We would love to hear your thoughts about our site and services, please take our survey here.
On the topic, I found this kind of funny:
https://youtu.be/RYSLyvbR_1w
Chris,
Chiltling don't look at fundementals, he wouldn't understand them anyway. He's a sucker for the unknown and unproven technologies. Had a blast telling us "deniers" that green tech was the future a year or so ago. He proudly mentioned shares of negative-profit companies where he had gained 3-400%
No mentions of his holdings lately, most are down 50+%, a few 70%+. If you ask him he probably sold at the top yet maintain his bullish view on the industry.
Chiltling had a hot hand and got roasted. Now he's trying to recover having bought a long way into an oil rally. Doubt the chap has a clue about anything, a total trainwreck by the looks of it. Be warned.
Romaron,
Highly doubt it. Earnings happened within the previous shelter held by Suncor. They're the party liable for the taxes up until the transaction closes.
The effective date is just an agreement that protects both parties should the transaction encounter issues and not happen for an extended period. Would otherwise suck if we agreed to buy GE and regulatory entities held it up for 2 years.
Best,
Romaron,
From 1/1 2021 the post tax cash flows will be offset against the final payment for the GE asset. Suncor have payed taxes for the asset which will cease to be the case from the date we move GE into the vehicle that carries Enquest's tax assets (Enquest Heather LTD. If I recall). The money have been received by Suncor but the check Enquest have to sign on closing day has reduced daily since 1/1. I guess we will pay in the $200-225m range instead of the initial consideration of $325m.
So the tax money payed by Suncor is forever gone, but as of last week we carry the asset and will offset any tax bill against our tax assets and pay zero taxes, and receive the cash in our accounts.
Best, HMH
Chiltling,
Maybe you were a toddler back in the 2003 - 2008 rally. Didn't you have $50 Brent year end back in Q1 while many warned of undersupply and an energy crunch?
How could you ever trust your own intuition when it evidently sucks? Your calls are always dead wrong, yet you keep amuse us with your total lack of perception.
By now the only one who cares about your opinions would be you, yourself.
Best, HMH
Lads,
I don't know if I'm right, but the payment is large for contigent resources land-locked in the most corrupt oil producing country there is. Pipeline capacity is worse than Canada 2017 and you'll sell the oil at a $25-35 discount.
Not naming a counter-party is the biggest red flag in my view. And not disclosing this value to the market in previous calls to cement the value is another.
I think it stinks like a pile of horse**** and I will keep my distance.
Hello Pelle,
I know nothing of this entity but I've seen countless similar deals with stupid pay-as you go terms and suspicious wordings in the statements naming no counter-party whatsoever. Wouldn't touch that company with a 2 metre pole albeit I could just be missinformed.
Don't have a lot of trust in an oil-company turning into an office-rental operation in the most of the pandemic anyway.
Best HMH
Therapist,
We will likely have to contract "Neilhannon Latex Limousine Services" at £159/h to get the pump delivered and installed given the trucker shortage. Glad the lad stopped wh*ring at EP when she went into warm stack, and didn't end up the next Spielberg story of a lone lad in a massive building with alot of joysticks all by himself.
Best, HMH
Hello Pelle,
EP is the feather it our hat. Could easily be worth more than half our current MC cash and way more as a farm-in payment in a new project.
Market don't price GE nor our warm-stacked FPSO.
Funny thing, is during several of the cof-calls I've attended, operators have been searching and bidding for FPSOs to get new smaller projects going. Gonna keep myself updated on this issue during the Q3 calls. I think stars are aligning for the Enquest saga. Let's just give it a little more time.
Best, HMH
Hello Pelle,
I've been lurkin, but when plans are moving forward without interruptions in slow times I'd rather be golfing than forum-posting. I think the case is pretty straightforward. FCF at current oil price in the $800-1bn range and tax losses that will make that the case for the next $3.5-5bn of OCF depending on time-frame.
Bumpy road in the rear view mirror, and likely a bumpy road ahead. A great setup for a higher oil price environment.
Added modestly to an already vast holding today. I believe we're going to meet the leverage target in less than 5 month and thereafter the voice from management will change radically.
AB & CO. have handled this in a fantastic fashion. They gave us zero expectations and over-delivered. Let's just wait for the market to come around.
Best, HMH
KO, you own a piece of a business. The pieces are up for sale daily on the stock market. The price are whatever some other holder of the equity is willing to sell that piece of the business to you for at any given moment. It means nothing, and even oil investors are jumping between companies to capture the value of the discrepancies is the market place.
Look 5, 10 years into the future. That's where the value has accumulated and we know wether we made the right decision to buy this company at present value or not.
*But I know you're a real piece of work and I hope you made some money. You should have given your swift shifts in bearish- & bullishness since forever.
Beat, HMH
Of course it does master KO.
With bond-prices at par refinancing would put Enquest in a favorable position to refinance the outstanding bonds. When dealers are paying par there's an insufficient amount of paper put there in the nexus. We will probably see Enquest issue new notes or bonds to redeem the 2023 papers in due course. The interest rate of the new RBL is really telling regarding the state of banks willing to support the company.
*Chiltling not making his way into the conversation yet have me concerned. Hope he didn't smoke too much of the natural stuff and ended up in the carbon storage.
HMH
Splendid HM. Bond players will always be the clever ones, but given the interest-rate environment I suspect both the bond- and equity cohorts have gotten more stupid.
The equtiy is doing nothing so I added a few today. Things are looking better than ever with GE around the corner, EP appreciating in value by the day and 2.5bn barrels of movable oil in controlled and owned fields, or 180 years or 2C at 38000kbopd around Kraken.
Our time will come. We're basically net cash within 18 month given future curve and heavier capex.
Does anyone know the covenants on the new facility? If they're light we could possibly be in for imminent shareholder returns. And we're trading at a 6-15x discount to American players.
Best, HMH
Chiltling,
Oh yeah sure. You were in from the bottom to the top, and then scaled.
Attending the floors of hundreds of conferences with people trying to sell their ideas into funds I've seen it all. Your approach is that of most.
So, I give you £2m for investing if you provide me with 5 years of audited returns from your strategy. But hey, with your track record you will then be telling me you don't really need the money. You can post em here, guess we're all friend anyways and there will likely be more investors that will benefit you with higher fees. Win/win.
Your call, champion.
Best, HMH.
Hello Chiltling,
I could not give less of a **** about some imaginary lines on a chart. I've bought at levels higher than this and I bought a massive amount well bellow 10p.
But I don't run a one share book. I've got some real liquidity even in bad times from some heavy investment in high dividend paying companies. I don't pretend that I can predict what the share price will do in the short run.
What's your mission? You keep on getting everything wrong time after time. Last Hydrogen was the future and you proudly presented hydrogen stock. Now they're down 50% and you get the privilege to pay $18/mBtu instead which is what? $110/boe?
Being short-sighted is a vice and a threat to the general prosperity we all currently enjoy. Sweden is currently moving to ban ICUs post 2025 so I'm looking at vacation homes in the Sochi region and different parts of Europe currently to get my ass out of this disaster.
Best, HMH
Being out of the woods is the major achievement. From here we've got a massive opportunity set and cutting the parasites i.e the assets with high opex/barrel was a necessity and well-timed endeavor given the times we were in.
Now we've got a lean company with great assets and a relative low debt burden. Out tax assets makes Enquest one of a kind as taxes is levied on companies well ahead of the FCF number is derived, and we can got well into the latter half of the 20s before a single penny leaves the company in cash.
The instant reward-sentiment the market participants is wielding at this moment reminds me of back in the late 1990s. The most ridiculous companies went haywire while the idiots with the value stocks made a killing while the rest went from potential profit to dog$hit in the matter of months.
I'm sure we'll get our revenge, in time.
Best, HMH
Hola Pelle,
They're already paying taxes so that number is correct and solid for another 5-10 years given current assets and an oil price at $57. With ~$11 of FCF-breakeven cash i is pouring in.
Today PIB passed, so refinancing incoming making 4-500$m payable from Prime to AOI in the coming years after refinancing from FCF. Terms looks better as well because of the massive EBITDA-margin with the substantially lower tax rate in the new legislation.
This is the kind of play I always expected and anticipated in Enquest. Get debt down and thereafter enjoy fantastic free cash flow. AOI flagged for dividends and buybacks by year end, and I expect Enquest to do the same by year end report next year when leverage ratios have come down. AOI could easily pay 40% of FCF which would provide a dividend of 4 sek/share/year or almost 40% of current market cap. Same thing with Enquest.
Having $2.8bn or so left of tax losses when debt is essentially gone will give Enquest shareholders a massive windfall when the time is right. I've got a lot of patience, but currently I expect this thing to fly over the coming years and I could easily make a case for a share-price in the £3bn range given current oil price and outlook. But I also expect the price of oil to go ballistic in the not so distant future, and if that call is correct you will most certainly notice the cash flows of 60kboepd at current costs.
Best, HMH
Hello Pelle,
Apples and pears. They are both great companies but a 2P reserve life index of 61 years at current production is crazy. Enquest will need alot of incremental investment over that 61 year period while MEG only spend sustaining capex to keep production flat.
Enquest is in for a FCF windfall in the coming years and we'll see how that is reflected in the share price once we got it in print in the coming reports. I own both companies and they are in great positions to create alot of value.
Best, HMH