Member Info for L3Trader

Rylidan, I will be delighted if IOF posts 2.3p EPS this year, but I also happen to believe that until IOF starts paying a dividend no matter how small it will be hard to get PIs to park their money here.
I post figures and calculations publicly available...

Iofina:
- produces 500-600MT year, sells for $35s/MT. Revenue is about $30M, because some of its products have more value added. at the moment iodine is selling for c. $40K/MT, so perhaps revenue might be up 10% higher, i.e, $33M.
- EBIDTA $5M,
But IOF needs to build a plant every two years to keep production steady perhaps with an increment of 10% of annual production... so that costs $3/$4M every 2 years or so.
So, what vakluation can what is left (after interest expenses, etc.) support ?
ATB

Yes, you are not alone.
I took a small punt on this few years ago. It is part of my "companies operating in emerging markets"
It has the potential to do well.

Thunder2040,
That is not true. Please ...
The moment courts in jurisdictions around the world acted on the court's ruling, it was game over for the GoI. Please go and read what the hedge funds did to Argentina when it defaulted. After assets were seized abroad, it was game over for Argentina. It was just a matter of time until Argentina had to pay. Yes, you might have to wait, but this was an incredible court ruling in favor of CNE. CNE are already at the stage of having assets being seized. That is why GoI were trying to sell their airline in a rush... And CNE were already acting to do what they had to do here...

"CNE was trading 125p only a month ago and the SP went north because of the new law passed by the Indian Government. Nothing else and I mean nothing else changed for SP to rise by 40%."

Thi is not true. There were developments on the enforcement of the court's ruling to seize assets. So, let us get the record straight, rather than suggesting that there is altruism by the GoI in passing the legislation. Yes, Mr. Market reacted to the news, but the value was always there...

What next? Suggest the GoI is a benefactor of CNE's shareholders...

The longer India waited to pay the larger the amount it would have to pay... until they paid interest continues to accrue... This award was like owning A rated (although not AAA rated) sovereign bonds. I would sign up for that.

Whitehat, dharmendra obviously has a different understanding of how countries should operate when dealing with 3rd parties...
So, a country ilegally takes possession of assets that belong to others, then 7 years later says it is willing to return most of them (but not all) as long as it will not have to recognize that its move was illegal in first place ... and the "returning of the assets w/out admission of guilt" is to be interpreted as an opportunity being offered to the party that was robbed... You cannot really make it up...
This kind of discourse is nationalistic bias at its best...

I meant I will lend them $1M and they pay me back $1.7M next year.

dharmendra, you are make assumptions about people you know nothing about. I have had legal training and know more about these matters than you think. as far as negotiation skills, let me tell you that this a case of complete caving in by CNE. W/out getting into techincal jargon, this is outside of what any experienced negotiator wold tell you is the zone of possible agreement. This will end in a case to be taught at business schools on how not to negotiate. The CNE board are completing ignoring the outside options available to it. It is rationalizing the descision by saying that $1b today is better than $1.7b next year. If this is their discount rate I am happy to lend them $1M and they can repay me $1.7b next year...

NobbyD, exactly, and that is why they are not putting the proposal to a vote. They know they would be defeated. In fact, they could get a larger amount (that they might get from India, if it can get all the cash repatriated outright and w/out delays, which I very much doubt...) by selling the claim to a company in NY that went after Argentina. The reason is that the CEO and the rest of the board will collect plenty of cash for reaching a settlement, regardless of how bad it is.

The fact that Mr. Market is not happy with the deal speaks volumes...

"Some of our core shareholders likes BlackRock and Franklin Templeton agree (to this)"... but what does the majority of the shareholders want? This should be put to a vote.

Yes, I am entitled to my view. This deal is shocking.
7 years of waiting and management agree to receive only what was taken from shareholders. Where is the compensation for the time value of money and costs involved (how much have legal costs been so far?) ? So CNE are choosing to leave $640m on the table.
What does India lose? Nothing. They are simply giving back what they took that was not theirs. And giving it back 7 years later as if they had just taken it away yesterday... In other words, there is no reason why they should not try to do this money grabbing out of foreign investors again.
CNE had a moral obligation towards other international investors, in addition to its shareholders, to get some compensation, so that the GOI does not repeat its behaviour in the future. By choosing not to, the board is showing moral issues are irelevant to them. At the same time they talk abouyt their ESG concerns. Well, they are not very good at G, so I doubt theiy are good at the E or the S...

p.s. By the way the difference is $60M not £60M. (that would be close to $80M)

Ant1986, Please read the results. They eplicitly state the risk of not being able to repatriate the cash. the monent CNE signs the cocument droppping the case you will see how the GOI will drag what it hasd to do.

Management is doing this because of their reward from achieving the agreement (they will earn a payout). they are not thinking about the shareholders' interests.

I would prefert to wait another year and get another $700M. CNE can make more money from doing so than extracting all oil and gas it can in the next 2 years. and, for anyone that read the ruling, this is a very certain ruling that will not be overturned and could be enforced. Management sold out.

Ant1986, and you think that India will allow immediate repatriation of the money, or that it will pay it right away?... Once can dream, but CNE will be fleeced. This is a very bad deal.

bad idea to settle for so little money.

Bad idea to settle unless is for the whole amount. Once they drop the legal proceedings GOI will pass a new law and CNE will get robbed again. Watch this space.

rylidan, $6M of profit? I do not see how. can you share how they get to 2.3p?
are they selling the raw material at $45/Kg?
But remember they need to re-invest hakf of that in a new plant... So, what is left?
ATB

Hi Pelle,

Same page but reading a different paragraph... Indeed I skipped the one with the word "utdeling"... -:)

Focusing on (net debt) / EBITDA as a way to guide the level of debt is not a good idea, because the denominator has a huge variance as Brent moves up and down. Thinking in terms of absolute lelels of debt as you do, "Then we are where they want to be 500m bond + 500m RBL and 300m cash and net debt 700m" is much better. Also needs to account how much it costs to servive the debt given the rate of return of investments...

Squif, I believe you are being optimistic with your H2 production estimate, but that is my opinion. I would be delighted if you were right...
You write "I have been surprised that Enquest conveniently removes Magnus debt from net debt." This has always been there since 2018. It was very convenient for ENQ to slot the BP vendor loan there at the time. It was debt and it should have been classified at debt... But ENQ could get a way with not classifying it as debt on a techincality...
The rest of BP's interest in Magnus is not debt, it is a contingent payment, so definitely not debt. And if you read the HY results you will see the $1B will never be paid to BP. In fact every semester the cumulative amount that will have been paid to BP the time Magnus enters CoP in ENQ's accounts gets smaller...

ATB

Hi Chilting, the source of the mistake of the IC writer is very obvious. He obviously compared gross production of Kraken in 2020 with net entitlement of ENQ in 2021... Thus the 30% difference... That tells you how much time he spent looking at the figures. .. Most of IC articles are of very poor quality. Some of their best people have left.
ATB

Of course, delaying paying suppliers and squeezing clients can make net debt lower at YE than at HY, and that is what I would do to avoid thoughtless headlines by the IC and similar outlets about net debt going up in H2. But of course, AB/JS will do as they please, as the major shareholder is someone they know very well... So, no point in trying to second guess them...
ATB

Hi Pelle,

We are on the same page but on a different paragraph...

"My latest FCF show 265m H2
+ OO money 50m
Let’s say 300m in" , Agree!

"GE final price around 250m", yes, but before we had heard $85M would be deducted from purchase price. But let us stay with your $75m.

What is missing? $30M in fees for the GE transaction (as described in the prospectus, and HY results release) that will be added to debt, and the BP vendor loan paid in July (it used to appear in Provisions as a contingent consideration, that was $57M). So cash was used to settle it. This cash has to be subtracted from your FCF calculations.

Conclusion: end of year net debt very likely will be higher than at end of H1. I am fine with that, but Mr Market is very moody, so day traders might or not have their day... There is a small chance oil price surprises on the up (it only takes a direct hit to a large facility in SA... the people shooting the missiles only need to get lucky once, the ones on the receiving end need to get lucky every single time...) AND production surprises on the up. To end up below net debt level at end of H1 you need both to happen.

Now, in terms of production report says Crathes/Scolty were affected by issued from late June to mid August. Magnus is having a shutdown for maintenance too, if I recall this was announced at the start of the year. Nov/Dec production hopefully slightly above 60Kboepd. Until then be patient....

hitman1a, IC has 90% of all oil companies on a sell (they have turned green!). And they do not even get the facts right, as Pelle pointed out. Other outlets were better, e.g., The Times.

Jan2, I thought you were going to wear your djellaba at Tesco? I could have lent you mine...

Therapist, did you sort out the paperwork for Jan2 to work in Malaysia?... I will look forward to your file with production figures, shrinkage, etc... Of much help. Much appreciated.

ATB

Hello Jeffrey1979,
Of course, I should have added Tigar, PYUECK, etc... to the list of posters here. I mentioned the earlier set of posters because they are the ones I have exchanged messages on this BB more frequently and for longer. But, others like Krakie and Chilting who do not get into details about ENQ have also contributed to my understanding of ENQ. ( I filtered the one-line moniker posters and the day traders a long time ago...)

I did not post yesterday or today before trading closed, so as not to inadvertly influence anyone.

But, I am baffled by some posters reactions today. A lot of data was publicly available already. Ditto for the share price reaction.

I still need to go through the HY results report in detail, but I have not been surprised by what I saw so far, apart from one or two pieces of information.

I am looking at H2, and on that we already have some good info. Since 06/30 there were 4 Kraken offloads. That is 2MMbbls in 63 days. So, an average of 31.75Kbopd, which will hopefully be the case in the 4 months that remain in 2021 given that we were told there will be no shutdown of Kraken. ENQ is really being carried by Kraken. Magnus, at current levels of production, is not generating any meaningful CF after subtracting CAPEX. Some people will object to this statement. To them I say: go and read the financial information released today in detail... It is all in there.

Once the GE completes there will be a RNS and apart from any other major developments (EP and an acquisition using sukoks in Malaysia, etc) the next update will be in November. Until then the one-line moniker posters and the day traders will keep this BB very active.

In an earlier post I wrote that to stand still ENQ needs to generate after subtracting all outflows of $262M in H2 to stand still in terms of net debt. Hitman1a just wrote some figures, $96.5M + $58M + $42M (=3 x $14M for GE in Q4) = $196.5M... So, if his figures are right that means net debt at YE will be higher than at the end of H1. I have not done my calculations yet, but I was disappointed with AB's production guidance, i.e., full-year production will come in at the lower end of the guidance. When AB spoke today he was in the know of the July and August production data. I infer from his words that production in July and August has not improved to a figure like 50Kboepd, as otherwise his words would have been different. Even though I have yet to do my calculations I believe that it won't be easy for ENQ to end up the full year with net debt at a level not higher than the figure at the end of H1. However, ENQ can always play with ithe terms of payment of its suppliers to make sure net debt does not increase during H2.

The refinancing of the bonds at an interest rate below 5% will not be a walk in the park, unless ENQ strongly delivers on the operational side.

All eyes are on Jan at Tesco tomorrow... Which aisle Jan?
ATB