Member Info for L3Trader

Pelle and I were spot on our Q3 production estimate: in Q3, ENQ is producing less than 46Kboepd. That seems to be the reason why AB guided production at the bottom of the range in September. He already had the production data for July and August. Expect onky slightly better production data for August when OGA releases it (Kraken produced more in August. The main reason is that Magnus is really not delivering, in July oil production was 12,56k bopd (so, it dropped from June by 300bopd). I was expecting it to cross the 13Kbopd...
The issue with ENQ has always been execution, and that is not going away.

In general, ENQ is not benefitting from the very high oil prices as some might imagine. 6MMbbls are hedged. Sales in H2, without GE will probably come under 8MMbbls (you have to exclude Malaysia's production that goes to PETRONAS, so 33% of production) (with luck it would be 8.5MMbbls. So upside is on the 2.5MMbbls unhedged in H2. but part of this is the 37.5% of Magnus that belongs to BP (it lowers provisions, of course) (that is 900Kbopd), so unhedged for cash flow the upside is coming from 1 to 1.5MMbbls. Oil would have to increase $20/bbls to make much of difference.

Now, with GE completion delayed, this messes up all the calculations, and remember taxes on profits (40% is the tax rate) are not coming to ENQ but going to HMRC.

Finally, we learn that completion "around the end of September" means sometime in November... (as Mikko had stated here but people doubted his statement) Using this interpretation of "around", may I add that ENQ's SP is around 60p, and January can now start preparing the party...

I am sticking to my prediction: Net debt at the end of 2021 will not be below the net debt figure at the end of H1.

I do not think many sophisticated investors with tens of millions to allocate will like the way ENQ goes about disclosure of information. This relates to a broader point that E121 had made several times here. ENQ needs to be more shareholder friendly. Indeed, and in many different ways.

Fortunately, a couple of my oil&gas stocks are doing better than ENQ, among them PMG and VET. The latler, which I eventually added to the portflio was brought to my attention by E121 and Modestus (where is he...?). Many thanks to both of them.

ATB

Welcome londoner7, very good you are posting here now. we both talked about PMG back at the start of 2021. The time for this to deliver is now or never...
ATB

Sale 9 Dec 2020 Lodovico Gianluca Braguti, Executive Director, Manufacturing Director 3,542,729 £0.90 £3.19 m
Sale 9 Dec 2020 Jeremy Anthony Philip Jerry Randall, Executive Director, Chief Executive Officer 2,752,751 £0.90 £2.48 m

Any news on the sale / cancellation of the sale of POG's stake in IRC?
Iron ore down, IRc drops, but they have hedged a lot of sales of iron ore, so Cash flow generation will still be fine.
ATB

Hi Therapist,
The piece of news about a contract having gone wrong in Malaysia must be "fake" news.
ENQ's half year results press release explictly states (see page 27): "The Group becomes involved from time to time in various claims and lawsuits arising in the ordinary course of its business. The Group is not, nor has been during the past 12 months, involved in any governmental, legal or arbitration proceedings which, either individually or in the aggregate, have had, or are expected to have, a material adverse effect on the Company’s and/or the Group’s financial position or profitability, nor, so far as the Group is aware, are any such proceedings pending or threatened."

Now, note the last few words at the end of the last sentence... The results were released on 2 September.

Thank you for the file with the production data. In the last page unfortunately both the left and right side are cut out. Any chance you could upload or send it, please?

By the way I would like to discuss some production figures with you, but perhaps better via email, which is
l3traderuk (at the Sergey Brin and Larry Page's domain!)

ATB
p.s.: As for people engaging on rational discussions, you would know that assumes they are rational to start with. That basically means such people that do not need either your services or those of other health professionals... The best way to guarantee that you only participate on rational discussions is to filter those that are so rude that you would not talk to them face to face anyway -:)

Hello Happy,

That was not my intention.
But you posted a similar message about Borders and Southern in several bbs: BP, HBR, TULLOW.
Borders and Southern is a company w/ a market cap of £4M (that is not producing any gas now and won't be doing so for ages; by the time it ever produces, gas prices will be very different from today's) and has a bid-ask spread over 10%. I am sure you know what I would write next. So, I will stop here.
ATB

Hello Londoner7,
Hope you are well. Welcome back!
Thank you for sharing your thoughts. The change of guard between IIs is also what comes to my mind. I have not taken adavantage of the recent drop to add more. Had done so at some point but above current levels.
I fully agree with you that a new large acquisition across the channel is not needed. I would, like you, like to see higher aggregate margins.
Nevertheless, with money available at low rates companies seems to always be thinking about acquisitions.
To me the net effect of increased pay for drivers, carbon licences fuel and increase of the prices of the products Breedon sells is not clear yet. Can it pass through all its cost increases? But, level of sales might be lower than expected because of supply chain issues not just on their own supply chain but also the supply chains of others. A construction project can only go forward if you can secure all the supplies and labour you need.
I have found it difficult to get supplies and labour over the last half year for my own small construction projects.

It is disappointing that this BB does not attract a lot more posters sharing information. I guess commenting on cement prices is not as exciting on commenting of the prices of oil, gas, gold, iron ore, nickel, you name it...
The price of commodities evertywhere in the world are definitely up. Fortunately, I have some direct exposure. So cannot complain too much.
All the best,
L3

Happy, Borders produces ZERO gas at the moment, and its gas fields are in the Falkland Islands. You are trying to ramp a £4M market cap company in the hope the price moves. ...

Trading suggest something is going on. Rotation of of investors. Who is buying and who is selling?.... May be Londoner7 knows -:), but he is nowhere to be read...

Barnyrubble, if the GOI wants all the companies to agree before paying CNE, then good luck with that. I expect that some companies won't settle on the current terms.

Whitehat, I voted against the Egypt deal. Unfortunately, I am not given a vote on the india settlement. I know what I would do. I would be happy for CNE to pay taxes on the part of award above $1.06b (i.e., up to $1.7b and still compounding), as it would have to be taxed, if it received it.
ATB

CNE should continue with the court proceedings. The way CNE is acting is naive. Have people realized the kind of GOI you are dealing with? Just google its legislation on the National Register of Citizens which it got approved first, and the subsequently (with some time delay) approved Citizens Amendment Act.
Let us just hope CNE stops behaving in a naive manner...
ATB
p.s.: The Market hates the Egypt deal. Selling Kraken was a crackpot move...

Ant1986, these are PSC agreements, so CNE does not get difference between sale price and cost. You have to go through the formulae and have info on cost recovery, etc. So, not that amount of money.
ATB

1) do you want us to keep IRC (Yes)
2) will we keep IRC (It does not look like)
3) Where will the SP be by the end of October (above 20p)

Tigar,
Seller is happy to sell. I am also a Suncor shareholder, and if you go over their plans and accounts and earning calls (etc.) this transaction fits their announced strategy. So, they won't back out of the deal, even though the terms that were signed would allow them to do so, given that ENQ missed some deadlines (see the prospectus). Given that they won't do a U turn (also because they are keeping half of the upside up to the reference Brent prices of the contingent considerations, as computed by Londoner7 half year ago, but he no longer posts, so he cannot corroborate/deny this), and ENQ offered to pay more than all the other interested parties, that is why it buying the asset no chance this will unravel. The only barrier in front of the deal are the regulatory approvals. So, yes Krakie you can relax.

As far as the deal being a fantastic bargain, that is not the case. People are confounding the asset's quality with the oil prices. The deal is good or bad on the basis of the asset being acquired, not on the basis of the oil price. The latter is just playing the oil market and ENQ could achieve the same profit by having bought calls at the time it agreed to buy the asset.
Suncor are no fools. So, let us stop treating them as they are. Ditto with BP. BP has dfone much better out of Magnus than ENQ. They have now received close to $475M from selling Magnus, plus all the interest they earned out of the vendor loans...
So, when people say let us do another Magnus deal, my reaction is: please go and check the accounts. The value of Magnus on the balance sheet has been lowered on a consistent basis... It might still be seen as a very good deal at some point in the future. But so far it cannot.
It is Kraken & AK that turned out to be ENQ's life savers.

ATB

Aloj, Kraken together with Armada Kraken is ENQ's 2021 money printing set. However, production declines mean ENQ will guide Kraken's production down next year. My calculations point to between 27500 and 31000 boepd.
Now, if ENQ can fix Magnus and keep it producing at 19Kboepd (so, including gas) for 6 months in a row to show the issues have been dealt with, Pelle will finally get his "utdelning", if ENQ has hedged enough 2022 and H1 2023 production. More 2022 production than 6MMbbls needs to hedged sooner rather than later...
Pelle's broken record idea is key to ENQ becoming more shareholder friendly, using E121's terminology.
ATB

Petroatlantic, ETA at Kraken: 2021-09-13 08:00.
Therapist, over to you....

Stupmy, And when does the TA see January performing at Tesco again, i.e., the share price crossing 30p?

Therapist you are right (but, I would say breakeven is an investor specific variable, not a company based one. Now, it is time for me to repeat my request for your file with the production figures, please? I am pretty sure my prediction about H1 production was right... a tad under 46Kboepd, but I need your file to prove it!

Squif, last week you asked my prediction for H2 production. It is the same as the one Pelle wrote that day, for Q3, put it at 45Kboepd, and Q4 at 60Kboepd (including Ge at 10Kboepd). In Pelle's Swedish, this is that he wrote "I am at Q3 45k Q4 60k so 52,5k H2." Pelle was having a good day last Sunday. Very analytical and rational. Speaking of which I need to tally up his penalties...

Now, let us agree on 2 things; the file with H1 results clerarly states FCF was positive, but post-tax profit was negative.

ATB

Seav, fully agree with what you wrote.
I have held GENL for a while. And that is why I would want CNE to stay away from Egypt. For the current KRG agreements do not need to be honoured... GENL is owed $140M by the KRG who also terminate licences whenever they want. Al-Sisi's Egypt is relatively stable, but sometimes change happens overnight...
ATB

Benjie, Incorrect. This is a set of PSCs, a different one for each licence. CNE and its partner gets a "fee" (to make it simpler it gets a slice of the CF after expenses). The formulae are easy to understand but some of the variables such as cumulative cost recovery (which we cannot compute or know), etc., make it difficult for one to get a precise number of how much accrues to CNE+its partner per unit of production. And note that Egypt buys the gas at prices it sets. This acquisition was a daft move by CNE. They never learn, after what happened with India. They could have bought oil fields in better jurisdictions, such as Malaysia, etc.

Selling Catcher and Kraken also a very daft move... Kraken is generating very large amounts of operational CF at the moment, and most likely for the next couple of years. The board seems to have erred.

ATB