Member Info for chilting

Kraken
AB is clearly trying to maintain the growth of the company while paying off debt - a very difficult balancing act.

Magnus is a prime asset and at this price is a real bargain - the potential of this field is enormous, especially as oil recovery technology improves..

I personally have no problem with dilution if the capital raised is being used to grow the company, especially as in this case the cash is being used wisely.

This is all very reminiscent of Autumn 2016 at the time of the last rights issue for Kraken financing.

Anyone who was a holder then will remember that after that rights issue the SP almost doubled to around 50p by the end of January 2017 only to fall back again when POO fell.

Magnus is a magnificent asset and a perfect fit for Enquest. There is still a massive amount of oil but a lot of it is currently classed as unrecoverable.

With Enquest's ability to exploit diminishing assets, I think that Enquest will get far more oil from the field than is currently considered to be possible.

Its looking like short term pain for long term gain ???

Still at least AK is signed off and production looks set to improve with added water injection.

Lets see what the market thinks.

I think on the run up to the financing being confirmed the market will be thinking worst case scenario and that will reflect in the SP - it ALWAYS does.

After funding is confirmed with the majority being borrowing with maybe just a little dilution or more likely an add on bond issue the market will relax and the SP will recover to above the level it was at the beginning of the week.

Don't forget that at some stage the institutions are going to start buying in here big time - they will underpin our investment on the run up to first production.

In situations like this the main priority is to reassess the risk - in this case I think the extra expenditure, especially on the tunnel actually reduces the risk. The information released today reinforces the believe that the construction project will complete successfully.

In the short term the best answer is just to hold and watch - we are still likely to get volatility unfortunately until the funding is sorted - support is currently at just 22p.

In the longer term just see how things pan out with the financing, wait for the SP to stabilize after stage two then make a decision on how much stock to keep - always try and spread risk.

It takes a brave man to admit that the original concept wasn't quite right and then to fine tune it when more detail/information become available - especially when costings increase.

The thing is the fine tuning could determine the success or failure of the whole project.

To often we see public projects where politicians stick with the original plan to save money even when it is wrong.

The extra cost then is for a wider diameter tunnel and for the thicker lining that is needed because of the increased diameter.

The systemic study that was completed in May hopefully didn't find any additional problems with rock strata on the route but presumably the big unknown is ground water - or am I wrong ???

Ground water is the big enemy when tunnelling as it has to be pumped away and slows things down considerably.

Also they were talking about increasing the thickness of the tunnel lining - that maybe suggests that maybe that there is more ground water on the route than originally thought ???? - another reason for the extra cost.

Yes, hopefully - Navion Scandia is due to sail at 8am on Sunday morning - no confirmation yet that it is going to Kraken.

Yes, I think that is down to Sirius - they are so good at pushing a positive news flow that when there is a negative to report the market overreacts.

The good thing here is that the SP will recover so we can just sit and watch or top up - unfortunately I topped up yesterday.

Sometimes there is no way back - remember Circassia anyone ??? - 60% and no bounce.

Current level on Castellain is 5.97% - this just records holdings over 0.5%

New data out this morning from Euronext - includes all stock out on loan in August is 9.02% - up from 8.37% in July.

Shorts are down on Euronext from 4.86% in July to 3.88% in August.

It seems that a large part of the additional capital required is to fund the tunnel.

Why is this ???

To get some understanding of the complexities of tunnel building, this is well worth a watch -

https://www.bbc.co.uk/iplayer/episode/b0bdmswp/ad/the-five-billion-pound-super-sewer-series-1-episode-3

I think oil traders are just hiding from risk at the moment and POO is likely to stay around this level for the time being.

The main risk still has to be trade tariffs imposed by Trump on the Chinese and maybe Canada as well.

The talk tonight in Washington is about envoking the 25th Ammendement - good luck to them !!!

https://www.washingtonpost.com/news/opinions/wp/2018/09/05/trump-isnt-really-running-things/?noredirect=on

With an established crop like Tea the benefits would not seem to be so dramatic but they are nonetheless good.

It would be very interesting to use Poly4 to establish a new crop of Tea - I think then that the results would show the true potential with much more rapid establishment. Then if the crop was regularly fed you would I think see a much more dramatic improvement in yield.

On of the key bits of this report is at the end - re for Cereals - Inclusion of Poly 4 lowers chemical blend application - basically Poly4 can be substituted into other fertiliser mixes - I guess ICL will be doing this already.

An awful day, we just have to hope that the SP isn't dragged down more tomorrow.

SXX fell as well - even after I topped up - wonderful !!!

Oilman
It just bounced of the support - there is strong buying at this level - why should it fall anymore, unless there is bad news.

To suggest anything else is just inexperience or mischief making.

We would seem to have bounced off the support at 31.90 - good news just around the corner - strong buy.

http://uk.stoxline.com/q_uk.php?s=SXX

The Fool should offer free subscriptions to anyone taken in by their marketing articles.