Member Info for hitman1a

We only need $25 for the rest of the year to break even , but they did say we don’t get the screen price, Something about hedging non Kraken production for Q2 at a discount to screen price. Say $6 instead of $9 , Kraken still get a positive price . So with Brent at $34 , we might be getting $28, Let’s see what happens post OPEC , . The discount should decrease in Q3/Q4. But limited scope to delever, We need Brent above $40, and the SP will get to 15p/16p, Brent at $50 in Q4 or earlier should see us over 20p.

JS confirmed the cashflow break even numbers were after taking into account all interest charges .

Austria thinking about coming out of lockdown in May.. inc restaurants , eg moving to back to normal.

Oil glut wont build up if other countries can do the same... Oil deal will extend further to end of year, may be more. Brent will rise.. so will Enquest eventually.. but it's still $33. tough 2 months to get back to 13p/14p/18p

TRUMP just said he dislikes Opec, but thinks Russia and Saudi will do a deal to save themselves. If he has to protect US energy companies and jobs, he will do what he has to do, ie tariffs.

We all know US production is declining anyway.

Let's see on Sunday what price SAUDI set via OSP for May orders. If they remove the big discount and boost it back up, that would be a good sign they are prepared for a deal, even though the meeting has been moved from Monday to Thursday

Tbh, I was confident in early March that Opec + would rollover the new deal, but they didn't. I was less confident an agreement could be made on Monday, due to the number of parties involved. I guess Thursday is a good bet, but the way Trump is handling this is a joke. He hasn't offered anything because he knows America won't be back at work on April 30th, and rig numbers will continue to fall and storage will be full. US producers will have to shut in within 2 months.

50 ,34 ,34 ,34 = 152 /4 = $38 Break even

Kind of think we will average higher than Brent $34 for remainder of year.

https://rigcount.bakerhughes.com/

Germany sees no reason for EU Insurers to cut dividends. Aviva should follow LGen next week with dividend confirmation.

STOCKHOLM (Direct News Agency) The Trump administration has discussed cutting down oil production in the Gulf of Mexico due to the spread of corona virus among workers.
It reports the Wall Street Journal citing sources.
It is unclear whether the proposal remains open for serious consideration. But if implemented, production would reduce 2 million barrels out of 13 million barrels in total, but would be controversial in the oil sector.
Donald Trump said on Thursday that he is trying to find a solution to the price war that has been between Russia and Saudi Arabia.

in at 22.25p / £2.5k..

Got to be worth 30p with good news next week with OPEC and some shorts closing.,
( I guess more will invest at a higher price next week in a fresh isa)

but no one wants to pay 10p

remember ….one sheet does plenty..

approaching Brent $33.63. but WTi is still $27.11. WTI needs to be near $40 and rigs and frac crews would still need to be cut.. The US will demonstrate this as a cut.. but restricting US exports is the solution. Trump can sign that at the appropriate time imv.

I like the idea of a fixed price, but there are always some who would send a large credit note back to make their supplies more competitive.. Given the US can't cut production due to various laws, I believe a OPEC reduction will still happen, so long as US exports are restricted.. There used to be a 40 year law that prevented US supplies leaving the US until 2015.. so this should be brought back in.. This automatically restricts Shale investment and provides a method of compromise for Russia and Saudi.. ie, if they cut and drive up prices.. US shale isn't able to take away their markets.

$50 is below the Shale breakeven ($54). so $60 is possible if US exports are once again restricted.. all sorted in one go.

If we do 60k /day this year.. and 55k /day next year with average $55 and costs at $35, that gives us 2021 $400 FCF,

Cash reserves 28.02.2020 $268m
add 2020 FCF : $262m x 10/12: $218m
add 2021 FCF : $400m
Cash reserves 31.12.2021 $886m, less (Oct 2021 repayment $440m +$32m). $414m

Personally I would still cut capex to maintenance only mode ...... no more money until the Oct 2021 RCF has been repaid. The scavenger business model isn't really that great in a sub $55 environment. above that $60=$70 works very well. I'm not a great fan of Enquest spending $150m capex per year , on the basis that it's a short payback period. quite frankly I prefer a smaller company with less debt. I can't see any justification for spending $150m chasing a bit extra production when your market cap is so low either. The same applies to all other oilers for the next 2 years.. which should mean higher prices above $55 in 2022. So despite the positive cashflow above.. it's pay debt off first before any extra capex.

The deleveraging process can still continue into Oct 2021 with early repayments to save interest, so the SP should climb each quarter with Brent.. and we can do extra Magnus and PM8 in 2022 and be quite ruthless in terms of costs in the meantime..

I believe force majeure by refiners has forced OPEC+ to act immediately.

Apart from China filling strategic reserves, the refiners are making losses on product and are no longer interested in supplies.. We should expect a combination of significant global shut ins as well as an OPEC deal to raise prices... a similar action plan and pattern to the CV.. pushing the curve of peak glut down and spreading the supply to the later part of the year(s). We are only at week 1 of 8 in respect to force majeure.. Frightening indeed,

Reuters poll (last week average $38) should now have a Brent 2020 average over $40, but if we get Q2(38) Q3(48) Q1& Q4(55), our average would be near $50, giving us $262m FCF, with costs at $38.. not bad..

Brent now $33... heading up into OPEC meeting Monday. 50/50 on whether its enough to get it past $40.

We do have J&J making a vaccine, I’ve been told they never spend money , so the fact they are committing so much money assured me that it will get done , I understand it’s a joint venture with US and will be provided at cost ,

The biggest problem is time , How do OPEC + countries fund themselves over 18mths , with only a partial reopening of the economy ... higher prices near $50 make it much easier with a global coordinated effort which probably has to last 2 years .

Apparently eligible for Fed lending program .

Good, the shalers are just a ponzi scheme . Debt junkies. Should ensure production declines and prices rise.

Sp can't really go up with Brent at $30, but should start to rise as we approach $40. I can't see how Opec + would want to wait till Q4. Think we still have a tough 3 months and then re-assess, but at least Saudi want a meeting. Brent at $35 this month gets us to 11p range. Nothing special, but so important cashflow wise.

Sounds like you've scored Pelle.