Member Info for hitman1a

Probably just AB buying via Double A.

"rapid deleveraging" … not quite the same as "increasing the annual dividend".. First div ( will they know how as they have never done one before).. say payable mid 2022. ( 2.5 years away).. no II will rush to get in today.. but I was impressed by the video yesterday.. presenter bought in Q3 2019 , and can wait 6 months to see the SP rise for good quality US oilers.. Guess I just want to get to 24p by next March.. 1p rise/month.. is my target. General uplift in oil sector which carries us up with it..

I'd agree for using $1-$2 premium on Kraken for the time being.

Thanks for your hedging analysis,

It was a good video.. but I guess Enquest will be last to rise, albeit when it does it should double very quickly given the low market cap. When the oil market started to crash, I was told the Russians never expected oil to fall below $80. I expect to see it again , so low $70s in Q1 2020 imv would be a great start. Shale Tier 1 is gone for ever. It lasted longer than I thought. I would say US growth with the benefit of DUCs is say 200k, which as the video suggests should flatten and then decline over the next 6 months, pushing the WTi price up further.

According to the CMD, AB said the infrastructure is already in place for the gas, but I gather Petronas (state operator) doesn’t need the gas at the moment,

Hi Pelle
I just listened to the CMD again , looks like they will play safe and get net debt down to $1b next year , 2021 looks like $150m capex and look at divs etc , so payable 2022. Wild card is something with BP or Exxon , both of whom were mentioned early on in AB speech. apparently impressed by Enquest’s ability to extend asset life and improve productivity.

Lots of emphasis on creating shareholder wealth , but none of it made any difference to the SP , second wild card is gas PSC on 3.5 TCF in Malaysia.

With the April 2020 loan repayment now only at $75m and Oct at $35m. (Total $155m less $45m already prepaid), .. surely the options are wide open for a deal of some kind if the numbers are right. Or just deleverage to 1x EBITDA if nothing comes up.

Net debt down to zero over 3 years if they want to.

Imagine AB walking over to the bank..

Enters the doorway and heads to the loans department..

Welcome Sir , how can we help you? .. ( I'd like $2b please)
Ahh,, do you have any existing overdraft loans ( yes , $1.5b)
And you want another $2b based on what ( My company earns $600m FCF every year)
Any what will you do with the $2b ( buy more assets that make another $600m FCF every year)

Ok.. sign here.

We know they are comfortable with operating with net debt in the 1-1.5x area.. which is where they will be in Jan 2020.

Apart from the small debt repayments in 2020, WHAT IF, they have had discussions like others last year with Exxon. Last years articles suggested they wanted to exit the NS.. so perhaps Enq can look at some of the 40 fields they have interests in and do a package deal. $2b price tag for the lot.. I think Enquest could afford that now based on 2020 cashflow onwards, so long as the banks refinanced the existing debt. That deal would certainly increase the market cap of Enquest.. Deploying capital and gaining 5% of UK oil production, plus plenty of opportunities to improve things as they have done with Magnus.

I like the bit where it says the 2018 wells that came online are declining at the fastest rate yet..

Reducing the DUCs from 7,500 to 5000 in 2020 should take another year at -200/mth, so I sort of agree with US production plateau in 2021. Tier 1 has come to an end.. Maybe $75 Brent in 2021. We should be able to double the market cap here.. over 12 to 18 mths based on FCF.

https://www.chron.com/business/energy/article/Texas-Oil-Explorers-Say-Predictions-of-14866192.php

Need proof of life first before any upgrade.

Reassess on next accounts in March and the ops update.

68k for Q1, 70k for Q2, 78k for 2H 2020

Average daily production.

Doesn’t like Magnus now has an NPV of $700m either . (was $500m) . And that’s based on Brent $60.

Isn’t that the same question asked at CMD and JS responded with his $25m / year for the next few years , think this was covered over the last few days on here ., it’s not $200m , trans was back dated .

The EBITDA per annum is say $1b , so can absorb all the large deductions you mentioned.
I's say consensus on here is $500m debt reduction over 2020.

5320 shares added 18.59p

Target 21p .. people once believed in Enquest ... they will again..

3 tankers a month was what I expected 2 years ago.. so glad we have now arrived at our destination..

But still not enough to budge the SP.. All of the turnover here is by PI, who would now prefer to buy xmas presents rather than Enq shares.. Deleveraging with this magnitude is excellent and should enable us to sleep better. I guess a target of 21p next March might be reasonable. Thinking 1p/month improvement is fine.

What if they announce a commercial agreement on the Seligi gas, or another Magnus type deal, but with no cash upfront.

They don't need our permission, either could pop up and surprise us all.

Might as well watch Gold Rush. Just started