We would love to hear your thoughts about our site and services, please take our survey 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.
GKB, of course you and L3 are most welcome to Malmö if we ever reach 100p.
Your main posters here and if L3 now turned more positive and even start talk about dividend the future could be bright.
Guess it was the last person I expected to
hear it from. Very good sign!
Fines and jail don’t worry me.
I have a couple of those “ get free out of jail” cards.
Good luck tomorrow!
L3Trader, you ask, 'why does a $10/BBL increase only impact EBIDTA by $60M in H2? ENQ will produce at least 12Mbbls. So it should be $120M.'
Enquest guided to a $10/bbl increase impacting EBITDA by $60m in H2, so you should ask IR. To the 2nd part, cash flow should increase by $120m for a $10/bbl increase (given your assumption), but then a greater percentage of that cash would accrue to BP (Magnus 75% deal). A rough calculation suggests $10m-$15m, which means EBITDA would be correspondingly lower by this amount. I can think of other factors that could make a difference but it still seems a long way down to $60m. (Just a thought, there could also be a seasonal variation in how other volumes are assigned)
Which is interesting and why I highlighted the significant difference between guided full year and H2 EBITDA sensitivity.
Hi L3,
Maybe I cant give fines but my invitation list for 100p Party in Sweden is getting shorter:-)
I like GKB, he plays with his Iran tankers and war games and keeps us all updated.
Your nice also and I value your knowledge
Neil is filtered now:-)
Makes sense with oil companies with production further out have a low valuation in current market.
Keept an eye on Africa oil that have a lot of oil in ground and maybe 500 usd in bank account and marketcap of around 500 mill usd. Dont take numbers exact but something like that.
They have also a big deal ongoing since 1 year something with taking over some % producing assest from Major company but need african goverment approval I think. Seems complicated but could be money there if deal go through.
I also believe as you wrote that dividend will be priority once debt is down, after two cash injections and that market value it a lot now it makes sense. We will see.
Wow Enquest bed sheets:-) I want them to. You talked to IR?
I hold 1 mill since after RI and now double up parents holding to 800k during last month.
Good luck tomorrow
L3 appreciate your posts and if you could assess kraken. I will look deeper and see how much has been borrowed and paid in interest to bondholders over the 10 years. Will be interesting.
Pelle,
Yes, I wrote divi... (But it is time for me to remind you that SEC will also ask you about your other market manipulation by you referring to often to "dividends"!!! By the way I am fining you SEK50 (in addition to the fine levied by gkb47, which has the right to impose such a fine). You cannot fine him as long as his posts contain information (even if only indirectly connect to ENQ, or is an analytical piece), and are not just sound bytes or ramblings. I also read your exchanges with NeilH. Perhaps if you have some time read what he posts on the PMG bb. I cannot understand his logic. He dislikes ENQ because of its debt and because the POO might come down to $25. But he like PMG, which is a small E&P that produces zilch oil/gas (if you produce close to nothing then the price of what you produce does not matter), and that now purchased a bunch of land Owned by a company in which the wife of the CEO had a 75% stake in Aberdeenshire to install wind turbines (or at least that is what they claim), and claims that such deal is w/out suspicion, even if the purchase led the CEO&Wife to increase their holding from 20% to 25% of the company. If you challenge NeilH on that as some have done on the board he replies with "libel"! If he were coherent I would accept his views on ENQ, but his position regarding PMG says it all!)
Onto more serious things: I have come to believe that AB will want to pay a dividend sooner rather than later if he wants to see a higher SP. The reason is that the market will start focusing on oil companies that produce and pay dividends, as the E&P that have no production will be seen as not worthy of investment because of the climate change issue. Would you invest in a company that will start producing oil 5 year from now, when there is so much animosity against oil? No. So, you focus on the ones that pay dividends to their shareholders.
Squif: You might well be right. But, I beg to differ. I take the point you made in a post this week that ENQ has not generated much return from its projects, given the change in the value of the Equity in the BS over the years and taking into account rights issues, etc. But perhaps we will see a change. In fact, one of the things I want to do is to assess a few projects and try to figure out if they have been profitable or not, an how much money was made or lost in them.
I will try to assess Kraken over the next few months, and post about it, if I feel that I have some confidence in my figures.
Pelle: I have no idea of how much a 5% oil price increase tomorrow would affect the Enq SP? I know it will go up. By how much, I do not know and I am unable to predict. But will it reach 30p tomorrow? Of course not. Will it go above 20p? Absolutely!!!
The 40K is on top of the 17.5K shares purchased last week. I own so many shares that I have ordered bed sheets with ENQ's logo on them. How many do you own now? 3 million?
GLA.
I do hope that i am wrong pelle but there are no promises only vague statements that can be interpreted as one likes. Anyway step 1 is to return some level of respectability tl the sp. 18.99p is 10% below the Ri level last year. Most long term holders are severely down at this point in time. But short term we could have some fireworks but i suspect that Trump is already scriptkng his next tweet to hold brent down and possibly even push it down. Dont underestimate the power of his tweets. That he his creating a long term mess with world oil markets is another thing. This feels like the sub Prime mess of 2006 - 7. But eventually things will catch up
Right Squif, only for shareholders:-)
Longer-term development
In the near term, we remain focused on
delivering on our plans to reduce our
debt. We also have the opportunity for
material growth where our portfolio
has significant potential for near-field,
short-cycle development, particularly
at Magnus, PM8/Seligi and Kraken.
After we have reduced our debt to
sustainable levels, and dependent on price
conditions and company performance,
our capital allocation will balance
investment to develop our asset base,
returns to shareholders and the acquisition
of suitable growth opportunities. The
application of our proven capabilities
in enhancing hydrocarbon recovery
from mature and underdeveloped
assets means we are well placed to
pursue long-term sustainable growth.
Selected L3,
Did I hear right you start talk about dividend? :-)
With your always careful assumptions that sounds promissing to me.
And you cant resist loading up with shares. That says a lot:-)
How much should a 5% oil price increase tomorrow give in % on Enq share?
Roughly your opinion
L3 - i sincerely doubt whether enquest will pay dividends. AB wants to grow production as much as possible so all his energy is going into that. He did not pay dividends even before borrowing started in 2012 and enquest had a healthy balance sheet. I bet this will not happen anything soon if ever
Selected few
Have not had a chance to read and listen to CNE's 2019H1 earnings. Have only read some posts over the last week .. .Some comments.
DIVIDEND: As exceptionally well explained by E121 and Londoner7 $287M + ($35M October19 + $120M April20 + £132M PIK + possibly PIK from tomorrow if POO in the last 6 months was below $65) need to be repaid before a dividend. Note that ENQ does not need to repay all the $120M due April20 before it can pay a dividend, but since April20 will arrive before a dividend will be considered, I enter the full amount.
Bearing in mind that the final and largest RCF repayment is on Oct21 ($360M + £14MPIK if not repaid yet). This means that by Oct20 such debt switches from "non current liabilities to "current liabilities". Now, ENQ will not want to present an end of 2020 balance sheet that is stretched in terms of "current liabilities" vs. "current assets". at the moment it is $909M vs. $617M. This is far from ideal (you want assets>liabilities), but at the end of 2020 it could look worse given the switch related to the loan. So, I expect the RCF to be renegotiated before Oct20. And perhaps we might see also something with the bonds (in particular the retail bond) at that time . So, Pelle might get his small divi in 2021. (But will SA's event result in a much earlier cheque for Pelle?)
NETDEBT/EBIDTA: The idea that you can bound it within an interval is hard to achieve because the POO has huge swings. You cannot guarantee that from one year to the next the ratio will not increase/decrease a lot. You need to have a very large margin per bbl for the POO swings not to have a huge effect on EBIDTA. Thus my view is that initially ENQ should have a nominal target, say $1B net debt, rather than using a multiple.
SP: Barclays upping the target to 23p should have an effect on the SP eventually. posters have argued that they profit from a simple rule: buy at 18ish p / sell at 21ish p. It has indeed worked. But, you are trading off a small gain for a large gain when the SP eventually rerates to around 30p. And how do you know, that when you sell at 21ish p that the SP will not keep going up? I wrote many times in the past that a spike of the POO might happen unexpectedly.
Londoner7: why does a $10/BBL increase only impact EBIDTA by $60M in H2? ENQ will produce at least 12Mbbls. So it should be $120M.
gkb47: I simply meant that a statistical test on past POO prices (before you get tomorrow's prices) would not allow you to conclude if a major disruption was priced in. That is different from my subjective view. I have repeatedly posted that since the drop of the POO around $60 I have been trading short dated Brent call options (at the moment one that expires in October). The reason why I do so is because of what wrote in the past on the spikes of the POO.
I expect it to go up tomorrow, in which case I might even sell it :)
I added 40K shares to my ENQ holding!
GLA