Member Info for epiphany121

Sadly, the likes of Members continue to spout inane rubbish on down days like yesterday - a barrage of 'I told you so posts'. Granted PMO/ENQ have been a trader's dream for the past few months, but if Brent breaks out of this range because of the upcoming supply and demand positives that could dawn upon us in the near future, then both these companies SPs will take off too. That's my medium term base case certainly - 100p may not be too far way for PMO.

GL..

Geo - I don't post much on this board; it's mostly on the Enq board. I don't own Occidental, but I do have small holdings in Concho (second largest Permian producer after Oxy), CDEV, MUR, and DVN. Murphy is not in the Permian (it's GoM and Eagle Ford play), but the other two are. CDEV has a highly regarded CEO, Mark Papa, who was formerly the CEO of EOG, and he's always been a voice of reason among the shaler E&Ps. He's also been shouting out for a few quarters now that the shale growth model is not sustainable with WTI at these price levels and was one of the first to cut capex in Feb this year. He's said that he thinks that US production growth is likely to be circa 400 kbopd in 2020, versus the mill plus that EIA is projecting. Almost every shale company that I follow is focused on keeping capex lower than cash generated from ops, and they've done a good job in Q3. CEOs have already said they won't increase capex even if WTI goes into the 60s at this time - they'd rather focus on getting cash in and 'pay' shareholders.

What this means is lower rig counts and this down trend that started accelerating in Q3, is continuing in Q4 thus far. It bodes well for Brent/WTI in 2020, and where north sea producers like PMO and ENQ go from here - Upwards. And with the China-US trade deal done, when done with tariffs coming off, will remove demand worries that's plaguing oil prices.

Yes, might as well. ;-) That's definitely uninvestable. It's part of my shale tracking watchlist to see how capex is trending amongst these shalers. MRO reported last night - it's the same story with a lower capex and minimal growth next year, and they're actually generated more in Cash from Ops than they spent on capex in Q3. It's a $9 bill market company. Wherever you look in the shale patch, it's all about reigning in spending inside cash from ops - wall street is paying close attention to that metric and rewarding most shalers who do so.

The kind of reinforcement will only remind shalers to be prudent and cut capex, and that's what the oil market needs.

GLA..

https://www.enquest.com/fileadmin/content/statements_reports_presentations_and_general_PDFs/131115CapitalMarketsDay.pdf

I suppose this was when we had the last CMD - production till October was stated, along with Kraken project details. I wonder what this year's CMD deck would cover..

https://oilprice.com/Energy/Energy-General/The-Drilling-Frenzy-Is-Over-For-US-Shale.html

It's this one.

Chesapeake - that looks headed to Bankruptcy as the stock was off another 30% yesterday and bond prices are at 55c now. And I'd doubt there'd be a chapter 11 exit this time around with lenders and banks surely not supporting a debt-equity conversion.

I was listening to Mark Papa (one of the early godfathers of shale from his EOG stewardship days) on the Centennial call a couple of days ago and he did say what the article said - maybe 400 Kbopd growth next year versus 1 mill BOPD plus being bandied by S&P/EIA.

With a trade deal back on the radar now, oil will move up and a Santa Claus rally is firmly back on.. ;-)

GLA..

It looks like hookup tomorrow, but it'll still be a 9.5 day interval - the shortest ever!!!

Of course - Ponzi is a position poster. If long then there's ramping, and if he's traded out of Enq, then deramp it. ;-) That's certainly like Members and the more sinister NH. ;-)

And another of the Permian biggies/darlings that reported last night - Diamondback Energy (FANG), is still spending more on Capex than the cash generated from ops. They're still spending a sh**te load of capex (projected flat capex in 2020) to sustain production, ok grow marginally, in 2020. THey also missed earnings for their quarter and the stock's been marked down more than 10% at 52-week lows now. It's still a $14 bill mkt cap company, but will be dropping today.

Any capex overspend above cash from ops has been unrelentingly punished by Wall Street this quarter - good for you, Wall Street (finally). You're showing them what they need to do - this is all good for us

" despite having lost a fortune in 6 years I have been invested here" - that's been repeatedly pointed out to Members when he was trolling the ENQ board.

I couldn't but LMAO when he was projecting that since 2018 Q4 was a horrible quarter, this year would be the same. If you really are a macro-economics watcher, you'd know 2018 had a few negatives going for it - Fed hiking at the wrong time, PMIs were turning lower, oil production screaming upwards - all these contributed to a bad November/December. This year - it's anything but that - Fed lowering rates/global PMIs are actually turning up/Shale is strugling big time with hardly any growth. US badly wants a trade deal and Trump will likely get it, as his future next year depends on it. Put all these together, there will be big rally in oil and oil stocks in the next 2 months. This year will be a proper Santa Claus rally year.

And the losers will keep losing!!!

Jumped to 54.7, above 53.5 expected. Yet another positive piece of data and oil's hit the day's highs as a result. Nice..

That article is nearly spot on, Pelle. That's mostly what's playing out now - they missed out on the China-US trade deals hopes that's buoying the stock and oil markets even more. If that's resolved and business investment comes back, then the markets should even rally into 2020.

That scenario all but certain guarantees that Numpty will be re-elected, but for the sake of our portfolios, I'll let that pass.. ;-)

Hello Mav - these shalers have been really beaten down in the past year or so, and some are making a comeback now. MUR is a solid company (not just in shale though, as they have a large offshore GoM portfolio) but fell from $35 to $17 and they even give out a $1 dividend. Stock's up from $19 to $24 in the past few days after very good results and tempered production/capex. CXO hasn't gone up much, but they're the second largest Permian player. Everyone re-iterated on their earnings call that they'll temper capex even if WTI rallies into the 60s. CDEV is down 80% from the peak and is still not covering capex from cash generated and we'll see how their stock reacts today. There's a deluge of earnings coming out this week and it'll be great to hear their commentary about Capex/future plans, as that has a bearing on where oil goes from here.

There are some bargains out there in the shale patch, now that they're finally focusing on spending cuts.

However, majority oil producers in the shale patch are dropping rigs and cutting capex. Many are starting to cover their capex from the cash generated from ops. Examples - MUR, CXO and even OXY (though not generating enough profits). All have cut capex and there's, I believe, a recognition that there needs to be positive cash flow generated to cover capex, and that's the discipline that Wall Street has finally forced on them.

That's great for price stability/increase in the coming months.

Chesapeake is primarily a nat gas producer and gas prices are completely sh**te in the US. CHK isn't a good yardstick when making a connection between WTI and how much revs/profits they generate. However, point taken that all producers will need to cut capex to generate positive cash flows, and also enable oil/gas prices to go up as a result.

Hello L3 - to your question about FCF, I'm using the term FCF broadly. It's the net cash flow after deducting capex/interest/lease payments. I'm not deducting any OZ/RCF repayments, which has the effect of reducing debt anyway and reducing net debt. H2 shouldn't have the $50 mill working capital adjustment that was on in H1, Hedges are on higher prices for a decent chunk of production and maybe they took on more after the Sept SA attacks (as mentioned by someone on here). This is why I reckon there may be some upside to the net debt numbers in H2, possibly slightly better than H1.

Shale hitting 16.9 mmbopd by 2024 is a pipe dream, unless it's backed by high WTI prices in the 70s that can support the level of Capex needed to grow production to those levels. A large producer like Occidental (circa 770kbopd (oil) production in 2019) can only increase production by 2% in 2020 with a $5.4 billion capex investment. THey're cutting capex from $9 bill to this $5.4 bill figure next year to keep up cash flows and profitability.

Production growth in shale next year will be anaemic and will continue to be so with WTI at these levels. Shalers have released that production at any cost is not sustainable are cutting back. Large investments and higher production isn't happening unless WTI is up another $10 from these levels and stays there..Which is great for the likes of PMO/ENQ and other North Sea producers.

Morning Romaron,

We're at like 7% gas (mostly from Magnus) in the overall production portfolio and that's pretty light compared to our peers like PMO. As you rightly pointed out, the BOEPD sale value from Gas is a whole lot less than Oil - Gas is closer to $30 boe, about half the price of Oil, and this is one reason why we should be more 'valuable' than our peers like PMO - which is evidently not the case.

Sell-side just doesn't like us and doesn't buy our story, and they're an important cog in the investment wheel. The CMD is a good start and hopefully will get some on them onboard.

Gkb - we definitely need to add the Associated gas produced number to the oil produced number in order to be consistent with ENQ's guidance metrics. The headline gas (and oil) production number is what Enquest reports and is what is important - irrespective of whether it's flared, consumed internally, lost to shrinkage or sold.

Agreed, Therapist. Extrapolating Kraken's (out)performance in October/November to somewhere in between the 42 to 50 kbopd range, there may be enough cushion to get us to near the high end of the guidance range. If oil goes up on a decent run now with the news that Hitman posted regarding tariffs, we may end up having FCF of between $150 to $200 mill in H2 and that's not shabby at all.

Let's see if we get additional colour on this in the CMD update.

Hitman, OXY has a torrid time on the markets since they closed the Anadarko acquisition a few months ago - the stock's off 35% and near the lows of the year. As you pointed out, capex for next year is dropping from the $9 bill that these 2 companies would've spent this year to $5.4 bill. Production is only forecast to grow 2% next year to circa 1.35 MMboepd, with this spending cut, of which 1.1 MMboepd is US. I'm not sure what their oil-gas mix is, but is circa 70% for a typical shaler - maybe a 15 to 20 KBOPD increase next year - crikey, not much oil production increase next year with this grand $5.4 bill Capex.

Essentially, OXY accounts for 6.5% of the total oil production in the US. They're not growing next year and EIA and S&P expects US to grow more than a million bbls/day next year? That's a good joke.

GLA. Q4 rally still beckons post CMD..