Member Info for January24

Hi Stevo12,
I am sure others were interested in your last post. I know I was. Your calculations seem to add up.

However I have 2 serious problems with your maths !
They are both the numbers you use to calculate everything else from.
Firstly our 2P reserves are higher than you state. You state 160m barrels. Based on our 2p reserves at the end of 2022 then to get down as low as 160m we would have produced in excess of 80,000 barrels per day for all of 2022. We did not achieve anywhere near this which means our 2P reserves are higher than you state.
Secondly your valuation of these reserves at $6 per barrel is not even close. You should use 0.33 (1/3rd) of the price of oil. This is the industry guide price. That would give you circa $27 today.

How are oil reserves valued?
"The oldest and truest rule of thumb in the oil industry is that oil reserves in the ground are worth one-third the current market value. This method, in my opinion, is one that is after the fact. By that I mean that after Fair Market Value is determined then the price per barrel of in ground reserves can be calculated."

Both of these points sadly mean all your calculations from these 2 numbers are too low ! Indeed you need to multiply your equity value x3 at least = over 1B (as I previously posted)

Finally you deducted 40% EPL off your $6 value of 2P reserves ! You can't do that ! The calculation from value to tax is not that simple. Indeed I would go as far to say this calculation is totally misleading !
For just one example to prove my point - reserves in the ground could have a capex involved to get them out. Most of this capex would be offset against EPL. So 40% is not relevant. Reserve valuation is not profit .EPL is on profit only !

I will be sticking with my 1B fair valuation of Enquest. Eventually the market will join me !

Just to add KO's post also true and relevant.

Thanks for doing your numbers though, it encourages discussion which is good.

The crazy way things are going, I can see our annual dividend (when it comes) being higher than our share price ! lol.

Seriously though, with revenue somewhere between 1.2B and 1.6B and FCF between 250m and 500m Someone has got to attempt a takeover of Enquest due to our tiny valuation of just £356m.
Our accrued losses save 40% tax being paid. With over 2B losses accrued , that alone is worth $800m to someone ! ! !
that's without including any revenue , FCF and profit. Debt should be cleared within 2 years, maybe less.
Got to be worth at least 1B as a takeover valuation !

Not True Pelle,
Electricity has been around since the dawn of time.
There is electricity in the human body. Indeed the human body uses Electricity for many functions. There is also electricity in the sea and in the sky ! In fact it's everywhere !
However it's only recently (just over 100 years) that we have been able to make it and harvest it for our own use !

I think with over 500m fcf for 2022, then based on current POO and what we know, then 250m is a fair base level to be expected for 2023.
Our debt ratio target of 0 5 should be hit over the coming months.
The question is what comes next ?
We awaite the good news !
Could AB be delaying any announcements on share buy backs or dividends because he wants to sell. Why start something like shareholder returns unless you plan to stay. After all he's done 13 years here. His not getting any younger. I think ha will sell.

You are right Stumpy.
I have been wrong so many times that the law of averages says that I must be right eventually.

Such is the crazy stock market.
For years I have thought Enquest as a good oil company would achieve a share price of 60p . Sadly, Not yet.
However I bet ,when we produce our first kg of green hydrogen you will probably see our share price go up to £3.60 or something crazy like it.
Never mind about follow the money, it's follow the nutters !

907 kg = 1 ton.
907kg x $13 per kg x 1,000,000 = $11,791,000,000
Less the new green hydrogen windfall tax of 99.99%
Revenue = $1

$1 billion or thereabouts.
Nice.

Dumbly,
They did not listen before, why should they now !
We need to play our own game, after all the government does !
In addition - HBR, Ithaca etc are still paying dividends and buybacks, so I am not sure your argument holds water !

Hi Auson,
Agree with the descending wedge and the breakout ! Looks to be targeting $90 when it pops.
Enquest are actually in the best shape since I have been a share holder, which is around 8 years.

KO,
I think we will !
Trouble is the next update is only 4 weeks away !

I am expecting the next one (full year results) to get a different market reaction.
Our Net Assets were 520m at the end of 2021, expecting it to go to circa 1Billion at end of 2022. That should please the market. By the way for those that think I'm mad, Net Assets were 726m at H1 2022, so 1B is achievable.

Oil has got to put in a floor before it reverses and attacks $90. Looks to me that WTI will bottom at either $73 or $70. They are the 2 levels. Currently WTI is $74.50. So I think we have a few more days before we see a permanent reversal in direction of POO.
The big players in the oil market will switch from short to long soon.

They some up the market reaction very well !
I like the bit where they say " we could be a target for someone to buy" !

https://www.sharecast.com/news/broker-recommendations-/broker-tips-enquest-ds-smith-natwest--12400480.html

60p should do it !

Even our golf playing super trader BTFATH1 is having trouble. Remember that 9 Iron he baught with his trading profit. Well rumour has it, that he is taking it back for a refund. Seems profits have disappeared for all . Or Maybe he is just no good at golf !

That's not too bad, 35p.
Bloody Stumpy cut it to 14p.

That AB is in the hole with us. He has spent millions of his own money investing in shares. Not to mention his Charitble foundation investments in Enquest.
I trust that he has an Exit strategy. That will become clearer in time ! In the meantime I am strapped in for the ride. However the journey is not enjoyable at this time. Perhaps I suffer from travel sickness. Does anyone have something for travel sickness ?

Morning KO,
You are right. Sadly though, we are well and truly in this bloody hole too.

Being in an unloved sector is no fun, is it . I Was expecting a small rise this morning , but no they still want to kick us when we are down !
I am with KO, why can't they instigate a small "share buy back" programme NOW.

Kris,
I suppose if it's cheap, why not.
The update confirmed that we increased our stake in Bressey to 100%. Equinox and Harbour gave or sold for peanuts otherwise a price would have been quoted/given on the update
Or Maybe it's us that's sold ! What's our tax losses worth ? Well its worth 40% of the total tax loss to any potential buyer.

Just to add. The EPL is accounted for in the P&L and not the Balance Sheet.