Member Info for epiphany121

L3 - another point to add about the RCF interest and impact on cash flows. The bi-annual RCF repayments are amortisation payments and hence includes interest as well. Effectively, in H1, there'd no interest cash outflow on the RCF debt and there'd just be the one payment next month.

Effectively, the circa $73 mill interest that you've correctly listed in your post will not be a cash outflow, but will go against the P&L.

Squif has always been blurting idiotic statements like this about AB from the time I've been on this board and is nothing new. And these statements come out every time the SP goes down a bit and all's OK when it's moving up.

You either need to an emperor idiot OR a manipulator to claim to be 'heavily' invested in a company and yet keep slamming the CEO who's fronting the company. What squif is, we all have an inkling, don't we?

L3 - please remember that there is no cash outflow for interest on both the high yield and retail bond in H1. That would've been capitalised as brent hadn't been above the average $65 for 6 months. Sure that'll be in the P&L as interest costs/finance charges, but not in the cash flow statement as an outflow.

Chops - I hold some PMO too, very little compared to my ENQ holding.

PMO is a lot more Gas weighted than ENQ and hence realises less per BOEPD than ENQ. ENQ's gas mix is tiny compared to PMO. Out of Circa 54 kboepd, I believe something 1.5 kboepd is gas. I've not been able to flesh out PMO's exact mix, but for H1 their production was 76 kboepd, which equates to circa 13.7 mill BOE, and with their revenues of 643 mill, that's an average revenue of $47 BOE. We know they received $61 per barrel in H1 for oil sold, but it's the larger gas mix that's pushing down average BOE realisation.

For ENQ, assuming 52500 kbopd and 1500 kboepd (gas) for H1, that'll give us 9.55 million oil barrels, out of which 5 million barrels were hedged at around $58 in H1, and the hedged barrels revenue is circa $290 mill. Out of the remaining barrels, circa 600k barrels will be Mercuria revenue at $65 a barrel and the remaining 4 million, we could get say $65 a barrel, with Kraken discount - this is giving us circa $600 million.

Conservatively, I'd say that we could be looking at H1 revenues between $575 and $600 mill, which is still a pretty huge jump compared to last year for ENQ. Operating costs for ENQ is projected at circa $24 per BOEPD, and that's about $235 million, very similar to PMO for H1. PMO had EBITDA of $389 million, ENQ should end up at over $300 million.

Capex doesn't impact P&L, but interest/finance charges would, but they should be lower than PMO, whose interest charges were $120 million. ENQ interest charges for H1 should be in the $80-85 mill range for their circa $2.1 bill gross debt. We could end up with net earnings in the $50 to $80 million range, which is still good. H2 profits and cashflow will be much better though with lower hedging (2.5 mill @ $62 a barrel) and hopefully higher Brent prices.

PMO already had $210 mill CAPEX in H1 resulting in net debt not coming down that much - ENQ capex would not be that large in H1, but then we won't have cash inflows on 1 million barrels of Magnus + Mercuria oil ( we do get the revenues on the P&L though, mind you). Let's see where we land with net debt after H1 - we'll know in under 56 hours from now..;-)

That's just my tuppence..

Best

Everything can be fixed with super glue, Squif. That includes cash calls, let alone gaps. I have a spare tube 'lieing' around if you ever need it..Just shout.

How big is the gap? Will superglue work?

Fingers crossed for you then, MO..:-) Never say never. Lol..

Realistically, I'd assign maybe an equal probability to either of these happening A. the 70K rate for August happening or B. ENQ not being able to make the RCF payment next month and resorting to another restructuring - Both low probability events, in my mind. :-)

Hey MO - FTSE 250 is a story next year for me. Best case, I'd suggest that ENQ may say that they are producing at a WI rate of between 60 to 65 kbopd for the first 2 months of H2, which is still a good step-up. PM8 is due for maintenance shutdown in Q3 - not sure which month and this may impact production a tiny bit. As you suggested, Northern fields were impacted in June and that's possibly a maintenance related shutdown too and if my memory serves me right, they were indicated for Q3 and probably pulled forward.

I'll take incremental gains in production and SP..;-)

Best..

Morning Chilts,

Cheers. I have 5 shuttle tankers in my Marine Traffic fleet list and Navion Scandia is one of them. I did also note this from the Orkney list this morning. There's also Navion Oceania reaching Le Havre in France in a few hours for an offload and that could be a second option too. NS makes a bit more sense though given the destination states Offshore Oil Installation at this time. If it does turn out to be the case, that'll make it a 12 day interval and a circa 40+ kbopd production rate at this time..

Let's wait for real answers on Friday, shall we? L3/Indy/Squif have a bearish view and for the life of me I can't understand why someone like L3 and Squif are supposedly long when they think the company can't do well in a favourable environment for oil. C'est la vie - it takes all to make a market.

What'll set the tone going forwards is commentary on how future production is shaping from the likes of Alma/PM8/Kraken (of course). I'm not worried about whether ENQ can make the RCF payment next month - that's a given, considering factors I'd listed yesterday. The bigger factor is guidance. For a breakout above mid-40s, we need good guidance and that'll be the first in quite a few updates, if we do get it. If not, we'll back in the low to mid 30s as we saw back in May.

I'm long because I'm bullish and I do hope the bulls get what they need in 3 days' time..

Best

There's nothing in the AR about PM8/Seligi crude pricing and Malaysia crude pricing is about the same as Brent (a bit higher). Circa 40% of ENQ production, which is the Kraken oil, is sold at a circa $4 discount and the remaining should be Brent linked and hence we should be overall at a circa $2 discount to Brent, if we consider the entire production portfolio.

Best

Let me double-check Malaysia pricing as the PSC shouldn't dictate pricing, just what share ENQ gets.

Jan,

An additional point to note is that it is only crude from Kraken that is heavier than Brent and thus sells at a discount. I daresay that the remaining, certainly those from the North Sea, should be fetching ENQ Brent pricing.
However, we'd be getting less than Brent pricing for Malaysian oil as that is subject to PSC pricing with Petronas and on balance, as you suggested, we're probably looking at a circa $4 to $5 discount to brent for our entire portfolio.

L3 - if you read the additional notes in the RCF section, you'll see this too. This is the basis on which I'm saying that we'll be paying back $270 mill in October, along with the $50 mill in May.

"Borrowings subject to mandatory repayment out of excess cash flow (excluding amounts required for approved capital expenditure), assessed on a six monthly basis;"

The upper tier of the RCF is not substantial - as of end of May, that upper tier is $185 million. The carrying value of the PIK was circa $5 mill as of 31/12/2017. However, I can't see what that has to do with ENQ not being able to repay $270 mill next month. You're beating around the bush, without stating anything substantial/worthwhile to back your claim.

You run your numbers past this board/me and let us know why ENQ can't make the cash repayment. What have you assumed for cash oil sales for 6 months and then the first July/August 2018? What about cash opex/capex? Interest payment? What have you built into your model before you made the claim?

You say you're long and you're basically saying that shareholders are shaf**d anyway. Why would you be long if you think that ENQ can't make this cash payment in October?

Twalbyoff - the RCF debt as of end May 2018 would've been $1075 million (after the repayment). It's up for debate if ENQ is repaying just the $220 million (270 - 50), OR if they're repaying the actual scheduled amortisation payment of $270 million on the 1st of October. The more the better and we'd like the $270 mill to be paid down as then there is less interest we need to pay (circa 7.5% at this time)

Having a laugh L3 is, Jan. Anyone can make unsubstantiated statements - backing them up with something relevant and credible is the hard part.

L3 - We'll be glad to see your cash flow workings and why ENQ won't have cash to make the $220 mill in October. Why wouldn't it matter if ENQ pumps more and Brent stays at these levels - of course, operating cash flows will be solid. And cash capex outflows will be lower in 2018, coupled with lower than projected finance costs on AK.

Twalbyoff,

They'd made the $50 mill pre-payment at the end of May and I'm confident that the $280 mill payment in October isn't an issue. Unlike previous years, cash capex hasn't been massive this year and in terms of opex, every little helps, including reduced BUMI payouts. We'd certainly want an additional pre-payment and if Brent is at these levels and production stays up, we should be good.

Best

Good on you, Dol. SP is up 3 to 4% from the lows this morning. She must be clairvoyant, eh?..;-)

Ask her nicely what she thinks of this Friday? And let us know...:-)

Best

Lol, cracking..:-)

Did you buy more today, Dol?