Member Info for epiphany121

P - Personally, I think we'll get a good update. If there's no more really bad shiite around China trade wars, Brent should react positively this week. US should start to see draws this week and going forwards (more or less). The physical oil market is very tight, particularly for Brent. The last time physical oil was this tight was back in 2011 and we know what happened soon after - OK, Libya helped too back then.

As many have already said today - putting out debt reduction targets for 2019 is very good and tells ENQ that they're listening to the market and providing more transparency. That's just like PMO did in their AGM ops update. If we start seeing a more open/transparent ENQ, I don't see why we'll still languish at these levels.

I'd even request as many of my fellow boarders as possible to draft an email to IR (I already have) and ask for this to be done. That's a 100 times better than spending time slating AB, as the resident board Eeyore, Squid, does.

We may yet fly on Thursday... one can hope. ;-)

Yhyh - It's difficult to see ENQ put out a net debt reduction forecast $350 to $450 mill, given some of the payables that they need to work through in 2019. $250 to $350 mill is a reasonable range as Brent is certainly not higher now than it was in 2018 at this time. The key variable is how Brent trends in the coming months and if it significantly over-performs, then 2020 will be the year to look forward to for debt reduction outperformance, as I'd think that ENQ will hedge better in light of the missed 2019 opportunities, in Q3 2018.

There's more anecdotal signs of how tensions are building up around that region and how companies are taking precautions in the event that things boil over. As always, local resources are 'expendable'. Shocking..

https://www.reuters.com/article/us-usa-iran-iraq-exxon-mobil-idUSKCN1SO08O?

Morning Pelle,

It's difficult to forecast NET debt reduction for the first 4 months, TBH. We know that gross debt will be down at least $105 mill, because of RCF reduction and also the Mercuria debt should be wound down by the end of May 2019, as you remember that this was an 18 month arrangement that started in December 2017. There would've been a circa $17.5 mill debt reduction there till the end of April.

I don't see any bad news that could come out now. We know Kraken's been doing better, but there are still issues like we saw with load #36 which took longer and had to be split and so, I don't I would say that April is 45kbopd from Karken or it could be that the issue happened around the time Grena was hooked up in early May and it's May that may take a hit. I don't know. To be safe, I'd say that 70kboepd or a tad lower is a reasonable number for the 4 months to April.

Positives - Unlike in early 2018 when there were 4.15 mill barrels swaps at $59 that caused a good $50 mill cash 'losses', none of that is in place for this year. In fact the puts in Q1 for 3 million barrels at a $70 floor would've given ENQ a positive cash flow of circa $20 mill or so. Gross debt down $122 mill from what we know. Brent is higher, which is a positive and is now averaging over $71 in Q2 so far.

I'm nearly maxed out on ENQ too at this time, but I may look at a spread bet trade on Monday/Tuesday - I won't wait till Wednesday. I won't advise you on what to do with your dad's money, but I'd wager that the probability of the SP going down after the update, is low.

Lycka Till...

There are company specific issues too - Issues with Armada Kraken FPSO and downgrade of Kraken reserves by Cairn - both are company/project specific factors that are to be blamed,

That's quite a few filtered messages today. Is the nincompoop squid off doing his/her usual rants about AB yet again - like clockwork whenever ENQ doesn't move or goes down. The misery this Eeyore spreads around them is simply mind boggling. Lol...

Oil rigs down 3 at 802 versus 844 last year

Permian rigs down 3 at 454 versus 467 last year

Auson

CNE's impairment wasn't only based on lower production in 2018. What they did say was that they have the time/opportunity to do well tests on their own, and based on the water-cut that they were seeing, they expect production rates to be lower by 20% compared to the FDP. There was no change to the longevity of the reservoir itself, but they did classify it as an 'accounting write-down'. Here's some detail from their March call.

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Paul Mayland

Yes, okay. Essentially, we’ll comment in two ways as – why we are taking the reserves downgrade and basically why we’re doing it now. So firstly, a little bit about so obviously heavy oil was quite different from light oil. And water was always expected in this field and in every well quite early on. So that, we should have that in our minds and mainly because it’s a viscous oil field. So the displacement of oil by water was always going to be less efficient than in a light oil field. So it’s very similar in that respect to Capitaine.

The facility has been built to handle, process, reinject the produced water. However, what is clear today is that the displacement of oil by water is not as efficient as we had originally expected in the field development plant, so consequently we are producing a level of water today which is higher than what we had in the FDP. Now so why have we actually decided to take a downgrade now? Is we said back in September, that we were going to carry out a program of reservoir surveillance and well testing.

The wells, both the production wells and the injection wells, are performing very strongly. So we’ve got continuous production from the whole length of the lateral – the horizontal section. We’ve got very good injection across the horizontal injectors. It’s a line drive. And that’s all performing really well. We’ve produced a meaningful volume of oil. So we produced 15.5 million barrels of oil from this field at the year-end 2018.

And we’ve updated and history matched. Our reservoir model was a generated new production forecast from them. And we know that we’re producing. Even if you take out the FPSO performance, we know we’re producing at an oil rate about 20% lower, below the FDP. So if we had readjusted for the poorer performance than we expected on the FPSO the surface or above ground, as you’ve described it, we might have produced 40,000 barrels of oil a day. That’s 20% lower than the target oil volume associated with the reserves in the FDP. And when we put all of those factors together, we believe at this time it’s a prudent move to readjust our reserves to reflect current performance and to do it now.

ST - at a $70 average, we'd said about a $300 mill reduction. At a $65 average - that'll be say $75 mill lower. There's about $15 mill FCF move up or down for each dollar movement in average Brent price.

Best

PMO has net debt reduced by $80 mill in the first 4 months and they're projecting circa $350 mill reduction for 2019 as a whole.

I'm not sure where we'll end up - net debt may not move much in the first 4 months for us given interest payments and Payables wind down. However, giving an end year projection in the Ops update is very useful.

Sorry about your loss, Jan.

A build of 3.7 mmbbls. A draw of 1.1 mmbbls in Gasoline and a tiny build in distillates. Production is down another 100k bbls/day to 12.1 mmbbls a day - overall not too bad a report.

Beerbull - Magnus production is NOT apportioned between ENQ and BP. It goes 100% to ENQ and it's all on ENQ's P&L. That's as simple as it gets.

What BP and ENQ share is 50% each of the net cash flow (Profit) that results from the 75% share of Magnus, until such time that BP gets a total of gross profit share of $1 billion.

Just let me know if you need any further clarity..

A little bit of a relief..Lol..

Thankfully Numpty is using a tiny piece of his tiny amount of grey matter to figure out that slapping tariffs on European cars is about the next worst he can do at this time in the middle of a large trade war with China. There's some hope yet.

https://www.cnbc.com/2019/05/15/trump-administration-to-delay-auto-tariffs-amid-trade-war.html

No one films analyst meetings and puts them on the internet or the company website. That is pretty much the corporate standard either in the US or in the UK. Maybe they do this in Sweden, but certainly not here/the US. They're not secret, but is intended for the analysts that cover a stock/share, and it typically doesn't (or should I say shouldn't) contain material non-public information.

The deck that gets put that as part of the analyst briefing is the best we can expect, and that isn't the end of the world if you ask me.

Mary Poppins - no one's asking you to come on here and check on other's posts, are they? If you are a patient saint, so be it. But I couldn't care less about what you say though...

Jelenko,

Note that ENQ is the 100% owner/operator of Magnus, and so yes, all of the production from that asset accrues to ENQ. What BP has is a 50% share of the net cash flow on the 75% Magnus stake. However, all of the revenue/costs/EBITDA - all of this accrues to ENQ.

P - I think that 72 kboepd for the first 4 months may be a tad too optimistic. Just about 70 kboepd is where we'll end up IMO, given Kraken's better performance since March. I agree that the market thinks ENQ is opaque and doesn't talk with the analysts more often to give them the required clarity. I'm just glad they got started on that last week, and we'd like to see more of that happening, on a regular basis.

I broadly agree, Pelle. I'm sure that someone among us here or the wider SH community will make sure that this topic is discussed in the AGM next week

19th is probably a realistic date then. By inference, what this could mean is that AK did have another mental breakdown around the time that GK visited her a couple of weeks ago, and we know that the SP has been marked down/been weak since. ;-) Some brokers/market participants must have a direct line to a select few on the FPSO.