Member Info for epiphany121

Chilts - last one from me about HK's heading. To my untrained eye and considering the 'course' of the tanker that's now gone up from 20 degrees to 24-27 degrees (more easterly), it looks like it's moving away from Glen Lyon and more in the direction of AK.

Thoughts?

Although, as MO pointed out the last time, good old FS Cygnus left Kraken a short while earlier and is typically a harbinger of a shuttle tanker - Scott Spirit perhaps..

Glen Lyon, as per Chilting's previous note then? The wait continues..

Cheers, Therapist. HK is on her way; I just hope it's to AK. I'm away for a couple of hours and it'll be great if someone can post an update WRT to the final destination.

KO - FFS, this is your daily story - Monday/Tuesday/Wednesday/Thursday/Friday - makes no difference - Zilch. Try your own chill medicine that you dish out so freely - it may actually help. ;-)

KO - you can't be serious. You and Patience are utterly incongruous - I can't fathom how you managed to put these together in a sentence. Lol...

If you're sure about DC4 being the catalyst, let's see if you can prove me wrong and not provide a running hourly commentary on the SP movements and expressing your constant frustration. Wager on that, shall we?

The volume is better than on Monday this week, and most of it when it moved up off the days' lows. That's a very positive sign. Brent and WTI are looking good as well.

I suppose that on the downside, WTI in the 60s will encourage rigs to come back in the shale patch, but that's unavoidable. Maybe they'd have had some lessons to learn from the Q4 WTI crash.

Our regular, Heather Knutsen, is headed to Macduff and could be a candidate for #32. I hope that happens sometime this weekend. The others are all out servicing other fields..

British Reliance is apparently headed to India to a refinery (Sikka) on the west coast owned by Reliance petroleum - one of the largest . It looks like we have gotten ourselves a new customer to sell Kraken crude to. ;-).

Brent looking fine again today and signs are good that it breaks the 70 handle soon to the upside. The SP will take care of itself - that I have no doubt whatsoever, and won't bother with hourly commentary. There are plenty on here who own that anyway...

Chilts/MO - I assume you're keeping an eye for Load #32. Do let us know if you spot anything soon.

Best

L3 - the last thing I would agree with is to say that Fernan represents 'Smart Money's. It's anything but that, I'm afraid. Calling him/her a number cruncher is one thing, but that's a long way away from being Smart money. Fernan has already said they sold old out of ENQ in the teens, on the back of an expectation of $63 Brent for 2019 and the low FCF that could be generated at those levels, but that's already behind us now. I'd already pointed out to Fernan that their assumptions were very bearish and would lead to an incorrect assessment of ENQ et voila, we are now where we are with Brent and momentum is now building with ENQ. I won't labour on this any more.

Smart money is the hedgies that sold oil in the 80s and are now piling back in the past few weeks at a quick clip. I haven't seen MO state that he has sold out of ENQ and I'm unsure where you got that from. @MO, if you're reading this, can you comment? Either way, even if people sell out or not, I can't see that or them being or not being smart money. If Someone had sold ENQ in the high 30s and bought back in the low teens, I'd call that smart money.

As luck or maybe foresight ;-) would've had it, ENQ has managed to hedge right in Q1, and Q2 will support higher hedging prices, based on how Brent is trending. However, sustainance of this is all predicated on the trade war issue resolution, IMO.

Best

Afternoon P,

Yes, as L3 confirmed, it will be the $600 mill cash flows (post tax) that will need to be paid to BP, and the $418 mill represents the discounted value of these future payments, presumably based on a $70 Brent price for the next few years. The only way they can be paid off sooner is if Brent goes up substantially. ;-)

The RCF will need to closed down latest by October 2021, and pre-payments are fine. That should be the focus for us as the rates are a bit higher than the bonds. OZ is circa 8.25% interest and was originally cheaper than the rate on the RCF, which was close to 9% before the $195 mill payment in October, and is now down at circa 7.5%.

Regarding net debt, as I'd already stated (and posted my calculations) previously, ENQ will certainly be below net debt figure of $1.5 billion at the end of 2019, assuming an average Brent of $70 a barrel. I don't see a problem with that.

Best

It's a collar between 56 and 68. The floor is 56 and the ceiling is 68. They get market price between 56 and 68, but they won't get less than 56, if Brent drops below 56 and won't get more than 68, if it goes above 68.

Best

Again, the headlines state 2 rigs increase in the US. But the internals are better and the increase is from offshore/nearshore and Texas shale has lost 2 rigs and so have a few other shale belts. Canada has lost 14.

The likes of medium to small size Permian drillers are cutting back on drilling budgets. Take LPI (Laredo) a circa 30 kbopd Permian producer. They're cutting drilling budgets from $600 mill in 2018 to nearly half that in 2019. They just want to keep drilling inside their FCF based on a 55 Wti 2019 price. Lots more companies like WPX, NFX, OXY have all cut drilling budgets. That may change should WTI get into the 60s, but I'd wager that Brent differential would blow out more in that scenario.

70s - see you soon then.

Evening Pelle,

I have no problem with negative comments as it provides a basis to lay down a bull Vs bear case for me. Just as I don't like incessant negative baseless idiocy from the likes of Miner or Eurofil or Ponzi, on the flip side you have incessant ramping and updates by the likes of KO ( and maybe a few more). Neither lends itself to a fruitful counter argument.

The likes of Fernan and L3 have been glass half empty type, but it doesn't mean that they are wrong. After all, the SP is still languishing near the lows, even though Brent has been up more 30% from the lows. That itself tells a story in the short term. IMO, the market and the analysts have got this wrong completely. The likes of Fernan who sold out at the lows have as well. He/She has been negative about Brent and oil and to each their own. It's after all a judgement call. Based on the probability of the world economy not slipping into a recession with the US China trade war resolving amicably (primarily) and no hard Brexit, Brent will, as I stated early in January, do a V shaped recovery. It's already well on its way to a solid retracement of the Q4 losses.

We've averaged just over $61 in the first 6 weeks of 2019, and my base base is for a $70 average on 2019. That would mean a higher price in Q 2 and Q3. We now see Brent Wti differential at $ 10:30 plus and will probably blow out more. And EIA was predicting that to narrow to $2 in 2019..Lol..

Despite all of the negativity around Enq at this time, we're well placed for FCF generation in 2019. The SP will follow Brent upwards soon enough.

Best...

The China trade war looks like it will be 'resolved' and that is a good tailwind for the global economy + oil price. Here's to the 70s soon - Q2 hopefully, if not sooner.

It wasn't even 'hidden' in any way. It was always there to see in the AR. That was never a concern to me, TB.

As Jan pointed, Brent is tracking $70 by the end of Q1. So much for the $63 per barrel price forecasts for 2019, and that too this is Q1. Economic data is trending positive too.

Be patient, longs!!! ;-)

Ermm..We know this and it's a maximum $91 million breach claim, IF they ever to win it. I can't for the life of me see how that's an existential threat to ENQ!!!!!

I look forward to the 2018 results, AR and the next update..

There's just no volume on this up day though, and that's not great. Brent looks like it is about the only driver for ENQ at this time, maybe until there's more news, such as the actual 2018 results..

PRD,

Thanks for posting. The Magnus deal was perfectly understood by the regulars on here (I'd like to think anyway), maybe unlike the detractors, including Barclays. Here's what I posted on the 1st of February with regards to the waterfall. Obviously, BP's news release was over-simplifying the arrangement, but captures the essence of it.

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L3 - are you talking about the Magnus waterfall with $100 mill 'repayment' to ENQ? Here's how the waterfall works - straight from the prospectus. (B) refers to the $100 million paid by ENQ to BP in December 2018 for closing the deal. Remembering that Net Cashflow Gain is calculated every quarter, AFTER BP's Vendor loan repayment payment for the quarter, Enq gets reimbursed FIRST with whatever portion of the $100 mill can be repaid, on a quarterly basis.

I hope this clarifies...
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Each Net Cashflow Gain is applied as follows:
(a) first, to pay BPCO any outstanding amount of principal, interest (including incremental interest),
costs or other amounts, then outstanding and due under the Loan Agreement to which BPCO is
entitled to be paid pursuant to STWD (the “Loan Repayment Amount”) (but excluding
incremental interest);
(b) next, to reimburse EnQuest Heather up to an amount equal to any outstanding “Positive
Consideration Reimbursement Amount”, being the sum of: (i) the amount actually paid by
EnQuest Heather to BPEOC as partial consideration for the 75 per cent. Interests at completion
under the Magnus Call Option Deed (excluding any amounts drawn down by EHL under the Loan
Agreement at or immediately prior to completion) (the “Positive Consideration Amount”); plus
(ii) the amount of any Loan Prepayment Amounts received by BPEOC on or before the relevant
date; minus (iii) the amount of any Paid Buyer Claim Settlement Amounts received by EnQuest
Heather; minus (iv) any amounts already reimbursed to EnQuest Heather in respect of Positive
Consideration Reimbursement Amounts, together with interest at rate of 10 per cent. per annum
applied to the resulting amount;
10.4.1 (2)(e)
10.4.1 (2)(f)
10.4.1 (5)
112
171404 (Version 2) Proof 6 Friday, September 7, 2018 09:18
(c) next, to reimburse EnQuest Heather up to an amount equal to any outstanding “Accumulated
Interest Costs Amount”, being the sum of: (a) the total cumulative amount of all JOA Billings
accruing on or before the relevant date (together with interest at 10 per cent. per annum on each JOA
Billing); minus (b) any amounts already reimbursed to EnQuest Heather in respect of Accumulated
Interests Costs Amounts;
(d) next to pay BPCO any outstanding Loan Repayment Amount comprising incremental interest; and
(e) finally, any remaining Net Cashflow Gain, will be split equally between BPEOC and EnQuest
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