AGM24 May 2018 20:47
Some very helpful notes someone took for us from AGM
Very well attended AGM. Got to ask all the questions we wanted and Directors answered all questions during meeting and after in foyer.
1. Magnus very profitable and recent new well excellent.. 3rd longest in NS.. Historically previously drilled but didn't reach target// Enquest have done it for a third of the cost and results are excellent. Onto the next one.. This is a major asset.
2. Cash and cash equivalents looks weaker compared to year end.. but the company is very profitable at this time.. Current hedging was 2/3rd 1H 2018 and 1/3rd 2H 2018 on those hedged.. about 7.5m barrels.. balance is on the open market.. Discounts range from $4 to $6 depending on timeframe of customer.. You basically can say as a rule of thumb, every tanker that leaves Kraken is worth $30m . Cashflow looks weaker now due to timing of payments..eg: interest/suppliers invoices, but the cashflow is much better now. Wouldn't give current net debt position or movement in net total assets from 1 Jan to 30 April to ascertain increase in shareholder wealth creation..
3. Receipts from Kraken are about 30 days from loading.. 15 days from pipeline SV. Kraken is still being tested, so the timeframe between loads varies.. Those that watch tankers and see a few days over the last one should not be concerned.. Some will be quicker than others. Expect 50K/day, but no more.. to protect the wells/equipment. Kraken farmout process started earlier in year.. sort of gave the impression it was still being looked at.. if someone was interested.. Didn't think there was anyone at the moment.
4. DC4 planned for Q4 etc as per RNS.. but signoff on Kraken not dependant on this.. Signoff is close... but no date given.. but it's coming.
5. $50m debt repaid in May 18 so, Oct 18 tranche is that much less with small interest saving, but depending on receipts, it's possible to make another earlier to establish a trend the market can take note of.
6. Debt is still too high, but focus over 12 mths is to reduce it as quick as possible , then perhaps a chance in 12/18mths of restructuring it.. when it's a more comfortable level. Banks very supportive of Enquest. Resolution 18 regarding share buy backs was approved, but basically the discussion confirmed repayment of debt came first, and share buy backs unlikely over next 12 mths.
7. Decommissioning is a business they will expand into, but not a priority.. makes money , tight margin.
8. When we get the sign off Kraken RNS , don't expect the SP to jump up by that much.. The lack of institutional investors is what's creating the lull in SP.. Even though the SP was higher last year with less production and lower Oil prices.. the SP isn't higher now, because II''s especially in Norway and others have sold out..
Sign In
Follow the stocks
