Member Info for epiphany121

ProdOpt - somehow your links are getting filtered, whilst Pelle's is not. I need to be drinking whatever Pelle is.. ;-)

can you type the word for the first and the last word substitutions for the link removed in the URL?

Thanks

Pelle - I'm not technical and I can't explain what that is - I'm sure there are many on this board who can (and did in the past). Maybe they can help out again. Here's snippets of what was said in the H1 call regarding the voidage.
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Beginning with Kraken. Kraken continues to operate safely, and the team has now worked well over 400 days since the last lost time injury. Average gross production during the first half of 2018 was slightly below our expectations at circa 31,000 barrels per day. Adverse weather in March, which was followed by a lengthy maintenance shutdown, and reservoir under-voidage were the main contributing factors.

Now plant reliability and uptime continues to improve. Water injection rates have increased considerably following the course filter maintenance program and system modifications we completed midyear. This closes down the reservoir-voidage gap at Kraken, which in turn supports higher oil production.

Also focus on maintaining full reservoir-voidage via high levels of water injection. And as I said earlier, this is ongoing as we've increased the daily water injection rate.

And there's 2 main factors impacting the production efficiency of this asset or any asset.One is the uptime. And in the case of Kraken, or most assets, is also the volume of water injection. So as I mentioned earlier also regarding water injection, we've taken steps to increase the daily water injection rate. So therefore, we're increasing our voidage. That's improving production rates, which will improve production efficiency

Amjad Bseisu

I mean, we did mention the voidage. The overall liquids rate are but we still have the voidage, which really emanated from the beginning of the year, when the water injection after the very cold spell had to be revamped. And we have made a lot of progress on recovering that voidage. So I think it's as expected with the voidage being in place.

Since the Beast from the East , we've had problems with the vessel and, hence, the delayed acceptance and delayed issues on production. The biggest issue we've had is we had to prioritize. After that period, we had to prioritize the production and rather than the water injections.

So we started producing, and we had a large voidage without the water injection in place for a while. And now water injection has been rectified, and we have been recapturing the voidage. So I think that's in line with expectations.
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Evening Romaron,

Yes, I have no doubt that the small/marginal players are the ones that are currently getting slammed - even ones with sterling management reputation like Mark Papa at Centennial (Ex-EOG CEO), who's a highly reputed exec in the shale industry, and a pragmatic one at that.

https://finance.yahoo.com/news/c-suite-turmoil-shows-investor-100000718.html

This article sheds some more light on the troubles these companies are currently going through. We're not quite sure when funding for these players will get pulled, but it can't be too far away and that should slow production in those prolific belts.

I had word back from IR that the GCA Magnus Opex costs are purely extaction costs. The Tariff and Transportation costs via pipelines is not included in that OPEX. Including those, the Opex costs per Bbl are closer to $30 a bbl, maybe a touch lower. GCA had included these costs in their NPV analysis though.

That explains the 'increased' opex cost vs what you were projecting based on the GCA document.

Best

Thanks for your sobering thoughts, ProdOpt.

With regards to the link - if you can just write what the word is, we can put that together on the browser.

Pelle, Auson - management did initially say voidage issues in September. We're not sure if that's now OK. Assuming it is, there were recent system outages, weather related and so on. The FPSO seems to be the bottleneck in terms of it's ability to handle heavy crude in rough as well as cold weather. Maybe we'll get more colour on this in the 2018 release...

Talk about depressing - You haven't seen what truly depressive is - you only need to look across the pond to the shale patch. Solid, low debt companies have been beaten up 60% to 70% in literally 5 months. I posted about this company Centennial and I sold out last summer in the high teens/20ish and that's been pummeled to $9 now. I did most of those proceeds to ENQ.

https://finance.yahoo.com/quote/CDEV?p=CDEV

But here's the bad news - they've added net $500 mill debt in 2018, and on the flip side we've reduced $200 mill debt. I suppose I'd much rather be with ENQ when they're deleveraging, TBH. Even though we may go lower from here too to new 52 week lows - who knows.

Even on a stable day for WTI - my shalers screen is RED all over the place today, with falls of anywhere from 4% to 8% . It's all relative in this world. ;-)

No good that!!! Shall we both apply for that position? Two is better than one to sort out these issues PLUS we'll always know what's going on - will keep us busy no doubt. What say you?

Let us know what you find out, KO. ;-) That may be a better bet given we won't hear much from ENQ till the results are out in 2 or 3 weeks,

666 666 666. They'll help you right away

It's fair to say that Shale has Wall Street banking; but not government backing. I can't see in many senses they have government backing, other than via lower level of regulations around how much gas they can flare,which is quite rampant in the Permian/Eagle ford They've been thriving on extremely low cost loans from 2009 till 2017 and that allowed them to pile on lots of debt to drill, and wall street was paying scant attention to their actual free cash generation. Not any longer.

Pockets of shale patch, the Permian in particular, are low cost and are highly profitable even with WTI in the 50s. Hence, it's not a surprise that BP went and bought a pile of BHP's assets in that region.

For anyone that noted weekly production in the US - that hit another all-time high in yesterday's report at 12.1 mmbbls/day, up from 12 mmbbls. It's anybody's guess as to when that'll actually stop/reverse.. ;-)

Fingers crossed. Chilts. GLA

L3 - I believe many people have discussed the Kraken issue - it is what it is and plain to see. Broker price downgrades presumably on the back of this under performance have pulled this down. Lack of institutional participation is an issue too in terms of keeping the SP less volatile.

In spite of all these - a stable Brent in the 70s for a few months is what is really needed to get some confidence back to indebted oilers, maybe just oilers in general. There's no point worrying myself to death over Kraken. Keep generating decent FCF and pare down debt should be our focus for the next year.

Realistically though, the 60p party will be H2 2020, unless Brent breaks 100 on the upside for some unfathomable reason..

GL, KO...

It's been very rough in the near term and there's just no market confidence in ENQ at this time. There's too many execution worries, IMO. Let's see what the FY18 report and further guidance brings..

Even with the Kraken worries, let's not forget that we're still generating decent FCF at these Brent levels. I'm willing to stay patient. My fear is if the market broadly has decided that oilers aren't a great bet with the volatility we've seen and is waiting for more clear and stable Brent signals before committing to investing in them. It's not ENQ, PMO has been stuck at these levels and has gone nowhere.

I won't even bring up any of the shale names which have been pulverised in the past 5 months irrespective of their Balance Sheet strength. This broader trend is what we need to see be reversed.

Crikey - 8.6 mill draw on crude is still huge.

Hope all's well with you, MO!!

Crude -4.2mm (+3mm exp)

Cushing +2mm

Gasoline -3.8mm

Distillates +400k

No, I didn't as yet. I'll reach out to them ASAP and let you know what I find.

Yes, agreed Pelle. Last year's production growth was a torrid 2 mmbbls a day and that may fall to a quarter of that this year, maybe? With WTI at these levels, there's less incentive to spend anything more..

And CDEV's share price is down from $24 in October 2018 to under $10 now. And it's still a meaty $2.5 billion market cap company. That gives you a taste for how much these small/mid-cap shale shares have been punished since Q4..

A Permian focused shale company, Centennial Development (CDEV), is the latest mid-sized company to cut back on drilling budgets and project slower growth of 12% for 2019, as opposed to the lofty circa 50% plus growth they were forecasting just a quarter ago.

https://finance.yahoo.com/quote/CDEV?p=CDEV

They're a fairly low debt company, but they're still burning up cash with WTI where it is now. Even the larger shale focused companies are cutting back as these price levels are just not sufficient for them to FCF generating with a large capex.

Unless WTI goes and stays above $60 on a sustained basis, higher capex spend won't come back. I still think US will average circa 12.3 to 12.5 mmbbls a day for 2019, but the lofty 13 mmbbls projections for 2020 will not come to fruition unless WTI is back in the mid 60s. There's too much shale oil floating about and I believe the differentials between WTI/Brent will climb more soon.

Nope - destination updated to GLEN..Onto the next one then..