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EnQuests market cap is the same as its free cash flow.
Simply undervalued.
(Reuters) - North Sea focused oil firm EnQuest more than doubled its free cash flow to $138 million in the first half, boosted by bigger production, it said on Thursday, reiterating its output guidance of between 63,000 and 70,000 barrels per day this year.
The group, which had a market cap of around $380 million on Wednesday, is planning to drill two wells in the Western Flank area of its Kraken field in 2020, where it sees a reservoir of around 100 million barrels.
https://www.proactiveinvestors.co.uk/companies/news/902556/hurricane-energy-delighted-as-latest-lincoln-well-flows-at-commercial-rates-902556.html
Hurricane Energy Plc (LON:HUR) boss Dr Robert Trice declared himself delighted with the latest data from the Lincoln Crestal well which has flowed at rates of up to 9,800 barrels of oil per day in testing.
That peak rate was achieved with the use of electrical submersible pumps while under natural conditions the well flowed an average of 2,682 bopd.
Lincoln Crestal is the second of three wells being drilled in the Greater Warwick Area, which neighbours the now producing Lancaster field.
It was drilled down to a depth of 1,780 metres and cut a 720 metre horizontal section of fractured basement reservoir. The well is now being suspended with the intention that it will be used in the future for production.
A tie-back to Lancaster’s Aoka Mizu FPSO – floating production, storage and offloading – vessel during 2020 subject to further work, regulatory consent and financing.
The Transocean Leader semi-submersible rig third and final well in the current programme will be ‘Warwick West’.
"We are delighted with the results of the Lincoln Crestal well,” said chief executive Robert Trice.
“We have confirmed the presence of light oil which can be produced at commercial rates.
“The Lincoln Crestal well is now planned to be tied back to the Aoka Mizu FPSO next year. This would make Lincoln the second producing basement field in the UK.
"Based on the result of the 2016 Lincoln well, RPS Energy assigned 2C contingent resources of 604 million barrels of oil equivalent to Lincoln. This successful result brings us closer to monetising this huge resource."
In auction 51p on the bid 280k also at 50p
50p on the bid already!
Huge news well done all holders!
Pelle,
Agreed EnQuest is hugely undervalued based on read through valuations against Tullow, PMO, Cairn etc based on comparing operating profit, Net income, EPS.
EnQuest operating cost reduced to $20.1 boe incredible strides on efficiency. So still very profitable at $60 Brent...
Krakenoil - it can’t stay like this forever it is ludicrously undervalued. Cairn over 1 billion mcap even in the debt ratio EnQuest mcap doesn’t make any sense. I can’t fathom it...
The update was solid. I’m baffled by the EnQuest mcap. Oiler’s with more debt, similar production levels priced more than double. Don’t understand.
Breaking out...
Net debt ratio x1.8 is as low as it was in 2014. Surely the market will catch on to the ridiculous price.
Cairn raises output guidance after improvements at ‘Kraken’ field
Independent energy group had been hit by extraction issues at North Sea oilfield
Nathalie Thomas in Edinburgh
September 10, 2019 7:05 am
Cairn Energy has upgraded its production guidance for 2019 following improvements at the Kraken field in the North Sea which had been dogged by problems with a vessel used to extract oil.
The Edinburgh-based independent oil explorer and producer said on Tuesday that it expected full year production to average between 21,000 and 23,000 barrels of oil per day, up from previous guidance of 19,000-22,000 barrels/day. It also expects average costs per barrel to be lower than at expected, at $18 per barrel, down from $20/barrel.
Cairn attributed the forecast change to improvements at the Kraken oilfield in the North Sea, in which it holds a 29.5 per cent interest, with the rest held by fellow London-listed independent EnQuest. It also cited “exceptional uptime” at the Catcher field in the North Sea, which is operated by Premier Oil and in which Cairn has a 20 per cent interest.
In the first half, Cairn’s production averaged 23,700 barrels of oil equivalent/per day, a 15 per cent increase on the previous six months.
Cairn had earlier this year downgraded its forecasts of how much oil the Kraken field was likely to yield over its lifetime, although EnQuest had not lowered its own expectations in an unusual difference of opinion between two partners.
In its half-year results on Tuesday, Cairn said there had been “significantly improved facilities performance” at Kraken, referring to the field’s floating production storage and offloading (FPSO) vessel which is used to extract oil at field. The project, which produced its first oil in 2017, has long been hampered by problems with the vessel.
Cairn posted a $43.4m pre-tax profit for the first half, a turnround from a $602.9m loss a year earlier, when it booked significant impairments, on revenue of $270.3m, up from $182.4m at the same point in 2018.
ENQ market cap has become so detached from reality its just insane. The market is insane.
No sting in the tail nothing! Just solid results. Solid production and solid debt reduction. Amazing.
Brent crude down 2% to $57 a barrel on Trump trade war comments. HUR holding up well versus other oilers who are mostly down today.
Hurricane Energy
The City was swirling with rumours around Hurricane Energy last week as the AIM-listed North Sea oil explorer was caught up in a gust of gossip around a possible oil discovery.
The word doing the rounds was that Hurricane – a popular share among private investors that has amassed an army of followers – had struck oil at its Lincoln well.
Gossip-mongers even said the well, which like some of Hurricane’s other fields is named after a town, was flaring.
Even if it was, which I understand it wasn’t, that doesn’t necessarily mean it’s hit the jackpot – so investors should try not to get too excited just yet.
Hurricane Energy
The City was swirling with rumours around Hurricane Energy last week as the AIM-listed North Sea oil explorer was caught up in a gust of gossip around a possible oil discovery.
The word doing the rounds was that Hurricane – a popular share among private investors that has amassed an army of followers – had struck oil at its Lincoln well.
Gossip-mongers even said the well, which like some of Hurricane’s other fields is named after a town, was flaring.
Even if it was, which I understand it wasn’t, that doesn’t necessarily mean it’s hit the jackpot – so investors should try not to get too excited just yet.
https://www.google.co.uk/amp/s/www.thisismoney.co.uk/money/markets/article-7414549/amp/STOCK-WATCH-Apple-supplier-IQE-bite-taken-shares.html
Moody’s update on the 16th July which held the investment rating at B2:
“In this context, free cash flow should be boosted by an increase in average daily production to between 63 and 70 thousand barrels while capex is projected to be around $275 million in 2019. This should underpin the group's liquidity profile and enable it to reduce debt, which would enhance its financial flexibility to replenish reserves and sustain production in the future.”
https://m.moodys.com/research/Moodys-announces-completion-of-a-periodic-review-of-ratings-of--PR_404329
RBC top pick target 190p / Numis target 160p great buying opportunity at these levels.
SAUDI ENERGY MINISTER FALIH SAYS AGREEMENT BETWEEN RUSSIA AND SAUDI ARABIA AT G20 TO EXTEND OPEC+ OIL CUT PACT FROM JULY WILL REDUCE GLOBAL INVENTORIES, BALANCE OIL MARKETS
Consistent buying here so picking up