Roundtable Discussion; The Future of Mineral Sands. Watch the video 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.
Soon people need to sit at home because no inventory or production enough.
Just saying what I see
https://mobile.twitter.com/staunovo/status/1311318782099574796?s=19
Chilting "I just say it as I see it - regardless".
That wouldnt be so bad if you were more balanced in what you were saying. Talking about fall in demand and Brent remaining until 2022 and ignoring supply OPEC cuts (over 10 million this year). AND that inventories allready clearing up. Talking about Equity Raise when the company said this wont be required (see ZFG email and analyst call).
No agenda? I think you do have one having sold out and spending most of your time on the messageboard spreading negätivity. But in your words, "I just say it as I see it".
SmokinAces
I just say it as I see it - regardless - in reaction to events - no other agenda.
I hope you are right Hitman - My concern for Moderna is an RNA type vaccine has never been authorised.
I don't find it surprising at all that those who have sold out (or want cheaper entry) are the ones who mention the words equity raise whilst also being negative about outlook of Brent.
You dont have to be a detective to know that demand this year has been difficalt on ALL producers. But the largest consumers can not remain locked down for too much longer. China is almost back to nomal and is buying as much of this cheaper oil as they can. India and other large economies will have get back to nomality very soon becose their people and economy cannot survive in lockdown. Planes will have to be up in the sky soon too or the whole global hospitality industry will colläpse. Vaccine will help with all of the above.
As my frend Jan says. Its all about the oil price.
The key to getting vaccines early will be to remove a large part of the liability, should something go wrong, away from the pharma company to the nations who are using the vaccines - just as the EU has done with the AstraZeneca vaccine.
The EU have taken over most of the the safety liability in return for a much cheaper deal on the vaccine - so as soon as their state medical authorities give the green light the politicians can make the decision.
I don't see any need for a restructure via equity injection.. as JS has already said another RBL could be raised based on the strength of our reserves. AB is focusing on net debt reduction for 3 years.. Cairn production is much lower than Enquest.. so it's mainly debt and interest payment keeping the market cap down. I think Enquest penciled in $40 for remainder for 2020, $49 for 2021 and $60 thereafter.. so lets wait and see. Moderna vaccine we know works , but has to be more widely tested at higher doses which may not be needed.. like many many others. How come Vietnam. NZ and Aus have low cases? Where is Wales going wrong.?
You might as well approve Moderna type vaccines for emergency use to prevent deaths in high risk categories.. just like the flu. there might no need to vaccinate everyone. ....albeit make it compulsory for people travelling abroad.
londoner
If Enquest do make another acquisition it would be much better if it wasn't oil.
For the long term future of the company they need to make the move towards renewables.
The obvious move for all North Sea oil companies is wind power - the technology and expertise are easy to adapt.
The number of wind farms off the coast is expected to continue to increase at a rapid rate and the regular replacement of turbines will ensure this continues.
Chilting, you say, “the company is doing little more than paying of debt”. I see that as a good position. If Enquest was only paying off the interest on the debt I’d be concerned, but I’m expecting a c$250m reduction in net debt this year, and more next year at an average Brent of $49 (based on forecasts I use).
Whether the RCF is paid off by Oct 2021 is questionable but I take comfort in JS’s lead from the latest update that relations with the creditors are good, and no doubt discussions are in hand as to the possibility of extending the RCF payment window of what would be a modest residue at most.
In which case, Enquest would not need “an equity raise to pay down part of the debt”.
I do anticipate some form of restructure within the next year or so, but I expect it to be centred on an acquisition of some sort. Such a restructure could take many forms, but I'd expect it to be positive, assuming the deal is a good one.
Squif
AB seems to have done all he can to make Enquest operationally efficient with excellent results.
The dilemma is that the company is doing little more than paying of debt with Brent continuing to trade flat.
He will now, I think, look at debt restructuring as a way forward to get the company out of the rut it is in.
That will I think also result in an equity raise to pay down part of the debt.
It was interesting reading the transcript of the Cairn half-yearly presentation. Simon Thomson highlighted that their financial flexibility affords potential to make further shareholder returns. The call was well attended and I noticed a few familiar names who don't seem to bother turning up to Enquest's calls any longer... :-( I haven't found the transcript of the latest earnings call for Enquest. Maybe they don't bother any longer.
Anyway, I started looking at the Enquest website again - About us. Their comment on Investors was a little worrying "Our investors support management in the execution of EnQuest’s business strategy, including the provision of capital for management to develop the business". No mention of returns just a capital source :-(.
Under Value Enhancement " EnQuest employs a cost conscious approach and implements innovative initiatives to add value to its operations. Innovative transaction structures facilitate getting the right assets into the right hands " It seems that if they are going to do anything in terms of a financial transaction it will be innovative. On reflection, there does not appear to be an appetite to make a capital outlay on fields when the future for oil is so uncertain. I would imagine a profit sharing scheme where Enquest is incentivized to drive field life and efficiencies.
Finally, under Investors>Debt I found this "The maturity date of the new high yield notes will be automatically extended to 15 October 2023 if the credit facility is not repaid or refinanced in full prior to 15 October 2020". The 15th seems to be a key date. Some form of refinancing maybe in the offing after the 15th October.