Member Info for hitman1a

Gushing out like FPSO Kraken is connected to an Arabian field.. Maybe it is World-class.. Deserves an SP improvement again this week based on Tanker offloads ( subject to weather).

I note Ineos are now trying to double the price they charge Apache for using the Forties pipeline.. Jim Rad says they need to charge more to help pay for improvements /asset life extension.

GL

I was looking at my portfolio, I can see a purchase at 58.1p on 6 May 2015, Can also see a purchase at 14.29 on 27 Jan 2016, amongst many others. When Kraken arrived in Amsterdam, I confidently bought more in the 43p range , but Kraken has taken ages to get right and Enquest Producer should have performed better given the replacement pumps. Then we had the rights issues . 40p will come again given Magnus and Kraken performance , FCF ? , seeing the real numbers has become more important. I can wait for the 1H 2020 numbers on Sep, unless your suggesting the Feb Ops update will provide more forward guidance than we normally get.

Looking at Barclays coverage of Unite, what targets they have suggested in the past and how long it takes to get there, i’d suggest it would take 4 to 5 months for Enquest to get to 40p. , 30p however could arrive within the blink of an eye .

Australian broker last night says oil going up in medium term and was long on Santos , ie the one that gets the big premium on Brent , So quality picks are fine . Saudi today says caps should be in place for remainder of year which if agreed supports a floor until such time Shale peaks, Max $70 this year which is just fine for Enquest .

Interesting location but cannot offer any explanation , Peter Cetera once sang a song called ‘No Explanation ‘ from the hit movie ‘Pretty Woman’ , and I expect the SP to move up by 4.5p this week. Things just happen.

NH, ….You'd be crazy to short this now Kraken is fixed and performing.

Cod is good enough. (slightly pricer in my local chippy when compared to other fish).

Afraid I can't recall the article and happy to be corrected if so..

I would say the Pyrenees Grade which got the $30 premium is the caviar of grades.. Kraken is more like Cod.

I read in early Dec that the premium over Brent relating to IMO2020 had all but disappeared .. there was a shortage of transport shuttles but prices were stable and refiners weren't really having any trouble getting supplies..

Kraken should be achieving good orders.. I believe a European refiner should be looking to purchase 20% of Kraken to obtain continuity of supply and indeed which caps its future costs.. Perhaps a European banking syndicate can organise a loan.. If the pitch has done the rounds, no doubt Barclays and others have seen the proposal.. 40p looks conservative.. J P Morgan have said Enquest could shock the market..

I 'll agree the debt reduction is running ahead of what's due and payments are being smoothed between 2020 and 2021. I'll accept trade creditors are probably being brought up to date improving the balance sheet ratios.. but I can't agree Kraken gets this magical $25 premium.. it's low sulphur and Api properties however might persuade someone to part with a lot of money for a 20% stake.

GL tomorrow. 30.8p target this week..

The week in the markets section again... one liners

Enquest 26.4p up 15.3% on oil price spike (what spike, how about the broker upgrades)
Premier Oil £24.40 , up 10.9% on North Sea deal (not sure about this one ? )

Not that impressed with ST

I can't agree that there is any significant premium on Kraken..I haven't seen any, but I do believe 3 tanker offloads a month is a game changer. Not only for the extra revenue, but also because we are no longer spending time, effort and money trying to work out how to fix it. That bodes well for future drilling targets in Q2 and indeed Maureen/others later on at some point. The FPSO can handle EXTRA volume and Enquest have gained expertise and more knowhow.

Barclays were always optimistic with Enquest when Kraken was being towed via Suez and had SP targets in the 40p range, but when the FPSO arrived in Amsterdam it was obvious the ship was defective in many aspects. Perhaps they have gone back straight to 40p based on Kraken performance and the now much clearer path to debt repayment that I feel is much more important.

That said when we clear the 2020 and 2021 RCF, if they intend to operate with $1b, what do you do with the monthly FCF from Jan 2022 to October 2023 that gets saved in the bank. That's worth possibly $50m/mth. 1$b .. even Greggs can't bake a cake that nice.. Perhaps they will just buy $1b Shell shares and get 6% dividend yield to offset the interest on the rollover bond until they find another suitable acquisition.

Kraken production should start to tail off at some point as well so we need another Magnus type deal when available to maintain total company production at today's level.

26p seems too low. An early February operations update should boost us to the zone Zak mentioned of 34p if Enquest give details on future rapid debt reduction, and not wide ranges. He expected plenty of sellers in this range and I do too. However I expect Brent prices to be slightly better in March near $70 given what Mark Gordon said so 40p seems possible then.

Chase it all the way to Terps 33.4p and they are getting a very good deal .

30p very soon as the market cap shouldn’t be lower than £500m

Well done for holding and accumulating Squif, 2019 was Asda, 2020 and beyond is anywhere you like. GL

3 tanker offloads a month deserves 25p tomorrow by EOD. 2p boost.. but 1p at a time.

Why didn't Barclays just have a 30p target price instead.. and then revise later.. why go to 40p straightaway.. ? RBC are still at 24p , but I suggest Barclays are better informed directly from the Company.. Could there be something in the pipeline other than just oil.. ? Refinancing? not needed.. Malaysia Seligi gas deal: possible. 20% Kraken farmout : possible, as they tried before. The latter 2 would boost the SP beyond Terps ( 33.4p) if announced in Q1 2020., Maybe some in the city have heard something: re Kraken farmout is my best guess for Barclays to go straight to 40p and we are getting a very good price. Might be a European refinery securing supplies.

I’m assuming they had a chat with Enq IR before issuing the new broker forecast.

Just to check the numbers and progress on operations .

Fair enough KO . A dividend would underpin the share price at a higher level ......as you have suggested .

Topped up £1k at 22.56p.

My oars are wearing out, need Brent to behave and an II to do the heavy SP lifting

I think this is the last time Barclays will give a decent rating to Enquest , Over the years they have given many chances. no more large projects so chances of achieving 40p very high by Q4 2020. Probably need to see 1H 2020 accounts in Sep for a proper rerating, Can probably ignore 2H 2019 results and focus on just net debt reduction updates . GL

Locked and Loaded

https://oilprice.com/Energy/Energy-General/US-Shale-Struggles-To-Ride-Out-The-Storm.html

It took an Opec deal to get to $65, so I believe this is the new floor in Q1.

Really need US oil production to fall 1m bopd by Q4 2020. (less capex, natural declines, less DUC utilization). OPEC expecting demand to be higher this year, but very long term, perhaps demand will decline, but so will capex to balance out the price.

https://www.marketwatch.com/story/oil-tycoon-harold-hamm-predicts-19-jump-in-us-oil-prices-within-six-months-regardless-of-what-happens-in-the-mideast-2020-01-06?siteid=rss&rss=1

Interesting break even numbers

Still looking forward to what Harold Hamm explained .. lower 2020 capex spend in US.. DUCs coming down and WTi going to $75 in 6 mths time. 30p here in April.. maybe 40p by year end..?

The top Iranian politicians might not want a war, but they don't speak for everyone. I'd expect the lower ranks to continue the fight in their own way and activity to increase on easy targets as the months roll on.

I find it hard to believe the plane crash in Iran was just a technical fault..