Member Info for epiphany121

I wouldn't count on AB's support from squid for more than a day. ;-) All we need is for Brent to take a leg lower )and SP to fall, and then that's AB's fault. Lol.

What I noted in the AGM is that AB is really approachable, has time for you and engages. That's more than I can say for a lot of CEOs. Romaron has met him in multiple AGMs and AB's heart is in a good place. All oil CEOs made investment decisions earlier this decade that wouldn't have been signed off at this time in the cycle - AB was no exception with Kraken and Alma. He's righting the ship and is steering it as well as he can, and results are starting to show. It will take maybe more time for the market to digest this news of progress being made here, and that's OK.

I stated many months ago that H2 2020 is where a real re-rate may happen, if oil is around these levels. Sooner if Brent gets a bit perky.

GLA...

With regards to Kraken - here's the commentary. As discussed by Hitman last evening, some of the scheduled maintenance work was undertaken during the July shutdown. Maybe only a tiny maintenance shutdown is now needed in September. And production is getting better as noted from the offloads.

"In July and August, pipework repairs on the FPSO required short unplanned production shutdowns. Production efficiency is returning to a similar level to that delivered in the second quarter of 2019. The Group continues to review the requirements for a planned shutdown in September, with certain work scopes having been opportunistically executed during July."

Profitaker - Fair point regarding goodwill and intangibles. We could argue that deferred tax assets are useful for Enquest or even an acquirer and that should be counted towards assigning some value to what could be assigned to Enq's valuation.

Good luck

A final couple of points. We have to remember that out of the $124 mill capex out flows, a fair bit of that would've been the deferred cash payments from previous years, as guided by Enquest. Look for that to drop next year.

Finally in the words of the new chairman, we get a glimpse of the 2C opps of circa 200 mmbbls for Enquest. -- I am delighted to be joining EnQuest at this exciting time in the Company's development. EnQuest is a proven leader in owning and operating late-life assets and has significant remaining 2P reserves of 245 MMboe and a large number of low-cost, drillable targets within its 198 MMboe of 2C resources, particularly in its three major assets Kraken, Magnus and PM8/Seligi.

Not that it matters to mister market, but the Equity on the balance sheet has now climbed to $1.05 bill from $983 mill on 31/12. Our market cap is what $313 mill - that's less than a third of book value.

I'm quite happy with how debt has trended and interest costs are moving down. Libor is dropping and fed will cut this month (and maybe more) that should bring down interest costs too. Enq has ticked most, if not all, boxes for H1.

We just need a bit more help from Brent and 2020 will then be the breakout year when debt concerns go away.

Kraken production efficiency at circa 80% in Q2, up from 55% in Q1. Kraken selling at a premium to Brent, as was confirmed in the AGM in May. July and August - there were unplanned shutdown as pipes had to be repaired and that accounted for lower production that was noted - clarified.

Opex is now expected to be lower at $550 mill down from the guided $600 mill. Good. Debt/EBITDA guidance has been indicated as wanting to be closer to the low end of the 1 to 2 range. It will certainly be below 1.5 from what we can note.

GLA..

$65 mill out of $100 mill due in October already repaid. Fab. Covernant debt to EDITDA is already at 1.8 - trending well and would be lower on the back of more repayments. EBITDA - $525 mill. Cash capex down a bit from last year to $124 mill from $125 mill.

$7.5 mill hedging gains vs $77 mill losses last year this time.

No new hedges. We move with price of Brent - this is an area for improvement. Production guidance unchanged - not surprising, but could've done better.

Here are a few positive headlines...
Net debt 1637 - down 137 mil...good stuff. Yippee. Below what the city and many on here were calling. FCF was $138 mill in H1 - not in fantasy land thankfully...

Opex BOE costs down to $20.1 from 22 last year

More to follow...

Evening TWalbyoff - Yes, I do plan to go there next year. Once bitten twice not shy in this case. ;-) Assuming this damn trade war is resolved, Brent should be back in comfortable levels for Enq to pay down debt quickly. Management re-iterated in this year's AGM that debt pay down is indeed their priority, backed by incremental investments in existing fields. That's exactly how things would play out at least for the next 18 months, IMO.

GL..

L3,

I hope all's well.

Did you mean to say that you actually wrote/called ENQ with hedging advise? Yes, any additional hedging done during May/June would've been better. They didn't narrow guidance this time last year, but we can appreciate that Kraken was still not firing on all cylinders last year and it would've been difficult to project anything with all of the ongoing FPSO issues back then.

Now many of the questions you've posted below may or may not be answered in tomorrow's release, but i'm sure that many, if not most of them, can be addressed by IR. Do write to them if you don't get answers tomorrow - I've said this before, they don't bite. And in reality, you should go to the AGM next year and ask these questions..

Finance lease - what do you want to know? I thought that L7 had spelt out a lot of detail there. I doubt they will be putting out any additional detail that they haven't in the past.

Net debt - between 1650 and 1700 will be my take. That's where management's focus is and this is what will get us off the ground in 2020.

GLA.

HmHn - easy now, I'm not suffering from a deranged spreadsheet syndrome and you'll not try to pass that on to me. It's a bit rich coming from you asking me why I'm right this time? You, who can't even get basic numbers right and you go questioning others as to why they're right. Thank goodness, I don't look at fantasy garbage and spend my time trying to rationalise it and even spreading that as gospel. Whether I or any oil investor, maybe that includes even you, is right - who knows? I invest because I have conviction in my investment thesis that points to a sector (for many reasons) and a share that's undervalued, vis a vis other oilies in the sector.

I learn from my mistakes, and previous downturns have given me a good sense for how ugly things can get and how relentless it can get. I'm happy living with my feelings and even wearing them on my sleeve - that makes what I am. That's a lot better than getting ****ed on a little bottle of Singha and spewing numerical, and a lot more, nonsense on this board.

You can now go back to your Singha and stare at your fantasy cash flow statement that'll no doubt show up in your fantasy results announcement tomorrow.

HmHN,

What's with your mind-reading skills, old man?? Lost everything!!!! Ahem, extrapolating decimated portfolio to losing everything is a bridge too far in my world. Granted that I don't have your remarkable analytic and even better mind-reading skills, but not everyone's so lucky, eh? Good luck with your uber-optimistic spreadsheets with the incredible cash flow numbers and you can continue dwell in the dream - no doubt you'll be winning in every conceivable scenario just by looking at them.

Auson - Noted the uptick in the morning first after the HK news came out and then a bit more after Brexit news. Mavrick pointed out Chinese services data which was positive. And then the Yanks woke up and pushed it up a lot higher. I can't see how an isolated tanker can move the market on a sustained basis, and that too by more than a couple of bucks as it stands. Past oil moves on tanker news have been transitory. Let's face it, economy is right now front and centre in how oil price has been moving. The current stream of Iran news or rogue tankers don't really faze the oil market.

If an Iran deal is struck and you have those additional barrels added, then that's a different story. This is highly unlikely now, I'd wager. That's my take.

Cheers, Mavrick.

P - agreed. Recession fears are testing my nerves big time. I've lived through the 2001 and 2008 recession and came out with decimated portfolios. I was tech heavy in 2001 and tech/financials heavy in 2008 - and both were butchered beyond recognition. Lol. ;-) The ride back up was fantastic in 2009 though and I can't fault that move up. I have some 20% of my self-managed portfolio in cash now and if things do go downhill, then I'll up that number. My non-managed pension is currently 50% cash and 50% Gilts, and gilts do well in a recession scenario and get hammered when there's no angst in the market.

Economic data out of the US is still fine. The consumer is still good and that's great news for oil. Manufacturing is ****ty and the sector's now losing jobs, no thanks to Numpty. Most ISM manufacturing respondents yesterday were pretty clear on how the trade war is impacting their business. Non-manufacturing is out ISM data is out tomorrow, and that's pretty critical to note. From an oil perspective - economic data out of the US and then China are all that really matter. OK, No-deal Brexit is bad, that's clear and will add to risks for the global economy.

Good luck tomorrow. The numbers will be fine - we just oil to help out.

Pelle - Oil going up. It's down to some positive noises regarding Brexit and Hongkong. There's nothing more really beyond this. At least HK isn't the black swan event that it could've been - that's good for now. Brexit is complete sh**te and some more positive news on that front would be welcome. But, it's Donny that's holding the key cards now - the trade war cards.

Cheers, MO. It'll be good tomorrow - if only Brent continues to support the oil shares. ;-)

We have lots of positives going for us as a company. The orange buffoon is the biggest danger to the economy and oil prices, as a consequence.

ISM Manufacturing PMI printed a contraction for the first time since 2009, and if that's not revealing enough to the infant in the white house, I'm not sure what else is. Dow and oil have kicked lower after this ISM update came out about 7 minutes ago..ago..

Hi P - yes, I also topped up some this week. Horribly busy week it was for me and I couldn't really post, but been checking posts sporadically. It would've fantastic to have oil in the 70s now, when we're producing a lot, but it is what is. OK - I won't mention good hedging that should've been done last year.. ;-), but that would've been good. Unless the trade war is resolved, I don't see oil going up much, if at all.

The upside is that the smaller shalers are being forced to pull back spending (everyone really, TBH) and you see rig counts coming down sharply. If this continues, that's goodbye to all the wild output predictions from the Permian and the US. That's my biggest hope for now, outside of a trade war resolution.

Good luck for Thursday,

Outside of the totally chewed up topics on this board - Adrian Darya and Finance leases, a couple of bits of additional information.

EIA June production actual stats came out yesterday, and production was marginally down at 12.08 mmbbls from 12.11 mmbbls in June. Weekly estimated reporting was slightly higher at 12.2 mmbbls for June - so not that far off really. Rig count reduction was noted yesterday. Permian was off 5. Oil rigs are now sitting at 120 fewer than last year. However, it does time for production growth to taper off and this week's EIA report showed US production now at an all-time high of 12.5 mmbbls. Death of shale is far from reality I'm afraid. And with the new Permian pipelines coming online just about now, there is an incentive to produce more. This is yet another key factor that's causing recent gyrations in oil prices broadly, and the narrowing of Brent-WTI differentials.

https://www.cnbc.com/2019/08/27/the-us-is-about-to-send-a-lot-more-oil-into-an-oversupplied-market.html

Trade war...that topic's been beaten to death. ;-) The US consumer is about the only bright spot for the global economy at this time. How long can they keep up in the face of lunacy from the orange buffoon is the answer everyone's seeking. And Brexit shenanigans, closer to home, is yet another wild card. After a peaceful ride in the markets last week, I'd say that we should see some volatility this week.

GLA..

Morning P,

I hope all's well with you. Looking forward to what Thursday brings.

You shouldn't have brought up facts about Noreco and scared good old squid's analytic skills that much; It's injurious to their health as you know.