Member Info for bransonbull

Agreed - let's hope they don't know something we don't. But the latest TU reassured me ...

How long before upgrades from same analysts that marked us down?
Kraken's analysis of moves since Jan are very telling. This is being held back down to fears stoked by analysts of reserves downgrades at Kraken...but RNS told us FPSO and weather-related, not reservoir. Also Magnus might get revised upwards.
When this moves..........it moves very fast.

Cowardly disappearance. We did forewarn that ENQ @ 18p was the bargain of the O&G year...

My SP target just upgraded to 42p for summer 19. Premised on Brent @ 75 USD.

Warning - i own the shares & my analysis is about as flaky as RBC's.

It's a pity Fernan sold...one of the best posters.
But I'm fcf, overly pessimistic. Did AB not state that he expected significant ebitda reduction by end 2019. I presume substantial deleveraging takes Fcf...and he alluded to this.

He was misquoted. He said there's a special place in hell for politicians who sold Brexit without a proper plan for its implementation. He is right.

How long before the analysts emerge with their tales between their legs with major upgrades? I'd estimate April when Brent will be 70-75 USD.

https://www.energyvoice.com/oilandgas/north-sea/192031/enquest-forecasts-20-production-jump-in-2019-despite-kraken-glitches/

PMO has great prospects but a rerating may come for ENQ since we have lower debt, and a much higher % of our production is oil. Nerves calmed, the rest depends on Brent....

Retaining your shorts, you certainly are gambling! This could spike any time!

Hello all. Great update. Brilliant Magnus performance, grateful no Kraken reserves downgrade.
Thanks to posters that have a lot more technical insight than i do. At least this should stop the trolls...from speculating.
To me this TU casts major doubt on validity of the RBC and Barc downgrades.

Seems to be having a positive impact on the SP

I've had enough of M Gove

Id imagine if Brent oscillates in the 65-70 range in Q2-Q4, ENQ will rerate to 30-40p by the summer. Let's hope poor MINERB closes his short by then.

give it a rest. Deramping the entire w/end and all day today...to what end? The 0.4p drop is entirely Brent-related

Ps the 7% bonds don't exactly look stressed
https://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary/XS0880578728IEGBPUKCP.html

They obviously have not read the Moody's projections of high free cash flow. Or seen the steady recovery of the bond price.

Quoting RBC when they got the covenants so badly wrong they had to issue a retraction is a bit embarrassing.

Roll on seasonality. Dyor

Yes, Kraken is not producing as much a single quite hoped but Magnus purchase compensates and bring a our production total up. In many ways, this is no different from PMO. solan a disaster, 1.85 BILLION USD and producing 5000 BOPD. catcher and EON deal compensated for Solan's under performance. the low SP is sentiment . By time our hedges come off hope Brent will have recovered. Seasonal demand factors should be much improved by then

The recent SP fall was linked to the 2 broker downgrades. But those must have been prompted by the 40% fall in POO. But since Xmas Eve, Brent has risen more than 20%. I bought significant amounts following these declines. Moody's projections given we are hedged for 1st 3 months and seasonality means Moody's can't be far off, surely?
Not invested as investment advice.

Continued....

Higher sales volumes and realised prices (net of hedging results) combined with lower operating unit costs should lift EnQuest's EBITDA (as adjusted by Moody's) to around $760 million compared to $266 million in 2017. Moody's estimates that EnQuest will generate FCF of around $285 million in 2018, after capex of $250 million that has significantly reduced following the start-up of Kraken in June 2017. This should translate into a significant decline in leverage, with Moody's adjusted total debt to EBITDA falling to 3.8x in 2018 from 11.6x in 2017.

Looking ahead, Moody's projects that incremental contribution from the 75% interest in Magnus (assumed to be acquired on 1 January 2019) combined with the continuing ramp-up of Kraken should lift EnQuest's average production by around 20% in 2019. Assuming a Brent price of $65 per barrel and capex of $250 million, EnQuest should generate EBITDA and FCF of around $950 million and $450 million respectively in 2019. Moody's expects that this cash surplus will be used to reduce adjusted debt, including inter alia the amortisation of the secured term loan, BP vendor loan and BP's profit share. Overall, Moody's estimates that this will help bring leverage down towards 3.0x at year-end 2019.

Moody's considers that EnQuest's current liquidity profile is adequate. At the end of June 2018, the group had debt maturities (including finance lease obligations) of $570 million falling due within the next twelve months and held cash balance of $189 million. It also has access to a $75 million revolving credit facility (RCF) under its main senior facilities agreement (SFA) maturing in October 2021, out of which $6.8 million was drawn as of 31 July 2018.

In September 2018, Enquest secured a $175 million financing from funds managed by Oz Management, which was used to repay the $195 million amortisation due under the term loan of the SFA in October 2018. Looking ahead, based on Moody's current oil price assumptions, EnQuest should be able to meet its debt maturities (including aggregate term loan amortisations of $430 million scheduled in 2019 -2020) out of internally generated cash flow.

Moody's upgrades EnQuest's rating to B2, stable outlook. London, 16 November 2018 -- Moody's Investors Service, ("Moody's") today upgraded EnQuest PLC's (EnQuest) corporate family rating (CFR) to B2 from B3 and probability of default rating (PDR) to B2-PD from B3-PD. Concurrently, Moody's also upgraded the senior unsecured rating of the $677.5 million high yield notes due 2022 to B3 from Caa1. The outlook on all ratings remains stable.

RATINGS RATIONALE. The rating upgrade reflects the positive effect that Enquest's recent exercise of its option to acquire from BP p.l.c. (A1 stable) the 75% equity interest in Magnus it does not already own, will have on its hydrocarbon reserve base and production profile. The deal should add approximately 60 million barrels of oil equivalent (mmboe) to the group's 2P reserves of 210 mmboe as at 1 January 2018, and boost its production, which averaged 54.0 thousand barrels of oil equivalent per day (kboepd) in H1 2018, by 11.4 kboepd immediately post closing expected to take place prior to year-end 2018. In parallel with the continuing ramp-up of production at Kraken, the acquisition will give a significant boost to Enquest's operating profitability and free cash flow going into 2019. Moody's considers that the impact of the deal on Enquest's financial profile is mitigated by the funding structure of the acquisition. The consideration of the transaction comprises (i) a base of $300 million (plus or minus customary adjustments), which includes $100 million to be paid in cash and a $200 million vendor loan from BP, and (ii) the entry into a cash flow sharing arrangement whereby BP is entitled to 50% of the net profits arising from the 75% interest (subject to a cap of $1 billion). Subsequent to exercising the option, EnQ raised $138 million through a rights issue that will be primarily used to pay the $100 million cash component of the base consideration. In addition, vendor loan repayments and the deferred consideration will be payable to BP out of the cash flow generated by the transaction assets. It is expected that at year-end 2018, the vendor loan will have already been reduced by approximately $100 million of backdated cash flows from the 75% Magnus interest that will have accrued to EnQuest since 1 January 2017, the economic date of the transaction. Based on pro-forma financial statements published in the rights issue prospectus, EnQuest has a provision of $418 million immediately post closing, representing the outstanding vendor loan and BP's entitlement under the cash flow sharing arrangement discounted to present date. Moody's will treat this provision as debt. However, this adjustment to debt will be partly offset by the reduction in adjusted total debt of around $270 million (net of the new $175 million Kraken financing) that Moody's expects EnQuest to effect out of free cash flow (FCF) in 2018. Higher sales volumes and realised prices (net of hedging results) combined with lower operating unit costs.