George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.
I also agree that we are in good shape. Remember that the interest on the bonds will be Payment in kind when oil prices are below 65 usd. That means that FCF will get a boost of ~70MUSD.
Another interesting thing is the pricing of Kraken oil - is there still a premium?
Assume Kraken oil is priced 60 usd - In addition to the 65usd hedge.Then total price will be +60usd in Q1.
60pparty: Oil @ 80USD H2 would be great for Enq FCF if so there will be a 60p party and I would like to come!
Londoner: epiphany121 explained what I was refering to.. 100MUSD were shielded from profitsharing during 2019 when this isnt the case for 2020 the FCF will be lower..
All the best!
FCF 2020 vs 2019:
-lower production
-lower oilprice
-no repayment on Magnus 100MUSD consideration
+lower Magnus Vendorloan repayment
+lower Capex.
+Kraken premium (The big question).
+lower interestpayments
? Working capital movements
=> FCF 2020 lower then 2019 (=361MUSD). But how much lower? FCF=300MUSD?
Pelle,
When AB/JS is guiding us that debt will be lower then 1500musd @ year end in november they surely have a good margin. Would be great if it will be closer to 1450!
2020::
How much production from Magnus are you projecting? Have you deducted 37,5% to BP? and what OPEX per boe are you using?
As usually I belive 73 kbopd is way to high for 2020. I guess more like 65kbopd. I Hope you are right!
All the best!
chilting,
Enquest official production numbers:
Production jan-june = 68,548
Production jan-okt = 68,501
Production july-okt = 68,430.
Even though the improvment of Kraken we have a decline in overall production in H2 2019. I belive that production 2020 will be lower than 2019 - we need to wait and see the guidance... maybe operational update on thursday the 30/1 ?
I also wounder how it is possible with higher production 2020 then 2019 when Thistle and Heather is offline.
Its also hard to understand how FCF will be higher in 2020 then in 2019 given that in 2020 Bp will recieve 37,5% of Magnus FCF. In 2019 BP had to repay 100MUSD before FCF.
Vendor loan repayment were higher in 2019 ~70MUSD and in 2019 I expect ~30MUSD 2020.
Disclaimer - I'm a long term holder of Enq and waiting for 10 SEK per share in 2021. So please dont accuse me of beeing a deramper..
I’m not claiming to have inside info - on the CMD AB told us and the audience that:
1) Thistle and Heather is expected to be back online before end H1.
2) The development of the western flank will start 2020. (Impacts uptime)
The decline of Kraken production is expected.
So basically no news. And therefore no insider info.
I do belive that the debt reduces by 30 MUSD per month but I have missed AB saying that - when and where did he say that?
I feel that Enquest have never been stronger than now and I am looking forward to the 10kr/80p party! I do not think I have ever seen a company valued so low as Enquest.
One needs patients like an elefant.. 2021?
I bet everyone is waiting for the H1 2019 results on the 5th of September.
It can be good to be aware that the debt reduction H1 will not be as material as one can think due to the magnus vendor loan for the 25% and the vendor loan for 75% that will be repaid during H1 of 69MUSD. In addition to the 69MUSD the compensation for the favourably working capital position at the beginning of the year of 50MUSD. Also the CAPEX maybe is more heavy H1 than H2 because of the transferred costs from drilling at Kraken.
So according to my calculations we have EBITDA in the region of approximately 500MUSD H1.
-Finance cost =100MUSD
-Magnus Vendor loan = 70MUSD
-CAPEX =200MUSD
-Abandonment cost = 10MUSD
-Working capitalposition= 50MUSD
= 430MUSD
-> Net debt reduction 70MUSD H1. => Net debt ~1700.
H2 looks better:
EBITDA = ?
-50/50 BP profitsharing = ~20MUSD (Dependent on oilprice and production ENQ have 100musd before profitsharing starts)
-Vendor loan = 0.
-CAPEX = 175MUSD
-Abandonment cost =10MUSD
-Finance cost = 100MUSD.
H2: FCF = EBITDA – 305 MUSD.
Breaking point for FCF H2 ~50USD/barrel
Hi Orien and heardy - sorry for a late answer!
TLW is a very different animal with the businessplan focused on prospecting.
PMO is more simular to ENQ but is having a premium with regards to EBITDA-multiples and debt thanks to prospecting and reserves in the development pipeline as I understand.
I have a simple metrix - if the company can deliver free cashflow++= which wíll not go to debt repayment and CAPEX of X$ (the company can use the X$ to dividends and/or share buybacks). The X$ of freecashflow++ will need to be sustainable over time (ie the debt level and the reservbase should be in the right ballpark).
Its hard for a compay to be valued less then 10 times X over time. So I argue that in 2020+ the company will have 200MUSD in frecashflow++ which will be sustainable and hence the value of the compay will exceed 2000MUSD ~10 SEK per share (or 85p).
As I understand - ENQ can't engage in share buyback or dividend before the RCF i refinanced or payed back.
All the best!
Hej everybody,
I think that the major delevering will occur H2. My full year netdebt is at 1500MUSD.
The vendor loan repayment is occuring in H1 and the working captial adgustment will be H1. So we are facing a H2 which will be 120 MUSD better then H1.
All the best!
Ajes
My calculations:
EBITDA =500MUSD (oil price 65)
Capex = 190 musd (based on 1/2 of guided year capex)
Magnus vendor loan = 70musd
Working capital movements = -50musd
Cost of capital = 100musd
Other costs = 10musd (abandonment expenses)
= net debt reductions = 80 musd
Net debt = 1700musd
Things that’s interesting:
Refinancing (new bank facility could enable the company to buy back bonds at a discount) = more rapid delevereging
Investment plans for 2020.
Increased guidance for 2019 to 67-73k bbls per day.
My prediction:
Enquest shareprice = 10 sek at the end of 2020!