Member Info for epiphany121

P - I think that is a vote of confidence from the Chairman and AB, that even if the near term outlook for Brent is murky, they believe in the long term prospects for Enquest. I personally don't think that 2 and 3 are possibilities, given oil prices are where they are. A slow and steady grind down of debt is a likely scenario.

Wall street, with its 2 day current selloff is forcing numpty's hand on the China trade deal. He will bend over, IMO, and will tide over the newly emerged recession fears. With WTI at 52 and WLL in the 40s, no big capex spend from Shale will be forthcoming. In their earnings commentary starting in a couple of weeks time, we'll see more capex cuts. If WTI is at these levels for another few weeks, 2020 production growth is all but F***ed. That's my base case. We'll just need to hang in there and let this volatility play out.

GL...

L7 - the GOM dip was because of Hurricane Barry that caused large scale platform shutdowns for a few days in July. That was a one-off and production actuals will be back up to over 12 mmbbls in August. The weekly EIA numbers had the July average at 11.95 mmbbls vs the actuals of 11.81 (from yesterday), which was a slight overstatement. The August average based on weekly EIA was 12.375 mmbbls, which was an all-time high. August actuals will probably confirm a new actual high.

Yes, growth is slowing as capex is coming down and we can that trend being more pronounced next year, even a negative growth rate in 2020 won't be a surprise.

Great find, MO. Cheers. That's a 10 day cycle, assuming the offload does start on the 3rd - great to know.

Lol..https://twitter.com/4xInsight/status/1177560400264605697

Predictably, Oil is off more than 2%

He'll never get impeached. THat needs a 2/3rd of Yes votes in the Senate and that's impossible.

However, what the market is worried about is how this impacts his re-election next year. Maybe, this will just force his hand to get a positive China deal. ;-)

Orange man impeachment concerns is resulting in a risk-off trade today. Orange is giving us an uninterrupted stream of mini and major roadblocks..

Jan,

I wouldn't classify lease costs as debt in the traditional sense, that I agree. None of the debt metrics are based on lease inclusion, even though the Kraken leases are classified Finance leases. However, there's still the point regarding Moody's classifying the Magnus payables as debt - even if the covenants don't take that into account.

Again, all of these debt and other payables/liabilities are only a concern should Brent go a fair bit lower from these levels. And that's nothing that we didn't know.

Nice one, Romaron. I agree on both counts - Enquest is a great Brent recovery play (compared to the likes of PMO, given the relative undervaluation), and yet, we do have debt issues (and also lease payments) that we need to grapple with and we're making progress, no doubt. Sell-side is still not convinced if we can keep up the pace of debt reduction should Brent go lower.

And we also need to take into consideration the Magnus contingent liabilities, which Moody's actually count in their Total debt calculation. All of these are not lost with the sell-side. A higher Brent sweeps away all concerns, but it's not in the ideal range for Enquest.

Harry - "My personal opinion is that the reported Debt/EBITDA of 1.8x is misleading and really it is around 3x including finance leases. ". Personally, I have no problem with that assessment. I'm realistic enough to understand that the SP is where it is because of high debt levels and the key risk that Enquest will take longer to bring debt down should Brent go lower from these levels. £1 billion valuation for Enquest may only be a 2021/22 story assuming that debt is meaningfully down, supported by strong Brent.

Only as a trading position. I've not held PMO as an LT investment. However, LT investments in oilers in this current environment do 'suck' though and the ridiculous production numbers from the shalers isn't helping. Rystad is still forecasting 2mmbbls production growth in 2020 from non-opec+, although I'm not quite sure what they're smoking. ;-)

Doh, my bad, Ponzi. It's probably the other baiter, Members then. ;-)

Well put, WEny. Best to ignore or filter if you don't have the discipline to ignore (as I find a lot from the likes of KO).

It was probably Ponzi Man that said that PMO was doing better than Enq in the recent past. Hmm, just look up prices from what they were on 13/09 (before the attacks) to now. PMO is down from 85 to under 80. And Enq is up marginally. That says it all for me. We're still a play on Brent and 2020 should see better FCF generation (post capex), vis-a-vis 2019. Sell-side (and the market) will take at least 2 more HY reports with solid debt reduction before they full come on-board. And we need Brent to co-operate.

GL..

Great find, P. It's sharing articles like these that makes sticking around MBs, worthwhile. ;-)

I don't believe we're at a $10 premium to Brent - I believe there was reference to a small premium in the H1 call. Nevertheless, having Kraken crude quoted in the IMO 2020 fuel article, is fab. Slow and steady does it for me.

GKB - I broadly agree with you regarding divs. It's not a 2020 story, even though I did say once that they may look at it with the H1 results next year. The reason why the SP is 'floundering' where it is, is because of debt. The market doesn't believe at this time, that oil can even stay at these levels for a long time and all Brent price risks are to the downside. It's more worried about demand rather than the supply issue that Iran created last week with the attacks on SA (and may continue, who knows). Unless a trade deal is struck, oil is going nowhere (maybe lower from here) and this is why the market is concerned about the pace at which Enquest can generate FCF and actually reduce debt.

We've noted that, unlike the likes of CNE and PMO, Enquest has no oil hedged for 2020. And that is a concern to me. The only negative that I'd put on the Enquest team recently, is that they've been behind the curve with hedging and that may yet come back to haunt us.

If there's anything we need lot of, is good old luck, with Brent.. ;-)

Look up in my posting history inside the last month and you'll find it.

Democrats may not be 'as good' for the US oil industry, but that is only good for global oil price. ;-)

#Chilts - Looks like it's all hooked up this morning - I'm not sure of the time.

I'm still not able to post - I've no idea what these key words are.. ;-)

P - two of my posts regarding the rig count never got posted. I was wondering why and maybe now we know? ..;-)

Chilts - have you seen MO's post? NO is headed to Kraken, not AS..