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https://www.reuters.com/article/us-oil-prices-kemp/hedge-funds-oil-positions-start-to-look-stretched-kemp

Chilting,

TA.
the gap b/w loads was over 2 months, so we might expect the load to be more than 200k, say something like 300k, correct?
is 200k her capacity?

Tanker watchers,

Any idea of how much oil was offloaded from alma/galia?

Heather Knutsen is moored at MACD. Usually a staging point to Armada Kraken.
I had hoped it would show AK as destination w/ an expected arrival time by the 16th.

Hitman,

you are on a roll, £5K top-up here and there.

TA to all who reminded me that the ceiling of the hedge that relates to the Oz loan is $68. Good news.

Still strong backwardation for a horizon of up to 2 years. Start hedging...

PVX233,

TA.

So Q1's production was 126Koz, so hopefully on track for 500Koz year round.
That is good, but with gold stuck around $1300, only by cutting costs will free cash flow increase.

lawrence, the 60% increase in one of the mines results in a smaller increase in production than the 50% decrease in production of the other mine... so POG's overall production in march was down y/y.

btw i know the answer...

enough of exchanging pleasantries w/ rusty, Lawrence13... perhaps you could add to rusty by saying whether POG's production as a whole went up or down...

Hi E121,

I meant PMG, Parkmead. I am not adding to PMO.
I am impressed that you keep on adding to your ENQ position. Obviously, you do not care about risk diversification. That is how one gets extreme returns.
I am not adding to my LTH of ENQ. Might add to the trading position but for that I need to get more info about load #35, and Enq Producer offload.
Let us not wait for $75 POO before buying puts for the rest of 2019.... Delaying hedging? We have been there before, and we know what happened.

Pelle,

I mean poo not moving much since Monday. Steady at $70/71 as ENQ needs.
Now, we need those hedges. Hopefully E121 has sent them a copy of Hedging for Profit!
ATB
p.s.: I have upped my position in PMG.

SP not moving much. POO not moving much either...
Enq producer not offloading since late January...
No new target prices put out by brokers...

Some small oil companies seeing their SPs moving up quickly: PMG , BLVN, SQZ...

Hi E121,

Just saw the link to CME. Many thanks.
Not showing option prices at the moment.

A calm day today, which is good for a change.

On may 23rd ENQ will release a trading update. I hope management is sensible enough to report on net debt (unlike what it did last year..) at the end of March/April, on hedges in place in a detailed way, repayment of "Payables", and detailed production data on Kraken, Magnus and other individual assets. If t does all that there will be a re-rate. If it does not, brokers will stay the course. So, it is in Enq's hands to ease the fears of PIs at the next trading update.

ATBest

There is no breach of the covenants (it is RCF debt that matters to compute the ratios). Enough of light weight statements....

Read it and yo will understand it...

Hi E121,
I am not as much gutted as you are, as I found a few quid and have added a "Jock the Jocker lot" to my short-term trading position.
POO at almost $71 seems to be doing wonders (10% today), and thus I see this going up quickly, so want to get on board and exit at some point.

Which website do you use to check on prices of oil puts and calls?

Many thanks.

E121,

Let me rephrase what i wrote to Pelle about finance expenses so that the fulcrum of it is not misunderstood.

Decrease of the net debt is constrained by the amount of cash flow diverted to finance expenses. In the 2018 accounts,, these were $236M (but subtract a non-cash charge of $14M of unwinding of discounts on various items), and you get $222M. This is a significant amount of money that needs to be diverted from the operational cash flow instead of being used in CAPEX or to reduce net debt.

I am aware that finance expenses will be lower in 2019 (Fernan was coming up with lower values for 2019 than in 2018, in his posts and files). So, we all agree here. However, the fulcrum of my message is that as long as finance expenses are high, the reduction in net debt is impacted by it.

You write that "The three 'large' finance expense components are RCF Loan interest (RCF) - 93 mill, Bond interest - 64 mill and Charges on Lease payments 56 mill. The RCF interest component is about the only interest component that is variable for 2019. RCF + OZ interest will be circa 67 mill down from the 93 mill in 2018. " Agreed, but remember there are also finance expenses associated with the BP vendor loans (even if less than $15M), as bits and bobs that we might overlook unless we look at the accounts in detail. For example in 2018, amortization of finance fees on loans and bonds was $8.5M. There is also interest on some CAPEX related deferred payments, etc. All these add up.

That is why I hope that ENQ manages to bring the overall finance expenses bill to no more than $150M. That on itself would release $86M to reduce net debt.

In short, everything (load#34, poo) is looking look at the moment, but there is a danger of us being overoptimistic on the effects of all this on net debt reduction. I am not seeing a reduction of net debt to anything close to $1400M if poo stays at $70...

I am not negative on ENQ. To the contrary, I believe that if Kraken delivers big time until the shutdown in Q3 and Magnus too, then ENQ will eventually re-rate. Nevertheless, I expect it to be a slow process with volatility along the way. No point in scheduling the 60p party just yet. That is not going to happen in 2019: market cap would have to increase by 200% from current value.

LTHs have to be patient, and any share purchases to hold for the long term will take time to deliver three digit percentage gains.

Therapist and Gkb47: Thanks for the info about the role that gas has on Magnus's production figures.

Hi Pelle,

A big deciding factor in reducing net debt is how much ENQ can reduce its Finance expenses this year (they were $236M last year). That is a lot of money, more than $10 per bbl. My hope is that ENQ can bring it down to $150M, through the payment of all kinds of debt. (by paying down $265M of the RCF, it will save close to $20M, etc.) finance expense last year were $236M, but the unwinding of the decommissioning costs (at a rate o 2%) is a non-cash finance expense, so not relevant for cash flow purposes.

If you look at the water cut prior to DC4 coming online was quite high, in the 70%s. But AB mentioned water that was stranded already there, so not injected water. He menotioned the ESPs and AK would get some of that water out and as result water cut would go down if I understood correctly.

If water ct is brought down to under 50% with DC4 and all the way to early 2021, then that would do wonders to ENQ's sp.

Chilting and others, I agree with you that load#35 is key to get further insight into what is going on.

Pelle, oil companies and mining companies have to be valued differently, and according to their reserves. Those are the assets they have to monetize. I have gone for a simple model, where EV stays constant (which is never the case), and that $1 of net debt reduction is translated into $1 increase in the market cap. (we have to account for options as they are part of EV, but i have brushed this aside).

Disciunted cash flows would be better but for that I need to have revised production profiles for Kraken and Alma/Galia and Scolty/Crathes. I can take Magus's as they were in the prospectus, but I am actually surprised by
the different in the data and what was announced in the update. I know several of you mentioned the gas production, but I though it as much less than the numbers of gas production posted here. Does anyone know how much oil/gas does Magnus consume?

E121,
Please remember, the guidelines of ENQ say Hedging up to 80% of production for 1 year horizon, up to 50% for 2-year horizon, and 30% up to 3-year horizon.
If the up to 1-year forward curve hits $75 I would try to hedge 70% of the production with a floor of $75.

Hi Pelle & gkb47,

Many thanks for link and info.
I looked at the dropbox link you sent that has the production data.
The file says:
Magnus 18057 (December 2018)

But the Production 5 February 2019 update stated:
"Strong performance at Magnus, with 100% interest delivering 21,528 Boepd in December"

So, where are the other 3K boepd?...can someone help, please?

If I recall my calculation that need updating, it was about $300M in net debt reduction in 2019, w/ oil at 68 year round (remember POO was below $65 for the first 70 days of the 2019, so to get average at $68, it will need to be at $70 a few months), and production of 70K bopd. With the number of dhatre in issue, and assuminh EV constant, SP should go up by 16p. even if you take the starting point as 15p (the lowest point) and you use the EV at that SPA, you end up at 31-32p per share, my "party" point..

...Need IRC to fly higher...and get back to 40. Then POG will rise rapidally if it stops selling iron ore at discount prices to EVRAZ and the likes.

Hi Pelle,

I am going to be away for a few days, so not following the bb.
to value enq one needs more production figures. i do not even know January's production field by field. i just need to figure out magnus's production and other fields' as well. i hope i can find the january and february production data.
but if you were lucky enough to have load #40 before July 1st, with POO in the low $70s, I see the SP reaching 30p in the Summer.

p.s.: there are some on this BB who believe the CEO should not answer analysts' questions in a forthright way, or should not answer at all. i am afraid that is a practice commonly adopted by dubious characters who scam others. if a company does not want to be treated as if it were a boiler room it needs to answer analysts' legitimate questions.