Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
People think it is about the oil. But really, it is about the gas, which is a big chunk of the shalers revenue. Prices collapsed.
A few months down the road, the shale patch will hit a wall even with the capex cuts.
SmokingAces,
Exactly what I said, ty.
Little man Epip121 just didn't want to read the post. He has a strong bias towards himself and his ideology. Maybe he/she should just stick to what he knows instead of being a little ****.
Best, HMH.
Epip,
Must be easy to be the expert of "everything", just like hitman.
Maybe I'm a 19 year old girl. You just assume I'm not full of **** like yourselves. Hitman is surely getting out of touch, maybe it's an age issue.
Hitman is still on crack, and dont understand RCF.
Mountains of money are pouring in at this moment. Add the "potential" Kraken Premium you might have a totally different field today.
Dividends could be announced a year prior to Hitman's assessments. That is 2 months down the road, at FY 2019 report.
Hitman is taking Neilhannon's spot as the "worst person on the board" of 2020.
We're in the 1-1.5x leverage range. In the CMD AB said no acquisitions other than Magnus-type deals.
We've got Enquest Producer as a bargain chip in any new development. Could easily toss that into the mix and pay a small percentage of the cost for a large position in a new field.
Looking good.
Could anyone of you with an Twitter account help me out?
In this thread: https://twitter.com/Big_Orrin/status/1216684483442810880?s=19
Please post this question:
"Kraken crude from the North Sea has an API of 13.8 and a sulphur content of 0.7, any chance that this grade would be catching the same kind of premiums as the Australian ones? Thank you"
That guy knows this stuff, so maybe we could get some clarity!
Best, HMH
Epip,
Funny. You take the relaxed view of not having to present any data to confirm your stance. Must be easy to be a "sceptic", the worst breed of humanity there ever was. A non significant premium. What do you base that assesment on? Let people know.
I presented numbers. Tell me where I'm wrong so we all can build a better understanding of our case. We are all investors and we strive for complete knowledge.
Best, HMH
Pelle,
As I said, we sell oil to the highest bidder. We are not a buyer of oil, so location does not matter!
With your logic we should consider the buyer's location and give them a discount if they are far away. That's not the case.
The question is: why do Singapore pay more than Rotterdam? It's all about demand and prices, and if you can get 6 barrels of $95 bunker at $87 like my example. It makes sense to produce it.
Please, tell me how you come up with a premium of between brent and the "extreme cases". You need to anchor your idea in order to be credible.
Pyrenees is worth $100 because you can mix it with other high sulphur oils (which are cheap) and get alot of <0.5% bunker. That's the key to what Kraken oil is worth.
Tapis trades at $72. As blendstock with Kraken it would look like this:
($72+$90*5)/6 = $87.
A realistic price for the Kraken crude as blendstock is therefore in the low 90s as refiners need to pay for shipping + show some profit from the $95 sale.
I believe it's plausible that we're looking at a $25 premium. This is a potential game changer, and totally overlooked in everybody's cash-flow models.
Hitman,
Well, if VLSFO sells at $95/b and you can pretty much fill your tanker up with raw Kraken oil, that would be the arbitrage of the century.
I'm fairly certain we're receiving a nice mark-up for the Kraken grade crude. This hysteria started in December.
Regarding your estimates, I think you're way off. 2019 production with 2020 capex and opex should clear the RFC+PIKs and then some. And I disagree on the fact that Enquest will pay down the debt, and so does Enquest with the 1-1.5x leverage target.
Should refinance all 2021 payments + the bond in 2023. Anything else would be really damn stupid.
That leaves us with total obligations of about $300m for amortization 2020 and 2021. About the same amount as I believe we receive from the unknown Kraken premium on a yearly basis.
But hey, what do I know?
Best HMH
Hi Pelle,
The premium to brent has nothing to do with the shipping cost.
Enquest will auction its oil off to the highest bidder, and obviously companies from the other side of the planet is paying the highest price as that's where the oil is heading.
They carry the shipping costs, which makes it kind of interesting as the total cost will be higher than for a refinary in Europe, who should therefore be able to put in a higher bid.
So either the Kraken oil is in very high demand, or in very low demand. And with IMO2020 I guess we can rule out the later.
Hi Pelle,
Don't think the fright cost is part of the auction. As KO said, it's on the buyer to arrange transports.
The oil must be in high demand, as it apparently makes economic sense to win the auction and then ship it to the other side of the planet.
Scanning this list I find very few crude grades that share the Kraken characteristics.
https://www.mckinseyenergyinsights.com/resources/refinery-reference-desk/crude-grades/
This could be a BIG F*cking deal boys.