Member Info for colebrooke1972

Macquarie:

Just a quick one on Kraken, sounds like everything's sort of going well. Two train
operations and the efficiencies back up and water cuts in line. So, I'm just wondering
what do you need to see there before you get confidence to write those reserves back up?
Or at least narrow the gap between yourselves and the operator.

Paul Mayland:

The first thing to say is we fully respect all the views in the Kraken family and I think
across it, we're all striving to improve production potential and maximise economic
recovery from the field. And the second thing I think we should recognise, and I think I
said this in March, is reserves are estimated they're never determined. So, we carry a
range of estimates in P90, P50 and P10 and of course we chose and we believed that was
prudent at the time and remains prudent to reduce our P50 estimate, which we did back in
March. We would just like to see longer production data in terms of water cut trend and
overall performance in the field before we make any revisions actually, which we would
do as a matter of normal course of business on a six-monthly basis.
There is further potential on Kraken and touching a little bit on Michael's question about
the North Sea, we have three assets, when we acquired those two companies choose to
sell one of them, which was our small stake in Mariner, and if we step back and look at
Catcher and Kraken performance overall, we are pretty happy with it. There's still growth
potential on both fields that we're seeing investments next year on Catcher that we
touched on in terms of the satellites. There's a plethora of infill opportunities in Catcher
and there's significant potential in the West side of Kraken which we are going to
obviously test with our first two wells next year. So overall, we're relatively happy with
both fields.

More encouraging info on Kraken from Cairn's half year results:

Three Drill Centre 4 new wells were hooked up and commissioned in March 2019
adding two new producers and one new injector to the overall well stock. Subsequent
well testing in May confirmed the gross well production capacity in excess of 47,000
barrels of oil per day. Reservoir field performance indicates that the field water cut has
stabilised and is averaging around 60%, and well potential has improved due to the better
voidage replacement in the central and Southern areas of the field and the stabilised water
cut.
Further investment is also planned on Kraken in 2020 with the drilling of a single
producer and injector from the Drill Centre 2 template to an accumulation West of
Kraken called Worcester. The reserves associated with this area will be booked at year
end and these wells are expected to come online in the second half of 2020. The
inventory management of critical spares by the operator has helped to contribute to the
improved uptime along with more rapid response to trips by the FPSO contractor. As I've
already stated, we look to see further improvement in the FPSO performance in the
coming period. The Kraken crude pricing has continued to strengthen both in light of the
current heavy oil market dynamics and a good understanding of the crude’s
characteristics by a global set of buyers.

https://www.cairnenergy.com/media/2508/half-year-results-2019-transcript.pdf

ProdOpt,

Agreed he has certainly brought his average down!

The CEO Amjad Bseisu has bought 11.4 Million shares at an average of 19.6p at a cost of £2.2 Million. That is a huge vote of confidence and commitment in the future of the business. Interestingly he didn't buy until the sp hit the lows.

10/01/2019 Amjad Bseisu Insider Buy 120,686 GBX 19 £22,930.34
9/13/2019 Amjad Bseisu Insider Buy 896,793 GBX 19 £170,390.67
07/10/2019 Amjad Bseisu Insider Buy 1,037,334 GBX 19 £197,093.46
07/05/2019 Amjad Bseisu Insider Buy 519,793 GBX 19 £98,760.67
6/28/2019 Amjad Bseisu Insider Buy 885,067 GBX 20 £177,013.40
06/07/2019 Amjad Bseisu Insider Buy 417,577 GBX 19 £79,339.63
5/31/2019 Amjad Bseisu Insider Buy 320,686 GBX 20 £64,137.20
5/24/2019 Amjad Bseisu Insider Buy 489,320 GBX 20 £97,864.00
5/17/2019 Amjad Bseisu Insider Buy 545,965 GBX 20 £109,193
05/10/2019 Amjad Bseisu Insider Buy 483,688 GBX 20 £96,738
04/05/2019 Amjad Bseisu Insider Buy 274,317 GBX 20 £54,863.40
3/29/2019 Amjad Bseisu Insider Buy 2,321,757 GBX 18 £417,916.26
1/18/2019 Amjad Bseisu Insider Buy 1,907,722 GBX 19 £362,467.18
11/23/2018 Amjad Bseisu Insider Buy 1,259,493 GBX 23 £289,683.39

Beerbull agreed although it looks like a superficial deal for now hopefully it’s enough for the market in the interim.

FOX EDITOR:THE CHINESE COMMERCE MINISTRY TELLS US CHINA IS READY TO DO A DEAL ON THE PARTS OF THE NEGOTIATIONS BOTH SIDES AGREE UPON. THE MINISTRY TELLS US THEY ARE PREPARED TO SET OUT A TIMETABLE FOR THE HARDER ISSUES TO BE WORKED OUT NEXT YEAR

From Cairn results: " ... Significantly improved facilities performance at Kraken together with the DC4 wells coming online has resulted in more continuous periods with production rates above ~40,000 bopd being achieved.”

Beerbull wood question and again the H1 call has a good answer:

At Magnus, we've instituted a new reservoir management program where we've moved from water alternating gas and -- to water injection and gas lift. So instead of alternating the water injection and gas injection, we're just injecting water and having gas lift. That's reducing the cost of the operations by saving the gas that's purchased for reinjection but also, more significantly, enhancing the performance of the reservoir which is producing above Competent Person's Report and above our purchase case.

L3Trader on the point about Magnus type assets its all about having the asset in the right hands. Under BP ownership unit OpEx was unsustainable. As we know EnQuest have significantly reduced production costs at Magnus. From the H1 Results:

Unit OpEx has been effectively managed down, as Amjad said earlier, from around $60 a barrel a few years back to around $20 a barrel today including savings from the optimized reservoir management scheme to reduce gas injection and also lower cost right across the supply chain. And we've increased production from drilling, [flood pensions], plant debottlenecking and optimized [well injection].

https://finance.yahoo.com/news/edited-transcript-enq-l-earnings-173919788.html?guccounter=1

Squif yes either early Dec or late Nov for the opps update. There is a lot going on operationally with the company over the next 12 months. Good place to be.

Itsaponzi both Kraken and Magnus have untapped resource outside of the original CPR. Those well’s come in CPR revised reserves upgraded asset live extended and so it goes on. Kraken has ‘at least’ 20years remaining and more resource to be discovered: 400 million barrels; in the Western Flank, 100 million barrels; in the Maureen, we have 3 wells which has intersected tens of millions of barrels, it could be more.

Heardy IR should have RNS’d the Malaysia wells citing the resource they were targeting. We should get an update on those in the operational update in November.

IR should RNS’s the Magnus wells again citing the resources they are going after. If they did that there would be drilling result anticipation here.

Regardless the important thing is EnQuest have the infrastructure to tie these wells back pretty quickly as producers.

Exactly Beerbull there is considerable resource within the current assets to exploit. If the additional wells at Magnus and Kraken are a success EnQuest could be producing significantly more boepd by the end of 2020.

AB converting resources to reserves across the portfolio there is a significant amount of development ahead:

in our 3 major assets: Magnus, Kraken and PM8/Seligi. Our contingent resources are not expensive to develop from $5 to $15 a barrel, a very attractive level to deploy capital, and there's about 200 million barrels of contingent resources in our assets.

In Magnus, we have 50 million. We are starting to drill end of this year, looking at 2 wells this year and 1 well next year; and we have 270 million barrels of movable oil, so a very large, target-rich environment.

In Kraken, we -- as we mentioned, this is the first time we are stepping out to the field development plan to develop the Western Flank, which has 100 million barrels of STOIIP. We also have an exciting development in the Maureen sands, which underlies the Kraken field, where 3 wells have intersected that sand.

In Malaysia, the giant PM8/Seligi development has also a large opportunity helper, and we are drilling, as we speak, 2 wells this year. We will be looking at doing 3 workovers next year. Seligi gas development is also in the horizon with a potential 3.5 Tcf of gas. And we have put in place the infrastructure to sell gas into Peninsula Malaysia.

From the H1 2019 results call. AB talking about additional reserves at Kraken (transcript below):

k with the sanctioning of the Worcester wells and with the production being stabilized with the production efficiency being higher, then I think maybe with some of their assumptions, I think, I'm hoping that we will be more aligned in the future. But again, as far as I'm concerned, our reserve numbers are robust. We've produced 21 million barrels already. And I think we're more confident today than we were earlier this year that the water cut has stabilized and the reserves are there. Again, this is a 20-year life field, there's significant amount of oil in Kraken itself, 400 million barrels; in the Western Flank, 100 million barrels; in the Maureen, we have 3 wells which has intersected tens of millions of barrels, it could be more. So I think I'm confident, with the infrastructure there, we'll be able to exploit significant resources.

https://finance.yahoo.com/news/edited-transcript-enq-l-earnings-173919788.html?guccounter=1

TLW down
CNE down
PMO down
GENL down
GKP down
BP down

ENQ down but on very low volume

Bullish Crude Supply News vs. Bearish Economic Outlook

10/02/2019 12:50 pm EST

While the weak manufacturing data has buoyed crude oil bears, inventory data tells a different story, reports Phil *****.

The oil inventory report is not fitting the bearish narrative that is being exposed as global manufacturing data takes a dive. The surprise plunge in the ISM purchasing managers’ index to 47.8 in September raised concerns about a major global economic slowdown and a bad start to the fourth quarter of the year. Yet the American Petroleum Institute (API) report seemed to show data that seems to fly in the face of the doom and gloom.

Instead of the projected increase in crude supply that many analysts were calling for, we instead saw a sizable 5.92-million-barrel drawdown. The draw came as U.S. exports flourished and global demand for products tighten inventory.

Reports that distillate supply in New York Harbor had taken a major tumble were confirmed as the API reported that distillate supply fell by a very large 1.74 million barrels. That is going to be the one to watch as the new International Maritime Organization (IMO), the 171-member state United Nations agency that sets standards for shipping, is set to reduce the maximum amount of sulfur content (by percent weight) in marine fuels used on the open seas from 3.5% to 0.5% by 2020. These regulations are intended to reduce sulfur dioxide, nitrogen oxides, and other pollutants from global ship exhaust, yet will also tighten distillate supply.

The API did report a 2.13-million-barrel increase in gasoline supply but that contrasted with private reports that show big supply drops in New York Harbor.

In fact, oil supply is tighter than the market thinks as supply is ready to fall below 400 million barrels. Anas Alhajji points out that after accounting for line fill in new oil pipelines supply is really at the lowest levels since 2014. In fact, he says that U.S. crude inventories will be too close to the five-year average between 2010-2014. They are even lower when you adjust for rising exports.

So, while oil struggles on slowing growth fears and impeachment fears, the global oil market is going to see meaningful tightening this year. We are going to see significantly higher distillate demand and despite the calm recently, the tensions in the Persian Gulf have not gone away.

https://www.moneyshow.com/articles/tradingidea-52569/bullish-crude-supply-news-vs-bearish-economic-outlook/

U.S. Crude Storage Will Show Counter-Seasonal Draw In October
Oct. 2, 2019 4:28 PM ETBNO, DBO, DTO...57 Comments
Summary

There appears to be a lot of confusion on today's EIA weekly oil storage report, so we wanted to publish this along with our expectations for October for clarity sake.
For starters, EIA did not count ~500 to ~600k b/d of exports last week. For next week, we are expecting a report of -1.7 mbbls.
Now if EIA did miscount the exports last week, then it will show up in next week's report. The volume that could outpace our estimate will be ~3.5 to ~4.2.
How much will October decline by? We have -5 to -16 mbbls right now.
A counter-seasonal draw in October will help push US crude storage below ~380 mbbls by year-end.
This idea was discussed in more depth with members of my private investing community, HFI Research. Get started today »
Welcome to the counter-seasonal edition of Oil Markets Daily!

There appears to be a lot of confusion on today's EIA weekly oil storage report, so we wanted to publish this along with our expectations for October for clarity sake.

For starters, EIA did not count ~500 to ~600k b/d of exports last week. The cut-off date for the vessels was on the 26th and 27th of September and for those of you that are aware of the EIA reporting standards, the cut-off time is Friday morning. So if the vessels left on Friday, this may have been counted in the following week instead.

Some of you also asked us questions on the difference in API vs EIA. API gets the same submitted data from participants on Monday, so export data timing varies, hence the divergence. Now for those of you keeping track, API vs. EIA difference last week was ~9 mbbls, or the largest single week positive jump since we started tracking this dating back to 2015

https://seekingalpha.com/article/4294677-u-s-crude-storage-will-show-counter-seasonal-draw-october

Edited Transcript of ENQ.L earnings conference call or presentation 5-Sep-19 8:30am GMT

Full transcript including analysts questions and answers:

https://finance.yahoo.com/news/edited-transcript-enq-l-earnings-173919788.html?guccounter=1

Market focused on debt shrouding value here.

Whatever happens to $500 million of value added by Magnus:

Magnus to add $500 million in value

Explaining its transaction rationale, EnQuest said that the Magnus option is expected to add approximately 60 MMboe of 2P reserves (equating to approximately 30% of the company’s reserve base as of January 1, 2018.

It will also add approximately 10 MMboe of 2C resources and around $500 million of additional net present value to the company on a proven and probable reserves basis

The company added that the transactions complement its existing strategy to be the operator of choice for maturing and underdeveloped hydrocarbon assets

EnQuest CEO, Amjad Bseisu, said: “The opportunity to add around $500 million of additional net present value to the group and an additional 60 MMboe of 2P reserves through the exercise of the Magnus option, is compelling.