspect would be higher
5. Therefore after a year we would have been $40m better off.
6. Instead we've got zero income to releasing it but have no costs associated plus around $30m of FCF each year as we do not have to worry about OPEX and assuming 1.5k x 365 x $60
Therefore I think it is an OK deal. The fact that many of us have confused Eagle with Golden Eagle highlights the fact that the field was immaterial to use and allows us to focus on other areas. Hopefully we can be in a position to strike similar deals with other dormant fields of ours and focus on Kraken, Magnus, Bressay, Golden Eagle and Malaysia - unless other well priced opportunities present themselves
Hi Jan, not sure about $80k/day either.. but if we see an annual net income of say $15m from this, that's perfectly fine.. our SP should have increased a bit on the deal.. it's a good one..
Lads,
I did not make a mistake on the fields. I knew Eagle was not Golden Eagle. My mistake was the maths. I added up 1300 bpd and got $800k per day instead of what it should have been = $80k. Lol
X 365 days
I got 10 times its true value. Shows what adding just one Zero in error can do.
I jumped the gun assumed the worst lol
Jan......Must be an age thing
I made the silly mistake first thing and emailed my concerns over to Ian Wood:
I feel very silly now after his reply lol
Dear Mr ********
They are two very different and completely unrelated assets.
As the press release this morning showed, Eagle was an EnQuest discovery in 2016 in which we owned 100% equity that we have not progressed further due to other priorities since. In order for it have the chance to progress, we have agreed to farm-down to Hiibiscus who can look at a potential development concept.
Golden Eagle is a non-operated asset that we are looking to acquire that has been in production since 2014 and offers material production and cash flows to the Group.
I hope this clarifies.
Kind regards
Ian