Member Info for chilting

The world according to Samuel Shenton.

I am still very undecided about ENQ because of the windfall tax, also we need to see signs of an economic recovery or Brent may fall back on reduced demand.
Its good to follow Brent because it acts as such an important bellwether for the global economy and fortunes of most shares.

Kraken
I always take an interest in companies on my watch list and also in the oil price.

Monkey
No ENQ investment since I baled out when the trading update revealed the fall in production last November.

Actually - facts for the record - not boasting - up 293.11% with CWR a long term hydrogen fuel cell investment.

Up 209.07% on ITX - long term investment in green plant based chemical company - also a spindok investment.

Lost about 10k on Enquest over the same time span with one small payback of 1k when I traded short term after Covid.

One thing's for sure, there are a lot of investors sitting on the sidelines waiting to buy back in, not just here but right across the market.

I wonder if there will be a strong signal to buy or will investors just drift back?

The usual case of shooting down the messenger.

This board has more than its fair share of Samuel Shenton's who constantly deny what is obvious to the rest of humanity.

We have got to a stage where active action is needed to combat climate change and that means cutting fossil fuel usage.

All energy providers including the the oil and gas industry have a leading role in facilitating that change.

It seems that Enquest will be actively involved in the renewables industry at Sullom Voe and will also embrace electrification technology for oil extraction.

But, still we see that some investors simply don't get and will not accept the overwhelming scientific evidence and still maintaining that its business as usual.

The oil companies that do move to renewables will ultimately be the winners, attracting new investment from the new breed of climate conscious investors - this will reflect positively in their share price.

BNino
Don't be too hard on Eqtec, struggling to get capital projects over the line is the norm in the UK, especially when they involve new tech and planning with lots of different contractors.

Personally, I think Eqtec need to look at providing more off the peg small scale waste solutions to provide working capital - farmyard waste to power the grid for example.

It seems Petrofac will take a big role with procuring funding for Billingham - this has to be very good news, they have considerably more experience and muscle than Eqtec.

Likewise with Southport, Wood have an active role - all good news this morning after the setback last week.

The problem is that ESG promises have to be met because we are starting to see far more serious consequences of our over reliance on fossil fuels - it was floods in Northern Europe last summer and extreme heat this summer.

The point is that the economic consequences of not doing anything to reduce fossil fuel use are even more damaging than forcing change to renewables - neither course of action is palatable from an economic point of view.

Yes, its starting to look like long term buys now will give excellent returns, just as they did in April 2020.

But its much more difficult to call the bottom this time around - I am not sure we are there yet.

mrc
The simple explanations are usually correct - traders dipping in as Brent rises and then selling when Brent falls.
The lack of momentum that creates explains why the SP is so undervalued even with Brent at these high levels.

Not enough long term investors, especially institutions, want to invest in UK based oil companies, unlike the US where oil companies shares are performing much better.

Whilst there is a solid base of long term investors in UK based oil companies, I think that it is the traders who hold the balance of power and have done for at least the last five years - even to some extent with the oil majors.

Oil share prices are simply governed by movements in Brent and traders simply dip in and out as they gamble on the fluctuations.

However, Enquest's share price can clearly benefit big time if debt can be substantially reduced while also paying their share of the windfall tax - the traders will pile in if that can be achieved.

I honestly cannot see any point in adding now, even to average down, the SP is probably going to stay around this level for the foreseeable future and may even go lower if the market tanks, so its much better to wait and see how things pan out, even at the risk of missing buying at the lowest point.

1663
i don't think is quite as easy as that - slowing the new work down now would probably result in similar cash flow problems in the future with all that is gained at risk of being lost.

It probably is the case that to grow the company DP has to go at it all guns blazing, but the hurdles are much bigger at the moment - hence the peril and the cash raise.

Any company involved in capital projects is going to have cash flow problems from time to time.

The problem for EQT is that its involved in some large projects and its only a small company without the depth of resources, and because the pipeline is relatively new positive cash flow hasn't yet been achieved.

The growing pains have been massively impacted by the current economic situation and the Covid pandemic.

As investors we are now in the position of simply hoping that the cash flows in - there is great potential that it will - or seeing the company fail.

Personally I rate a positive outcome at 60:40 - it went down a notch after todays capital raise.

muldoon
Early morning fuzz - thank you for the correction - I was referring to EQT

The placing was hardly unexpected with ITX growing at a fast pace in a hostile economic environment with inflation and interest rates increasing.
Investors need to remember that companies list on AIM with the primary objective of raising funds when needed - that's why these are high risk investments - you will get diluted.

There are advantages now - the directors have more skin in the company and growth can continue.
The net affect is positive for ITX and long term investment but negative for investors in the short term - the SP will probably remain the the doldrums.

Yes BOO have fallen from just under 300p a year ago to 56p today.
They capitulated to the inevitable earlier in the week and started charging for returns - £1.99 for an item costing £10 will probably hit their clientele hard and will inevitably impact sales.
It will be interesting to see if other retailers bring in return charges - I guess they all have it under consideration.