I was just looking at the trading volume over the last 29 trading days and it averaged 3.78m shares per day. So what?
If you now divide the number of shares the company has committed to purchasing in 2024 (£11m/17.06p), that equates to the company buying over 10% of all shares traded from the end of April to end of the year. Now I accept the maths here is an over generalisation and sp dependent, but which ever way you calculate it, the buybacks have to have an impact on share liquidity.
Take production, life of GE field and a punt at future Brent prices, cost per barrel and complete a net present value calculation. Then simply work out what might be attractive in terms of price to ENQ whilst leaving enough for any buyer to make a relatively risk free profit over and above the return of their capital.
Perhaps upwards/circa $200m for ENQ?
The trouble is you then have to factor EPL into the equation, so you really need a buyer with tax losses.
Friday had the highest volume of trades since 29th February and a level well above average trading days. Punters are starting to take notice and who would not with a steady rising trend - +36.7% since 12h March. I have certainly added, as I believe other long termers have been - a bit of a no brainer........ Some new names popping up on the BB suggests that we also have new comers on board for the ride. Personally, I believe the MCap and Sp does not represent the value of the company for all the reasons previously given and this week's presentation confirmed.
If no news from AB apart from the commencement of buybacks, the next important update is in about 45 days time and assuming POO holds or rises, it should be a good update. The question is - what will the share price be then? I reckon we could be in the 24.5-26p range, anyone got a view?
Looked at yesterdays presentation again which confirms to me that ENQ is a rare investor opportunity. In such a small number of concise slides, the presentation outlines not just outstanding progress in a difficult environment but also clear indicators on the way forward and strength of the future balance sheet.
Brent is over $90 and likely to stay $90+
FCF generation will increase with increased production in 2025 and reducing lease costs
Share buyback imminent, expanding to potentially include dividends @2025, substantial % shares long term holders
Finance headroom, debt reduction to potentially debt free 2025
Reduced costs (diesel) and emissions, plus Sullom Voe/infrustructure offset opportunities
$2,000+ tax losses, mitigation against EPL
Excellent management team performance, good investor communication, AB heavily invested
M&A possibilities and ENQ potential target
This is what I took away from the presentation, which confirms my views on the potential growth of the ENQ sp, it is a rare thing to see a company perform in this way in a hostile geopolitical and economic environment.
This is by far my biggest holding thanks to averaging down following the impact of EPL (I still cannot believe that HUNTY and SUNAK and the LABOUR PARTY are so short term MIOPICALLY STUPID!) - DYOR and if you are onboard enjoy the ride!
Jan - nice one - have to confess to buying more on news of buybacks starting this month, just trying to help reach the 60p party or 400% rise.
Thanks Krak, month earlier than I expected, sp doing nicely 16.36p currently. The confirmation of buybacks should peak interest in ENQ.
Clive,
We'll revise the title after the investor meeting this afternoon, hopefully everyone will run out of the meeting and call their brokers - "Buy, Buy, Buy!"
Dumbly, you first have to find someone so incensed and principled that they are prepared to dig into their deep pockets and fund a long legal action..........then you might get a challenge. No NS O&G company is going to damage their prospects by taking on such an action, especially if they are surviving, and if EPL is forcing them out of business, there will be no deep pockets to dip into.
Personally, to tax one industry more than any other is anti competition. To apply an additional tax on all profit is tantamount to State theft and backdoor nationalisation of profits. To apply tax on one segment of an industry is wrong. For Labour to support EPL whilst talking about a State energy company is anti-competitive. To tax NS O&G in the twilight of production and extraction after companies have taken massive risks and investments is morale wrong, especially when the industry has a long business cycle. Moving the goal posts in the form of EPL is fundamentally wrong. Applying a floor price below a realistic level with multiple caveats is shameful. To place EPL on small companies and or indebted companies when the banks require them to hedge, so they miss out on the majority of any windfall shows a lack of understanding and judgement. To apply a tax and a retrospective one at tat which immediately means that companies finance covenants are breeched if debt is not immediately paid down is wrong at best. To pander to the extreme groups to win voters is wrong. To mislead the public over true renewable costs and subsidies is a lying. To have a strategy that does not take into account energy infrastructure and storage. To grab tax revenue in the short term whilst sacrificing GDP, longer term tax revenues, quality jobs, accelerating production decline and abandonment, exporting CO2 to claim achieving net zero and energy security. To rush at net zero and import the majority of renewable equipment from foreign companies is stupid economics at a state level. Not understanding O&G is fundamentally part of the transition and beyond, you cannot turn it off at a prescribed date as there will be every sort of chaos in our society.
Sorry folks, that is a rant off the top of my head and if I had deep pockets and a lot pf patience I would be the person to take the government on, unfortunately I don't have the former unless ENQ goes to £10 and having fought the sour mix of corruption and incompetence before, I have chosen to be a hermit who meditates on when will there be a 60p party?!
With Gas, dealing with condensate so that the gas is ready to use may be an issue.
Forgot to mention, added today based on Brent hitting $91 again and Bullish sentiment suggesting $95-100 possibility this year, briefing to analysts, briefing to shareholders tomorrow, article in the press and realisation dawning on people that NS O&G is important to UK and EPL is killing the Golden Goose, whilst debt reducing apace and thanks to higher average Brent compared to last year, plus general broadcast from ENQ Management - more positive, ENQ is well positioned and there must be more deal news around the corner. Getting very excited about ENQ - DYOR.
I received an invitation to tomorrow's meeting but unfortunately cannot attend much to my frustration, please can anyone attending provide some feedback for the Board.
Bull oil market seems to have returned with increased geo-political risk, if the same price rise is applied to Brent that would an equivalent of at least £5.6m p.c.m. increase in net profit or 0.3p increase in sp. p.c.m.
Increased geopolitical risk in oil-producing regions is seen as a key driver of higher oil prices.
Tighter markets due to OPEC+ cuts and Russia's export limitations are putting upward pressure on prices.
In an increasingly bullish oil market, Morgan Stanley sees Brent Crude hitting $94 per barrel in the third quarter of 2024.
Yep, I'll also retire at the 60p party.
Modestus, thank you for posting the article, it articulates well what I think we all know and believe on this board.
All I can say is send to your MP's or anyone else that might give a care and hopefully, we'll see a revision to EPL before it is really too late.
Still think that ENQ is uniquely in a position to find a way through to keep delivering FCF despite EPL for some time, just hope AB makes the right decisions and deals without over extending - he seems to be on the right path - the next update will confirm this.
The delays, re-routing, extra flights, traffic jams and cost to the economy will add to the UK's immediate carbon footprint and whilst air travel and airlines should be streamlined in every sense, it is not just people on holiday that are being moved around but for example huge quantities of perishable goods in the holds of the aircraft. I recall that BA used to make more profit on cargo than passengers in Europe. So I hope these protesters are growing their own fruit and veg at home!!??
So let's see these guys are participating in the destruction of the NS O&G, restricting the Banking, Insurance and investment sectors, and now attacking tourism and UK as a business hub for Europe.
Don't get me wrong, I believe in reducing pollution, reliance of Fossil fuels and the transition to renewables, but I do not believe in reducing the UK to a fifth rate state, whilst other economies laugh at us for our unrealistic and impoverishing net zero goals. We need a proper transition strategy backed with the appropriate technology which retains economic benefit for the citizens of this country and not simply export carbon so that we temporarily fell good whilst twiddling our thumbs in our mud huts. If the economy collapses so will the welfare state which many have complacently chosen to rely upon and I suspect for some, it gives them the freedom to protest and adversely impact ordinary people's lives.
I got bored whilst waiting for ENQ's sp to continue trending upwards, so I took a look at the historical dates of analysts announcements..................zzzzzzzzzz. What did I discover?
It appears that there have been 47 analyst reviews listed on LSE for ENQ between 2017 and 2023, an average of 6.7 per year although 2022 was a bumper year pre EPL when targets reached a crescendo of 47p, which coincidentally would have valued ENQ close to Krak's calculation of £900 MCap earlier today.
So where are the analysts targets for 2024? There aren't any and yet historically 57.5% of analysts predictions are made in the first four months of the year............so where are they? Perhaps they have all been fired for getting so wrong?
The average target for 2023 was 26.5p with the latest recorded being 22p which would require a 43% rise from our current price and being generous, perhaps Barclays 22p and Jefferies 20p are still valid so re-issuing a target is a pointless waste of time? However those targets were set eight and ten months ago and since then ENQ has hammered a reduction in debt with a bucket load of FCF, so based on what we know, although these targets have not been hit surely they should be revised upwards to account for said shed load of FCF hammering the debt whilst Brent is around 10% higher than last years average achieved, which is significant as apart from the dastardly evil 35% EPL most of it nets to ENQ's bottom line, although a small 16% of this extra FCF will be going towards our buybacks............analysts wake up - buybacks - less shares = higher target sp......!?.
Conclusion, we all get onto ENQ IR, Barclays, Jefferies and ask if they are snoozing and where is our new target and I would accept anything between 26-52p.............!
What next? Hmmmm - check Brent $19.19 - check the ENQ sp 15.4 - Oh dear! still 15 minutes before close.
Rom, what is interesting in there forecast for me: 1. They simply cannot account for what is happening in the current political and economic environment and 2. Their long term forecasts as one might expect, show a steady increase in forecasted Brent price.
What is certain is that any average price above last years average means serious extra $ in the ENQ account, even taking account of the disastrous EPL. At $91 we are pulling in roughly as extra net $7m a month equating to an extra 0.29p of share value per month (0.3p after 80m buybacks), equivalent to 2.7p added sp by year end if Brent stays at $91.
Everything points to the ENQ sp flying at some point, it is now potentially just 50 days to the next operational update in May which should show further debt reduction and I am now expecting the 0.5 ratio to be hit by then. The two key factors are now the price of Brent and whether any deal is announced. In my view, ENQ has been substantially de-risked and a re-rating is in order, I am disappointed that no new sp targets are out and perhaps IR needs to prod a few friendly analysts!?
ENQ Sp developing a nice steady trend line, roughly 24% up since 11th March, which is a percentage and trend punters will start to take note of, just need a little more herd mentality and the commencement of buybacks to tighten things up a little and BOOM!! 20's should be achievable in a few weeks and if not the next update will hopefully do the trick. After an appalling H2 2023, even my portfolio is starting to perk up, dropped back from DEFCOM 1 to 2 - phew!
As I type, Brent is $87.72 which is the highest since October 2023, so ENQ sp should kick off in a positive fashion in the morning.
I am hoping that last Thursday's news will have percolated through to some analysts returning from their holidays and we'll see some articles and upgraded targets for ENQ. Let's hope that this week will prove better for the sp than last week!?
Stevo - great detective work and post - best bedtime story I have heard for years!
If all this true - street smarts to AB and his team.
Dumbly, RNS timing - not sure the day before the Easter Break was the best timing...........
Pape - Good point about liquidity of shares, USD15m could have a bigger impact than I first thought.
Stevo, thank you for you answers and posts - I would never have guessed that the mention of three letters (EPL) could make me feel so queasy! I can see now why AB would go for infill/organic growth as a priority and only cherry pick the best deals to maximise use of the tax losses. This may mean that with $500m in cash and facilities, AB will go ahead with Bressay without further partners.
Some quality posts recently and I am still a believer that ENQ has turned a corner and the sp will rise from here but perhaps steadily rather than an sudden re-rate thanks to market sentiment towards NS O&G, but the figures and buybacks will eventually win out. I would not want to be shorting on the day buybacks actually start for real.