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Krakie,
Wait until you hear what is going on with Magnus. If Magnus is still limping, ENQ will not fare better than Tullow. Otherwise, you might get your day in the sun...

The game being played is:

TULLOW: TEN vs. ENQ: MAGNUS

ATB

Good:
" Underlying operating cash flow1 is expected to be c.$700 million and free cash flow is expected to be c.$250 million, ahead of guidance, driven by continued focus on costs, supportive oil prices in the latter parts of 2021 and favourable working capital movements."
Not so good:
-" Group working interest oil production guidance is 55 to 61 kboepd. This forecast is based on Tullow's existing equity interests in TEN (47.125%) and Jubilee (35.48%) and will be adjusted following completion of the pre-emption of the sale of Occidental Petroleum's interest in Ghana to Kosmos Energy. The estimated full year impact of the completed pre-emption would be an addition of c.5 kboepd (net) to the Group's 2022 production forecast, adjusted for completion timing."
(Was expecting 5Kboepd higher...)
- "At $75/bbl, underlying operating cash flow1 is expected to be c.$750 million with free cash flow2 of c.$100 million."
(Really, only the $100M to repay the $100M bond due w/ $75/bbl?)
- TEN oil production is expected to average between 22 to 26 kbopd (net 11 to 12 kbopd), driven by natural decline in the existing wells. (TEN needs to be sorted out in 2023...)

Upsides:
- Pre-emption acquisition might add a few bob to debt reduction...
- Oil at $85/bbl might add $10x 20Kboped x 365 = $73M to the debt reduction, but that is it...
- Production might surpass expectations...

ATB and SP is slowly heading to £1...

Plebleens "This rally looks unusual (although so were the early drops of last week)."
Could it be Tolmount about to get into the groove?
Last TU on 9th Dec: "Tolmount (UK) project start-up expected Q1 2022 at net rates of 20 kboepd"

Let us hope COBAS up their stake to 10% and push for change in this company. More accountability and transparency is needed.

Hi Londoner7 and Therapist,
Thank you for your replies. Londoner7 makes excellent points, as always. Yes, gas revenue is up looking at historical records on sales, but so is the amount spent on third-party gas purchases. The latter could arise as the result of an increased volume or a higher price. There seems to be no reason to expect the former. So it must be the latter. And this tells us that the price of that gas is not fixed, although it might be based on Brent pricing formulae or based on spot or future prices as agreed. If the latter then there is no pass-through profit that arises.
Which leads us to Therapist's ex-boss remark. We won't be able to know unless ENQ tells us. (Therapist, by the way, you ex-boss trivialized matters. I am afraid his quote ("If we had any bacon we could have bacon and eggs if we had any eggs.") needs to be qualified: "If we had any bacon we could have bacon and eggs if we had any eggs, assuming we have a frying pan and heat!"
However, ENQ decided to emphasize its gas revenues? Why? like londoner7 I lean towards that being related to ENQ making some money from it...

Therapist, let us know when you see white smoke. We are waiting to hear good news from the conclave, be it about gas, oil, Magnus, or EP!

let me say it again, there is no piece of news that says point blank Magnus was fully operational by December. The energy voice news just stated the whole platform was shut down, which meant that the part that was producing was also shut down, but that a few days later production had been restarted. It does not imply full production had been restarted. The OGA data for December will clarify matters. The best evidence things have improved is the NED purchase in January. I followed his lead.

Could be a very good year. (No Bressay and Bentley until 2024 the earliest is good news for some of us!)

Hi londoner7 and Therapist, So far no RNS about Hibiscus getting the Eagle deal completed. If ENQ were to instead keep it, given current POO, with some hedges in place, it might be an interesting development.

Hi squif, good to see you back...

ATB

A reply to early week posts by hitman1a, krakie, and chilting...

Hi Hitman1a and Krakie,

This is what they said in the TU about Magnus:
"The Group remains focused on optimising existing facilities performance and anticipates resuming dual compressor operations during November. "
So there is no confirmation that it has been fixed.
They only said that they ANTICIPATED resuming dual compressor operations during November. TU was on the 18th. So they anticipated they would resume dual compressor operations during November by Nov 30.
And given that IR won't say what is going on (very different from Tullow who even confirm end of year production rates;the IR people are not to blame, it is the BoD that instruct them to act like this and keep everything confidential - of course the largest shareholder is always in the know....LOL), we simply do not know. Some people in Aberdeen might well be trading on the information they might have...

W/ Magnus fixed, and producing 15Kbopd + 3Kboepd gas, ENQ would easily be trading much higher. A short review of the producing assests tells us that:
i) GEAD is doing well, most likely 9Kboepd in 22, w/out any new wells.
ii) Kraken, producing under 30Kbopd, will end the year at 27Kbopd, w/ 2 weeks of maintenance, should give net production of 19Kbopd.
iii) Malaysia, should average 7 kboepd once pipeline working and new wells in place in H2. Of which ENQ, gets FCF from 5Kboepd.
iv) GKA & Scolty and Crathes and Alba, 4.5Kboepd in 2022, if all goes well.
So that is 39.5K boepd (ingnoring gas at Kraken).
Thus, production guidance will be all about Magnus. If Magnus is fixed, ENQ will release guidance with the lower and upper limits in the 50KsBoepd range. If it is is no, they will give a lower limit in the 40Kboepd.

If I remove the 37.5% of BP's FCF entitlement in Magnus and Petronas's entitlement in Malaysia (i.e., about 2.5Kboepd), I believe that FCF calculations cannot be based on more than 47.5Kboepd in 2022, and this assuming Magnus is delivering.

This means ENQ in the TU will tell us they have hedged 60% of such production for 2022, i.e., they will report hedges of 10MMbbls, so an additional 3MMbbls since last update.

Hi Krakie, I filtered NeilHannon in its current reincarnation a long time ago...

Hi Chilting, Tullow's production in Ghana for the whole of 2021 is already known since two weeks ago... Tullow's TU will be about Kenya, and the completion of their increased stake in Jubilee and TEN. If oil prices stay in the $80s I see Tullow's SP to
keep moving higher although at a slow pace.

A question for Londoner7 and Therapist: Have you figured out if ENQ makes any profit of the third-party gas that passes through? All I have read suggests the purchase price is not fixed: it is either based on a Brent based pricing formula or spot price. If the former than there would be a profit given boe gas prices way above Brent.

ATB and lets hope for no more "Destroy it, and ask for

I had posted over the last year this company was not going anywhere, and thus the SP was bound to go down further. More evidence of this today.

This company is a big NO, NO for me.
No tangible progress in the last couple of years.

All IMHO and DYOR

Aqc888, you are missing the pie in the sky beliefs around KMK. No jam so far, no jam tomorrow, that is the history of KMK.

Bostonboy14, You are absolutely spot on. Way too many duds in recent years. VLG is another dud tipped repeatedly by ST you forgot to mention.

I can even draft ST's next article on KMK in a few months from now: "no jam so far, but jam tomorrow."

Hmmm... I am saying that we have heard the same exact story over the years and nothing changed. Why should I believe it now?
Sales have not increase YoY. Cash burn was £5M in H1. Do you think it will be much lower in H2, so that there won't be a need for a capital raise? Let me just say that often I had heard here that the upcoming capital raise was the last one.
Zero empirical evidence anything will change.
Once money comes through the door in higher revenues, I will believe that "This time is different". Until then it is the same jam tomorrow story.
ATB and DYOR

I have read this same story since 2017.... It never materialized. This company is headed for another cash raise.

This year's revenue forecast is LESS THAN 30% met (£4.3M sales out of £15M).
More, LOSSES of c. £3M.

"Administrative expenses and distribution costs increased to £6.4m (H1 2021: £5.9m), which is largely due to a combination of increased depreciation and amortisation expense, staff costs, travel and consultancy fees." And that is just for H1....

The accounts show a CASH BURN OF £5M in H1.

It will be impossible to avoid another cash raise this year. Which is consistent with KMK's record of burning cash every semester since I first looked at its acounts back in 2017.

"Investors are materially underestimating trading prospects of Kromek (KMK:14.5p) in what could be a pivotal year." Is not this the same thing he has been saying for several years. In his article he ignores that KMK is priced well below the SP when he first tipped it (February 2017, "what prompted me to recommend buying the Aim-traded shares at 25p in late February ...".
So, the recent TU just stated:
"Financial Highlights
· Revenue was £4.7m (H1 2021: £4.6m)".

But recently, July 2021, ST had stated "revenue estimates for the 2021/22 financial year which point towards turnover of £15m."

Where is the £10.3m are coming from in? More than the double of H1 revenue?

I am not gullible. This is a company that every year promises jam tomorrow. But every tomorrowhas come and gone and still no jam...

Should not Simon Thompson just close a position with a SP c. 50% of the initial tip 4 years ago?

ATB

Entering into a repo (repurchase) transaction with a non-affiliate third party, pursuant to which VTB Bank (PJSC) transfers 162,962,900 ordinary shares (4.12%) to such third party and undertakes to repurchase the same amount of shares from such third party within a specified period of time.

russian market: see etf down close to 6%
DB X TRACKERS MSCI RUSSIA CAPPED INDEX ETF 30,66 EUR -1,85 EUR Zeit 14:38:32 -5,68 %
Datum 18.01.22
once it subsides it will sky rocket.

This is all Russia driven.
We have held:
DB X TRACKERS MSCI RUSSIA CAPPED INDEX ETF
since 2010.
Today it is losing close to 5%. Bearing in mind that a lot of it is oil but Banks Yandex and Poly (gold).
When the media decide Russia is no longer invading, this ETF along with POLY&POG will sky rocket, IMHO.

Some people buy when the market is fearful...

Basu said; "As a result, the Board continues to look to the future with great confidence." LOL, yeah, same statement every semester.
Yet, always has failed to deliverd. The impairment of that contract from a few years ago never reversed. So, with this very bad commercial acumen, Basu will be asking for more money soon from the shareholders ...

Hello CaneToad,
Yes, two totall inconsistent RNSs, three weeks apart. At the time of the late December RNS, IOF already knew their partners were not delivering brine in sufficient quantities. If that was indeed true, so why not say it at the time? Instead today they mentioned something they had stated in the Summer, that absent being restated in November and or December, led some of us to believe such constraints were no longer an issue.

But there is more to this story, as we thought this was no longer an issue. This is what IOF stated in September at HY results (see RNS): " The second factor was lower brine supply particularly at two of our plants. Due to the pandemic's impact on oil and gas prices, oil and gas partners have not reinvested in their fields (new drilling, workovers, maintenance) at historical rates. More recently, Iofina has become aware that oil and gas operators in our area are beginning to reinvest now that hydrocarbon prices have recovered and stabilised. New drilling has occurred near IO#8 and has positively impacted brine flow to this site. While brine supplies are still lower than expected at two sites, we are optimistic they may improve in the second half. "

So, was IOF economical with the truth then or today? You cannot say the issue is fixed and several months later say it is not...

This is what was stated in 2021 with regard to the production in H1_2021 that due to bad weather came in much lower than the c. 300T projected: "IOFINA added that it will likely achieve first-half production of around 250MT, below the 285-305 MT forecast.
I do hope that the " 225-240MT for H1 2022" is achieved.
Fortunately, selling at $35/Kg. is a lot less profitable than at a price 50% higher, i.e., c. $50/Kg.

But IOF's Board needs to be given the RED CARD by the large shareholders that have bought in recently. Many operational misses in the last few years.

ATB

Hi Modestus,
Hope you are well.
What is your view on this year's prospects given the most recent Operations update? (Canada production seems fine, but production declining in Egypt). The signing of the Egypt agreement is good in terms of visibility.
ATB,
L3

Devas Multimedia shows how it is done:
https://www.ft.com/content/d1c4cbbc-bddc-4051-9c3a-44ee575d3a1e
CNE are up for a surprise thrown at them by the GoI...

Hi BananaJoe,
Just saw your post. Having a competition on ENQ's average daily production in 2022 would focus minds on what really depends on ENQ's management, i.e., getting on with producing oil&gas! I would be happy to take part.

Hi Tigar, HNY to you, as well. If you read my posts you know that my take on ENQ has changed after a few years. I no longer want to have a large investment on a company that conceals too much info on operational issues for my liking. The operational issues at Magnus during 2021 provided enough evidence that ENQ simply does not want to tell PIs what is going on in detail. It was one issue after another from beginning to year end. This is not just bad luck! As for whether it can be fixed once and for all, and at what cost, is what remains to be seen.

There is a contradiction on how ENQ approaches the release of news on Magnus (IR are not to blame, they just follow the policy set by the BoD/CEO on communicating with PIs and IIs): If it is material then it should tell us what is going on (good or bad). If it is not material, then there should be no problem answering PIs questions with some more detail, although not giving exact production figures, but saying the platform is operational and producing at, e.g., levels not dissimilar to Q1 or Q2, whatever.

Still on Magnus: someone asked at some point the amount BP has collected from its $1B contingent consideration. The answer is a total of a little over $60M in 2019 and 2020. ENQ's accounts show BP will not collect anything close to $1B by the time Magnus enters CoP. Those figures can be used to determine how much ENQ would collect as well. When I was following this more closely I posted such figures.

Slift: I agree with you. That is why my one line moniker for ENQ is the one I posted recently.

The question now, and as stated by Krakie, is how much debt reduction is going on: Did ENQ repay $50M of the RBL facility before the end of 2021? That means only $35M needs to be repaid until 31 March. But can it get $135M repaid in Q1 so that the repayment due by 30 June is made before entering Q2? We shall see.

Modestus: HNY. My best preforming oil&gas stock is VET. Many thanks.

hitman1a: good that you agree that until ENQ shows it can show operational issues have been sorted (some) investors won't be convinced all is fine and dandy...

Good luck all.

Simon Thompson's piece has zero analysis. It is just a re-write of the RNS. I am amazed people rely on such articles to make investment decisions. At least his previous notes on VLG had something that was not in RNSs or TUs.
There is zero evidence that VLG is integrating recently acquired businesses well. Indeed, they at some point stated an acquired business was delivering sales lower than before being acquired.