Member Info for hitman1a

Lucky for us we only need a few years to pay off all the debt. And I won't even mention the 2C

Lucky 13 , omen

i would have liked him to mention :

1. Reserves life of 13 years.. so the debt is large but is manageable.
2. Potential interest savings during delveraging process and increased annual profitability
3. Balance sheet improvement of some $50m /mth say $1.2b over 24 mths.
4. Analysts poor Sp targets due to complex balance sheet and poor historic track record on a number of projects.

Refiners don't want it..

wrong type of oil..

and that's going to be a problem because they all have difficulty in understanding the balance sheet.

lol.

At the end of the day, if you were in a pub, and mentioned Enquest.. as a good bet.. and the other person went home and checked the broker targets.. they'd look at the SP of 21p and targets of 15p.. and think.. that's a sell.

So this has to change first imv before any re-rate..

Hello KO

It's a bit too early to rerate , Barclays , RBS and Jefferies need convincing in a few weeks time on the 23 May, as to why their SP targets of 15p ish are less correct than the current SP (21p) or what we think it should be (36p)

If they are more optimistic, then we should get a rerate between 23 May and 5 Sep half year results..

At the moment , Enquest seems to be more "issue prone" than other companies.. which has destroyed confidence..

I'm only expecting 1p / mth recovery movement anyway.. but I was fairly happy to see 23p the other day..

correction:

Berkshire will receive 100,000 shares of preferred Occidental stock that will accrue dividends of 8 percent a year, according to a statement Tuesday.

As per last night

US billionaire Warren Buffett signalled support for Occidental’s $38bn offer for rival Anadarko today by announcing he will invest $10bn in the oil company.

BUT he made sure he gets a 7% yield on the loan from day one..

Interest rate seems similar to what Enquest pays.. so i guess it's the market rate.

I thought about the 2C reserves last night.. just as substantial as the 2P.. so how do they monetize this.?

Perhaps 5G and AI can help over the next few years. I intend to ask at the AGM whether more deeper analysis and detail on the production profiles can identify areas/zones within 2P that are similar to 2C apart from some minor variables.. If they can identify more patterns with AI and 5G, they could perhaps trick certain aspects of 2C to behave like 2P, with a couple of adjustments., which only better data and analysis would identify.

GL.

Hi Pelle.. money is still very tight.. so I don't expect dividends for a few years yet..(post 2021). but you should be compensated with capital growth.

I always remember that even the new 2 small Magnus drills this year have a 2 year payback.. so are cash negative in short term..

I guess many feel that they have been very patient, Enquest has now played all it's cards, the Brent price is very good but the share price hasn't responded at all.. I feel it should be a £500m market value company with Magnus on board.. and targeting £750m, but it's early days ..

Like many that don't post anymore.. it's have a look at what it's worth at the end of 2020.

Hi Pelle, i don't see any point saving money in bank for 2 years and then giving it back to bond holders in 2023.. Much better to get a bigger deal (portfolio of similar assets like Magnus).. and use the bond money as a deposit.. The profit from the new portfolio pays off the new bond capital and interest over 5 years and some of the profit from remainder of old business gets paid out as dividends for shareholders.. So expect some sort of deal after all of RCF has been paid in 2021, which in itself is a very large RCF payment to make in 2021

The long term bonds are due in 2023..

The RCF will be finished in 2021.. so you have FCF in 2022 and 2023 to settle bonds, but I guess they will refinance the bonds and make a large acquisition and go for gigantic growth..

Even the OZ loan could be reversed out at end of 2020.

But 2019 is about paying RCF instalments and trade creditors/others.

Reserve life 13 years as of 31 Dec 2018.

Cheers YOY25.. Looks like FPSO uptime is very good at the moment,

We will get March 19 and April 19 production numbers by the AGM.. but i think we need them to revise the 2019 annual production forecast range which is currently 63k to 70k.

TBH.. needs to be minimum 70k to 75k for market to take notice..

Anything in the 60k range is negative for the amount of money spent, so if they repeat that again at the AGM (like we heard when the financial accounts were released), then analysts won't be impressed.

perhaps explains the higher volume a couple of days ago..?

I wouldn't worry too much Squif.. even Facebook beats all analysts expectations last night..

Enquest will do the same.

Accruals at 31 Dec 2018 should all turn into actual invoices and trade creditors over 1H 2019, and lots of it will be paid off by mid year, so balance sheet at mid point will look good and even rosier by end of year..

Analysts don't like being fed net debt numbers , relying on this in their valuations and not being told about the significant accruals that accumulated or indeed why the company never highlights the significant Kraken lease payment that doesn't go through the P%L when talking about EBITDA or net profit...

It will all be forgiven by 31 Dec 2019. Even Cairn look a bit suspect. The NPV must be positive for both partners with Brent at $75.. so why write down an asset lower than cost or Net realisable value, when the NPV is still positive.., even if you do expect less barrels over a set period of time ?

We can all do creative accounting. but i can't complain too much as Enquest have accumulated losses in the $billions to offset current and future profits.

Yes Pelle, the risk premium is enormous, far too high for most people including large investors., . We need 18 mths of solid deleveraging.. no more shuffling, as we saw with OZ and using the trade creditors and other payables as an additional interest free loan. That being said, the balance sheet could improve by $1.2b over 24 mths..

A smaller company with lower production (say 50k/day), but with no debt would be much more valuable..

Morning Jan.. as you have pointed out correctly, the stock market values the equity story as a percentage of balance sheet book value..

So any increase during 2019 should be added on the same terms..

Imv, 2p every month gets added to the NAV on the balance sheet.. so 1p gets added to the Sp on a monthly basis.

based on 70k at $70/$75 range.. Be nice to get a higher starting point if the AGM inspires a bit of confidence..

Yes, turnover $1.8b per year. One third profit margin, $600m per year, so $50m per month.

Analysts will say it all goes out to repay trade creditors and debt for several years, so don't expect any upside in equity, until there's something left over each month for shareholders. Fair enough, but I'm only looking for 1p per month improvement in SP. I think 25p is achievable by end of June. The balance is growing every day., even on weekends too.

I estimate Enquest is raking in $50m per month.

Far better than spending it every month. The tide has turned.