Member Info for Dumbly

20.95p minus 8.9% equals... 19p

Aloj, Svennson, MRC, Pelle, Oxygen, Tigar; thanks for your comments. I don’t think in terms of ramping or deramping. I try to be objective and my question was genuine and to benefit from the “wisdom of the crowd”. Thinking what happens on this board impacts the SP is delusional. I hold over 6 figures of Enquest shares.
The market knows the current oil price and info is available, if maybe not “known”, on revised NPV of GE deal.
Announcing a decent deal re EP FPSO would be nice, but it comes across as “desperate” to hope that would trigger a major re-rate.
MRC, feels unlikely but, yes, dilution could be priced in already too.
MRC, Oxygen, that the market has not cottoned on and the deal not fully in the SP is the most likely situation (I hope…) which, once things change, could lead tto a major re-rate. Plus negative sentiment in general towards this sector.
Thanks again, guys.

The perceived value of the completion of the GE deal and the Placement/OO must be pretty much already baked into the current SP. It’s a done deal; completion of both is next to a formality. Therefore, if the new shares to be issued as a result of the Placement/OO represent an 8.9% dilution then, with all other things being equal, why upon completion of GE/Placement/OO would the SP not also drop around 8.9%?

5 shares for every 89 held, a 8.9% discount on yesterday’s price, if take up represents a 5% dilution.
Still can’t see interest rate on recent new finance deal??

A good way to tell the market could be (as others have suggested too - epip?), would be share buybacks. Are they any restrictions on doing this (as there are with divis)? This would also part neutralise the effect of the OO if this is still obligatory.

For info only.
"The donations include: a total of £25,000 from Amjad Bseisu, the chief executive of EnQuest, an oil and gas company with strong interests in the North Sea".
https://www.msn.com/en-gb/news/uknews/oil-and-gas-donors-gave-over-400k-to-tories-before-north-sea-decision/ar-AALomnX?ocid=msedgntp

Thanks, Slift.
I am assuming a average floor price cannot be agreed before the market price has reached that point. If this is correct, the initial 9.0mmbbls could not have been hedged before 5th Feb when a market price of $59 was first reached this year.
The situation at end April was therefore even better than Ammu123 was alluding to in his 11:22 post today. And... the current situation could be even better, even higher floor and ceiling prices than at end April if further "re-hedging" has been done.

ALL,
What is the below from the 12th May Ops Update understood to mean?
That 9mmbbls was hedged at some point at the conditions stated, but at end of April the total hedged position had changed to 6.2mmbbls at the improved conditions?
“EnQuest has hedged a total of c.9.0 MMbbls for 2021 predominantly using costless collars, with an average floor price of c.$59/bbl and an average ceiling price of c.$68/bbl. As at the end of April, c.6.2 MMbbls of production has been hedged with an average floor price of c.$63/bbl and an average ceiling price of c.$72/bbl.”

I have a feeling there will be surprises for EnQuest this week. Actually, more than a feeling. It is supported by tasseography. Positive surprises.

@Tom8080, "when there is a solvable credit problem, you want to be in the equity". Yep, I’m with you and romaron on this. There could be some shopping around on GE/refinancing, but the nod must have been as good as given, and the preference will be to stay with the lenders who have shared the journey so far. The Open Offer is an irritant, probably needed to satisfy some risk mitigation ratio. Best to almost disregard it at this point. Brent likely to stay in the $60-70 range most of this year, and while this is the case best to keep in place on a revolving basis similar hedged volumes using costless collars. What is EP on the B/S at and what would its value be if used commercially? More for sure. Something is bubbling under in Malaysia. Considering all this, the SP is only going one way; 25+ by mid-year, 30+ by year end.
Normal caveats apply regarding this being just an opinion, DYOR, predicting the future, emergence of completely unforeseen general or company-specific impactful events, and the need for good luck.

https://www.bbc.com/news/science-environment-56503588

@mswatz, Pearls, Soder, Valew, and others; thanks for your replies. The basic answer to my question is as Pearls put it, being that Jefferies' estimated market value of $5b underestimates the company. Even with a market value of $7b the upside from the current SP (29p, but let's see shortly... what today brings) cannot be more than 10p.

@L3Trader, you're certain Hibiscus choice of FPSO is not EP? Thanks.

If the newco, HE, is estimated to be worth $5b, and PMO shareholders get 5.5% of the newco, and 5.5% of $5b = $275m = £196m, how can PMO be worth more than £196m? And yet its MC today is £270m.

Worth a listen https://youtu.be/BCRSm-VMZmQ
Just because he says what we want to hear does not make it "right", but his opinion is backed up by information and plenty of experience.
At the end of the presentation, something for you too, chilting.

When on the 8th of Feb I voiced my vote of confidence in the GE deal ("Actually, now I understand the GE deal better and have reflected, focusing on the Open Offer is not the right thing as I like the deal and, in all probability, I will support it) I did not anticipate it would have such a big impact. For the avoidance of doubt I can now say I will support the deal. Let's see what happens now!

Pelle, only what we already know:
"We have received notification from our custodian of a Priority Offer with Interim on Sedol: B635TG2 | Security name: ENQUEST PLC ORD GBP0.05 | Corporate Action reference: 007912915.
The Company has announced that it anticipates raising up to USD 50 million of equity through a placing and open offer. Further information to follow upon receipt.
Options:
1) Exercise
2) Take no action (default)
Please note, we have not yet received a reply-by date for this event. The reply-by date will be communicated to you once it is received by us."

Chilting, is in not the same thing, same cost, if an existing shareholder wants to maintain their position without dilution? A bigger discount means a lower OO price which means more shares is the same as a lower/no discount means higher OO price means less shares have to be purchased. The net result is £s terms is the same, no?

Thanks Hitman, Pelle, TimTimebomb, Chilting, Romaron, Squif, for your helpful comments. Actually, now I understand the GE deal better and have reflected, focusing on the Open Offer is not the right thing as I like the deal and, in all probability, I will support it. The OO is up to $50M (not £s as I put before) and could likely end up being well below $50m. The OO price and discount will be what it will be based on conditions and judgement at the time. Yes, AB and all LTHs (as I am) would want any OO discount to be as little as possible (though, if the OO is set too high for the market’s taste, AB would have to step in an honour his backstop loan commitment).

If it is correct that AB will backstop the raising of the £50m via a loan, and any Open Offer shares not taken up would not be offered on the open market, why would there be any need to price the Open Offer shares at a discount to the prevailing share price? Therefore, would the price of the Open Offer not be simply the required £50m divided by the number of issued shares, and therefore its cost to existing shareholders could be calculated now and would remain constant at any share price?