Member Info for epiphany121

I agree with Pelle on this count. Basically, ENQ screwed up on that count, and PMO didn't screw up as badly as ENQ did. PMO did hedge 36% of 2019 production at a $70 floor.

I'm hopeful that we'll get another chance in the 70s, IF the trade war issues with China are resolved..

Lol..Spot on, Whiteace. :-)

I have no problem with the update. It was as good as it could be, save Kraken. This is why we're still languishing and will do so, until a Brent goes higher and/or positive Kraken news comes out. Over the next 5 months till the end of H1, the former is more likely to happen than the latter to be announced - I await to be positively surprised though..

The problem is with the time horizon that many boarders have for the SP to move up. This week 24p and next week ..whatever. Lol - give your BP a bit of a break people.. ;-)

A couple of missed words (in Large caps) in my last posting..

Blind optimism is not a recipe for success in the WORLD of investment ..

This is the REASON the SP is where it is

Oh dear, KO. It doesn't mean that we start accusing people of shorting, just because they don't align with your uber positive views. Blind optimism is not a recipe for success in the investment - let's not forget that the market doesn't exactly share your optimism at this time, does it? This is the SP is where it is.

It'll take time to work through, I'm afraid. It may take Brent to be in the 70s before we make a move past the 21p mark.

GLA..

Fernan - your figures, for prices and FCF, are overly pessimistic, in my view. I certainly am not making my investment decisions on that basis and hence am a lot more bullish on ENQ's future (and SP, by extension).

To each their own though...

All the best, Fernan. Besides PMO, I think ENQ offers the best outcome from a risk/reward perspective in the O&G sector. Time will tell though and execution is key.

Are you still thinking of investing in the O&G sector or are you moving on? It was great to have your inputs/insights here as well.

So, that's an average of 35 kbopd, which is a step up from what we've seen in Novermber, December and January as well. I'm getting more and more convinced that AK needs Singapore weather to function efficiently. Lol..;-)

A logical deduction is that February production has been trending upwards and I think the next load would certainly confirm it. There's no real cold weather coming our way in the next few weeks.

That 30 - 35 kbopd range is indeed conservative, IMO..

Evening MO - I hope all's well with you too.

I did spot that slip, almost right away and made a corrective post too..Lol ;-)

Let's hope we get the Rockstar over to Kraken sometime in the next 2 to 3 days..

Yes, MO. There was this article on oil price today. OPEC desperate for 70s again..;-)

https://oilprice.com/Latest-Energy-News/World-News/OPEC-Seeks-More-Formal-Marriage-With-Russia.html

Hmm, that's 2022 then, as that's when the bonds are due to be redeemed. lol..That's a long wait for the 60p party with that debt reduction number then.

I do hope I was able to satisfactorily answer your question, GKB? ;-)

GKB - let me turn around the question to you. What debt level do you think we need ENQ to be at, in order for the SP to hit 60p? I can then tell you when we'll approximately hit that level.. ;-)

Based on yesterday's market reaction, it is a bit more obvious that the market doesn't believe in ENQ's execution story with Kraken being the problem child. Even though AB has done a great job with Magnus, the market isn't buying it, as yet.

Right now, I only see a higher Brent as the catalyst that may boost the share through resulting higher revenues that'll bring down debt over time. Or maybe an idiot analyst will wake up and decide that 15p was too pessimistic after all, because of my idiotic analysis (unlikely to admit this).

I haven't modelled either yet, Pelle. I'll ping as soon as I have done so. I see $70s soon enough, maybe in early Q2 and that's when additional hedges should be taken out.

Evening Pelle - did you mean for H1? Or actually Q1 where we have about 50% hedged at $70 floor?

Place a bet..I meant to say.

24p by this Friday? Never say never, but if I had to place a bit, I would say NO. ENQ is not showing the short term strength to break out of the teens. We shall see.

Not completely true, Profitaker. EBIT less interest and capex doesn't mean straight FCF in ENQ's case. We have the 50-50 profit share with BT on the Magnus 75% and that reduces some FCF...

For some reason, I've never seen volumes in the differentials quotes on the CME website, but these are very representative of the actual rate differentials with WTI. Oil producers certainly trade these as part of their hedging activities. The differentials were a lot wider as recently as December when the Midland was at a $8 discount, but has lowered now - not 100% sure why, but a new pipeline could be a good reason why. I certainly know that large capacity pipelines are coming online in the summer in the Permian.

Also, I just noted that Bakken (North Dakota) differentials, which were at $20 back in November because of refinery maintenance, are now also down to the $3 to $4 discount to WTI. Bakken produces circa 1.4 mmbbls a day of shale oil.

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122018-after-months-of-record-bakken-oil-output-dip-expected-next-month

With the actual link now

https://www.cmegroup.com/trading/energy/crude-oil/wts-argus-vs-wti-calendar-spread-swap-futures.html

Here's a link to the WTI Vs WTI Midland crude differentials. For March to August, they're trading at a circa $2 to $3 discount to WTI. WTI Midland is the crude priced in the Permian Midland area of West Texas and is the hot bed of Shale activity.

The discount was in the $6 to $10 range through the Summer/Autumn last year, but has come in now. There's lots of additional pipeline capacity being added in the summer and hence the differential falls to less than a buck or disappears, from September onward.