Member Info for epiphany121

Dunc - Unfortunately, the 25% levy came at an inopportune time for Enquest and other UK O&G producers. Has it dealt them a hammer blow - possibly not. But, it will be an uphill struggle to regain the momentum that Enquest had just a few days ago. Ill thought-out fiscal policies such as Sunak's tax is a major impediment in getting NS companies the investment backing that they're due and deserve. There was lots of talk on here a few months ago that the Yanks would come riding in and buy into cheaply valued companies like Enquest/harbour - there's zero chance of that happening now. Enquest is drastically undervalued at this time and I dont believe for a second that AB could've done anything to make this tax policy not happen. It is one of those instances where the UKG has shot itself in the foot, whilst staring in the face of populism. Even dividend paying companies like HBR have faced levels of selling that you wouldn't have contemplated with Brent at 120 bucks.

I wouldn't pin this on AB - the UKG has led the sector deep into the sewers. Maybe the likes of APA corp that has circa 50 kboepd producing assets in the NS would be looking to sell and they won't be getting rich valuations at all. Who knows, maybe AB is making a play for such assets, although the rational side of me says that he''ll focus on getting debt levels down this year - that just makes sense.

We'll just have to see how things shake out in our UK O&G sector in the coming days/weeks.

"Windfall tax on oil in the US on the cards." I'll even give you a probability of a windfall tax happening in the US - ZERO. It won't happen this year with Joe Manchin being the swing vote in the Senate and it certainly wont happen in 2023 when the House will certainly be in the hands of republicans.

MRC - as you'd stated, we cant use carry forward losses to shield these profits. "To appropriately tax the extraordinary profits, companies will not be able to offset previous losses or decommissioning expenditure against profits subject to the levy."

The only option for Enquest to shield these 'extraordinary' profits from the new 25% tax is to actually make more capex investments. 91% of any new investments from today onwards will be tax deductible. I can see Enquest go down that route a fair bit, but I'd suspect they wouldn't want to shield all of the profits - the optics of that can't be overstated.

Peeps - it's a complete waste of time trying to respond to BJ about his/her gripes. I'd be selling out of a stock if I was convinced that the managment team was incompetent. Do I believe in their version of why the AGM was moved - of course not. Do I care about the move itself? No. I'd rather see how they've been operationally executing - that's the only thing that matters to me. Engaging with BJ is a fool's errand and we'll be subject to his endless round-trips of views of Enquest's incompence.

GL..

Chilts - I'm still staying stron g in Energy. A recession isn't imminent - the US economic data (both lagging and coincidental) is still pretty strong, and I'm sure we'll see a trading bounce soon. Dow/S&P - open down big and maybe a close higher today? Right now, costs are a big issue for almost every company and that's why you're seeing even the likes of Walmart and Target getting hammered this week. You'd think these companies would hold up best in a downturn, but we're living in a set of unique generational cost pressure circumstances. Even staples weren't spared from the sell-off yesterday.

Profit-taking has happened and will keep happening for oil shares, but a recession isn't imminent and hence they will bounce. I do have my eyes and ears firmly focused on what the US data is telling me. I don't pay too much attention to UK/European data - that's just noise.

"One consequence of that will be a drop in demand for energy - Brent will fall back and ease inflationary pressure." Right now at these Brent prices, demand isn't and the oil shares will still be in an upward trajectory. Another 15 dollars or so higher and staying - then that's a different story. That's why I don't really want oil prices anywhere around 125 - a global recession, however mild that is, would then be a certainty.

At $110 brent, oil companies can still make a lot of money and won't be vulnerable to a pull back.

Thanks, Tim.

Morning Mod/R - I certainly don't sit in the 'higher pruces are coming and that these are good for oil shares' camp. This couldn't be true for anything more than a few days/weeks, IMO. Maybe another 10 bucks tops may be the ceiling of what the global economy can take, with all of the other inflationary pressures still in play.

With the recent S&P 500 tech stock price action, I'd imagine that tech would be a lot lower than 28% weighting and energy could be getting closer to the 5% weighting - remember that was below 2% in late 2020. But, this is still lower than the 12% weighting seen early in the 2010s. Energy still has a way to go, but this rebalancing will take time to work through. What we definitely don't need is a global recession induced by high oil prices to upset this equation.

Did anyone on this board check with IR if there's an ops update incoming?

Hello P,

That's a bummer. The AGM is now on the 17th June per L7's post. Surely during these Covid days, flights and hotels can be rescheduled??

https://www.enquest.com/investors/corporate-governance/financial-calendar

Morning P - I hope you dont need to go and change your flights. My II tstock trading account also doesnt have the AGM listed and I cant request a letter of representation from them at this time for the AGM. I'm hoping that a formal confirmation comes through from Enquest in the next day or two, OR Romaron will hear back from IR and he'll let us know.

GL

It's a grand oxymoron, but that's what the fed chair JP delivered in his Q&A just about 90 minutes ago and that set off a short covering rally. US oilers moved up sharply to the upside and me thinks, the likes of Enquest will move up too going into the update in a couple of weeks time. I remember that the 2019 update on AGM day wasn't received well and Enquest fell 15% on the day - I'd wager a 10% up day this time around - I'm happy to top you up with your favourite tipple post AGM (if you are aorund) - just make sure it isn't a Dom Perignon P2 2000.. ;-)

Lol, Romaron.

Cheers, Jan. Pelle was trying to reach you. Hopefully, you've connected and we can catch-up that day.

Hello Mod,

I think that SA article is mostly BS. A 33% fall in EU GDP without causing a global recession that will bring demand down and along with it, oil prices - that's fantasy!!! EU has alreddy started importing a lot more from the US and maybe the shalers will get on the act to pump more, if there was a long term supply agreement in place with the EU. I'm all for the Russia oil embargo, even if there's near term pain for the global economy. It's not like Russia can go sell oil at spot prices - the Dated Brent and Urals' spread was 40 bucks last week and will go up more with the latest EU action.

Maximum pressure on Russia is the way to go, IMO.

All - this thread provides a bit more clarity on the oil embargo that the EU is proposing on Russia. It's not just the oil as such that is being embargoed in the coming months, but it's the sanctions on shipping insurance + engg support that could be a bigger problem - even for countries like India and China.

Do I really want oil to go above $110 - NO. Will it - definitely it will, and its the demand destruction that it will ultimately bring in which is of the biggest concern to me.

https://twitter.com/cbjom/status/1521809296547356672

Good for us in the near term.

Out of interest, who's going to the AGM on the 19th?

That's right, MRC. It's the Opex (probably a lot of it) and GBP debt which reflect favourably when translated in USD. In the grand scheme of things, they aren't differentiators. Stay focused on Brent and hedge levels to see how profitability will track in 2022/23. I hope that the EU finds a way to reduce Russian oil/gas imports quickly and shaft them economically - whilst keeping inflation from uploading upwards - that's the key balancing act we'll see in the coming months when the driving season takes off in the Northern hemisphere.

Hello P - I suggest to write to IR and check. I remember in 2019, I took a printout of the ownership letter that my broker Interactive Investor provided for me. I can't remember if they do really ask for it - maybe Romaron remembers as he's been around to a few AGMs?

Yep, that's where I'm coming from too...

Auson - I suppose it matters if you're a trader. This is not the first time we've seen lockdowns in China and it certainly won't be the last either - as long as they are bent on enforcing their moronic zero-covid policy, these will keep happening. The oil market will live through this one too. Gold and Silver markets (and other commodities) - they're inversely correlated to the dollar and traders do pile onto that trade all the time. There may be some more volatility in the oil market but with Russian demand slowly but surely squeezed in the coming months, there will be plenty of support for oil at around these levels - even if does fall another 10 bucks from here in the near term.

A potential Beijing lockdown, with the continuing Shanghai lockdown, is the biggest factor hitting the oil markets today. It's always the demand side of the story that dominates any supply constraint conversations. It's not a bad thing that oil is down to where it is - it takes some heat out of inflationary concerns and should eventually lead to a more tempered reaction from the Fed.

I suppose if you don't have anything like a minute by minute view of the oil market (or share prices), then oil prices are just fine ?