Member Info for L3Trader

If The Lagan family members are not leaving Breedon, then one has to wonder why is one of the two Lagans selling about 50% of his holdings. There was no reason given in the RNS.

Kenj, thank you for the clarification. I would be happy with that: iron ore 62% is at $119., so a little above is $120. What are their AISCs?

it is interesting to see read that sos_shares is scaring people around here. i am not surprised, b/c people get influenced by words not facts. and the facts are that POG has never been in better shape. IRC is bringing in a lot of cash everyday with iron ore 65% at around $125-$130. at this pace ot can repay the gazprombank loan very rapidly. Gold is taking a breather (led by goldman sachs, who create volatility in markets to make money) before charging higher. so, the question is: can one see the big prize and hold one's nerve and add to one's holdings?

Hi Pelle,
No, No sun at all. I have not even been out today.
I did not say in the short term, I mean that at some point, perhaps in 2021, one could see a short-lived spike up to the low $70s. The days of $100+/bbl are long gone given all the evidence around us, unless SaudiA or Russia implode.
Can you find epiphany? he sometimes goes to sweden on business...

Where are you epiphany121? I will have to post the content below in your absence:
Baker Huges US oil rigs count -4 to 172 on 14/08
of which:
Permian -5 to 116
Williston unchanged at 11
Eagle Ford unchanged at 10
Cana Woodford unchanged at 6
DJ Niobrara unchanged at 4

We now also need the frac count: The Primary Vision Frac Spread Count is 70 for the week ending August 7th, 2020. we need this one around this level for Pelle to start dreaming again ...

TWalbyoff: Not sure how you did your calculations but I suppose you took into account that 60Kbopd includes All Malaysia production, even though ENQ only gets up to 70% of it. In addition, 37.5% of Magnus's FCF goes to BP, and that 15/70.5 of Kraken is to pay the Oz loan. Only the rest can be used to repay the RCF. I am sure you took into account all this.

POO: my views are close to those expressed by chilting, but i see a chance for a short lived (a few months) spike of the POO of up to the low $70s. If that happens, and this rebounds, I will email IR about hedging and if they do not give a straight answer that they have hedged, I will sell 2/3 of my holding because the SP will have gone up. Not clear they can ever learn how to hedge, as they always fall for the momentum trap of the poo.
GLA

THe Ceo Tom Becker keeps on promising but not delivering. One has to wonder why he does not get someone else to replace him. Take a break and rest Tom. You have tried, but did not quite succeed

Therapist, Much appreciated. No volcanoes on the horizon. I follow this page on what can propel the poo:
https://carnegieendowment.org/publications/interactive/protest-tracker
(even Iraq is "peaceful").

gkb47 and Londoner7, sorry for being confusing about Kittiwake and MOL. gkb47, yes loose language on my side, it is decline rates. I assume you group oilfields (e.g., it seems there is a dance b/w Scolty and Crathes (production in one increases, while it decreases in the other, as others have noticed in the past and explained in detail).
londoner7, I thought ENQ had dropped the licence for Avalon. I hope you are onto something w/ the current licensing round and there is black gold lurking around Kittiwake.

Finally, where is E121 with his running commentary on Shale/Rigs/Etc.?

G&R's manifesto revisited: note that OECD stocks increases in June: "Preliminary June data showed that total OECD commercial oil stocks rose by 24.3 mb, m-o-m, the fourth consecutive monthly rise. At 3,240 mb, they were 301.5 mb higher than the same time one year ago, and 291.2 mb above the latest five-year average. Within the components, crude and products stocks rose m-o-m by 12.8 mb and 11.5 mb, respectively. OECD crude stocks stood at 120.3 mb above the latest five-year average, while product stocks exhibited a surplus of 170.9 mb."

The market will pay attention once the stocks move lower than the 3,000 mb barrier. Until then a few bucks up very slowly.

GLA

yes, rusty you are correct. at what price did they buy their last lot? they have several fake companies buying on their behalf. but of course the Takeover Panel is a worthless body, so they might not do anything. do they ever do anything?

rusty, they converted the bonds when the price was above 40p. That is an active "buy" decision.

BeauJayce, Yes, POG will go higher than 40p+. Yesterday's price was a bargain. IRC also doing well. Ayla should really be ashamed: selling one day before the vote. That tells us all we need to know about her...

L7, I hope the OGA tells ENQ to restart the pumps at Hather/Thistle. What prospects are enticing in the current round od licensing that would extend the life of Kittiwake, or the Northern Producer? I am not aware of any black gold lurking nearby those platforms.
L7 and Gkb47, Yes I know MOL has nothing to do with Kittiwake, but isn't the Scolty/Crathes oil routed through there? (I thought that may be MOL would indicate they would - with ENQ - do more drilling/in-wells (whatever) at Scolty/Crathes, but they do not mention anything). Incidentally Gkb47's CUBE might tells us the depletion rates? What are they, can I ask?

L7, "but how significant is the variation in Malaysian production with respect to POO?" I looked into this at some point and thought that for very low oil prices ENQ would really get a lot of the pie. So, we might be nicely surprised here...

Where is E121 for the running commentary on the rigs, Frac, and shale producers' results. I assume he has been reducing his holding...

Chilting, Well done. Congratulations on anticipating what happened so well. I wish I had done the same when ENQ was in the high 20s. At least, I have not added anything above 21p since the RI. But having some hundreds of thousand shares keeps me looking for the black gold here...

Krakie: Yes, draws, but POO goes down. The market wanted a larger draw. Iraq continues to talk compliance and do the opposite. Their spokesperson is the new comic of Baghdad... He better hope MBS is not upset!!!

GLA

Hi Londoner7,

Thank you for that observation: SVT loan. I expect they can refinance it in similar terms... There is also the Malaysia loan being repaid, but they are also getting cash back from Malaysia. One thing I wanted to say in previous messages was that the share of the Malaysia production will be higher this year because the POO is low, and the Tanjoram field is now history.

Kraken: VLFSO is stuck below $350/Mt in Asia. So, repaying pace of Oz loan will be slower since April. But, there is hope VLFSO will rise...

gkb47: I no longer have any idea of what their business model is. They talk about "differential capabilities." To me that is mumbo-jumbo, unless they are properly identified. They do that when they show they can drill at lower costs (some smart engineers and geologists sitting at desks in Aberdeen I suppose. Hope ENQ can keep them.) When it comes to lowering OPEX costs of aging fields, the evidence is not so clear in the sense that there are limits to how much they can lower those in some fields (Heather/Thistle) apparently. Success with Magnus and in Malaysia.

chilting: May I ask you to share why you started offloading last Autumn when the SP and the POO were increasing? What was the thinking behind it? (Ex-post it was an excellent decision). But what did you foresee at the time?

GLA

All,
hitman1a: Thank you for posting your estimates. I am waiting for Therapist to post his production data file to feed into my spreadsheet (if that were that easy). Note that the effects of the hedging up to the end of April already appeared in the May TU. Net debt was at C$1360M. Can it get close to $1100M by ear end? All depends on the poo (assuming no more low ball hedges were put in place). I was using an average POO in Q3 of $48 and $55 in Q4. There are good signs there is upswing pressure on the POO. US companies are withdrawing their reserves in the SPR... Traffic is getting worse in many parts of the globe. The one lagging behind is air travel. Bressay: it is not the easiest of projects. Can the Alma/Galia FPSO be put to use somewhere in the next semester? Perhaps a partnership with some other operator. this FPSO is not prepared to process the heavy oil of Bressay. Too expensive to refit I would suppose? But others know more than I do about this.

Londoner7: I get back to Crathes/Scolty. MOL has just announced results. There is no indication of any work planned here in the next 3 years (unlike at catcher and scott), and there is no indication that reserves were upgraded. But MOL in 2019 increased their 2P reserves in the UK by 3.7MMbls (It might have been related to Catcher or to Crathes/Scolty, but the AR is moot on this matter). I still believe the reserves were or will upgraded, but ENQ's AR also says little. Eagle might make sense in 2022 to keep Kittiwake going? Which other wells/licences could help it keep going so as to extend its life?
Thank you for sharing your calculations on Heather/Thistle. My reading of them is that when production finds obstacles in these old fields, OPEX per bbl shoots up. But should not ENQ take the long view and smooth out OPEX/bbl over several years when deciding whether to stop production? I read somewhere AB saying that decommissioning these fields would reduce 2P reserves by 30MMbls. If true there would still be life left in them. I wonder what criteria they use, and what others who post here think.

Pelle: Yes, you can talk about dividends when the POO 20-day moving average crosses $55. But, you will still be fined (gkb47 keeps the tabs on that) until ENQ starts paying those dividends. I have lost hope on it paying dividends in the next few years, byt happy to be proved wrong.

Modestus: I read the G&R piece. I believe some of their info on the volume of stock increases is slightly inaccurate. OECD stocks increase by close 300MMbbls in April (I believe), so more than what they indicate. Also, OECD stocks have less importance nowadays that non-OECD stocks (hard to measure) are playing a more important role. So, the stocks that do not build in the OECD, end up in non-OECD countries (such as China). This is my only comment about their views. But they have spent more time than I did looking at the issue... I like their neural network model approach to predicting shale production.
GLA

Schedulike, Spot on. The fact that the old board wanted us to vote against the forensic investigation was hardly reassuring. I would say more. It probably cost them their place on the BOD. IIs sitting on the fence might have felt they could not vote for a BOD that is afraid of being scrutinized.

All, As you will have considered, now the BOD of IRC will change as well. POG will use its 31% of IRC to bring change there. There go the Hambros. Perhaps IRC will start seeing its cash balance go up...

This will revert to the previous SP. I am counting on 50p.
GLA

UpDownFlat,
That is precisely what I thought. Given the way the votes went many IIs were not happy with the current board, and there has been some agreement behind the scenes.
This will bounce back. There is smart money taking advantage of the absolute bargain price at the moment.
GLA

One has to keep things in perspective. The forensic investigation approval by almost 90% shows that there was uneasiness with the current board. We all know the cash was not coming in. UGC will need the support of other investors. My view the price is going to bounce back to above 40p. Keeping things in perspective is important.

Very bad news. I am not holder, as I have always been worried about PTAL having to rely on one pipeline they cannot control and had at some point read about the grievances of the indigenous population. They are not dumb at all. They know that PTAL is "weak" at the moment having had no revenues for a while. Hope this gets sorted quickly and favourably to PTAL shareholders. GLA

spot on kenj. the $125M CB was a sweet deal for the friends, at the expense of the shareholders, who could not take part. and that is one of the reasons why at the AGM I voted against their re-election. i still want hambro&son out of POG&IRC. and this time i voted for the audit. transparency is needed.

RetiredBanker, Your calculations make sense. Nevertheless, more value than the $40M savings in interest was created. With lower debt the risks of financial distress are lower. And in heavily indebted companies like POG such risks are priced in a non-linear way. This is not to say that I disagree with your analysis. In addition, some of the increase in market cap might be linked to other factors, such as the increase of the iron ore prices (suddenly, POG's underwriting of IRC's loan should weigh less on the SP. 1.4Mton every half year sold for an additional $20US would increase the "profit" by $28M. So, one should see IRC's debt coming down fast. If it does not, then one might wonder if there are sales of iron ore being made that involve someone getting a cut... One would think not. IRC should be thriving now.

rusty, there are collar hedges in place for 3.5Koz per month until the end of 2021, w/ a ceiling price of $1822/oz. It is precisely because Hambro was not a sensible person that POG into trouble. When a company is indebted and the commodity it sells has a high price that you need to protect the downside (to lower the risk of financial distress; that helps push the SP up). Thus, now would be the time to get new collar hedges in place for 20Moz, per month until the end of 2021 with a floor price around $2000/oz. That would bring certainty to future revenues and would make it easier to issue new debt at a much lower interest rate than the one the $500M bonds pay. All IMHO

Assuming everything is transparent at POG, b/w yesterday and today POG's operational profit should have gone up by a couple of million USD...

GLA

Rusty, I fully endorse what you wrote. Pavel and Co. would have not found themselves in this mess had they been more transparent. At the moment IRC should be a jackpot machine throwing coins at POG. POG should be able to repay the rest of the loan it got from the banks by the end of Q3. At $2000/oz, 60Moz is enough to repay the loan. Also, the conversion of the bonds should save $5M+/year in the years ahead.
But one thing is clear Pavel has the technical expertise that is needed. to make the POX HUB a success. When it comes to the till, it would be better to get a couple of outsiders (neither Russians nor City grandees) being parachuted to take control.

The price of gold will keep on rising, but I fell that now is the time for POG to hedge the downside at $2000/oz of its production for the rest 2020 and all 2021. That would bring visibility of revenue s going forward.

GLA