Member Info for epiphany121

Kraut baby - Who let the Kraut out - who, who, who, who?? Or was it the dogs, I forget..

25P nice...

Kraut Baby - what are you doing here?

L3 - I'll see if I can find some time to do this later today. It's been a hectic day this far.

L3, name calling never does anyone any good, even though we may have differing views. Although, I do like a bit of banter with Squif.;-)

Much of H1 2018 hedging was done in 2017 when oil pricing was in a relative stable range during 2017, it was probably deemed that Swaps were the way to go and they're cheaper than puts too. If you know the hedge history from 2016, they were puts back then and they gave ENQ additional $220 mill revenue, and in a way saved their bacon, when Brent pricing was dire.

L3 - you were more realistic about debt than I. Revenues were closer to what I expected on account of $77 mill being eaten up by hedge swaps. Like you said, we need to understand more about the structure of the financing from OZ capital. I assume this is 15% of the Kraken's Enquest WI and yes, more details would indeed be good. Could this have been deferred for a few more months until back end of the year, before resorting to a rights issue is the one question in my mind, but with cash interest payouts now in order, this may not have been an option.

Revenues for H2 would certainly be better, largely because the 5.3 mill barrel hedges in H2 are puts, rather than swaps, and positively, they offer downside protection below $66 whilst retaining all of the upside. That's as much as I can spin it now, before delving into more details about the H1 results.

GLA...

Quick thoughts....away for a few minutes.

It looks positive, on balance. Revs - 550 mill
EBITDA - 311 mill
Net debt - 1973 mill (as expected not much movement, but trending..) - Cash on hand 256 mill..After 75 mill RCF pay off

Magnus Acquisition with Rights Issue - we'll have to take it. Signs are good there..

Let's see how the market takes this news...

Waiting I'm too, MO. I'm optimistic that we'll get a positive tone in the release and that to me is what's needed to change the trajectory of ENQ SP in the medium to long run. I may take some off the table if we do get into the high 50s/60s, but best to give ENQ a clear run till H2 results to see how things are fully panning out.

But, baby steps first - H1 results will set an early tone..

GLA..

MO - Savour your Rose tonight. Tomorrow will be a step in the right direction. I'm not expecting a gang-buster of a trading day, but should the guidance be good, we'll break out. However, one step at a time.

Look forward to the update in about 9 hours

All the best to you, Jan. Wow, you threw the kitchen sink at this, didn't you?

I'm not as brave as you, but not too far behind though. I hope it works out well for all of us - there are valid reasons why some of the boarders are queasy about what may come about tomorrow. I'm reasonably confident and to borrow MO's phrase, Brent is a bit of wet blanket for ENQ. Fingers crossed.

A bloodbath would be +10%. If the guidance is good, well, we have a breakout to new highs...

Onwards and upwards - who let the dogs out - AB, AB, AB, AB (with JS the side-kick)

MO - reads good to me. JS said in his 2017 results commentary that out of the 2017 Capex, Kraken's share is just over 50%. That should mean anything from $130 to $150 mill and so, good with what you've extrapolated. They'll possibly use less Capex if Magnus drilling costs aren't coming out of the budgeted Capex.

Alma, like you said is Opex and was budgeted at a cost of $1.5 BOE and that's circa $30 mill. Capex is more H2 loaded before of the bulk of work at Kraken and work at PM8 are in H2 - PM8 more in early H2 and Kraken as we know would be mainly Q4 when TL gets there..

Chilts - we also have 3 regular tankers in or reaching Rotterdam - HK/NO/NA (Anglia). All are decent possibilities, I suppose.

Yes, and this schedule lines up with what Enq has been saying in the AR and what's in the balance sheet as current liabilities for 2018 - a $270 mill repayment in 2018. You're saying that because the drawdown was lower on the term facility that the repayment would be $170 mill, but that's not what the balance sheet and AR statements are confirming.

The $140 million due in April 18 was part 1 of a bi-annual repayment of the RCF and second of which was due in October 18. What effectively happened was that the payment due in April 18 was pushed back to October 18 and obviously bundled with what was due in October 18 to come up with the larger $270 mill repayment.

The November 2016 restructuring mandated half-yearly repayments starting in April 18 and continuing till October 2021 (8 amortisation repayments).

Fernan,

Your read on the RCF amortisation is incorrect, I'm afraid. The RCF repayment due in 2018 is $270 mill and not $170 mill. There was a further amendment to the RCF in November 2017 and this is spelt out in Note 19 of the AR - Page 134.

During November 2017, the Group agreed additional amendments to its Term Loan and Revolving Credit Facility. These changes include the deferral of the scheduled $140 million reduction in the Term Loan facility from 1 April 2018 to 1 October 2018. A single amortisation of the RCF is due of $270 million in October 2018.

Here is an additional note from the AR.

Page 33 - Net current liabilities have increased to $377.9 million as at 31 December 2017 (2016: $45.1 million), primarily driven by the scheduled $270 million RCF amortisation due in October 2018 and the impact of the Kraken FPSO finance lease commitments due within one year.

I still don't see an issue with paying this off given where Brent has been over the past few months. We'll get a formal confirmation tomorrow..;-)

Cheers L3..

L3 - Where did you get the info that the $250 mm Cash Capex doesn't cover Magnus and that drilling costs come out of the cash flow from Magnus? I didn't read this in the acquisition release or in 2017 AR.

The Capex covers DC4/PM8(Seligi)/Heather and Magnus - bearing in mind that ENQ currently only pays 25% of the costs for any Magnus drilling and BP foots the remaining 75% - that's the WI ratio. The AR clearly lists all 4 of these on page 4 next to the Capex headline under drilling programme and elsewhere in the AR. The AR does say the Capex is primarily for the other 3, which is true given that effectively ENQ is paying less than a well's drilling cost.

Who, who, who, who sold out..not me, me, me, me..

Iffy - I'll let you in on a secret - I've calculated that ENQ will have $2 in the bank as of 1/10/2018. AB is quitting and going on Haj to get some piece of mind; he just couldn't take both your insightful analysis and slurs on this board.

Nah - I was only joking. How could he quit when you're still a shareholder? He's going on Haj to bring back enough gold to make the RCF repayment in October; they have lots of it floating around in the dead sea This is the only way he figured he could make the repayment and goodness, only you and Indy knew this ahead of time. Maybe your good mate DD was wrong after all...

Squif - when you wonder about who's feeding the bots, listen to the Baha Men and stay calm...

Who let the dogs out - who, who, who who...

The only thing I would add is watch the volume - the selloff is on light volume at circa 7.6 million 15 minutes ago. The 5% drop the day before earnings last time around was on 11 plus million volume.

We'll know very soon how operations are trending at ENQ.