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Hi Pelle,
The analysts are still clueless. Next year reduced opex will go straight into the net result, bumping our EBITDA and earnings by $100-150m. This combined with higher production will have us well above $450m creating a p/e sub 1.
Regarding production numbers going forward, we need to remember that Eagle tieback will likely offset all natural decline in 2021, and that Armada Kraken is designed to produce upward of 80kbopd. Maureen sands may prove profitable.
Hitman:
I put a 0% chance of Enquest even considering paying off the bond on maturity. The debt will be rolled over fully or partly. $265m cash and a $700m bank loan payable over 5 years is reasonable. That leaves us with a maximum of ~$750m of debt due in the comming 3 years and 9 months.
At $50m FCF/m we've got $2.25bn distributable minus $750m leaves us with $1.5bn to throw at dividends/investments over the period, and there's alot of upside in both production and POO.
Now we wait.
Best, HMH
Posted by "malu" on the swedish forums. Kind of explains the bull thesis of a fund manager and the view of Goldman Sachs commodity department.
Ties well into Squid's thread yesterday called: "No clue What is going on".
https://youtu.be/dhc6vyxVsDs
Best, HMH
Just gonna put this here:
AB and Co. have just turned a sinking ship into something that has a bright future. Kraken has performed well for what, like 5 month? We've got 6-7kboepd offline so raising guidance is stupid.
The company has been on life support for 5(!) years. The board and the executives have likely had alot of sleepless nights, and suddenly the sun rises.
After over-promising and under-delivering for years you cannot expect the board to start making bold statements of future riches when production didn't cover costs 15 months ago.
Recovery will be swift, but most of you behave like day traders. Stop whining and go read Peter Lynch's books. His average time from finding value to that materializing was 3 years.
We may get some tailwind from the oil price development , but financials will probably lead the way.
We've got assets producing well into the 2050s. The company is not going away unless it's bought out.
With Amjad at 10%+ I guess that's not going to happen. Enquest will probably/hopefully be around in 30 years.
A strong captain with skin in the game is the best you could ever wish for.
A very good CMD indeed. Even heard BD say "the coming dacades". I believe the company is now focusing on the future rather than its survival. Finances are looking really solid at 68500boepd compared to 37- or 55kboepd.
The game has changed in the last 12 months. Really looking forward to the comming 12 months and beyond.
We had some massive hedges heading into this year. Maybe there was some hedging magic around the time of the Saudi attack? I recall our new chairman buying 500k and AB doing some big buys a week or so later.
Let's hope that's the case. Wouldn't be surprised to see a nice collar in place for the next 6-8 months of production. We'll know in less than 24h.
Bananjoe,
Capex spending becomes assets on the balance sheet. You can sell assets, therefore Capex is not a sunk cost.
You could classify most Opex-items as sunk costs, as the money is not possible to recover.
Have a nice day.
Nice to see your weekly questionnaire L3. Didn't know you worked Saturdays.
About the sunk costs, come on? You even get the Capex-spending as a balance post on the active side of the balance sheet. Nice one.
It's funny how you have the whole case figured out, yet you have to ask the frequent posters about their opinion.
Hope you're payed handsomely. Well deserved.
So non adjustments.
Seeing a deficit in hard data prior to this residual adjustment-number beating the 914 data month by month you should start reflecting on the real production. Where does this put storage levels mathematically?
Best, HMH.
Epip,
Good data gathering. How do you calculate the 4w average? With or without adjustment? What's your adjustments?
Adjustment could be lower export, higher import, higher exports, higher import, or linefill? Where's the flawed data?
Best, HMH
Heardy,
From Erik Townsend:
"It's amazing the Cushing draw was ONLY 1.22mm bbl. The #Keystone pipeline being offline for the entire reporting period took >4mm bbl out of Cushing. So a 1.22mm draw means we'd have had a massive 2.8mm build if the pipeline had not been taken offline. Now back @ reduced pressure"
See my prior post. The weekly data is deteriorating. EIA use complicated econometric models and therefore numbers will likely be as flawed as whatever model is used. It's not a questionnaire to the producers- but rather a forward assessment of prior moving averages.
EIA is always wrong. Working for the government is a losers game. Anyone with a brain leaves before 40 to enter private entities.
Model is likely 20 years old. Worked well around the dot-com bubble.
If the model is based on MA the production numbers should drop a few months later. I bet 2020/21 should flush out shalers. I guess the gap is 6 months in the EIA-model looking at when production came in.
We'll see. Economists are stupid yet highly educated. Toxic combo.
Epip,
Having worked alot with econometric models, I suspect we're looking at some massive residual errors when regressing the time series of the recent years output. Hence the adjustment - which is likely just a statistical figure to keep the "production" figure within the boundaries of the model used. The data is deteriorating in a serious pace as adjustments keep on increasing.
At some point this will have to be reversed. 914 production figures are always lower and they have been for some time. US stockpile is probably 150-200m lower than reported figures in my mind.
Simplifying the assessment:
Tullow is that girl in class I wouldn't even touch with Neil's manhood. The STD doctor even remember the social security number after the many visits. Toxic hazard.
PMO has potential, she may turn into a woman with a university degree. A good wife and a decent mother... But might as well turn into that doped up chick selling her own putang (and more) outside the local Dollar General-store to support the costs of a broken story.
ENQ is the autistic bullied guy sitting in the last row in the classroom and acts awkwardly in every situation. People think he's insane, and as the popular kids all enter the workforce, this guy starts excelling in math and goes on to achieve his Ph.D earning all the money. This candidate, Neil's manhood should be all over. Could get Neil off the streets and give him an enviroment where he could progress in life. This candidate could also become the Una Bomber who knows?
Best HMH
Regarding Scolty/Crathes,
Field is said to peak at around 20kboepd. We have a 40% WI so I suspect the "Substantial improvement" should in my mind put us in the 6-8kboepd net range.
I got production close to 80kboepd Oct/Nov/Dec.
Best, HMH
Hello Londoner,
Yearly guidance don't specify when the cash will change hands.
PM8/SELIGI had 2 wells drilled, and Scolty/Crathes pipe-work was probably paid for (~$110m) during the 4 months ending October, impacting the FCF and therefore the net debt figure.
Production was down in July and August. Now we added the above assets and Kraken is producing good numbers, creating a higher revenue while costs are lower = more cash left in the bank.
You still got net debt reduction of $80m for H2?
Best, HMH