Member Info for epiphany121

Lol..Indeed. if you read Page 11 of the presentation in the link below, it does state that Enquest will own 25% of Magnus by the 'End of 2017' - the acquisition date presumably. And that's the Annual Report indicates. Best

Evening Chilts, The unfortunate reality is that incremental barrels coming out of the high-octane production regions like the Permian basin and the Eagle Ford basin, their break even costs are around the $20 to $25 figure. This includes the LOE (lease operating expenses) as well as Depreciation figures. It's the lowest in the Permian region. There is another consideration for the oil produced in the Permian basis region. The Permian region of West Texas and East New Mexico is currently estimated to produce circa 3.5 million barrels, out of the circa 10.5 million barrels out of the US. The Permian is long way away from the export markets of the gulf market, and the big issue now is that there is not much more takeaway capacity via pipelines from this region to the gulf coast. And hence, new wells may well have to be shut in because of a lack of this takeaway capacity. Oil in the Permian region is priced lower by $12 to $18, a few months out from now. So, with WTI at $66, the Permian oil is only fetching $54 when sold in that region, unless this oil is transported to the coast for a higher price. And of course, there's the problem with takeaway capacity. Hopefully, production does get reigned in soon, at least until September 2019 (next year), when large amount of new pipeline capacity is made available. And therein lies the hope that there won't be too much excess production from the US. GL

Hi there MO, Here's what I've pulled up from 2017 Annual Report. It does show that the revenues on Enquest's books aren't counted from the 1st of January, but rather from the Acquisition date, which should be 1st of December. Here's the details. -------------------------------------------------------------------------------------------------------------------------------------------- Fair value of consideration The consideration payable has been satisfied via a vendor loan from BP. The loan is repayable solely out of the cash flows which are achieved above operating cash flows from the Transaction assets and is secured over the interests in the Transaction assets. The loan accrues interest at a rate of 5.0% per annum on the base consideration. The base consideration was $85 million, which was adjusted for interim period and working capital adjustments since the economic date of 1 January 2017, resulting in contingent consideration of $66.6 million. The present value of the contingent consideration was calculated from the future expected cash flows, at a discount rate of 10.0% and assumed repayment of around three years. This is recognised within contingent consideration within provisions (see note 22). From the date of acquisition, the Transaction assets have contributed $14.0 million of revenue and $2.1 million to the profit before tax from continuing operations of the Group. If the combination had taken place at the beginning of the year, revenue from continuing operations would have been $73.9 million and the profit before tax from continuing operations would have been $25.9 million. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2017. All transaction costs were paid by BP as part of the deal agreement. --------------------------------------------------------------------------------------------------------------------------------------------------- Only $14 million was recorded as revenues in FY 2017, which would've been $74 million if the acquisition date was 1st January 2017. @Jan, in answer to your question about Debt, this transaction is NOT treated as debt on Enquest's balance sheet. It is included under Provisions and doesn't affect debt levels. Ditto for the 75% Magnus stake acquisition. It will be exactly the same scenario in that the 'BP Vendor Loan' of $200 million will go under provisions and not under debt. All of my previous comments about cash flows for Magnus oil sales not coming on our balance sheet till late this year, is still true. GLA.

You too, wee laddie. I hope the sun still rises in the east for you.

Good to know that you at least know yourself very well!!!

FFS...this is what history has taught us to avoid, OM. The short-sightedness of populists like you is what starts an eventual economic armageddon.

MO - the 25% acquisition only closed on December 1st 2017. Did you read somewhere that this was effective dated to Jan 1st 2017, as I don't believe that's the case? The ownership of the Magnus 25% should've been effective from that date, unless I've made a glaring error somewhere. I probably swing towards the optimistic side of the spectrum in stocks I take a position in and I feel deserve a better valuation; you're more realistic I'd suggest from what I've read of your posts. But, I don't try and worry about day to day price swings. The global economic growth story should take care of the POO; however, I do see dark clouds threatening that story through the unilateral actions of the US, read the idiot Trump. Hey ho - we'll see where we go.

Tit for Tat retaliation from Canada just now. EU will be next, I'm sure. They won't take this lying down. What kind of a mess the Trump chimp will get the world to, god only knows. WTI is down $2 and Brent is down $2.5 from the peak this afternoon. https://www.zerohedge.com/news/2018-05-31/canada-unleashes-dollar-dollar-retaliatory-tariffs-us I can expect to see more downswings tomorrow. GLA

MO - considering that one well has been drilled and the second is in progress at Magnus and BP would've coughed up 75% of the drill expenses for these, there's only one additional well that we'll need to fully fund, if we do push for the 75% acquisition in July 2018. As discussed in a previous posting, even though we won't get cash flow for that 75% Magnus stake, it does add to our profitability and reserves in 2018. The profits are going on the P&L and full Magnus/SVT asset value is going on our balance sheet.

MO - you and I are in agreement. I'll take a whole year circa 40K BOPD figure, resulting in a net 28K BOPD for ENQ. If we do get there, and that's not in realms of fantasy by any stretch, we'll close to the mid 60 BOPD, if we include acouple of thousand barrels from the Alma/Galia workover. We'll keep watching the tankers!!!

Apologies - I meant to write in the first line above that the BP Vendor Load WASN'T counted in the gross/net debt figure on the balance sheet as of the 31st of December 2017.

So, BP's 'debt' is a complex arrangement and is counted as debt on the balance sheet. Look up the 2017 AR and you'll see the following as the Gross debt components. The below is as of December 31st 2017. ----------------------------------------------------------------------------------------------------------------------------------------------------------- Cash and net debt1 The Group had $173.1 million of cash and cash equivalents at 31 December 2017 and $1,991.4 million of net debt, including PIK of $90.5 million (2016: $174.6 million of cash and cash equivalents and $1,796.5 million of net debt, including PIK of $27.7 million). Net debt1 comprises the following liabilities: � $224.1 million principal outstanding on the �155 million retail bond (2016: $191.3 million) including $14.9 million of interest capitalised as an amount Payable In Kind (�PIK�) in the year; � $720.8 million principal outstanding on the high yield bond, including capitalised interest (PIK) of $70.8 million pursuant to the Restructuring (2016: $677.5 million and $27.5 million respectively); � $1,100.0 million carrying value of credit facility, comprising amounts drawn down of $1,095.2 million and PIK interest of $4.8 million (2016: $1,037.5 million comprising amounts drawn down of $1,037.3 million and PIK interest of $0.2 million); � $25.6 million relating to the SVT Working Capital Facility (2016: $nil); � $75.5 million relating to the Mercuria Prepayment Facility (2016: $nil); � $10.0 million outstanding from a trade creditor loan (2016: $40.0 million); and � $8.5 million principal outstanding on the Tanjong Baram Project Finance Facility (2016: $24.9 million). 1 Net debt excludes accrued interest and the net-off of unamortised fees (see note 19 of the consolidated financial statements). ---------------------------------------------------------------------------------------------------------------------------------------------------------- Here's another statement from the AR. Complexity of acquisition accounting The acquisition of 25% of the Magnus oil field from BP along with BP�s interest in the related infrastructure assets completed on 1 December 2017. This is a complex agreement funded by way of a vendor loan from BP and is linked to a further agreement in relation to the funding of the decommissioning of the Thistle field. ---------------------------------------------------------------------------------------------------------------------------------------------------------- COnsidering that the agreement around decommissioning of Thistle was signed/paid for January 2018, it is possible that the vendor loan (net of thistle decommissiong) came on the balance sheet early in 2018, and may also partly explain net debt not changing much in the first few months of the year. I'll try and do some more analysis to fully validate this. Best

Spot on, Auson. We won't see any net debt reduction figures until the H1 figures come out in September. The positive news we may see before that would be the final commissioning, Kraken loads, and POO (big unknown). Another big one could Enquest exercising the Magnus option in early July - that'll be a big vote of confidence for the company, even though it's a cash outflow of $100 mill, but that pushes up reserves and net sales/profitability figures, and as you'll see below, not necessarily cash flow. Mind you, the entire 100% Magnus stake won't add to net cash flow until 1. BP is paid off the first $85 million (for the 25% stake) from the oil sales from the 25% Enquest stake. Let's assume that Magnus will produce at circa 14000 BOPD through the year and Enquest share is 3500 BOPD. That equates to circa 1.25 million barrels annually. Assuming a net realised price of say $70 a barrel and net of production costs at $50, all of the cash flow this year will go to BP. From next year, it's straight to Enquest's coffers 2. Ditto for the 75% option, should AB choose to exercise it. BP will be owed $200 million for the 75% stake and Enquest will pay the first $200 mill cash from sales. This will probably take till 12 to 14 months to pay off (assuming a $50 net cash flow), and after that, BP and Enquest will share 50% of net cash flow, till BP receives an additional $700 million. THis will of course take a few years to work through. For Squiffy - the above (point 1) is another dynamic you need to consider when you bang on about debt and why it didn't move/increase till end of April. The 3,500K BOPD Magnus cash flow goes straight to BP at this time. Best

Lol..;-) Let it consolidate and move up/down for a bit. We definitely need higher POO and one or 2 positive news flows before this goes upwards meaningfully, IMO. The holders expecting quick turnaround in the SP will be disappointed, IMO. I'm sitting and waiting for either of the above. If POO goes down more, I won't be surprised if it hits the low 30s. Best

Large draw - 4.2 million barrels. And the trend just continues. One week up and one week down. Bullish though!!!

And DJIA keeps tumbling. And the Koch bros aren't happy either. We should get another 400 point Dow fall by the end of day today. Aww, morons.. https://www.cnbc.com/2018/05/31/conservative-koch-brothers-network-denounces-trump-tariffs.html?__source=sharebar|twitter&par=sharebar

Numpty deserves to be ignored..

Why don't you give you us your angle, Squiffy? Unless Brent's below $70 or Enquest comes out with bad production data, personally I'm not counting my ENQ pennies every day.

This is what I was afraid of. Lunatics in the white house and populists at the helm. https://www.zerohedge.com/news/2018-05-31/stocks-bopnd-yields-tumble-eu-threatens-immediate-retaliation-trump-tariffs

Try and predict day to day movements and why we're down or up on a day to day is nigh on impossible. For me anyway...The broader market is down today and many oilies are down as while. Angst over the idiot Trump's trade wars would be a factor, I'd suggest,