Member Info for L3Trader

Hi Pelle,
Since you want to draw a pension from the UK, in addition to your Swedish pension, let me explain. You choose how much to put in. There is a cap of £40K per year (but there are some exceptions to this rule ...), and there is a lifetime allowance for your pension (i.e., the value of all your pension pots combined, including the value of any pension you might have from current or previous employers), which is £1,073,100at the moment. If the total value of your pension pots goes above this amount, then "bad things" happen... Others can add, if they wish. I have part of my ENQ holding in my SIPP. This has come in handy as I have been able to reduce the total value of my pension pot over the last few years...

EmeraldCarrots,
Unfortunately with jurisdictions like India it is all about give and take. But I do believe that CAIRN would be naive to get anything lass than 75% of the award in cash. Whatever assets it will get in addition will be valued close to nothing by Mr. Market, because there is always uncertainty around what might happen in the future. The headaches that those assets will bring are not worth the hassle. That is why I will be extremely dissatisfied as a LTH if Cairn gets anything less than 75% of the award in cash.
GL

danlee007,
Thank you. But if Aaron Banks sold a lot of his stake an RNS would be issued. Btw what is going on with the $900,000 loan to Organic Vines. Has it been repaid? Or was it impaired? Or, is it still a viable loan.

Ecclescake, Thank you. Why margin calls on IG, and why would it continue until Friday?

Thank you.
GLA

Hello IOFINAers,
anyone has any idea why IOF's share price is dropping towards 10p? Is the iodine price in free fall? have IOF's production facilities been badly affected by the snowstorm? have the stocks of finished product continued to increase, because they do not sell?
answers much appreciated. thank you.

anyone has any idea why IOF's share price is dropping towards 10p? Is the iodine price in free fall? have IOF's production facilities been badly affected by the snowstorm? have the stocks of finished product continued to increase, because they do not sell?
answers much appreciated. thank you.

It is most likely a RNS is coming...today, tomorrow, friday...

Pelle, we all know what the D stands for in OD. A fine is coming... and no Stockholm Water Festival attendance for you this year.

gkb47, I'm not feeling smug at all. My notepad calculations led me no choice but to act on them.
w/ the share price going up Pelle can afford the fine, if he falls for it... Hope you are well.

What is going on? I am on a lunck break... and has my eyesight gone bad? .... close to 18p. Early retirement?

I did post on Monday that "The OO is old news for me. I took it up today in the morning! I bought 1 for every 7 shares I have. I reckon that it is about right. Better buy them now than at whatever price hitman1a foresees it will be announced at. "

Also, as I wrote on Monday. Here E121 and I have different views, as I am following a lower risk strategy in case the POO has a hiccup (yes, I know, everyone believes there is only one way, and it is up...)"as i wrote last week, intergrated european oil majors were still priced quite low, so i did some shopping w/ a view to exiting the position by the end of 2021Q3. E.g., ENI can issue debt w/ a really low interest rate. all it takes is to be involved w/ the new green technologies. they are developing 2 ccs projects in the UK."
You have ENI, REPSOL, OML, OMV, etc. And they pay dividends, Pelle...
DYOR and GL

hi Pelle,
i have not gone back to my calculations, but i know that by the end of 2021, BP's contingency consideration will still be at least $800M.
atb

the question is : why is novak taking my side of the bet ?-:)
at the moment the uncertainty is high. you will have very lax fiscal policy and monetary policy w/ the usd plunging, etc., etc.
regardless of that expect totally wacky numbers in EIA's numbers next week.
as i wrote last week, intergrated european oil majors were still priced quite low, so i did some shopping w/ a view to exiting the position by the end of 2020Q3. E.g., ENI can issue debt w/ a really low interest rate. all it takes is to be involved w/ the new green technologies. they are developing 2 ccs projects in the UK.

GL

Hi gkb47,

Pelle will be happy until he realizes it is all a mirage... 1B EBIDTA? including the BP stake?
Pelle, Novak has come out with an interval for 2021.
https://sports.yahoo.com/russias-novak-says-oil-market-124810463.html
I wonder if he is taking my side on the bet... Not to worry, I have ordered the SEKs just in case I need to get them across the sea.

The OO is old news for me. I took it up today in the morning! I bought 1 for every 7 shares I have. I reckon that it is about right. Better buy them now than at whatever price hitman1a foresees it will be announced at.

Therapist,
Thank you for the file. ENQ always imagines good production figures for the assets it buys and develops.
Speaking of more immediate concerns. What is Ingrid K up to? Still hasn't found a mate to offload, I see.

Londoner7, It was good you reminded some of the posters of their past posts. People should not be afraid to have their bb aliases posted. After all, their posting history is available... Your projection was actually close (you did mention that it was conditional on no more disasters in terms of production hubs going down). There is a big difference between credible projections and outlandish ones. At the start of 2020 some people were posting $600/700M in FCF for 2020.... That was never going to happen.

GLA

hi Londoner7, Therapist and Chilting,
thank you for the good news. i will assume the magic number is 38Kbopd, which is indeed very good news, all the kraken oil that exceeds the monthly hedges in place are being sold for good money (i have read $77/bbl), if we are to believe some enthusiastic posters. the net debt numbers will do the talking in March. w/ the two bonds PIK interest in february and april, there is no reson why the balance of the RCF cannot go down a lot in jan&feb to shock the market. as you will have noticed hardly any company is raising capital through a RI/OO. the fact that ENQ can do it speaks for itself. i do not expect more deals for other assets. hard to do deals w/ the current poo.

pelle: oil prices are going to take a breather. but i am still positve about oil. european integrated oil companies are looking very attractive, because refining margins will surely improve, and this summer there will be a lot of driving (e.g. from hamburg to amlfi coast) to go on holiday because flying is a pain in the neck. but no flying across continents. and that is where the problem for the oil demand is...

gla

does anybody have any news on Ingrid K? Thank you. it is of no use vlsfo being priced high if Kraken is not producing at max capacity...

Hi Pelle,
If it was today I would not change my 95% confidence interval by much . May be would up the lower and upper limts by $2.5, but no more. Wait until shale comes back, Venezuela and Iran can add 1M/bbld each , and compliance within OPEC+ goes down. It might be counterintuitive for some, but I encourage people to read historical accounts of what happens to cartels when the price of their product/service goes up... Keep an eye on Iraq's production...
Hope you are well.

hitman1a: Easier if you add a call (buy a call) at say $65 and you will get the upside from there. But it will be a waste of cash. The poo will not stay that high...

Hi Therapist, Thank you. how many days since the last one left?

Hi Therapist,

Thank you for the figures. I like all pages the same. Indeed, your choice of putting together ENQ's data and an image from Asterix's bande dessinée (which I really appreciate) leads me to wonder if it would not be better if we treated investing in ENQ as a hobby (albeit an expensive one because of the negative dividend we face every three years), rather than anything else.

A question for the numbers driven posters: ENQ's case for buying Golden Eagle assumes 2P reserves will be 18MMbbls (by finding 40MMboe to add to the 27MMboe reserves left based on the Operator's estimate in 2015) and a production level of 10Kboped in 2021(alone or over the next few years?). W/out the extra 40MMboe, ENQ's entitlement of the 2P reserves ould be 7.2MMboe.
I looked at Suncor's most recent quarterly results. The presentation states that Golden Eagle's 2P reserves were 10MMboe at the end of 2019, and production was 7.8Kboepd in 2020, which means 2.6MMboe of the 2P reserves were produced in 2020. I understand that the wells underway in 2021 will convert 2C reserves that were on Suncor's books. But, does anyone any info how larger these were for Golden Eagle at the end of 2019?

Hi Londoner7,
Thank you for your reply and your estimates. I did read your figures for the GEagle transaction and how much would accrue to Suncor as the price went up, which made me realize they will get a large size of the extra pie if the poo is high.
Yes, hedging is company specific rather than field specific. But you can do it through the subsidiary that owns the WI in the field whose production you want to hedge if you wish. And, you could do it notionally if you wish, which might be what ENQ is doing in relation to the Kraken production (VLSFO collars). Even if we assume that Suncor will not hedge any of the production until the closing date, ENQ could hedge the price it gets for "its GE WI's estimate" until the closing date by buying puts, as the settlement is financial rather than physical (of course, ENQ can always engage in speculation for barrels in does not produce). The reason why I believe ENQ might want to guarantee a certain level of revenue for that production, say 7.8Kboepd over 250 days is that the production over that period corresponds to c. 2MMboe, so a non-negligible portion of the 2P reserves. If the transaction is going to be profitable to ENQ then it need to guarantee it will sell the oil reserves it is buying at a good price.

Thank you for your views on the Kraken decline rates. Is AK production capacity binding at the moment, given the water caut? Is that why you believe there will be no new wells until 2022?
With Kraken doing well in Jan and Feb I could see a repayment of over $100M of the RCF, to be announced when the results are released in March.

I did see your figures on GE's contingency payments as a function of the poo. With so many daily posts I might have missed the link that Pelle posted.
GL

Hi Therapist,

Thank you in advance for the file you will be posting. I am using the same figure as you for H1_2021 Malaysia production. I was expecting the OU to mention more about Malaysia's operation (new wells, workovers, etc., you name it!) given that they have a new person in charge. I have yet to read that Asterix title. It goes to show Coronavirus have existed since Roman times -:).

Hi gkb47, thank you for the reply on the water cut. I would just prefer ENQ presented the data. It would save a lot of time to a lof of us. Equally important would be for them to let us know how much the worcester wells are producing for me to have a better idea of the decline rate. The time stamps of the offloads that Londoner7 kindly posted reassure me that at the aggregate level Kraken produce above 35Kbopd in January. But is the good production driven by the initial surge of the Worcester wells or by the old wells? We won't know, even though that would be very informative.

Hi Londoner7, you question the size of the Kraken premium. Let me start by saying that I never believed some of the figures that have been posted or discussed here for the average of the premium over a semester, i.e., anything equal or above $15 never made sense to me. As you know I have posted some guesses inspired by some numbers I could use. It is true that in previous years the Kraken premium must not have been that large given CNE's revenue figures. I remember than early in 2019 Kraken was still selling at a discount. And, we also know that last year there was a period during which VLSFO traded at a discount. I will have a go at guessing the Kraken premium again when CNE and ENQ publish their annual accounts, using the Oz loan balance and CNE's figures. The good news is that it must be the case that the Kraken premium is not significantly lower than the VLSFO premium, as otherwise ENQ would not be hedging Kraken's production in relation to VLSFO equivalent prices. The question that I have is whether Kraken's oil is priced above (and by how much) the VLSFO equivalent price.

On a different note, and this is for everyone, I have no idea why people keep saying the price is $325M given that we now know there is a $50M contingency payment. The expected price of the acquisition is whichever figure comes out of the calculations after you plug in your expectations for the oil price over the period the contingency payment applies.

My view of the deal is that it is ok, not wonderful, but not bad. I would like to know more why Suncor is selling this midlife asset, and if any (and how many) others, besides ENQ, also submitted a bid for the asset.
Londoner7's calculations show the importance of closing the deal early ($23M in taxes that ENQ would not pay). I have another question that relates the price oil will be sold at until the deal closes. Has Suncor hedged this production? Could ENQ push for that to be the case? If so, a bird in the hand is worth...

GLA

Hi Therapist,

Malaysia production in November & December 2020 was 3052Boepd (way lower than in the previous four months, which was 5338boepd; this indicates the disruprive event was in September). How much are you predicting during H1 2021? And after that? (Of course as per the PSC, ENQ will be entitled to a larger percentage of these barrels while the production is low because CAPEX per bbl will be higher. I am going to use 80% in my calculations, a totally arbitrary guess!!!)

Have you posted the data after the OGA released the data in February? (You have you have a legion of fans...)

Hi Hitman1a, you won't see much progress in the entries you listed in your message, i.e.,
"1. Lease Liabilities ( 614m).
2. Contingent Liabilities ( 545m), Magnus ,
3. Decom Provisions (707m), "
The reason is the unwinding of discount. If I am not mistaken Enq uses 9%-10%. So, you have to make a sizeable payment to stand still. And remember that the Magnus contingent liability fluctuates also depending on the POO (goes up as oil goes up), and changes to the projected production profile and reserves (goes up if you expect to produce more in the immediate future). The big change among these items will have to do with the 75% BP vendor loan being repaid with money drawn from the new RCF. A question for you: Where did you see the value $50M for decomissioning? (I know it was mentioned last year, but given that ENQ is budgeting $120 for Decom and CAPEX, I wonder what the split is...

One for the Net debt watchers. I have yet to spend time figuring out which debt entries changed. We know that net debt decreased by $108M. Here is what the OUpdate allow me to say: $25M was the RCF re-payment, cash also increased by $16M. The SVT loan was due on 31Dec20 (so that is another $11.2M. I need to find about $56M that went elsewhere. In fact, I need to find more than that because there was increase in the debt line that corresponsds to the Retail Bond due to the appreciation of GBP versus the USD (exchange rate moved from $1.29/GBP to $1.37GBP). So, we are talking about plenty of cash!!!
Some of it will have gone to repaying the Oz loan (the question is how much?). And, of course, the re might have been interest that had accrued on the RCF that was classified as debt on 31Oct that was then paid. Yet, by my calculations there must be something else. My suspition is that there was some short trm loan in the form of an advance cash payment related to oil sales (perhaps related to Kraken oil), that was used to pay suppliers that was then repaid before the end of December.

Finally, I have no idea why people are complaining about the OO. We will get a new Prospectus and a new (C)PR. The last time we got them was almost 3 years ago. As a younger person I used to have to wait sometimes 4/5 years for a new title of my favorite bande dessinée, ASTERIX. ENQ is much faster at releasing new titles...

GLA

hitman1a, i will write more when work is less busy, but i do not want you to lose sleep over the BP vendor loan. the balance was less than $100M at the end of 2019. interest of 7.5%;
OZ loan's interest is 1m USD libor + 6.3% (but PIK interest earns interest at a high rate)
it only makes sense to move these two loans into the RCF, if the interest on it is no more than 6% (fixed) .
otherwise, a waste of time on fees;

you wrote that the OU had a lot more information than in the past. i beg to differ. please read the paragraph on Kraken. it is silent on how much the two new worcester wells are producing / have produced in 2020. w/out this info it is impossible to get an idea of the true joint decline rate of the older wells. More, the paragrapgh says "rate of water cut evolution remaining stable". this is not very useful, because the word "evolution" is in there. w/out that word there we would know the rate of water cut was constant. with that word there you have no idea of what is going on. it might be constant, it might be increasing by a little or by a lot...