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I also noticed the sp graph improving like the old days when an II was buying in the market slowly and consistently over the day and then a RNS appeared 48 hrs later. Not sure how much they want or what price they will pay upto but I think there was some strength in it and would anticipate it still has some way to go .
Target :22p. Before Friday close.

We should have a higher market cap, given the depletion /depreciation charge for 6 mths is $255m . I just think of this as extra money.. on top of the net profit.. which allows Enquest to pay off large chunks of debt and also reinvest in new drills/capex every year. It's upto Management to decide where to spend it.. . but in my book, having an EBITDA of nearly $1b gives the board a nice problem to have. After all, even AB mentioned at the AGM, why do people always concern themselves about the debt. ? It doesn't look that high now.

I certainly don't like the interest rate we pay, lower for longer might work out cheaper if they could refinance now.. otherwise it's deleverage as fast as possible. Even Greece wants to pay off high interest rate IMF loans and replace them with alternative cheaper ones.

We should have a market cap near $750m but need another 6 mths accounts to prove it.. I can't agree with others that this is a speculative buy, given the significant reserves and expertise.. but as mentioned from the AGM, Enquest has consistently failed to meet it's own targets and Kraken was a disaster that caused more issues that can't be forgotten, even though it is now fixed.
GL.

If you look at the equity improvement over the last 6 mths accounts it’s about $64m or £52m , multiply by 6 or 7 and you get £350m , basically our market cap, The technical stuff isn’t relevant to the sp, if we get £100m profit in 2h 2019, then our market cap should double , given how much extra drilling with short paybacks the company is doing to replace reserves, Definitely worth waiting for the next half accounts so long as Brent behaves , we should get more profit if we don’t get beaten with exceptionals. Ebitda is massive every 6 mths ,

I doubt they have done anything.. probably happy to let the balance ride unhedged for 2019.
It was going to $70 in Q1 2020 due to IMO 2020 anyway imv… this has just accelerated the process.

Demolition process takes several weeks.. so how they intend to get back to normal within a week is unlikely.. It would take several months to repair/replace/test/, but they don't want to shock the market with a realistic statement.. We should be content with $65 plus. and 21p tomorrow.

Smart Houthi.. seem to be telling the truth, that they can target Saudi oil fields whenever they want for the price of a Mixed Kebab.

This will go on for years. Repair, bomb, destroy , repeat.

Hedge balance of 2019 production this week at $66 plus and we should get near to Barclays 23p very quickly..

Haven't seen any estimates on timeframe to full repair, but let's estimate 6mths.

Probably able to run on reduced run rate or one one train like Kraken, but health and safety aspects including risk of further drone attacks would entire ensure site closure for at least a month imv. GREAT news for those long on Brent . Target $65 next week. It has to have some impact, despite existing stocks.

Topped up £3k at 19.27.. every little helps.

Barclays.. B stands for braveheart.. 23p.. a little optimism.. essentially so long as exceptional items don't blow a hole in the 2H 2019 accounts.. and considering increased capex/maintenance.. lower realised pricing but with hedging.. and perhaps almost equal production. the balance sheet equity should add quite a bit (say 20%).. and some of it ( say 4p) might get added to the SP, even though it should be more.. only 3 .5 mths to go till year end.. so thank you Barclays.. your a winner ! , but just remember if you can't look in her eyes, she's out of your league.

I think it’s a case of not understanding the balance sheet and not being able to predict the exceptional items that deters brokers from commenting any further , just look at what happened to RBC earlier this year , .... so long as Enquest is still investing in extra capex , there’s a chance the equity won’t improve until we see the returns . 6mth to 14mths on new capex

I see your point on the estimate for full year 2019 at the beginning of the year, but if you look at the recent Sep 19 half year presentation on page 19 , it's updated and says

H2 2019 outlook ? c.4.6 MMbbls hedged (c.3.9 MMbbls at average floor price of c.$66/bbl) ? EBITDA increases c.$60 million at $70/bbl vs $60/bbl1

I would say our hedging program has largely reduced our sensitivity to the oil price for 2H 2019

We need a capex break for a year, but they want to develop Magnus and Kraken further. Fair enough they only have 6mth and 14mth payback periods, so I have to agree with them, but otherwise a nice 1yr capex free period at somepoint would strengthen the net equity valuation in the balance sheet and hopefully the SP. I think JS said the annual maintenance capex was $50m, so it surely means the medium/long term outlook is very rosy, if you accept our annual EBITDA isn't that sensitive to the oil price fluctuations of say $5 within our average hedged prices.

We know the annual EBITDA only changes $6m for every $1 movement, so given the low trading turnover and lack of II, a few people could cause a stampede and collect cheaper shares .However, the company spent billions and it's now flowing back into the coffers with profit. The opex cost is very low , so all in all, I think the board are confident and optimistic about the future . There is an enormous amount of cash being generated. Perhaps the SP can increase 12p/annum for several years.

We have seen many analysts over the years cover Enquest, but most find the balance sheet confusing. I do too, a bit complex which results in exceptional items that spoil the show. No point in them covering it and making positive predictions until we complete 2019 and get the trading statement early next year. I think we will see 28p in early 2020, but higher only after the full year 2019 numbers have been issued in March 2020. Most analysts don't want to ruin their reputations. Much easier not to cover it.

Hi Romaron,
I still feel there are plenty of things in outer space that for some reason enter the atmosphere and end up hitting the Enquest P&L and Balance sheet. No one seems to be able to anticipate them, and hence the Larger IIs and investment houses keep issuing low SP ratings.

Baffled how a company with annual EBITDA now of say $1b needed to raise a measly $100m in the RI.. the SP is 19p and no mention of FCF being used to reverse out the issued shares ( $50m max per year).. and a reducing EV , with low market cap.
Who on the board is looking after equity / shareholders interests.?. AB extra holdings aren't really enough..

Perhaps IMO 2020 earnings next year and another 6 mths cleaner accounts will help.. but I agree the sector is out of favour , even though it can make money.. Fixable with a dividend policy, but I'd rather have another Magnus type deal first.

Hi Squif

Another acquisition.. 100%.

FCF of say $300m (1.4-1.1) buys a nice piece of real-estate in our own back yard, so long as the commodity hedging department don't screw up.

Net Debt will still be $1.6 b at end of 2019 and $1.4 at end of 2020. very little due in 2020 apart from $155m
imv.

Think AB said he wanted to operate in the 1x to 1.5x range in interview,,

Hi E121, thanks for the reminder on the $1b BP cap..

They have always said Magnus was out-performing expectations

Is our EV value declining.. and should it be at least constant if every $ of debt repayment adds the same to equity.?

EV ( 31.12.2018) $2246m
EV (30.04.2019) $2184m
EV (today).. maybe $2000m, ( market cap of $400m.., net debt $1600), which would mean the market cap should be near $646m, or 31p

Our market cap is declining , despite substantial debt repayment.. so 2020 debt repayment may not add anything to SP.. Fair enough depletion cash gets reinvested as fresh capex, but if you lose 75% of normal trading profits of say $500m/annum to adjustments I don't fully understand, then that destroys investor returns and interest.. I guess we should be about 31p today.. but aren't, due to the large adjustments which are due to having a complex balance sheet the wider investment community can't understand either.

Will another 6 mths numbers reverse the trend ….or do we need another 12 or 18 mths. ?

https://www.google.co.uk/amp/s/mobile.reuters.com/article/amp/idUSKCN1VR15P

Remeasurements and exceptional items of $120m for six months wiped out 75% of our trading profits. That can't keep on repeating itself. But we did add about $50m to the balance sheet, about 5% ... the same as the increase in SP today. If we could get a clean run for 2H 2019 and beyond , then we could get a market cap increasing substantially over the next 12 mths. Anywhere between 40 % to 100%. It's a shame something always crops up, but I think we have turned the corner. Just listened to the webcast and they seemed more confident than before. Avoiding a 3 week shutdown on Kraken in September helps us out a lot.

Hopefully avoid sentences like this going forward , but if they repeat, then it’s certainly explains the suppressed share price.

Remeasurement and exceptional items were a net loss of $120.0 million before tax for the six months ended 30 June 2019 (2018: gain of $34.5 million). Revenue included unrealised losses of $42.9 million in respect of the mark to market movement on the Group’s commodity contracts from 31 December 2018 (2018: unrealised gains of $2.5 million). Other remeasurement and exceptional items in the first half of 2019 also include a charge to the statement of comprehensive income as a result of an increase in the fair value relating to the contingent consideration on the 75% acquisition of Magnus and associated infrastructure of $26.9 million, which reflects the Group’s expectations of continued strong performance at Magnus, $28.1 million unwinding of discount on the end 2018 contingent consideration balance and the provision for settlement of the historical KUFPEC claim of $15.6 million.