Member Info for epiphany121

I wondered why they call you Master Gaslighter on the advfn board - it never was a difficult call.

LY - Why you don't you go protest against the protesters, rather than feed us this endless, mindless shite? That should do you some good mentally...

That was eye-opening. We just don't know how to observe oil prices - we can but rely on geniuses like you to let us know. Nice...

Lol...

Morning P & A,

Yes, indeed. H1 net debt reduction may be in the $100 - 150 mill range and will be skewed to H2, assuming Brent holds in the 70s.

It didn't fall off a cliff, KO. The front-end Brent contract is rolling over to July from June in a couple of more days and most sites are already making this adjustment. July Brent was already trading a buck lower than the June Brent and that's reflected in what you see.

Pelle - Capex is still $275 mill - I don't see why that should be adjusted. Yes, it does contain the $100 mill of prior year capex invoices AND the DC4 drill expenses that was discussed in the AR.

Certainly the prior invoices are included in the Accrued Expenses line item under Current Liabilities. There is only $12.8 mill over-lift classified under current liabilities and I can't see why under or over-lift needs to be a key consideration for FCF calculation. In the grand scheme of things - up or down move in receivables are captured in cash from operations component of the cash flow statement anyway.

Just stick to the $275 mill capex figure and the FCF that results from it. Based on the historical revenue that ENQ gets, in light of the the lower realisation from Malaysia, a $70 average Brent would result in ENQ realising around 92% of Brent - circa $64.5 to $65. That's what my revenue figures are based on for the business other than the 75% Magnus, which is tied to Brent. With these figures, my FCF is circa $420 mill. Assuming that trade payables to the extent of $100 mill is cleared from this FCF and this is speculative, then you're still looking at net debt at around $1450 mill. But for the hedging losses in 2018, net debt would've been circa $1685 mill. And we'll certainly be looking at some hedging losses this year, just not as much as 2018, given that ENQ would've had gains in Q1.

Best

Easy, chaps..It's not a buy. It's bonus and PSP awards

At this time, the market is having a tough time believing what ENQ is saying. That is the reality, albeit unfortunately for shareholders. I agree with L3 that until a few more tankers are noted at regular intervals, ENQ's version of Kraken still remains challenged. I don't believe that ENQ's reputation is damaged past the point of no salvation, as a result of the CNE 'debacle'.

In the meantime, as the market still remains fixated on Kraken, FCF generation would now be chugging along just fine with Brent at these levels and that is the biggest saving grace for ENQ.

Yes, indeed Chilts. Volume today is very anaemic. I nibbled on one hunk of 7,500 at 8:53 and another 8,000 at 9:03. Truly in the dumps is the volume..and this is 2 days after a spectacular up volume day

Pelle - because of some of the reasons we know of around accrued expenses repayment in 2019, net debt may not come down a lot lower than $1.5 bill in 2019, unless Brent significantly outperforms this year. That'll enable ENQ to take out additional hedges for 2020 too.

Brent is still surprisingly strong and even on a strong up day for the USD today, Brent finished a few cents lower which is great strength indeed and shows the key hedgies are aligned with a rising Brent. That's something to look forward to as well.

;-) Good for some who managed to get in lower or even at these levels. My average was in the 30s and maybe now in the high 20s, even after adding a fair few in the teens and low 20s. C'est la vie. 30s this summer isn't unrealistic, IMO. 40s and 50s will have to be 2020.

WA - since you're a long termer, then you shouldn't be fretting over every day moves. I can't see that benefiting you in anyway whatsoever. It's only human to be wanting the SP to go up every day, but that's not how it works in reality. ENQ is still a finished product is the reality - at least in the market's eyes. I agree that CNE really made ENQ a much more difficult investment story than it should be.

Yesterday was a solid volume up day and I'm glad we had that, followed by a low volume down day as presumably some of the PIs sell out. That's the way the market works - best not worry yourself to death over these moves. It's only natural that most posters get euphoric on and after a day like yesterday and out come 60p targets by the end of the year - take all of these with a handful of salt and have realistic expectations for this year - this won't be a breakout year - that honour will belong to 2020, assuming Brent hangs around the 70s.

Best

LY - tax rate is a moot point for ENQ, more or less. ENQ's UK carry forward tax losses are $3.2 billion as of end 2018 and even in a profitable year like 2018, carry forward losses went up from $3.1 to $3.2 billion. As Pelle said, there's no issues with UK taxes for many years to come.

Malaysia, and not Indonesia, as you' ve been banging on about, is where ENQ's production base is. Again, that'll constitute what around 12% of ENQ's total production in 2019. I can't see these taxes matter much in the grand scheme of things.

Ahem...Indonesia?? Since when has Indonesia colonised Malaysia?

Auson - Yes, that's right. We did hit 50 kbopd for a period early year, but never got to a plateau rate at that level (50k), as per the FDP. This was primarily because of the higher water cut from the wells that were seen after the initial flush because of the lower water cut.

We'll all be pleased if Kraken produces between 35 to 40 kbopd for 2020 as an average. We should get there as long as AK has better uptime than in 2018/early 2019.

Yes, indeed Auson - go back to the earnings call and listen. Oil output from wells will be higher with low water cut initially, and vice versa. This is the problem that ENQ (and CNE) has said exists in the other DC wells, and that's why a plateau production of 50 bopd was not achieved. 40 kbopd plateau is still possible if the FPSO uptime can be maintained a higher clip, which it seems to be doing so at this point in time.

Even AK likes warm weather!!!

It's a 5 mill Crude build, but draws on Gas and Distillates. RBOB must be moving up on these numbers, I'd expect. Production is back up from 12.1 to 12.2 mmbbls/day.

Net neutral as demand is still good, but production increase isn't good for WTI (oil in general), and the gap with Brent may widen a bit.

It's like the market didn't want to know about Kraken improving from Greg's email, rather than IR saying it so. That's a possibility.

Martin Mentiply did say on the call that when DC4 wells were turned on, there would be higher production to start with, because of low water cut and that it would then stabilise at 'normal' levels. When that stabilise phase starts, that's an unknown. Maybe, that's in a few more weeks' time.. Either way, AK's higher uptime (after the maintenance fixes) and higher production from other wells is critical after this DC4 flush period.

It's a large build this time around and maybe will prompt a bit of profit taking tomorrow.

API

Crude +6.86mm (+500k exp)

Gasoline (-1.82mm )

Distillates (-712k )