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Hello Pelle and E!
Ok - the underlift/overlift position of 50MUSD I stated were derived from the conf call - "Favoral capital movements in working capital" which I translated in to underlift/ overlift position. I should call It for "Working capital movements" instead.
J Swinney:
"It should be noted that we also had a favorable working capital movement around $50 million in the year, which is unwound in the first couple of months of 2019"
The Capex is 275M including 100M of earlier years occured expenses.
I also had a mail conversation with IR and they pointed out : Cash abandonment expense – Enq have historically spent $10-$20m.
I am calculating: FCF =~ EBITDA-CAPEX-"Finance cost" - Vendor Loan Magnus 25% - Vendor Loan Magnus 75% - Underlift position - 50% BP-share of 75% (post 30M Vendor and 100M ENQ)
CAPEX=275
Vendor loan magnus = 39+30= 69MUSD.
Finance Cost (Conservative assumption ~200MUSD).
Underlift position ~50MUSD
50%BP-share of 75%=~50MUSD
So FCF=~EBITDA-650MUSD
And EBITDA @ 70bbls/day and 70 USD =1125MUSD (Some reduction for Malaysia so 25Mbbls instead of 25,5Mbbls)
=> FCF= ~475MUSD
Hello Pelle!
Slide 14 on the H1 2018 PPT there is a cashflow breakdown - and they have "Net Finance & Others" =159,7MUSD and "Non cash interest capitalisation & FX"=35,6MUSD.
Since there is alot of different transactions like.. Vendor Loan, Pre sold oil (Mercuria) etc.. I think it would be helpfull with at guidence.
For 2019 my conservative guess @ 65 is:
Cashflow from op: 900MUSD
CAPEX: -275 MUSD
Interest & Others: - 350
---------------------------------------
FCF: 275
Net debt end 2019= 1499MUSD
I share your view - 2 years and we stand in 10 SEK.
We are all probably woundering what's happening with the kraken FPSO.. and why isn't the problem solved..
Does anyone have the details about the Kraken FPSO-leasing deal?
From what i understand the company had a lease liability of 749.1 30 June 2018. (payed down aprox 50MUSD in H1 and payed interest of 28,5MUSD for H1 2018. So for the full year 2019 the total "lease cost" will be ~100+55MUSD =155MUSD.
For 2019 the lease liability will be 1/8 less then 2018, will the payed interest part be 1/8 less then for 2018 since the lease liability is reduced? 1/8 of 55 MUSD = 6,8 MUSD?
The total cost of lease and interests is rougly 350-400MUSD for 2018. In H1 there were extra finance cost relating to the refinancing.
Cashflow chart full year 2018 could look like this:
Cashflow from op : 762MUSD
CAPEX: -225 MUS
Net financing & Other:-400MUSD
-------------------------------------------------
FCF = 137MUSD.
Then + 30MUSD RI (wells Magnus 19)
+ 50 MUSD prepayments Abandonment costs
-> FCF=217MUSD resulting in a net debt start 2018 @ 1991MUSD -> net debt end 2018 @ 1774MUSD.
I have written to Enquest IR asking them to guide investors on the "Net financing and others" for 2019 at the full year 2018 presentation.
Hello Pelle!
Net Debt at 30 june 2018 = 1973
1973-141=1832 - 27 (RI (Magnus Wells)) = 1805.
I think time will tell. There is a lot of moving parts like oil produced / oil sold ..
But year end net debt should be somewhere 1800-1850.
Then the net debt will be down ca 10% this year and the interest payment will be down 10%, more FCF.
Interesting questions:
1) CAPEX for 2019?
2)Will there be a refinancing - is it possible to reduce the capital cost?
3) Are the company still looking to sell part of Kraken?
4) Expansion plans in SE Asia?
:) Ajes
EBITDA 2018
H1 was messy with the Vendor Loan for 25% Magnus ~27MUSD (Not stated as debt as I can see), Mercuria payments (Stated as debt) ~27MUSD. Then I think there were a onetime fee for the refinancing deal in 2016 that was charged in H1 2018 ~10MUSD.
And from Q4 15% of Kraken will be used to repay the Oz facility. So H2 will also be messy.
In H1 2019 - the 25% Magnus will generate Cashflow. The Mercuria deal will end in Q2.
But Magnus 75% will be abit messy. The good thing is that The first ~20MUSD will go to BP (Vendor Loan) and the next 100 MUSD will go to Enquest (For the cash payment) and after that it will be 50/50.
From the december update:
In Oct net debt was 1771 but then 100musd were used to pay for Magnus. So we were actually in 1871 (inc Magnus). So perhaps we stand in 1830-1850MUSD net debt at the end of 2018.
I haven’t done a spreadsheet just rough calculations. But I basically agree with your approach! The Oz financing is not necessary to use since it replaces another loan perhaps slightly lower cost but that’s not material in this context.
There is one thing I wounder regarding the tax and Magnus - perhaps just wishful thinking:
When Enq owns 100% of Magnus is 100% of the cashflow shielded from tax? And will BP benefit from the tax shelter? Example 100musd profit oil should be taxed at 40% but thanks to Enq tax position no tax will be drawn - will BP receive 50 Musd and Enq 50musd or will BP receive 50 * 60%= 30musd and Enq 50 * 40% (Tax BPs share) + 50 musd =70musd?
Hi Pelle! Is the 100musd that Enq will get back from Magnus in 2019 included in your numbers?
You know:
1) Loan repayment to BP 100/5 + interest
2) Repayment of the consideration 100musd to enq.
3) 50/50 profit split of the 75% share
Best regards, Ajes