The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
MINERB, can you help me locate the filet option to 'block user' option for this BB. Simply exhausting to read all opinions and little facts to underpin said opinions portrayed as factual statements. Thanks for your help
Total production on OGA reported was 74.5k (WI 44.7k). Assuming 10k for MAL takes us to c. 55k for the month of Oct
Magnus came in at 17.2k (!)
Kraken continue to have issues at 31k
Extrapolating the averages for Aug/Sep/Oct and uplift to 100% WI on Magnus indicate c.65k prod.
Keeping Magnus at 17k and anticipating Kraken at 35k would indicate 70k prod.
Confident ENQ will endeavour to maintain the upper percentiles of the provided guidance range.
Just need POO to recover....
taking a market average 2014-2018 the EV/EBITDA for ENQ has been around 4.6 based on Jan avr valuation (excl 2017 as an exception, otherwise a very small variation around 4.6)
Would indicate EV $3.5bn, [debt $1.85b] > MCAP $1.67bn or SP $0.99 (c. 78p) - seems to be a dream with today's sentiment.
But, we have been here before:
21 Nov, 2016 19.65p --> 47.25 6 Jan 2017 (POO from $48 --> $56)
29 Nov, 2017 20.50p --> 38.3p 16 Jan 2018 (POO from $62 - --> $70)
As an attempt to help the board [and myself] focus on something else than the current demoralising sentiment in the market.
It's time for the 2018 figure estimates.
I'll collate all results under this thread in case you want to participate. Honour and recognition favours the winner. Feel free to join in!
Note: excluded any Magnus payments from OCF to FCF deductions. Keeping it simple.
My estimates below:
Total (Mboe) 19.8
Total rev ($M) 1269.5
Total cost ($M) 446.0
EBITDA ($M) 753.3
Capex ($M) 250.0
FCF ($M) 503.3
romaron, I'm with you. Buy the unloved, out of fashion and bet against the market. First time I was in ENQ was 2010; with POO at $70 at c. 70p it was a bargain. Sold most in 2013/14 and an anticipated crash. Since then been accumulating various oil stocks at favorable levels during 15-17 with POO below $50. Whilst I have a sizeable share of my account in oil, I'm fairly comfortable history will repeat itself, even with the threat of renewables and EV. There is too much focus on US and their stock levels; oil market manipulation and political games. Oil is highly sensitive to even small changes around the demand/supply curve and the the sentiment changes very quickly, especially when shorters need to close their positions.
Some interesting thoughts [so far not validated the numbers and few sources in the article], but in principle confirms my view - much less investment in exploration to uphold supply: 3-4y investment cycle leads to increasing decline of supply and a visible gap. Investments in oil exploration have been decreasing since last crash and this is the snow ball effect which will become visible. Saudi are maxed out on their spare capacity, so likely Russia. US have been able to plug the gap with shale and shorter investment to supply cycles. How long will that be sustainable?
https://energi.news/opinion/opinion-are-we-heading-for-an-oil-supply-shock-2/
Hi Romaron, stats and data never tell a lie. Interpreting them though is were biases occur. Anyhow trying to understand your analogy and believe we are close to the same interpretation of the current games.
Bloomberg made headlines a week ago with stating US being a net exporter for the first time in 75 years. This is confirmation bias. US is still a net importer of crude oil. US consumption is roughly 20M barrels per day (BPD) and have been since 2006. The week referring to net crude import was roughly 4M BPD, include refined products net and you'll find a surplus export to the tune of c. 200k BPD.
So what is happening in US?
- Most refineries are setup/built to refine heavy crude, following the crude export ban 1973 - 2015 ; why US is setup to import preferably canadian crude and export refined products (not embargoed) (and later sweet oil from shale). The discount is favorable to US as well as the value add in the refined products.
- What is the benefit for US to create shale supply and flood the market?
a) more supply of sweet oil, will arguably push price down for all oil qualities (glut, oversupply fears)
b) cheaper crude for refineries will increase the value add (as refined product prices are not correlated to the same extent)
Coming back to your question, yes I believe that is/was the problem for US and being addressed by as you rightfully say over-expose shale production. Even running into deficit, but there is another dimension.
The hypothesis, consequently; by increasing supply, there is a net positive effect from the exports in refined products gained from discounted heavy crude and the trade off (lower price for shale exports).
- US are dependent on heavy crude to feed the machinery. Little investment in heavy crude exploration because of the export embargo, has made the US refineries dependent on heavy crude imports, predominantly from Canada and Venezuela (also favorable in price)
- US were the worlds largest ($) exporter of refined products in 2017, and growing
- Venezuela failing and US imposing further threats, subsequently limiting the supply/import of heavy crude
- Heavy crude prices rise because of lower supply
- US have to find new sources for heavy crude imports or push prices down, in order to uphold market share and dominance in refined products
- Shale is used as the catalyst to push supply and move prices down for heavy crude
The video with Jim was appreciated. What has happened since 2013 is that the last try from OPEC to take shale out led to the competitive pressures and shale adopted and significantly reduced production costs (nearly halve them). Don't believe that was expected by OPEC. The attack failed. OPEC lost their dominant position on the oil market and needed more support (Russia). Shale has still been growing by alarming numbers. Ref Jim's slide: the shale peak have likely become higher, but narrower as decline rates are stacked.
Is shale a long term play? No, is my con
Pelle, bookmark these
EIA
https://m.uk.investing.com/economic-calendar/eia-crude-oil-inventories-75
https://www.eia.gov/petroleum/supply/weekly/
API
https://m.uk.investing.com/economic-calendar/api-weekly-crude-stock-656
Recently found the below resource, not had time to play around with it to validate its usefulness.
https://www.jodidata.org/oil/
LoL - ROM is a favourite or 'back of the fag packet'. My thesis - if you can't derive an investment case in 10 minutes, there's less likely to be one [or at least one the market will find as well]; move on to the next opportunity. Not criticism to anyone, I truly, truly appreciate the details provided by the likes of fernan et al.
Yet, I would not have the time to corroborate and digest all details. Even less able to understand them :) I leave that for the professionals.
Wrt to your heritage, always nice with a fellow 'countryman' abroad: Scandinavia account for Denmark, Norway, Sweden. Finland are often [wrongly] included, but that is a fallacy. Nordic countries, on the contrary, do include Finland as well as Iceland. I guess we are all a bit of everything in the end.
Share your view on AB, regardless of what many seem to believe - he's got a sincere stake and skin in the game - there is no possibility he will quit. Hybris might get to him though, with an unrealistic aspiration to become the major NS player. Rather have that though than a pessimistic leader.
Good luck all
Tried to send you a DM, but requires a paid account. Don't want to take up the chat with private conversations.
Lived in Lund for many years. Given Oil price hold up - have next crash in 2020 in the scenario planing; adding a fair and reasonable, market appreciated valuation and some common sense we can get to that £1 party in 2019 based on your EBITDA forecast and some applied logics [wish markets were acting more rational than irrational]
Brexit will likely cause some turmoil an insecurity for many people. It's still indecisive what the outcome will be. The proposed deal is not very precise; not that I have read it, but many Swedish people in London are upset that Stefan signed the deal with an unclear direction on how they are to be dealt with come Brexit. We shall see - I'm less worried.
True, revised forecast though, less bullish oil price levels for the below case. The Swedish forum seldom adds as much [if any] value as LSE. 2019 will be the deal breaker, just hope OPEC+ will stick to the expectations. Wonder what is needed for the market to appreciate the value in ENQ. Good seeing some more Swedes onboard, albeit I've forfeited a few years ago in favor of England. Used to live close to where you are.
Patience is a virtue
romaron, I'm not often participating here in the dialogue, yet following the discussions on a daily basis. Many, such as yourself add alot of value, precise logical reasoning and keen attention to details. Been a keen oil investor since early 2000, following the oil price cycle and often with leveraged oil plays such as Enquest.
In theory it's a perfect setup, high gearing, historical EV/EBITDA levels that are consistent. YoY production growth. CEO commitment (own investments) to ride out the storm.
As you, I struggle to find a plausible explanation of the market valuation of ENQ. Bear with me this is not the detailed view fernan provides, but a ROM calculation to set a vision and possible exit point.
- 2014-2016 EV/EBITDA was on average 4.68 (January average share price used for market cap).
- 2017, due to high market cap in January, it was 8.5 (assumed to be an exception, hence excluded).
Applying known info and current production figures to date with the release of OGA September numbers amended with assumed production and price levels to end of year
- H1 EBITDA - $311M
- Jul - Sep (54.4k, $70) - $238M
- Oct - Dec (54k, $63) - $202M
Believe we will end up with a 2018 EBITDA - $795M
Average 2014-2016 EV/EBITDA 4.7
EV $3727M
Debt $1855M
MC $1872M or $1.11 per share = £0.87
The basic case, based on historic valuation, known production and assumed year end figures is near to 4X ROI in the short term. Do notice that market cap in previous years was taken from January - will we see similar effects in 2019?
I'm in for the long term and been investing in ENQ since 2015.
Some numbers estimates for Friday report, appreciate other views.
H1 estimate (M) Average (barrel)
Total production (Mboe) 8.99 49800 per month
Total rev ($M) 582.43 64.79 per boepd
Total cost ($M) 226.48 25.19 per boepd
EBITDA ($M) 355.95
CAPEX ($M) 150.00
FCF ($M) 205.95
Production based on OGA, Malaysia production based on 2017 average (after 'tax').