Member Info for epiphany121

Last week oil fell on a large draw. It'd expect it to go up today on a small build. No rocket science there..Lol. ;-)

I doubt that there'd be a counter-party that'd be willing to sell a Brent put on such a volatile day for oil - certainly if these were options hedges. I'm sure they can't tell you/us if they've taken on additional hedges - that's certainly inside information.

Here's to throw something else into the mix from Tanker trackers. There'll probably be a lot more twists and turns yet, and we can't say for sure the oil will find equilibrium around these levels. Maybe the Saudi will strike Iran over the weekend (to minimise impact...says the cynical me).. ;-)

https://twitter.com/TankerTrackers/status/1174223324681068544

GKB - do you know if the press conference is live on TV? I'd assume it is...

I already said over the weekend that I'm not worried about the SP will react on Monday or this week - that's secondary. Primary is how Brent holds up as that'll determine how much cash Enquest can generate to pay down debt. That's the real game changer for us and it's really a 2020 story. Granted if Brent goes into the 70s and stays there for a little while, the SP will react positively in the near term, but the market will expect to see hard numbers eventually.

The headline of this thread says it all for me.. ;-)

Cheers, MO.

Morning MO, Chilts,

Can either of you share load #44 and 45 stats please?

Ta

Beerbull,

I was over on the PMO board and noted you were on a Cathay flight (Iassume flying to HK) and checking via the plane Wifi. ;-) By tomorrow, maybe we'll be firmly in the 22s with Brent in the 70s - ideal scenario.

Cheers, Cole. We do know the SP started moving up in July after a string of purchases by AB's foundation. And we've seen the same happen just now with the foundation and that's a harbinger of things to come, IMO. Albeit, Enquest is in a much better position financially and Brent is even higher. :-) What's not to like..

Yes, I broadly agree, Romaron. We're in a superior position compared to the shalers who couldn't produce any FCF before this recent jump. And the falling rig counts were a testament to a level of discipline that I wasn't sure they'd have. Maybe they'll surprise us and continue pulling the rigs back, even with this jump. That'll be good for their balance sheets - whether they're disciplined enough to do this in the face of higher oil prices, that's a big question mark. We'll see soon.

Oil market is now pricing in a longer delay in SA oil coming back and Brent is well over 69 now and should be testing the 70 handle soon I'd expect. Let the cash flow into our coffers... ;-)

Cole - $80 a barrel will see the shalers bring on the rigs and pump like crazy. I doubt we can sustain 80 for a long time, but that'll be result, IMO and that'll naturally temper oil price increases..

Yes, I noted that oil had another leg higher to 68.50 just now. What were the predictions from Ponzi and NH this morning - $62 oil.. ;-) Go Brent and we'll see Enquest spike more first thing tomorrow..

Hi Romaron,

"It does look like the damage caused in Saudi won't be remedied quickly as intelligence about the damage will have reached those who pay for this kind of information and oil is up c.12 percent at the mom." Yes, 100% agreed. SA will be dipping into reserves no doubt, without invoking force majeure at this time. The oil market had become too complacent about ME risks and this was certainly a huge wake-up call. IMO, at least a $5 premium will exist for oil going forwards, given this changed reality around risk to oil supplies from SA (and ME, in general).

I know you remember this well, but it was the 10 million swaps that Enq sold in 2015 for $68 that gave Enq the additional $220 million cash flows, and I remember you saying (I wasn't invested back then) that the resulting cash made all the difference and ensured Enquest survived during that horrid downturn of 2016.

Best

P - what you wrote below is indeed the conundrum. Oil may fall a bit if things wind back from here or go up to the 70s, if production is offline for a few weeks in Abqaiq. Goldman, for what that's worth, is stating this too. When does Enq pull the trigger is the big question.

"I just want them to put some smaller hedges now, I feel oil can go a lot higher now but if not we at least got some hedging done. Maybe fill up 60% until year end, 30 % Jan/Feb And build more and more if price continue up. Not easy call this right."

Looking at the 2020 forward price curve, that's at $62 in June 2020, even as the spot is now at $67. Enq can either sell swaps at a fixed price for say June 2020 at $62 OR put on a cashless collar for say $5 below 62 as floor and $5 above as ceiling. It protects downside below $57, but restricts upside above $67. But, given all the uncertainties in the global economy, this is a golden chance provided to oilers to hedge and Enquest has to bite - no ifs and buts, IMO.

If proved, this is not good for Iran, TBH. This makes the whole situation in the ME very volatile. I don't think the US will go to war with Iran over this, but this could escalate and that's not good for anyone. We certainly don't need another war in the middle-east.

Hello P,

Slow and steady it is. It's great to have oil at these levels and I do hope Enquest is hedging downside at these levels for 2020. The 2020 curve is in the low 60s and it may not be that great to hedge now given we may only get high 50s with a cash-less collar, but it's better than not will be my take. We'll see as this provides more certainty to the market.

Centennial (CDEV) is about my only real shale trading position now. I have a few thousand (under 5k), and that's shot up 30% today. WLL is up 42% today and I don't have that unfortunately. But then, these 2 companies fell more than 50% just in the past 3 months. What goes around, comes around...

Good luck

ignoring Doomberg for a minute, here's Reuters chiming in. May take 'months'... ;-)

https://www.reuters.com/article/saudi-aramco-production-idINKBN1W10XC?utm_campaign=trueAnthem:+Trending+Content&utm_content=5d7f9203d04a480001c183fb&utm_medium=trueAnthem&utm_source=twitter

Are posting very large gains pre-market in the US. My tracker shows anywhere from 10% to 25% up today. Obviously, many of them are down 80% or so in the last year and this isn't a surprise on a big up day for WTI. It'll be interesting to see how the BHI rigs report trends at the end of the week. If it is stable/falling, this would indicate that they're still careful about spending more now and focused on cash flows, like our oilers are.

Here's an update on Bloomberg. Aramco will formally put out an update later today (hopefully), but it looks like this will take longer.

https://www.bloomberg.com/news/articles/2019-09-16/aramco-said-to-be-less-optimistic-on-pace-of-oil-output-recovery?

Cheers, GKB.

"they also seized one a week or so back, it's a fairly regular occurrance I believe and I'm not tracking them as it's just part of the 'normal' smuggling going on around there." -- I didn't know this was about par for the course - good to know.

GKB - here's some tanker news now. IRGC have picked on a UAE flagged tanker.

https://www.zerohedge.com/energy/irgc-seizes-emirati-flagged-ship-strait-hormuz-suspicion-smuggling-diesel