Member Info for epiphany121

No new hedges - that's good. And Swinney is leaving. And yes, we should be putting out FCF forecasts - can't see the reason behind that reluctance.

50.4 kboepd - good and net debt down to $1090 at the end of Feb from $1220 mill at the end of December. Looks good on that count

Good luck all - we need it.

North sea taxes, windfall or otherwise, are a moot point because of the carry forward losses on our books. If Malaysia were to do that, there'll be a tiny impact, but that isn't even worth a tiny consideration.

The stars are aligning for fund managers to get back into this sector - any ESG considerations are out of the window for the next few years at least.

All - Good luck on Wednesday. A good production update and a steer on debt reduction for the first 2 months of the year will do nicely!!!

"The creators of inflation want to curb inflation as they continue to print and buy 40 billion a month on mortgage back securities alone." mmmm, no. That's fake news. QE is done as of this month - there's no more treasuries or MBS fed purchases after this month. JP isn't an economist by profession, had his eyes on just the markets rather than labour markets and supply chains, and the outcome is the inflationary mess we're in - and let's not forget the black swan event which is the Russian war on Ukraine.

6 more rate hikes this year of 25 bps each in 2022 was projected by JP, but that may not be enough to offset the inflationary pressures we're seeing. The danger here is that the fed overdoes it and the 2yr/10yr yield curve inverts - that's been a remarkably accurate forecaster of a recession in the past few decades. We're now at a 15 bps differential on this measure and that's not good news in the medium term. QT is the next point in order, but the fed may not choose to do this if that pushes up front-end rates - they may choose to go towards the long-end of the treasuries curve at best.

Inflation is good for oil companies and shares - that means a lot for the likes of HBR/ENQ, particularly as the UK Gov drops its oppostition to NS investments.

In keeping with this theme of demand being resilient, in the US anyway, real-time consumption data shows that demand is holding up well for now, even in the face of all-time highs in retail gasoline prices. When Iran is back in the JCPOA in the comin days and assuming that Ukraine war is resolved, oil should stay around the 90s in h2 - good for us and other oil companies. And as noted here, North Sea drilling activities will no longer be restricted and we'll see more of that in the coming months.

https://twitter.com/GasBuddyGuy/status/1505302724728041492

As I've said before, it's not as simple as this. There's the positive difference between dated Brent and futures Brent that needs to be taken into account. This would add a few $$/bbl at this time, as opposed to being a negative like it was back in 2020.

Iran JCPOA talk suspended. We don't need to see higher inflationary pressures as a result - Brent $90 will do just fine for Enquest - this won't run away to 7 SEKs or 10 SEKs or to the 60p party until the results are out on the 24th and we show progress. At least there was a break to 28p earlier this week, and whilst that didn't hold, is comforting enough.

https://twitter.com/markets/status/1502235149676969987

Here is a detailed breakdown of the debt numbers. I'd always ignore post-IFRS debt numbers - they're future liabilities and don't have a bearing on a company current finances or interest payments.

Gross Debt - £531 mill
Cash in hand (31/12/2021) - £101 mill
Cash from Portfolio sales in 2022 - £210 mill
Net debt when Trustmarque cash is received in March = £220 mill

LESS - 2021 headwinds - £240 mill

Pension contribution - £155 mill - will be circa 20 mill in 2022 (from memory) = £135 mill reduction
VAT Deferral - £105 mill

Even if you ignore FCF generated by the business in 2022, net debt (pre-IFRS) should be close ot zero in 2022. Note that actual debt payments in 2022 will be £218 million - due later this year.

Roll on CPI.

Spot on, Ian. People can't or won't read announcements properly and can't tie up businesses SOLD versus Cash actually received when looking at net debt. Fact is 210 mill cash for the £700 mill disposals are only incoming in 2022 and won't be reflected in last year's results -That shouldn't be too difficult to understand for an investor. Plus read up last year H1 report - Pension and VAT headwind is practically non-existent for 2022 and all that cash generated goes straight to the balance sheet. It's an absolute bargain yet, IMO.

Chaps - gross debt (ignore IFRS lease liabilities) is 512 mill and that'll come back by another £220 mill in 2022, through a combination of cash in hand at the end of 2021 PLUS the 95 mill received in January 2022 for AMy Sybex and SSS. And another 115 mill incoming this month for Trustmarque. Take out the 250 cash outflow headwinds from Pension payments and VAT deferral payments, CPI will be net debt ZERO by the end of 2022 on a Pre-IFRS basis.

Throw in interest reductions and slightly higher revs, this will be profitable year.

GL

But Brent has fallen $25 from the highs to the low today. Whatever it is, it seems to be working!!!

It looks like the Ruskies are backtracking after all and you're seeing oil slide as a result.

https://twitter.com/LiveSquawk/status/1501492526393577474

Good on you, Ukraine. It could yet be a false flag, but nonetheless, it's good for the global economy if the war gets resolved without a bigger destruction of Ukraine.

Well done, Mod. Good job on VET. I've sold half my position there over the past few months - needless to say I would've been better off holding them. ;-). Alongside CPG, GTE is probably my largest holding now and it's even listed on the LSE - very illiquid here though. There's some political risk being in Colombia, but at these oil levels their current valuation overstates that risk. They were a $8 share back in 2014 when Brent was around these levels.

Again, agree on the UK companies' valuation - I think the results' annoucement - next week for HBR and the week after for ENQ, could be key catalysts IMO. I firmly believe that Enquest will truly break out once the market is reassured of production and debt-killing prowess in 2022 - we await the 24th of March.

Hello Mod - VET & CPG have been phenomenal, VET in particular. I recommended them to a couple of US mates last year and they did buy a few thousand shares at $6. They're almost at $24 yesterday - all driven by Irish gas. CPG has been slower, still sells under book value, which is mind-boggling to me. At 7.50 now, they're still very cheap - I could see them at $15 - 20 this year if oil stays at around these levels.

Enquest will turn around once institutions get back into investing in O&G companies. I can't predict when this would be - The fact that Enquest hit 2 year highs this morning is a good sign. But, it should be at a minimum, in the 40s at these Brent levels. Something will give soon, and to the upside IMO. HBR is a head-scratcher - they should be valued a lot more, but I imagine it's still old bond holders' selling their shares keeping that one down - there's simply no other explanation. Tullow is valued silly when compared to Enquest and Harbour. That may change in the coming weeks.

GLA..

We have our gripes about Enquest's hedges - did anyone note the Sh*tshow hedges at Tullow for 2022 through 2024. 75% of 2022 hedged at a $75 ceiling (55 floor). And about half production hedged in 2023 at similar levels. And 25% or so in 2024. They do say that Sold calls were increased to 95, probably for 2023/24 - that wasn't too clear.

Compare these to Enquest's hedges, we're doing mighty fine. Don't you ask me why we're so undervalued compared to TLW, even though we're a NS operator.. ;-)

US imports aren't that large n reality - It's the big importers like Korea and Japan that need to cut down on Russian imports. Europe is about 2.1 mmbbls/day and by far the biggest importer.

https://twitter.com/BurggrabenH/status/1500591594772254723/photo/1

This. They're calling $115 to $175 brent in 2022 and that 2023 futures are underpriced. And the US is on the verge of banning Russian oil imports - others will slowly follow by cutting off Russian oil, even if they don't outright ban them.

https://twitter.com/Newsquawk/status/1501192968505602048

I hope that Brent doesn't stay around 125 for too long - the global economy may not be able this rapid jump as easily. We'll do fine if oil hangs around between 100 and 110 for a while. The UK government will change their tune on NS production shortly and funds can then get back into UK oilers like ENQ/HBR - which are all in the doldrums at this time. This will happen in the coming days/weeks IMO - there's no other choice if Europe needs to cut their dependence on Russia.

The results in a couple of weeks with hopefully an update on net debt at the end of february will be key.

Dated (Spot) Brent hit nearly $113 bucks today - that's the highest level since 2014. Just remember that Enquest can still be making quite a few additional bucks on the hedged barrels at this time through futures/spot differentials ;-)

https://twitter.com/eklavyagupte/status/1498752629836500996