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ponzy creature, what are you saying?

Hi E121,
This is what is needed: 40K bopd would be very good indeed. Just forget the analysts.
Hedge, hedge...

Hi Pelle,

ENQ IR needs to be more direct to get back the trust of some of the good (not all) analysts:

-E.g., " With regards the debt, we made our amortisation payment due on Monday and so have now reduced the bank facility (excluding the revolving facility of $75m) from $1,125 million to $680 million since mid-2018, and so are making good progress with reducing our debt as planned." True, but true net debt decrease is less than that, as
It borrowed $175M from Oz capital to repay $175M of the RCF, and increased "Payables" by $50M.

- "Kraken performance, which has been improving since our year end results" Get some production figures out as performance improves in a meaningful way.

- "They have downgraded because they have moved the Kraken reserves to the lower estimate announced by Cairn, which we clearly disagree with and said so in a public RNS at the time Cairn made their announcement." For ENQ to disagree it needs to be sure that all that oil can be extracted profitably. The market thinks otherwise. Rather than repeating themselves they should put out a revised production plan for the rest of the life of the field etc. to show why they are correct. The same oil might be there, but with the production profile over the years ahead being completely different, it might not be economically to extract it all. Remember FDP was done under the assumption POO would be $90. And, that is not what it is at the moment.

ENQ is its worst enemy by not being more proactive in releasing objective news.

To the LTHs, just relax and enjoy the SP volatility.

BTW, does anyone know if Magnus is producing above 20K bopd?

yes, 15 days with a load of 525K, would give you 35K bopd. So, not ideal (i.e., 40 K bopd) but good ...

26th March + 15 days = April 10. Should have indication tanker is on the way by Monday 8th.

Weny,
That is the target price for the Stockholm stock exchange shareholders. We are LSE shareholders, and so we deserve a higher target price. Arbitrage never takes place ... (Just joking).

As I wrote yesterday, if Kraken were able to reach load #50 this year, all such targets are pointless. Enjoy the volatility.

Yes, there is a rumour, the poo is down to $69... and therefore leveraged oilies can react strongly. This is a penny stock until leverage goes down, and interest on loans and leases comes down to $100M a year from the current close to $250M a year. Be patient and enjoy the volatility.

If load #50 from Kraken were to take place still in 2019, then you will have a re-rate...

understood now about Q4 sales figures. TA

revenue figures are not correct... they all sold more than $1B in oil&gas
TLW Revenue 2018 $477m
PMO Revenue 2018 $386m
Enq Revenue 2018 $374m

Hi E121,

I guess we have slightly different interpretations of the data. With the US being able to export as much oil as it wants price differentials will be driven by demand of particular oil grades and net transportation costs to the consumer markets.

I was hoping POO to get to $70 by March 31st and it did not. On the other hand, I do not see POO going over $75, apart from a very brief spike related to some supply constraint that results from political instability in some oil producing country. So, it is close to the time to talk hedges to ENQ... (Going back to ENQ's accounts it is easy to see that their selling prices in 2017 H2 and 2018 H1 were negatively impacted by their hedges at low prices, while the end of 2018 and start of 2019 should have been positively impacted by lack of substantive hedges over this period. It is easy to come up with figures of a loss of $100M in revenue due to poor hedging).

I know you like collars, but I would suggest they just buy puts for the moment, w/ the exception of the hedge they are required to do for the Oz loan related production. Here I would get a collar in place for 1.5M bbls for the next 12 months ( 15% of 30Kboepd at Kraken over a year adds up to a little over 1.5M bbls).

Hi Pelle,
Not that easy for the POO to get to $80. It is proving very difficult for it to get to $70. I am afraid you still have to spend a few more months in the office -:)
What we need is higher ENQ production...

Romaron,

Try to be objective, please. Writing such things as "Amjad Bseisu ...is himself something of a genius" and referring him as a "true leader" is just way over the top.

He is no genius, as otherwise all projects would have been successful, which is not the case. Look at how much less oil Kraken and Alma and Galia have produced in the first years of operation compared to what was predicted in the FDPs. Ditto for Scolty/Crathes.

He gets some right (Magnus) and some others wrong. If he were a genius he wold have hedged the oil production like PMO did, and the FCF would be much better...

So, let us put the hype aside, as no one is being paid to promote AB's virtues (and weaknesses).

Finally, It is not "Build it and they will come". You always end up with this quote and I had hoped you would eventually would get it right.
The correct quote is "If you build it, he will come"

Hi E121,
Hope you are enjoying your stay in Norway.

In fact the spread has been narrower than at the moment. Spread changes as a result of the imbalance of light oil crude available in the US. The easier it is to export with additional pipelines accessing the Gulf the narrower will be the discount (net of transportation costs).

Were you able to look at production figures for the different fields in December/January? I could not download the data from the site. I would be quite keen on getting these numbers. If somehow you see them, please do let me know. Much appreciated

Hard for Brent to break the $70s barrier. Once it does it might be useful you tell the hedger in charge at ENQ how to do things right this time... I might email them as well with some unsolicited advice -:)


p.s.: A lot of people very excited on this BB...

That same crystal ball tells me the opposite... That is the problem with crystal balls!

of course he knows a few things, such as how much ak is producing today, when the next offload is, and when the next offload at alma/galia is too, how much magnus is producing, etc.

on the contrary, we do not know the exact numbers for any of this, despite not being nescius...

hitman1a,

If that works you might have to keep buying until the sp reaches 60p

hitman1a,

I need you to top up much more so that I get sell my trading position.... just kidding.

I often take the kind of Chairman purchases (such as the one by Jock the Joker) as a signal that I should stay away from that company, because I interpret it as "no confidence" whatsoever, and just the result of an obligation that comes with the job. I wonder why Jock the Joker does not understand the message he is conveying...

Pelle,

Seeikng alpha: they seem to have forgotten all you mentioned... Not sure what to make of it.
Also, AB has said he does not intend to pay all the debt. The goal is always going to be to either issue new bonds r get some loans at some point in the future. Of course, the currently issued bonds will be repaid at maturity, assuming all goes well.

SP up or down does not pay any debt: only higher POO and/or higher production do.

Hope skying holiday was good.

I suggest people look at IRC's account and check who is now buying Iron Ore... EVRAZ. This all looks very strange, and might explain the large discount, which leads to the low IRC's EBIDTA. Perhaps EVRAZ is going to try to buy IRC on the cheap...

Hitman1a,

How do you inspire IIs to buy Enquest?

In the short run, i.e., next 3 months, you cannot unless POO shoots up to $85.
In the longer run you can, by reducing debt via increased production (if it is by a slight increase of POO, there is no reason for IIs to prefer Enq to other oil companies).

Increased production is a must.
Enq needs to up its projects' record:

- Kraken has produced 13.8 MM boe so far (reserves are 148MM boe, but FDP predicted 138 MM boe would be sold, the other 10 MM boe to be used by FPSO).

- Alma/Galia has produced 6.8MM boe so far, way less than should have according to FDP; First oil was achieved on 27 October 2015; 2P reserves were set at 38 MM boe; 3 years after first production recovery rate is still around;

- Scolty/Crathes has produced 3.3 MM boe so far; First oil was achieved on 21 November 2016; 15MM boe of technical oil reserves; So around 20% recovered so far;

So, you have to give time to ENQ to improve its record. I am afraid any turnaround will not happen overnight. I believe that before the end of 2019, SP progress might be limited given some people's aspirations. Hard to see this touching high 30ps soon.