The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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.
Stevo, I do not see how EPL can be applied to Bressay sale unless it has a book value of zero and the sale price or a proportion of it is regarded as pure profit on a NS asset, surely that cannot be the case? If it were the case not only would the government have stolen 35% of the profit on operations but 35% of element of an asset showing above book value. This has some logic but is another element of the scandal if true that had not registered with me.
We need clarification on the Bressay deal, sale price, rumoured loans to Rockwell and tax implications - I am now confused following the various comments, RNS and presentation Q&A's etc.
Overall not a good day despite an excellent RNS. Bad timing for the RNS but hopefully the positive news will percolate through to some positive analyst reports and upgrading of targets in the next couple of weeks.
Nice one AB! Say it how it is!
Keen to see what the pundits are saying, I clicked on the Alliance News article under ENQ Share News.
I can report it is sloppy journalism by someone possibly ill qualified to comment or lazy, so I have complained to the editor via the email address at the bottom of the article. I am not going into detail, but it does not mention massive net debt reduction and whilst it correctly states that no dividend will be paid again this year, it fails to mention the confirmation of a share buyback scheme.
If you agree with me about the article and can be bothered, please send the editor a missive - thank you.
I thought the new production guy was good and even with his dour style, still managed eloquent answers and and a higher degree of confidence and enthusiasm than AB and the new FO.
Given the good news story from ENQ, I thought AB was hesitant, but overall, this is a team that is delivering and has clear but perhaps cautious plans for the future, which on balance is good.
Well Brent up at $86.81, a good results by any standards and all the sp can manage is 2.5%, let's hope for a little more by close following some new targets from the analysts/brokers.............?
Krak WTF!!!!! The 70m reduction in debt should have been worth almost 3p alone on the year end sp, we should be in the 16-18p bracket and then confirmation that buybacks will start in 2024 should be worth another 4-5%+.
I just hope the ENQ share spring is properly coiled and we'll see a re-rate soon.
Phut fizzle..................a couple of traders cashing a few shares in has taken the shine off the opening sp, market needs to digest and post 09:00 I think we'll see a rise and end with decent Blue today.
ENQUEST PLC will be holding a Results for the year ended 31 December 2023 meeting on 11th Apr 2024 at 2:00pm BST.
Presentation at 09:30 this morning.
0.5 target close, so I reckon buybacks around end of H2 but DURING 2024. It is an action not just a policy, so very positive for the sp and future. ENQ BoD has the authority for 10% buyback currently, so there may be more.
Appreciate, there will be some shutdowns but so far production at top end of forecast @44,500 and Brent above last years average I think, so also very positive.
Debt @29th Feb '24 $409.6m or £325 roughly.
Everything seems to be on plan and as expected although buyback programme a little conservative, but heyho it has started and a conservative approach means faster debt reduction and room to manoeuvre.
POSITIVE - looking forward to presentation which I assume will be later today.
Board of Directors shake up and addition of Rosalind Kainyah MBE - possibly to help with deals and M&A activity.
RNS out and committed to $15m share buyback in 2024.