Member Info for January24

Crazy Bank.
Barclays have raised their forecast for Brent this morning. They increased their 2022 price forecast for Brent by $11 to $111 average for the year., and they raised their 2023 forecast by a huge $23.
So they accept Enquest will have a much higher revenue than they thought before, indeed 11% More than they thought. Then they should minus the Tax Levy. Would give a net decline of 16%. Their price target was 40p minus 16% would give a new target of 33p -34p.
How on earth do they get 23p. ? Like we have clowns here, then I guess they have clowns at Barclays too.

No Robbie11,
The government have said the tax will be removed if POO falls. They have not said at what price they will stop the tax though.
It will be somewhere under $100 - my guess would be $75 or $80

Guys, I think that you are giving the little weasel to much intellect.
The only shorts he has are the ones he wears for School !
He would not know how a short works, let alone be able to purchase any. He is as Simple as they come --
He spouts 7p, 12p 15p 25p - eventually he buys.
Then
He spouts 40p, 50p, 60p - before he sells.
It's kids stuff - I have him on filter as I do not believe children should be allowed in Bars, Strip Joints or Investing forums !
He slipped through, I don't believe that LSE checked his age !

The share price (market cap) will resume it's rise again soon. It has too!
Why ?
Because with POO at these prices, despite the new tax Levy, we are still making very large free cash flow and profits. These continue to go up on a daily basis. We are accumulating wealth daily which has to be priced-in . The market can not ignore this for very long !
The march up will resume.

Prior to those trades going through. I.e. 29p
Looks to me that they were late reported trades and any effect on the share price had already happened much earlier. From memory O trades can be reported up to 3 days after . KO was right.

Romaron,
That was a clever idea. So average oil futures for H2 is $115. Current average is $103 . However we have June average to add to H1. Say H1 comes in at $105.
This would give a final price average for all of 2022 of $110. That's $7 higher than the current average.
If you remember my earlier numbers, $7 increase basically is worth $100m Net of all taxes onto the bottom line profit = it's more than paying for the windfall tax in 2022

I guess it does not seem to matter if we make £1 profit or £1 billion . The market will still value us at what it wants too. Currently she is upset with us and has turned away from us. Reminds me of someone !

To do nothing !
Let's see what his next move is ! He owns circa 10% of the company.
He will do something. But What ?

Sorry guys - Hope The Numbers Help.

You see, I woke up this morning and started "playing with numbers", as the wife was not looking to hot !

Yes Dumbly, hedging figures given by Enq. Production too.

Last one - just spent a while on It.
Enquest's production for 2022 is 18m barrels. So year to-date the average price of brent is $103. We will say that Enquest's profit is X at this level.
Now for 2022 if the average POO increases by $7 then Enquest's profit increase by $100m . This is net of windfall tax.
Basically for every $7 increase in average POO gives 100M increase net to Enquests profits.

Last week the share price was around 37p with POO at late $113 per barrel. The market had worked out our profits on these numbers.
Then the 25% Windfall Tax appeared from the British government causing the share price to fall as profits would now be less,
But surely if POO goes up by a certain percentage then we will hit the same profits as before ? And our SP should be back to 37p - Now I know it is not as high as adding 25% to the original $113 which would give a POO of $142 per barrel. As production does not change , the costs of production does not change so every $1 up in POO falls straight down the P&L into profit. It's a moving percentage which gets lower the higher POO goes.
Example - If we said we have lost $100m in profit and we know our production for 2022 is just over 18m barells . Then if the average price of POO for 2022 increases by $6 then we get our $100m back and our SP should be back to it's original price.
We were at 37p with $113 oil. Playing with numbers I worked out that following the windfall tax we will get the same amount of profit at $122 POO. At $122 POO we should have a SP of 37p as profits are back to the same figure.
I wonder how long the market will take to work this out ?

Thanks Robbie for the feedback;

Key Numbers-
Production- I have production at 50kbpd - Currently it is just over this. Some will say it will fall due to summer shut downs. They forget we have "workovers" and New drills coming in 2022 to help increase production. This should negate the summer shut down/maintenance period.

Price Of Oil - I have used average for year to-date which is $103. This is likely to go up as POO is higher now and is likely to be higher all over the summer. I have kept $103 for full year in my forecast as QTR4 prices could offset the summer highs of $120's plus, leading the average at year end to be around where we are now at $103.

Opex, Capex numbers have been given by Enquest for 2022.

Robbie11,
What Price Of Oil were they assuming ?
Yes if Oil Price stays around these levels they are likely to be correct, BUT our net profit after ALL taxes has to be well over a Billion to pay that tax.

ukbbbbb and Pelle,
Thanks for the feedback. Ukbbb you are right I took the Pre-tax profit without apportioning the 1/1/2022 to 26/05/2022 period with NO windfall tax. (5 months 2022 without ) So the 2022 revised profit numbers are;
2022
Revenue after hedges = $1.6 billion
Operating profit = $ 890m
PRE Tax Profit = $578
POST Tax Profit = $494m (After Payment Of Windfall Tax)

SUMMARY
Keeping it simple, we are looking at 500m post all tax profit for 2022 -nice
That's useing an average POO of $ 103 . Should this average of $103 climb higher during 2022 then we will exceed $500m profit after all taxes.

Rather than post numbers and people believe or trash them. Lets look at the REAL numbers so we can base our facts on actual figures !
Here we go - For 2021 the actual figures in the accounts were;
Revenue = $1.26 billion
Operating Profit = $580m
PRE Tax profit = $352m
POST Tax profit = $377m

Now for 2022 - My Forecast (I am not being generous in my numbers) And FCF Forecast.
We know for Oil companys when you achieve above your cost per barrel ,, then basically anything above becomes profit.
So we are tracking for a 50% increase in Revenue for 2022. Which comes from 50k bpd x $100 POO. Current year to-date average for oil is actually $103.7 However we can use $100 x 50 x 365 days (equate out the hedged production) = Net

Revenue after hedges = $1.6 billion
Operating profit = $ 890m
PRE Tax Profit = $578
POST Tax Profit = $434m (After Payment Of Windfall Tax)

Free Cash Flow

I have production Figures @ 50k bpd = 18.25 mbls (within Enquest guidance)

8.60 mbls @ $78 = 670 mil (actual hedged data Enquest)
9.65 mbls @ $103.07 = 994 mil (using POO actual annual average year todate of $103.07)

Revenue Total = $ 1,664 mil

Opex = 430 mil
Capex = 165 mil
Interest = 100 mil
Decom = 75 mil
Other = 80 mil (lease)

TOTAL = $850 mil

Free Cash Flow = $1,664 mil - $850 mil = FCF of $ 814 mil

Yes free cash flow $814m

Rich,
What are your numbers ?
I agree with Pelle, I posted my numbers on here a few days ago. Revenue 1.6b etc etc. FCF 800m.

Dividend will be 25% of profits.
Tax Levy <25% profits.
Leaves < 50% for debt/AB to play with.
Profits 500m gives dividend of 125m that's just over 6p per share - Nice.
All IMHO

TimTimebomb,
My understanding is this;
Say you are planning to spend 100m capex. and your production is 100 barrels The government want you to increase your capex so you get more barrels then pay less tax. So you mite increase your capex to 120m and now you produce 120 barrels. The extra 20m you spent will be where the clawback is !

No way will any north sea operator pay the full 25% . To quote the qovernment website " Capex is included ans some Opex".
Stop trying to be a B-I-T-C-H