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Krak - Like you I struggle with a reducing MCap whilst net asset value is materially increasing, mainly in the form of reduced net debt thanks to FCF, today's ENQ sp even more confusing after a positive above expectation update and Brent rising, now $82.5.
As you say, around 20th Dec will be a date to watch, unless the directors start buying before then to soak up some slack, that would be nice to see as a vote of confidence, hitting 20p by year end would be a half decent Xmas present as would a decent deal popping out of the woodwork. My only worry is that if Harbour moved swiftly on the run up to the delisting and did a deal with AB, we could see ENQ go under the hammer for perhaps double the current sp, which would be a disaster for long termers like myself.
Am I dreaming?
Enq has just confirmed an increase in net asset value, Brent is up 1% and ENQ is down 0.65% and optimism over an indexing of EPL when the trigger price was far to low and potentially all profit is subject to EPL. Then there is the Coleman advert, mildly amusing and pointed but completely kicking independent UK NS O&G companies in the slats. I just wish someone would challenge the government perhaps on grounds of being anti-competitive.
Romaron, months ago IR advised that a number of discussions were taking place but none of them were at the stage that needed reporting in an RNS - so there is a reasonable chance something may be coming to fruition.
Now that it is clear the Government is unlikely to modify EPL beyond inflationary increases in the trigger price of oil and gas, my guess is that ENQ's hand in any negotiation will have strengthened. What I would like to know is whether we might expect a mega merge with Harbour or a scrap of of incremental production added to the portfolio to accelerate the use of capital losses and debt reduction. I do not see a major acquisition on the cards or a major field development without a cash rich partner buying in.
What I do want to see is a robust statement from AB confirming all is well and that buybacks will commence as prudently and practically possible irrespective of the 0.5 target. It should be made clear that all is well at ENQ and destruction of MCAP directly as a result of EPL should be taken advantage of with buybacks now. I would rather pay £2.5m now for 1% of the shares as an example compared with waiting to next year and paying a lot more, spoken as a committed long termer. I would like to see buybacks and director buys immediately in support of a robust operational update to return some value to shareholders, raise ENQ's profile in the market and protect ENQ from an aggressive takeover and to generally strength the company's standing/MCap. Bland updates are pointless, we need a robust statement on debt, finance, shareholder value, Swedish de-listing and direction............
Shareholders need some reassurance from the BoD, especially if the update figures are mediocre.
AB seems a decent sort, he has my respect for his achievements and that of the ENQ's team, but needs to put an arm around the shareholders, we are also part of the team!
Romaron - good point - I met someone recently whose sole job was to X/twittter on behalf of politicians and CEO's, plus I suspect Ed considers himself a Labour older statesman, so he'll beat the populist drum until elected and then look/expect for/a more senior cabinet position.
Glanced at review and not impressed - white wash comes to mind and an early sentence summed it up - "Therefore,
changes to the Energy Profits Levy (EPL) were not considered as part of the call for evidence".
No mention of the impact of EPL on financing investment (bank covenants being trashed) in capital projects.
Whilst 2028 firmed up for the end of EPL, a lot of words ruminating on the next form of tax to take its place and no idea of what constitutes windfall profits - $70??!!
Interested to see report apparently highlight what was coming in the Autumn Statement.............
Someone timed the announcement on the refinery to perfection, probably does not like EPL either, EPL probably hastened the decision, plus the lack of an EPL bone being thrown to NS O&G sealed its fate.
Very, very disappointed in the report, in Hunty and the Government, probably disillusionment over the whole state of play on EPL, or perhaps lack of fair play. The increased costs (transport) and associated carbon footprint and growing £30bn hole in UK GDP makes me feel poorer already.
It occurred to me that even without EPL, when POO is high, UK government gets windfall tax receipts, but it seems they hand them over as subsidies to anyone with a Green idea and apparently without checking the technology and viability - perhaps our politicians need to go back to school to brush up on their maths - there was something in the Autumn statement for that! EPL should be named the DWWWEPL 0r Double Whammy Windfall Windfall EPL
On the Upside, ENQ does have plus points including tax losses, let's hope AB can deliver some decent EPL figures in the update and way forward on all fronts - perhaps as Churchill put it, we are at "The end of the beginning", that was in reference to el Alemein, but it feels like EPL has put NS O&G on the other side of the NS/Channel on the beeches at Dunkirk!
Apparently, the update will be in early December after the BoD meeting and of course post the Hunty's Autumn statement tomorrow, I would guess the 7th or 8th December. Apparently, the BoD needs to approve the update before it is published, I am more inclined to think that the figures for the end of November will look better than the figures for the end of October. In addition, if as promised, the BoD is going to announce its strategy for buybacks, dividends and shareholders returns generally, perhaps that does require BoD approval and tinkering with before going public.
Sp now at lowest since early February 2021 which given the transformation of the balance sheet, production, POO and delivering on targets - IT DOES NOT MAKE SENSE!
Oxygen - interesting thought - Chinese company suing the U.K. government over NS. Just wish somone would get the ball rolling and EPL would evaporate and just imagine if EPL was refunded..............dream on!
Oxygen - good point about burning wood, both CO2 production and I myself have been surprised by how much of the UK's supply of logs are imported. If the government moves to curb burning logs, particularly rural communities will experience energy poverty.
Evi - interesting article - I can't understand why the NS O&G have not sued the UK government, I particularly can't get my head around retrospective taxation of an capital intensive industry and impacting financial covenants to the extent that impacts financial viability - Waldorf a case in point and of course ENQ's own reduced financial headroom.
After the rise in POO on Friday, I assumed we would start blue, but no - we are down 2.19% and POO is up 1.31% - I give up and can't work out why ENQ is so undervalued, even the 20m Swedish sell off represents just a 0.1% of the total shares.
Well, Brent above $81 again, so hopefully we'll end blue but not holding my breath.
Firstly, Brent rose almost 1% after UK market close on Friday, so expecting a good start tomorrow. That assumes Brent's price holds or goes up on Monday morning.
Secondly, global strife, falling investment in production falls inflation are likely to see a spike in POO and potentially sustain a higher price than $80 in the next 12 months.
Thirdly, I did a rough comparison of ENQ's sp as the price of Brent moved up and down through $80 in the last year, the staring sp was 23.75p and Fridays sp was 14.6p. Now does that make sense with ENQ making steady progress in meeting targets and reducing debt?
So, I compared 15 points on the graphs and the average ENQ sp was 19.04p, 34% higher than Friday's price, but if you averaged the first three months or 10 cross overs of the year the average ENQ sp was 21.03p or 48.6% higher than Friday's price.
This does not make sense because although we had the shut down, the company has reinforced the expectation of meeting this year's production targets and improved hedging should have increased revenue. So all things being equal, some higher costs cannot alone account for this dramatic drop in ENQ sp or undervaluation of it's FCF and assets.
This is why Hunty's Autumn statement (expectations low) and ENQ's operational update are so important for a re-rating of the sp. So what are my expectations? Hunty will do nothing material to EPL, but any concession could spring load the sp. What I would like to see from ENQ is a solid update confirming further debt reduction supported by higher end of production targets being met whilst Brent holding $80+ through period. I want to see the company explain shareholder value return (preference buybacks), Swedish de-listing no issues and could be followed by share consolidation. If there is now RNSable news, then I would like to see immediate director purchases and if at all possible buybacks starting even if the 0.5 ratio has not been reached.
Not expecting a 60p party any time soon but a 2024 30p Spring and 40p Christmas 2024 would do for now. DYOR
"Red Rock Resources Plc, the natural resource development company, with interests in gold, copper, cobalt, lithium and other minerals, announces that at the General Meeting, held today 17 November 2023 at 2:00 pm, all resolutions have been passed on a show of hands."
From the RNS, I don't think I have ever seen such wording , so who was present and what percentage of the shareholders were represented?
Well, AB's strategy can continue with all resolutions passed, I truly hope he pulls some rabbits out of the hat this week, we could all do with some solid and incontrovertible good news.
Well, that interview was not Bell's finest hour or even 9 minutes. I was not impressed and I would love to know what a speech analyst would make of his words and delivery during that interview.
It sounds like he has done a deal with the local farmers ploughing their fields - if you find any interesting rocks drop them in my stockpile.
If there is a placing tomorrow, I will personally yet again feel mislead and of course diluted again. Walter Mitty Bell can certainly spin a story, but even he was struggling today. My guess he is being cagey to reduce the chance of being accused of fraud in the future. The sad thing is that RRR does have some interesting licences, royalties and DCR but what are the chances of shareholders seeing any value?
Go on Bell, get a couple of these prospects across the line and prove us al l wrong before you run out of puff; love to know what he is on?
Like others, LGEN second largest holding to ENQ, I see LGEN as long term income provider and steady sp recovery play. It helps that most have a target price of 300p+ which is perfectly justified on dividend return alone and cover, strength of balance sheet and given the type of business, the effective forward order book.
Long term holder DYOR
Interesting IR tied the update in with the board meeting and requiring their approval, suggests either they are delaying to ensure the best report possible (in coming cash, debt reduction etc) or there is something worthy of a collective board decision in the update?
Disappointed we are resetting the clock for three weeks to an update but I don't think the delay is necessarily because of bad news.
AB/ENQ has been very quiet lately, the chances that they are working on something potentially get greater with time and the ENQ balance sheet/financing should be strong enough to do something. Months ago, IR said they were working on a number of possibilities but none of them were yet notifiable - time has passed...........
Just to remind everyone that there was an Operational Update on 24th November 2022, so I am expecting an update any day now. The second observation is that AB appears to regularly buy share in the late November/December time frame, so it will be interesting to see if he does this year.
My belief is that POO is likely to climb the longer Ukraine and especially the Israeli wars continue and we are coming into the winter season, so higher POO, a good update and AB buying would conceivably see an ENQ sp rally into Christmas, as historic data generally suggests this, about 80% of the time.
Dumbly, from your article - "The energy transition to renewables across the Western world is cracking. Remember, the Biden Administration's Inflation Reduction Act was all about 'sustainable' wind power... Time for another bailout? "
Add this to growing global conflict and energy insecurity - what don't you do? Suddenly increase the tax burden on NS O&G to drive out investment..........................Well done Sunnit and Soppy Hunty.
Equinors boss is sending a pretty clear message to the UK government and opening all the right doors to get that message across - where is AB?
I am beginning to wonder if the ENQ sp is being walked down for some people to make major purchases and the the government and sentiment do a U turn. We now know that the directors can buy following the Chairman's purchase, why didn't AB and the others not add a few at these prices or do they believe we have not hit the bottom?
Two weeks from an update and hoping for a positive update, but perhaps whilst the underlying progress is good, the headlines might not be pretty with a lot of costs/taxes in this period?
Letters, media, questions etc., need to keep pressure on government for meaningful changes not just sops from Soppy Hunty.
Government now nicely reversed into double whammy, having raped the NS O&G independents and accelerated the decline of a viable industry, they are now going to bale out the renewable wind industry just to hit some arbitrary green target. I still think there is a cost/technology gap between viability and that target. So, if you have saved a few quid or have a decent salary, just be aware that you are the ones paying for achieving this target, whether you realise this or not and you will be levelled down but I doubt if there will be any benefits left when you get there!
Krak, if the November update in a couple of weeks is not half decent - I too will loose patience. Having said that loosing patience has always cost me in the past.
So hang on for the update, confirmation of debt reduction and perhaps at some point EPL will be sensibly modified - that could be a game changer for the sp.