Member Info for Hector2018

When I sent the email a few days ago, share price was much lower than now.

Now ECO has enough funds to drill 3 wells (2 this year and one next year if they wish to do so). At today´s prices, ECO can raise US$ 10 million (enough to drill 2 additional wells) for a shareholder dillution of just 5%

The chances of success of a 5 wells drilling campaing will be close to 100% in my oppinion. This reduced exploration risk will more than offset the negative effect coming from shareholders dillution

Just my oppinion

Fernan

I agree with those posters that said that CNE has kept Kraken production guidance for the year at the same level (30.000-35.000 bopd) and that in essence, nothing has changed from a forecast and financial modeling point of view.

But I think that reasoning is missing another point, as important as production forecast, and it´s related to management credibility.

ENQ have informed the market that it´s not going to take any impairment hit, in spite of the fact that average production for the last 21 months and the foreseable future will be 60-70% of the originally planned schedule.

how is it possible? doesn´t the NPV of reserves change at all with the lower than anticipated production since first oil, even if the total amount of reserves keeps the same?

Wihout a solid explanation on the next conference call, I´m sure that AB reputation as a prudent and trusted businessman will be seriously compromised.

There will a lot at stake for AB on March 21st.

That´s my oppinion

Cairn impairment will be in the order of US$ 564 million, on a 100% basis.

So, we have two publicly traded E&P companies, with a material difference in their valuation of the same field.

Cairn said that their "estimation of Kraken 2P reserves has been reduced to reflect current performance".

ENQ, on the other side, says that they are not performing any impairment, despite of the fact that the field is currently producing less than 50% of what was originally planned. And that average production for the year will be in the 30.000-35.000 range, that is, 60-70% of original target.

Reserves are valued on a NPV basis. Even if the total amount of oil to be recovered remains the same, the lower production in the first few years will have an impact on their NPV

Two of the three companies involved in the field (Bumi and Cairn) have taken an accounting impairment, for a few hundred million dollars each (on a 100% basis).

But the operator says that there is no need to take any action in the accounting front, that all is going well.

what do you see that Mr market will think of that?

In my oppinion, without a clear and consistent explanation at the next conference call, ENQ management credibility will be seriously impaired (not punt intended) by the analysts and investors community.

ok Matrix thanks

Cheers,

Excuse me again Matrix, what does TERP mean?

It´s not easy for me to understand this whole "rights issue" business..

Thanks again

Hector

Dear Matrix:

You wrote:

"Think allotted rights are worth 12.32p per extra share allotted, underwritten by JPMC & BoA ML.

Rights to receive: 55.000 X 3/7: 23,571 rights *Spot-on

These total rights are worth 23,571 x 12.32p = £2,903.94"

Excuse me Matriz, but I have a question: how do know that rights are worth 12,32p? Any link?

Thanks in advance

Hi MO. Thanks for your response.

how do you know that the alloted rights are worth 12,32p per extra share alloted?

thanks in advance

Hector

I need some help regarding the rights issue: I own 55.000 shares, and I would like to convert my rights for partial allocation into ordinary shares, at no additional cost, as MO said.

Is it possible for me to do that?

How many shares will I receive?

MO: you wrote:

“Your broker should offer you a nil-cost option, this can be used to purchase shares with proceeds or rights, this method you'll get approx 58.5% of entitlement for no fresh cash, so will be approx 13% dilution...”

How do you calculate this 58,5%?

I made the following calc:

Rights to receive: 55.000 X 3/7: 23.571 rights

Price per right: 12 pence (33 pence - 21 pence)

Total value of rights: 2.828 pounds

Price per share: 33 pence

Total number of shares to receive: 2.828 pounds / 33 pence = 8.571 shares

Is it right?

What do I have to do to receive these additional shares, at no cost?

Thanks