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Chevron is gearing up to sell its remaining oil and gas assets in the North Sea, marking the energy giant’s exit from the region after more than five decades.
The American energy super major, which is the third-largest in the world by market value, confirmed on Thursday that it will market its assets in the basin, which may or may not result in a deal.
The sale could raise up to one billion dollars (£791 million), and the process is expected to be formally launched in June, reported Reuters, citing multiple industry sources.
Chevron was among the first oil companies to drill in the North Sea in the 1960s, but has since pulled out of exploration and production after offloading its drilling assets in 2019.
The latest planned sale would see it pull out of its remaining interests in the region, including a 19.4% stake in the Clair oilfield, west of Shetland.
It comes after a portfolio review, the company said, and follows a trend of Chevron selling its legacy assets to focus on new low-cost projects.
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The Clair oilfield, the largest in the British North Sea, is operated by BP and produces about 120,000 barrels per day.
The sale would also involve offloading Chevron’s interests in the Sullom Voe oil terminal, also in the Shetland Islands and operated by energy company EnQuest.
That includes the Ninian pipeline and SIRGE pipeline systems which are both linked to Sullom Voe.
A Chevron spokesperson said: “As part of Chevron’s focus on maintaining capital discipline in both traditional and new energies, we regularly review our global portfolio to assess whether assets are strategic and competitive for future capital.
“A portfolio review has been completed and a decision has been taken, to initiate the process of marketing Chevron’s 19.4% non-operated working interest in the Clair Field and associated assets in the UK North Sea.
“This includes various working interests in the Sullom Voe Terminal, the Ninian Pipeline, and the SIRGE Pipeline.
“The process is expected to take multiple months and may or may not result in a sale.”
O.K. Romaron, you are not interested and you don't need to respond to this post. I accept the point you made and the fact that the subject has been discussed on the board. However, does it not occur to you that the BoD may have realised they had "options" after announcing the buybacks regarding share allotments etc. My question is - why did they not simply buy 25m shares for the ENQ treasury? Do the same rules apply as with buybacks? Why water down the already limited value of buybacks, it did not seem necessary?
In summary, I think the BoD realised they had an option to allocate some of the buybacks to meet the upcoming requirement for allotted share, why not, but in doing so they unnecessarily raised some little or relatively inconsequential questions.
Romaron, I take all your points but I do not understand why they have mixed up the 25m shares for treasury with the buybacks, surely they should have just bought the shares and then started the buybacks?
The AGM is on 30th May!!
Previously a resolution was passed to buy back up to 10% of ENQ shares in any year, I presume this still stands or the BoD will need to allow investors to vote on a new resolution. One presumes that the buybacks can continue after the AGM, perhaps for another set period. I don't think the BoD would want to delay the buybacks, the amount is so small and therefore it would not look good in the eyes of the market. The BoD has pretty much hit or exceeded all other targets despite EPL.
The sp is still well above $80 and I think will rise again in the remainder of H1 and in H2. 15 days to AGM, less to update.
Based on 174 trading days and a daily RNS cost of £250, that would be £43,500, the number of buybacks is getting smaller by the minute. Having announced buybacks, I would have thought that it was in the company's and investors interests to get as many buybacks in prior to the next update?
Just looking at the trading today and it appears to be virtually all sells, the site I looked had 22,100 buys to 866,639 sells, I assume this is wrong unless we are going to see a decent amount of buyback today.
Sp nicely in the 16's and touching 17p earlier today and Brent up at $84.30, hopefully we'll end well today. Whilst we have dropped a little on recent highs, the average trend line since the 12th March has been maintained. If this trend line continues with debt reduction, we should be hitting 18p by the end of the month, a good set of figures with the update could see us celebrating a 20p party with any luck. Exciting times!
I hope to be at the AGM this year as I am heavily invested here at ENQ, keen to meet the management and hopefully get a better feel for their direction and strategy.
Looking forward to the imminent update at just a couple of weeks away and seeing some hard figures for FCF and debt reduction over the last couple of months.
I wish ML would get on with these purchases, if the sp starts climbing they may be limited and we want to get the first 25m shares out of the way. The sp was down yesterday, they should have been buying a boat load!
Sek, yep, understand your point, but this tax is not applied to all businesses, so why can't a minority that is suffering punitively challenge the government? If the tax is based on the making of excessive profits, where are these profits? Why does this tax not allow for all tax losses, other businesses are allowed? I am sorry, sovereign or not, EPL is unfair and has disrupted the market and is damaging the UK economy. If it cannot be challenged, personally, I would de-list from the UK stock market and list elsewhere, still have to pay EPL but the UK Government would not benefit from other future tax revenue.
I hope they (NS O&G companies) start making noises about a legal challenge a.s.a.p. The companies should all get together (even through the trade association) and put some money in a pot for a legal challenge. Such a challenge may even help the sp if people believed it might be successful. Any successful challenge would have a massive positive impact on the sector whether from increased profits, reserve valuations and economic stability/environment perspectives.
ENQ in the low 15p and Brent up at $89.59, we should be having a decent bounce purely based on the Brent price, but nothing, plus volumes have been very low. I cannot understand why the analysts are not issuing or reiterating targets. It seems that ENQ and NS O&G have fallen off the radar. I just hope that ENQ's ridiculously low valuation represents a coiled spring that will eventually fire the sp upwards. I can't remember owning a share that has been so incredibly undervalued, particularly given the level of debt reduction - why does the sp not reflect the ENQ's net asset value and FCF?
Jan, I know this half million trade would normally be a UT and appreciate your responding. I was surprised that there should be such a large UT on such a low volume day, hence my wondering if it were a buyback trade. Thank you for putting me straight.
Topped up again, if Brent holds at the $86-88 range or higher, then the sp will surely rise into the next update, backed up by buybacks - I wonder if the late almost half million trade was the start of the buybacks. I assume ENQ will want to get a couple of purchases and then RNS to say they have started buybacks.
It appears the Arms Industry is about to have its own windfall moment, so I look forward to EPL being applied to any excessive profits!?!
Back to ENQ and EPL, when is the government going to announce the new EPL baseline figures?? Any increases should help a very little to underpin share prices of NS O&G's.
About time - a few more positive broker targets would be helpful and over due in my opinion.
Sp performance has been dismal considering Brent is well above $88.
Just a month to the next update and in the meantime the price of Brent, buybacks, positive broker targets should all play into a higher sp, even in the absence of any other positive news. Plus AGM at the end of May.
I have been averaging down since the EPL (35%) news and only see this depressed ENQ sp which is barely off the bottom as the last remaining buying opportunity at these levels. 33p today would be amazing but I think this target will be surpassed over a two year timescale.
Interesting article and I particularly liked this paragraph, I had not realised that the figures quoted for gas powered electricity had such a large proportion of tax included as a opposed to the subsidies in renewables.
"The offered price for large scale solar at £84/MWh is more than twice that quoted by Newkey-Burden in the National Grid sponsored article. In fact, the prices offered to all renewable technologies are more than twice those in the Generation Cost report. Third, the £114/MWh price quoted for gas includes an assumed £60/MWh in carbon taxes, meaning the real cost of gas fired electricity is only around £54/MWh. Finally, these levelised costs of energy estimates do not include any allowance for the cost of backing up intermittent renewables, nor the extra costs to expand the grid to bring power from remote offshore locations to the source of demand. Moreover, the costs for existing renewables are even higher than those offered in AR6. Contract for Difference (CfD) strike prices for the year ending March 2024 were £173/MWh for offshore wind, £109/MWh for onshore and £106/MWh for solar, as per the LCCC.
The first “myth” is confirmed shown to be true". Clean energy is too expensive!
Personally, I think a few people are using and or effectively creating these small swings to trade, I have to say when I saw the price yesterday at 17.46p going in the opposite direction to POO, I was tempted to trade a few, unfortunately, I was about to go into a meeting and the opportunity passed. Having said this, I would not want to out of ENQ when the next big news arrives or for the May update!
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!