Member Info for epiphany121

Pelle - one of the reasons for 'poor' FCF generation in 2018 was the circa $90 mill hedging losses that needed to be paid out in cash and most of it was in H1. We won't be having that in H1 - if anything, I see a small positive contribution in H1 from Hedging. ;-)

We know what the market/analysts think and have been modelling, but therein is the value gap between their perception and what ENQ can achieve, even purely based on how Kraken has been trending over the past month or so. It may take a few months to get there. After all, Kraken's been the primary reason for ENQ's under performance since the start of the year.

GK's STS is now confirmed for the 2nd at Orkney. Minerva Atlantica is the Crude Tanker..

Chilts - it looks like GN is in a hurry. ETA updated to early morning tomorrow and looks good for a hook-up tomorrow morning, rather than the afternoon/Wednesday.

That's a good point, Chilts. CNE would have the chance to get another load update (#37) before the AGM and maybe another positive load duration will help them focus on recent improvements and provide positive commentary. I doubt they'd do anything radical like reversing their write-down from March, as that'll be egg on their face.

Who'd have thought that we'd get a new/first time shuttle tanker and I just didn't have my eyes on Grena.. HK left at 8 PM on the 19th and Grena reaching there on the 30th would put Load #36 at just under 11 days. (In line with MO's calculations - that's the difference between when the previous tanker left and the current tanker gets there and hooks up with AK).

Going back in time, this is actually pointing to 3 shortest back to back loads since February 2018.

Best

Thanks, YOY...THat's great news.

Cheers, Chilts. It's not unlikely that HK would head straight to AK from Rotterdam after the offload. It's now 8 days since HK left AK with load #35 and we should be due by Wednesday/Thursday for 12/13 day load. Fingers crossed.

Beerbull - yes, so Pelle and Tom have answered your questions. Some patches in the Permian are prolific - example, Delaware is better than Midland, and acreage in these areas are more desirable. The majors have contiguous acreage and access to capital at a low cost - just what you need in the shale patch. BP bought assets from BHP last year for $10.5 bill in both the Permian and Eagle Ford. Both Chevron and Exxon have large acreage in Texas in both belts. Shell has minimal presence there. Whilst the smallies are pulling back spending, the big guns are pushing forward with expansions plans. However, it's likely they can't compensate for reduced production from these smaller players, should WTI stay at these levels.

I'd agree with Tom's assessment about a near-term platreau in production and this becomes a lot more likely with WTI where it is now.

Hi Chilts,

On a sheer barrels per day production basis, they are doing well at this time, no doubt. But, there are major underlying issues in the various shale belts. It's now widely known in the shale world that there are issues with Parent Child wells. Taking the example of Permian - In essence, small/medium operators don't own large contiguous pieces of land in that belt. Since pretty much 95% or more of the activity is horizontal drilling and these wells are circa 10,000 feet deep/across, they were running out of adequate space to drill more well-spaced wells within their limited acreage.

In all their investor and banker presentations, they were projecting say X number of wells that could be drilled in a given acre producing certain output per well. But when these secondary/child wells got drilled close to the primary/parent wells, the child wells just didn't perform as well as their rosy projections. There was the usual spurt to start off and then they tailed off rapidly within days/weeks. To make matters worse, pressure in the parent wells started dropping, as a result of these closely drilled child wells, and they started producing less. This is the Parent-child well issue that is now well know in the shale world.

This is what they refer to as the treadmill effect in that they needed to keep drilling more and more wells just to keep production stable at previous years' levels. As soon as the drilling stopped, production would tail off quickly. This is the problem facing the majority of small producers and they account for more than 50% pf production in this belt. I can't see how a decent IRR and cash flow can be generated to pay off their debt with these issues. Debt funding is shutting down for these shalers and so is Equity funding. All in all, they're in troubled waters and if there's another downturn in WTI to say the low 50s, they're pretty much screwed, as FCF to pay back debt just isn't there. US production will drop in thsi scenario. Permian crude has yet again started trading at a circa $4 discount to WTI as the off-take capacity just isn't there. At best, IMO, US production may touch just under 13 mmbbls/day in an optimistic scenario, but this will be a difficult proposition.

UKCS producers are doing just fine when compared to the US cowboys and that's a fact. I'm just glad we're invested here than there..

My bad - I pulled up last week's detailed stats from Baker Hughes. 10 down was last week's number and this week's was even better. 21 rigs overall down, with oil rigs down 20. Permian is off 3, Eagle Ford is off 4 (both Texas) and Williston (ND) is off 3. So, 10 rigs down in the 3 most prolific shale belts.It's a sign that they're pulling back and that production growth in the US will be tempered in the near future.

Numpty's bluster will pass next week and Brent should stabilise at these levels. Plus a large draw is on the horizon for API/EIA.

Hello Pelle - yes, new shares will be issued indeed when these options vest. Stock options are common place in the US and in some quarters of the market there is a concern that this motivates management to purely look at managing share price performance (read higher share price) above all through higher profits and leveraged growth, sometimes ignoring the long term stability of a company. Given where ENQ's share price is sitting now, that'll be a 'nice' problem to have for us. :-)

I know that the rest of Europe is conservative when it comes to options and management making plenty of money on that count, but the US certainly doesn't, and we're not too far behind.

On another note, Brent closed up a buck higher off the lows of the day and I was really hoping (and praying) that this is where it would end up. There's hope yet that this is a one-day news driven sell-off, rather than something that could lead to a longer duration selling pressure.

Good luck

Evening Romaron,

Yeah, you're right. The temptation to engage them is near irresistible (to me anyway), even though I have a few of them away in filter - my good mate Squif included. :-)

Personally, I'm optimistic that they have actually included share performance and debt reduction related metrics in determining how much they actually get after 3 years. I'll read up how TLW compensates their directors (and PMO too maybe) and how that compares vis-a-vis us. That'll be a useful comparison. I'm not fussed about these down days or share gazing and fretting on a daily basis - but if ENQ does truly come good, then the rewards are there for us to see.

2020 is what I see as a break-out year for us. Many of here will probably be gone by then - I do intend to hold a good chunk of my holding through then.

Good luck

Iffy Squiffy only specialises in moaning and never offer up anything constructive. Either is total faker in claiming to be a holder or had their bum physically bitten by AB - likely the latter though in what context I have no idea. Both credible reasons enough to ignore what Squif spews...;-)

No, Pelle. Those are actual shares in the benefit trust possibly linked to the employees' contributions. These are options that vest later and so these are not linked. The US and the UK are somewhat more aligned in that regard.

As long as this motivates them to keep the focus on achieving the listed vesting goals, that's a price worth paying. Let's see how they follow through.

The awards per today's RNS are options that only vest in 2022 and as such they're not shares at this time. A stock option converts into a share when it 'vests' . There are conditions for today's granted options vesting such as 1. share price performance 2. debt reduction 3. Production growth and 4. 2P reserves increase.

All of the above factors determine how much of the granted options actually vest in 2022.

THat's down 10, with oil down 8, and is finally below last year's oil rig count at this time. Permian's down 1, but that's still up 10 from this time last year. For context, Permian has 463 rigs out of the 825 oil rigs operating in the entirety of the US.

Master Gaslighter - not sure why you're pleading your case with all on this board. ;-)..It wasn't like you took 'Hi all' everyone's permission before letting loose with your profanity.

Maybe, It's worth pausing a couple of minutes as rage consumes you and hitting send - especially if you're as thin-skinned as you come across. Okie dokie - Not to linger any longer and moving on then...

Thanks, Pelle.

The positive in the 2019 PSP, as per your note below is the fact that they are finally linking the vesting of these options to 1. Shareholder return vs Peers and 2. Debt reduction - that's comforting.

Yesterday's options (RNS) was from 2016 PSP and they're fully vested now - no strings attached and shares in hand. Whoever is at the AGM should definitely push for Bonus comp to be always tied to shareholder return. THat's a sure shot way to ensure their rewards are aligned with ours...

He's generally as predictable as a wasp on speed, but not when it comes to Gas prices. As sure as clockwork, here goes..;-)

https://www.cnbc.com/2019/04/26/trump-says-he-called-opec-and-told-cartel-to-bring-oil-prices-down.html

I usually don't let profanity come into the picture, but to each their own - free speech and all that..Winding up know-all personae is a good release, IMHO..