Member Info for epiphany121

Nice one, Romaron. Next year will be Enquest's year.

Evening L3 - let me review the financials in detail and I'll come back to you. My initial thought on reading about these from Hitman's post yesterday, was that most of these items are non-cash items, other than of course the KUFPEC charge. Part of that provision was paid last half and the rest would be paid this half. Circa 10 mill from memory.

That's a big number, Mavrick. Way above mine certainly and I can then understand your 'nervousness'. With a large holding, maybe I'd be worried about the move we saw today after a great results day yesterday. However, it's a low volume down day and possibly PIs selling out after they didn't see a move up today.

I met a Swedish shareholder at the AGM who said he had a larger holding than you. I wonder if he's adding more at these levels as he was very sanguine about Enq's prospects.

Maybe you should come to the AGM next year and meet AB.

Hello P,
"
Can you explain how debt could drop approx 42 million/month in May/June?
First 4 months we did 25/month.
Did they kick some cost over to H2?"

My best take on this is
1. The $50 mill paydown of payables/trade creditors in the first 4 months
2. $125 mill capex payments could've been more front-end loaded. We know there were past period invoices that had to repaid and that could be a factor.
3. Cash flow timing can always influence cash balances and net debt. If we have a load of cash come through in the last 2 months, that would move the needle.

However, the key to note is that Enquest did pay down a good chunk of RCF debt in H1 ($160 mill), a fair bit of it in ahead of the scheduled amortisation. Mercuria is done. OZ being paid down. All ticks in the box for me.

Good luck, Mavrick.

I'll be happy if ENQ keeps executing and Brent stays above these levels. SP will catch-up, eventually.....

HMHN - You're the anonymous fantasist, not I. ;-) There are board members on here that I have met at the AGM. How many times have you been at the AGM or who knows you?

You're probably be looking at yourself in the mirror when you write "You're still the self proclaimed expert of everything". However, when I spot something that's blatantly incorrect, either pumping numbers or being negative, I try to give my views and correct them. I've already said last time I wrote to you that I'm certainly not right everytime - I'm only human. I wouldn't be averaging in the mid 20s in Enq if that was indeed the case, would I?

Mavrick, the problem is about expectations and time horizon for when the SP could move. You want it to move today and let's just say the market is still sceptical about ENQ's debt pay down prospects given the current oil price levels. Pure and simple, we do need better macro news that pushes up Brent above $65 or another set of AB buys to move the SP meaningfully this year.

Number crunching or poring through balance sheets/financials that may help us better understand a company's short and long term prospects is, IMO, better than having a constant moan about something that no one on here can control = the SP.

Best

I did say fantasy and if you put this hedge into your model, it still stays a fantasy - no difference really. Take a real hard look at your H2 projections and figure out why it is a fantasy. Singha and spreadsheets don't necessarily mix well.

Too much Brexit nonsense. Very enlightening no doubt for you, P?

Oil rigs off 4, Gas off 2. Oil rigs at 738 versus 860 this week last year. Permian is off 3 at 427 from 484 last week. Slow, but steady down moves. That's down 34 oil rigs in the last 3 rigs. Every little counts.

Looks like the Buffoon's best mate Jerome has lit a tiny fire under the oil market. Now firmly in green and up more than 2 on the day.

Good weekend all.

Nice find, P. I'm a regular CNBC watcher, but I don't often watch the morning slots and I missed this. Cheers.

Here's the transcript to yesterday's H1 earnings call.

https://finance.yahoo.com/news/edited-transcript-enq-l-earnings-173919788.html

Malaysia saleable/entitlement barrels are 70% versus the 65% that I'd been modelling. And shrinkage is 1.5% and that's something to factor in for final sales too.

Other highlights:
25% Magnus repaid in August and hence, all CFs accrue to ENQ. The 50-50 profit share will kick in later this year. Obviously, cash from Magnus will subsequently not mostly come to ENQ to reduce debt, and that I assume is also adding to the market angst over low oil prices and how quickly ENQ can run through debt at these prices.

To Pelle's point, $50 mill was working capital movement changes from 2018 (Payables) and $34 mill of the $275 mill Capex was deferrals from 2018. And P, you'll love this, Capex is coming down 'Materially' from the $275 mill level in 2019. ;-)

Kraken exploitable resources - here are some comments - " Again, this is a 20-year life field, there's significant amount of oil in Kraken itself, 400 million barrels; in the Western Flank, 100 million barrels; in the Maureen, we have 3 wells which has intersected tens of millions of barrels". That suggests a STOIIP of circa 500 mmbbls. I don't know if that a transcription error, but it's great of there's that amount of exploitable resources.

And as we speak, Brent is up more than a buck and a half from the lows today. Hang in there all - our time will come in 2020. With a bit of help from Brent and the orange buffoon not escalating his trade wars.

Neil,
Regarding how quickly Shale may actually get into negative growth rates - Joe Papa's view is that at current prices circa $55 to 60 WTI, he sees US production growing by 700 kbopd in 2020 and that 1.2 mmbopd rates are not possibly based on how rig growth is trending. He's been one of the few voices of reason within the shale patch, having built to EOG to where it is now, and he's long been warning about spacing/parent-child issues in the shale patches, and only in the last 2 quarters have other CEOs been parroting his lines.

We know that decline rates for the shale wells are much higher than conventional wells - some wells have noted drop-off rates of more than 50% after year 1. This treadmill effect needs a lot of capex to drill more wells, just to keep production stable at the higher base rates that shalers are currently producing at. With the level of wall street scrutiny now over keeping capex spends within cash generated from operations, shalers simply won't have room to spend prodigious amounts of money to keep production going.

at $40 a barrel, and given the amount of debt coming due in 2020 and 2021, shale has nowhere to go, but to pull back hard. They're true swing producers and can ramp up quickly when prices are high, and will have no choice but to pull back at the sub 50 prices. There's typically a 6 to 9 month lag between a rig being deployed and a well producing oil and so it may take a few months for the numbers to show up, but show up they will.

$40 Brent, sub $40 WTI - that's recession pricing and that's not really on the horizon after all the data points in the past couple of days. More than half the shale patch would be bankrupt and that'll more than ensure that US production, which is now the biggest contributor to production growth in the world, will fall.

Crude down 4.8 mmbbls, gasoline down 2.4 mmbbls, Distillates down 2.5 mmbbls. And production down 100k bopd. Brent/WTI bouncing..

I picked up the following on the call.

1. At worst, there may be a single-train 4 or 5 day shut-down on Kraken. They'll decide at the end of this month if this shut down is required or can be postponed to next year
2. Opex is a bit more H2 loaded as that's where a lot of maintenance activity across a broad swathe of the portfolio is carried out
3. Most recent kraken shipments have been at a small discount to Brent, but see the trend changing at IMO 2020 deadline comes close

Cheers, Osaka. Listening now.

Michael - the $311 mill EBITDA reference is for H1 2018, and not FY 2018. FY18 EBITDA was north of $700 mill. You'll need to rework your numbers, I'm afraid. ;-)

Fantastic. Thanks for that heads-up, Beerbull. It's great to get that sense from someone actually on the ground with customers all over the UK.

Good luck.

Beerbull - I'm not in the headed to a recession base case at this time and I'm talking about the US at this time, which is the most important country from an oil price viewpoint. UK, with all the Brexit nonsense, is probably already in one and so is Germany. But, if anything they're in a mild one because of consumers pulling off and export angst, respectively. However, that's of no real consequence, IMO.

The US consumer is still quite strong and income growth/spending is still good. The unknown at this time is how the trade war and the tariffs that higher in higher prices for consumers could start impacting them. I still believe that as long as the tariffs are removed ASAP, the US can go back to functioning at or above trend growth of 2 to 2.5%. Maybe more, as business confidence comes back too. And that's net net great for oil.

If the trade war escalates or more tariffs come on in December, then there is a real chance of a 2020 recession in the US. When someone as unpredictable as Trump is at the centre of this circus, investing becomes a difficult proposition. At least there's been some good news today that China and the US are meeting in October, after all the fake phone calls happened last week. That's a good start.

Is your business based in the UK and do you have any operations/hook-in to the US?

Best