The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register 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.
Well I think EnQuest know exactly what they are doing, We may of had an offer that can’t be refused and ties in nicely to a bigger plan.
Agree Stevo.. A sale of GE doesn't make sense if as we expect values will be significantly lower than what we paid.
Only way it makes sense is if we have lined up other asset purchases and maybe some clever accounting with losses and subsidies etc... Which I'm way out 9f my depth on?? Certainly seems to be something brewing.
I'm thinking of a future Labour government who will without doubt target North Sea oilers and their activities. ENQ will be able to absorb those attacks far better if their balance sheet is clean and unencumbered.
Labour is unreconstructed shti, I don't like that word, but I cannot think of a better term to describe their ideology, their personality and their vicious politics
The best way to pay down debt is to convert tax losses into cash though growing production. Selling producing assets at current market values for 2P reserves does not make sense and we should be buying producing 2P reserves which, with tax losses, will cash payback in 2 years.
Enquest is not in a distressed situation like others with debt in place until 2027 and with FCF in 2025 looking strong. accordingly no need to sell of assets into a depressed market. Debt should reduce to 0.5X target over next 2 years while still freeing up $200-300m to buy 2P producing assets.
Of course the potential sale has not been confirmed by the company and might be another non-story. However it also has not been denied which probably means there is some substance.
Well they had the authority to buy back when the SP was 25% lower, so clearly not rushed.
With the share price increasing you would think that they would want to KO the buy backs sooner than later?
Let’s push and hold 18p today.
Schle, agree on debt, but I am interested to see how the company manages to both reduce debt, and maintain the reduced position, and achieve its stated growth ambitions.
Price doing good now. 17p fallen
The board have openly committed to reduce debt as their main priority which is a most wise decision. if that means asset sales then that's what needs to happen
Achieving a debt free balance sheet must be the main objective
Thanks. Surprising not bigger volumes here with that amount of free cash to play with. Buybacks will stumulate though and if that’s this month it’s good news all round.
Is it Jefferies ? , thought more likely existing Advisers J P Morgan , or at least it should be .
I'm not sure how long it takes for the Analysts to analyse the Results and the companies presentation. Stevo seems to be able to do it in under a hour or so.
I suppose being paid the big money entitles you to hang everything out
It’s annoying that we are using Jefferies to handle the sale of GE after their damaging broker note a few months ago. If they can’t get that right why the hell are we giving them anything?
Hi Timebomb (18:35). The rebase was more to do with lowered debt, longer maturities and tidying up the balance sheet not moving out of the UK. He was suggesting that it is from here as a base we can have lift off. As a first step I would like to see some upgrades from analysts.
By the end of this month, and after they decide whether to buy or cancel shares.
When we get 'Transaction in own shares' RNS's then that will indicate the start of the buyback program
Did they on any call or presentation highlight when they were starting?
The free cash flow here does looks immense compared to the enterprise value, $300m reported last year. Clearly they can afford it!
The AB CNBC interview TTB referred to: https://cnb.cx/3U37F2G
Seems sensible when you consider the focus on Bressay and Bentley with Bowyer praising the Kraken as well able to handle a significant increase in production . More control
Now that Iran has proved it can and will hit Israel will a warhead. Even though only a few got through, it must be truly worrying for the Israel government. Which is why I expect Israel to strike inside Iran and hit their Uranium enrichment plants. Israel has to ensure its survival and one way to do this, is by destroying Iran's nuclear capability.
Iran no doubt will attack Israel again. Sadly, I think a war is beginning.
Will Russia be helping Iran, like the US does Israel ? I can't see Putin not sticking his nose in, maybe by the back door.
Worrying times.
Of course with hindsight it wasn’t as good a deal as it first appeared. At least Enquest didn’t give away all the upside like Waldorf did when buying Cairns stakes in Kraken and Catcher. The deal could have been a lot worse.
We’ve had 3 years of income from GE at annual average of $70, $100, and $82.5. I’m not convinced GE has been the financial failure that some think.
Anyway If we can swap the remaining reserves for a different field where we can add real value then that works for me.
Thanks Stevo, intriguing indeed. I recall GE being regaled as a smart move if not a coup on here.
Bewildering.
I am somewhat surprised by the proposed sale of GE. At the time of acquisition Enquest's 27% share represented 18m barrels of 2P and 10k BOPD production.
Given production has more than halved to 4.2k per day in 2023, 2P reserves will have also have fallen to say around 10-12m barrels. Enquest paid $375m including $50m earn out. EPL has reduced the value of 2P reserves by a little over 50% and production is also approximately half of anticipated volume. Enquest paid over $20 per barrel plus additional $50m. Current values of 2P in recent deals are below $10 per barrel and so I would say $100-120m would be upper end of deal values.
I recall GE had low ongoing costs of $20 per barrel. Accordingly at $80 oil GE will be generating $90m pa pre tax or $22.5m pa post tax for a full tax payer or $58m if using tax losses. Accordingly I am struggling to see why Enquest would sell $58m of FCF for any thing less than $250m. There is no way any buyer would pay this sort of price as they will want to benefit from the value of their tax losses (if they have them) - as Enquest would if buying producing assets.
Intrigued to se how this develops!
Maybe a move to us listing is the thing. I remember romaron saying IR said a re base is on the cards. Is that correct?
It must mean something coz physically we'll be ns 'based'.
Ab did an interview for cnbc last week. Nothing new but publicity.