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Hey MO, Please see the note below from the 2017 AR, with regards to the Mercuria transaction. My reading of the transaction is that Enquest signed up to receive $80 million pre-payment/loan to be repayed through monthly deliveries over 18 months of 1.8 million barrels. That's circa 1.2 million barrels in 2018, if we smooth out deliveries. The pre-payment doesn't mean that Enquest is only liable to deliver oil up to $80 million pre-payment (which is how you're interpreting this), but would still be committed to deliver these circa 1.8 million barrels. That's how I read this transaction and it does sound straight-forward enough. It was a way for Enquest to get some cash/liquidity on the balance sheet heading into the beginning of the year. ------------------------------------------------------------------------------------------------------------------------------------------- Crude oil prepayment transaction On 25 October 2017, the Group entered into an $80 million crude oil prepayment (‘Prepay’) with Mercuria Energy Trading SA. Repayment will be made in equal monthly instalments over 18 months, through the delivery of an aggregate of approximately 1.8 mmbbls of oil. EnQuest will receive the average Brent price over each month subject to a floor of $45/bbl and a cap of approximately $64/bbl. Interest on the Prepay is payable at one month USD LIBOR plus a margin of 7.0%. The prepayment transaction is being undertaken on an unsecured basis. At 31 December 2017, the carrying amount of the Prepay on the balance sheet was $75.6 million, comprising of the initial draw down of $80.0 million, less the repayment of $4.4 million of the principal. $0.3 million of interest is accrued on the balance sheet. -------------------------------------------------------------------------------------------------------- @Nickel - The 7.5 million barrel hedge is a crude oil swap transaction, meaning it is locked at a certain price and is contractual, and can't be backed out of. Hedges are not linearly tied to debt, as I know of low debt companies that have hedges; it's more an instrument that provides downside price protection in case the POO moves against a oil producer. I'd view it more as a prudent way of guarding revenues, as we have seen on 2016 hedges that Enquest had in place and won big.

Nickel, 1. Not sure about this question? When does what expire? 2. For 2018, 7.5 million Barrels hedged at an average of $62 a barrel. That equates to circa 20.5K BOPD. And 1.2 million barrels were sold for 2018 at a ceiling of $64 a barrel in the Mercuria transaction and that equates to circa 3.25K BOPD. 3. As above.

Cheers, Chilts. Moving on to TL and the Skandi Bergen that's towing it, it looks like MarineTraffic.com hasn't received their updated positions in about 14 hours, however, it should be getting to Alma later today. Let's get more out of Alma ASAP with the workovers...

SO, where's the new link from Jeffries, KO or is there none?

OK - and there was one from December from them raising it to 27P from 23P. http://www.stockmarketwire.com/article/5789220/Broker-Forecast-Jefferies-International-issues-a-broker-note-on-EnQuest-Plc.html

KO - can you please paste a link? The previous one was 30P from Jeffries, as per this. https://uk.webfg.com/news/broker-recommendations/jefferies-downgrades-tullow-enquest-and-upgrades-premier-on-new-oil-forecasts--2832572.html And they're the ones who were hired to push the 20% Kraken farm-out. 2

Cheers, MO. I sure hope that the tanker pace picks up by 1 or 2 days for the next load, but 40K is nothing to frown upon. Best

Cheers, all. I suppose this indicates AK is producing in the circa 38 to 40K BOPD range?

From the Orkney shipping roster, we know that Concord is set to leave for Houston at 6 PM. So, it shouldn't too long before we know the draught there. AS' draught is now updated to 9.2 m.

Auson - in the link below, look for the Indian Basket, which is how their government determines local oil product pricing. That pricing is more in line with Brent than WTI, and includes heavier grades from the middle-east. https://oilprice.com/oil-price-charts And to Tom's point, yes, that's spot on. Eventually demand moves to where there is better value for the consumer country, and that still is the heavier grades, as A. the lighter grades from the US is more expensive from a shipping viewpoint and B. many older refineries can't process those

From what I know of India's refineries, only some of the refineries can work with the WTI equivalent lighter crudes, similar to how many US based refineries can't work with the light, sweet coming out of the Permian. The majority of the Indian imports are for the heavier Brent crude oil types.

Tomcorvid - Like you, I'm optimistic that sometime over the next 18 months, ENQ will get to the �1 billion MCap. I do understand the viewpoint of the negative sounding people on this board, Iffy Squify (and his Indy avatar) and a few others spring to mind. There have been lots of misses by ENQ in terms of delivering on targets and promises, and that is partly why the SP is still languishing where it is, when the likes of PMO have been 'on a tear' (as the Yanks love to say). For me, the key ultimate deciding factor of where the SP goes is POO - not how brilliant AB is or how well Kraken performs. If Brent at least stays at these levels, ENQ will be in great shape and the company will be re-rated as HY and FY results come in strong, and net debt WILL fall. For me, the $70 to $80 range BRENT is the goldilocks price range, where Trump won't interfere much and demand destruction will be limited. This is not a one week/one month/or even a one quarter story. Markets will ultimately notice ENQ, after ENQ delivers a cycle of a few positive news feeds/updates. Best

Okie doke, I understand now. Let's say that ENQ produces 56K BOPD (very conservative) over all of 2018. That's circa 20.5 million barrels. We know that 7.5 million barrels are hedged at an average of $62/bbl. That leaves ENQ with 13 million additional barrels that could be sold at market price, which is at a discount to Brent (between $2 and $5 - I'd guess). Out of these 13 million barrels,1.2 million barrels will be delivered to Mercuria in 2018 at a $64 ceiling price. Consequently, every $1 increase would result in a circa $12 million increase in revs. However, as we know revenue is not the same as cashflow and in 2018, ENQ will not receive cash for Magnus's 3.5K BOPD and for the majority of the 1.8 million barrels, equivalent to 3.25K BOPD of deliveries (100k barrels per month) to Mercuria over 18 months, as $80 million was prepaid. The ceiling price was $64 per barrel for this transaction, and the transaction was effectively like a Collared Option Hedge (Buy a put at $45 for the floor and Sell a call at $64 for the ceiling). Best

Tomcorvid - I don't fully understand the question, I'm afraid. Comparing to what does $80/bbl add $100m to revenues?

Morning Mo et all, It looks like AS departs Scapa at 3 PM today and we should have updated draught figures for us to make an extrapolation of the load size for #17. Given that brent is drifting lower today, Enq SP is likely to do the same, but who am I to know day to day movements. Best Best

cheers, Chilts. Can you please keep us informed?

One final point from me, Fern. As SmokingAces pointed out once the debt is back under control through FCF driven repayments over the next 2 years, Enquest can look at other blocks to drive additional production, in order to replace natural depletions from Kraken and other fields. Best

Fernan, All I was pointing out that the production profile in the link I posted below is an updated representation of the state of play of Kraken production, rather than something from 2013, when the project hadn't started. If you go to page 48 in the Enquest presentation from 2013 (your link) and look at the year by year projected production, you'll need to move those back an year. The initial FDP (field development plan) in 2013, called for production of 12.5 KBOPD in 2016. In reality, there was none in 2016 and the actual average BOPD in 2017 was 6K BOPD. If we simplistically move back the production by an year, we can see that projected production in 2021 will still be circa 40k BOPD (2020 production on page 48) and that's the point I was making. As MO pointed out in earlier post, it was for the best that the peak production years for Kraken should be relatively high POO environment, rather than the $40 - $50 range it was at a couple of years ago. Best

Fernan, Firstly, as you show in the link below, the projections are from 2013, that's 5 years old. The Kraken project hadn't really started in earnest back then. You can see from those projections that the first oil production was deemed to be in 2016 and we know that first actual production was in H2 2017, with real ramp up occuring in January 2018. What's more realistic for me is the projections in the link below from 2017. http://www.edisonthoughts.com/2017/ Search for the word Kraken and on the 4th hit or so of the word, you'll see a chart with updated projections. You'll see that peak production will be in 2019, once DC4 comes online in Q1 2019, which makes sense. In reality, there won't be a drop off in production in 2019, but that'll start sometime in 2021. This will give Enquest, conservatively, circa 28K BOPD net, which is approximately 10 million barrels each year for the next 3 years.

Cheers, MO and Chilts. A 500K load be a circa 38 to 40K BOPD production run rate and indicates good progress from the last load. Would be great to see how the next couple of loads pan out and we can then make an educated judgement about Kraken's progress.