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@Soder - do you realise that Enquest refinanced their RBL facilities a couple of months ago at under 5%, versus their existing RBL rate of over 8%? Tullow's issue was that they refinanced when oil price was a lot lower than the current $65 levels and that makes all the difference. I'd wager that the current oil prices, Enquest can refi their bond for well under their current 9%.
Enquest and HBR are different beasts though - Enquest is oil heavy (and better hedged) and HBR is fairly Gas heavy, albeit hedged too much gas over the next 2 years to take advantage of the current spot prices. I'd also bet that HBR will be the first to hit the Dividend button ahead of Enquest - their debt levels/ratios are a bit more comfortable and they've recognised that handing out dividends is the only realistic way to get the broader market's attention and boost their share price. This is exactly what the Canadian and US producers are doing and are being suitably rewarded.
UPDATE 1 – Harbour Energy posts first – half profit, mulls Falkland Islands project exit
2021-09-23 08:02:26
(Adds CEO comment, details on H1 production and Falkland Islands project)
Sept 23 (Reuters) – Harbour Energy was mulling options to exit the Falkland Islands project, the company said on Thursday after posting a first-half pretax profit as production from varied assets and the absence of impairment charges offset weaker oil prices.
Struggling with heavy debt after the oil price crash of 2017 and tepid profits during COVID-19 lockdowns, Premier Oil struck a deal with Chrysaor last year to bolster its oil and gas resources and began trading as Harbour Energy in April. ...
"The extended maintenance programmes, which impacted our production, have been completed. Drilling activity has returned to pre-COVID-19 levels and the merger integration is progressing well, all underpinning strong future cash flow generation," Chief Executive Officer Linda Z Cook said.
The oil and gas producer said it decided to exit the Sea Lion project in Falkland Islands, as it is not deemed a strategic fit for Harbour.
The London-listed firm also planned to exit its exploration licence interests in the Ceará Basin in Brazil and in the Burgos Basin in Mexico.
"This is in line with the Group's exploration strategy, which is focused primarily on infrastructure-led, lower-risk opportunities in areas with an existing Harbour presence," the company added.
Harbour said pre-tax profit came in at $120 million for the six months ended June 30, from a loss of $224 million a year earlier. ...
(Reporting by Shanima A and Pushkala Aripaka in Bengaluru; Editing by Sherry Jacob-Phillips) ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile: +91 852 751 3793 ;)
Kraken. Enquest need to refi their bonds. They have a legacy 7% pik toggle note which allows them to turn off the cash component of the interest of the oil price is below 65 in the preceding 6 months before the interest is due. That was structured when it restructured in 2017. Of it piks (pay in kind) the interest essentially tools up and is added to the total debt. That has happened quite a few times which has aged enquest from certain default over the last 4-5 years.
However, there is no way…and I do mean NO WAY… that enquest will get such favourable terms from the market to refi that debt in a new primary market issuance. Just look at tullow who have 10.5 percent all cash coupon. Ithaca who pay 9 percent.
Enquest will without doubt be forced to pay similar and the size of that bond outstanding (post pik) to refi is going to be about $1.1bn.
At 10 percent that’s going to eat a whole lot of cashflow for the benefit of creditors. I would say 10 percent is a minimum. To get that size done, on a company with a chequered past who needs to constantly make acquisitions to replace production is not a slam dunk. The last time those bonds traded at par was way before the 2016 oil crash and they are owned by a lot of hedge funds.
Update was ok but proves how under valued EnQuest is in comparison
Agree dip to buy….just as long as one of the instis doesn’t have an offload on closing price trade….but the way the other side walks it down is easy to spot and buying the close becomes a straight forward decision
Still in the red myself but going to hold ,with current oil prices this company should only get better along with a possible dividend soon
I'm also expecting a rise in afternoon when the Yankees are out if the bed. Been happening quite a bit of late with good afternoon sessions driving prices back up
Expect a rise the afternoon after morning sells ....