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Fernan , E121 and Pelle,

I had planned to stay silent for 2 weeks, but when by chance I looked at this bb I read the post by DAZ88, who made a claim about " ENQ are currently planning to sell EP." w/out providing further information, I felt I had to ask him how he knew this. Unfortunately, neither he nor anyone else replied about this particular issue. This is really what I would like to know.
Fernan pointed out a fact (that I already know, and have factored in my analysis, i.e., there is a legal case b/w ENQ and the other party w/ a WI in Alma. And as a result of this he has been accused of being this and that, which is incomprehensible. He is also being treated poorly just because he liquidated his position. Well, if he sees better opportunities elsewhere, there is nothing wrong with that. People often here seem to forget that for a trade to take place you need someone selling and someone else buying, which means that without finding two people with opposite views you cannot get a trade, and therefore a price...
The fact that the poo is increasing is no justification to keep your Enq shares. you can sell them and then bet on some other oil company that you believe to be more responsive to the poo. that is what investing is all about.
Fernan had in the past posted the spreadsheet with the most comprehensive financial analysis of Enq, and helped correct Victoria's flawed analysis, so why cannot we just be grateful for that.

I have not changed my investment in this company since November, but I have had my eyes wide open about the balancing act ENQ has to perform to change its fate around. Let us just hope that Enq has not hedged more of its production within the last month as dictated by Oz capital, as per the last TU " In accordance with the Oz Management Facility agreement, the Group has a further c.1.5 MMbbls hedged across 2019 with an average floor price of c$56/bbl."
Hopefully ENQ will in the next week or so buy put options at $65 for another 3M bbls and do nothing else hedging-wise.

DAZ88,

You wrote " ENQ are currently planning to sell EP."
How do you know this?

I believe the announcement (copied below) says it all. First and foremost the goal is to get more time to get IRC on a better footing. This is good news. What we need now is to get that POX facility doing its job. Bear in mind that Russia want to increase gold production. It is abolishing taxes on gold sales. Price of gold is sustained by the current US foreign policy of "you are either with me or against me". Central banks of countries like China, Russia, Pakistan, etc. will want to diversify away from US dollar reserves. So there is a price floor for gold of perhaps $1200 henceforth. This will sustain higher prices.

-----
The Gazprombank Facility terms are more favourable to Petropavlovsk, IRC Group and K&S, compared to the ICBC Facility, because the Gazprombank Facility extends the maturity of K&S's debt obligations, thereby reducing the scheduled repayment amounts for K&S and allowing the repayment of those obligations to be over an extended period of time;

· the Gazprombank Facility repayment schedule better aligns with the proposed ramp up of K&S and the revenues IRC anticipate it to generate as a result; and

· the Gazprombank Facility will provide a US$63 million aggregate cash flow benefit to Petropavlovsk via the repayment by IRC to Petropavlovsk of approximately US$57 million as full repayment of the two Bridge Loans and the payment by IRC to Petropavlovsk of the outstanding US$6 million guarantee. These payments will be made following the repayment of the ICBC Facility in full.



The Gazprombank Facility will be used, inter alia:



· to repay in full the sum of approximately US$169 million outstanding under the ICBC Facility;

· to repay Petropavlovsk, by 21 March 2019, the Rouble equivalent of approximately US$57 million, in addition to any accrued interest and fees, as full repayment of the two Bridge Loans; and

· for the payment of approximately US$6 million which is owed by K&S and IRC to Petropavlovsk in respect of the guarantee provided under the ICBC Facility.

PbtoGold,
That being the case, they will want the conversion. A cheap way for them to buy cheap shares. And since they are in charge of the board, they won't oppose the conversion. Easy... Are the bonds trading anywhere?
TA

PbtoGold,
That being the case, they will want the conversion. A cheap way for them to buy cheap shares. And since they are in charge of the board, they won't oppose the conversion. Easy... Are the bonds trading anywhere?
TA

Wigwammer,

Agree with what you wrote. My only questions are: i) who owns the convertible bonds? ii) at which price are they trading now?
TA

Wigwammer,

Many thanks for sharing your thoughts. But who owns the convertible bonds? If it is a large shareholder then she or he might be keen on the dilution. Not clear that id the SP went to 20p, avoiding the dilution would be ideal.
The Market Value of Equity is £267Mx1.3 + $600M = $950M. Although things do not work linearly, even when future capex is low, if the price of gold stays constant, then $100 of FCF will reduce net debt, and will lead the sp to re-rate by at least 25%. I am ignoring all the IRC crap...

what about fcf in 2019's question?

This story has been doing the rounds here and there. now on CNN:

https://edition.cnn.com/2019/02/05/investing/oil-companies-bond-market-debt/index.html

With the current offload taking place at the moment, nothing relevant will happen in the next 2 weeks, assuming the time b/w offloads is 14 days. So, I will be silent and will be back 2 weekends from now. Will let the nervous shorter (at 18p, I would not short Enq, unless I wanted to lose money with a high probability) post as much as he wants until then...

Interesting discussions here about the conversion of the bonds that mature in 2020. So, the consensus is that while the bond holders can ask the bonds to be converted, POG can instead pay the bonds in cash at the prevailing sp. So, the higher the SP the larger the cash POG would have to part with to avoid the conversion. I guess this caps the increase of the SP in the next year or so to a value much higher than at the moment. Yet, based on quick calculations FCF in 2019 will be larger than $100M (taking into account the $50M capex and the $50M or so in interest on the bonds and notes ($600M). So, what use will be made of the FCF? Will it be used to repay notes maturing in 2022? What else? Feedback from the POG experts much appreciated.
TA
LTH since 08/2014

finally. how many days? 15?

Hi E121,

Reducing cost, helps lower OPEX for ENQ and others. But, elsewhere the pipeline/port operator makes money handling this task. SO, ENQ mus be getting some extra benefits.Having a lot of working capital that is tied to the running of SVT at its disposal would be one such benefit.

hi Fernan,

it is l3traderuk@gmail

many, many thanks.

gkb47,

i do not have you filtered. i only filter people that ramble on, and at the moment there is only one around. i might have missed your post or better yet, i read it, but i forgot to reply to it. so, yes, anything you can find out / say about SVT would be much appreciated.

the hook-up can take place around 7ish. the sea is not as rough as in the morning.

hi Fernan ,

my address is my username here with small caps followed by uk at gmail.
many, many thanks.

HI Fernan,

many thanks.
sure, but how?

hi Fernan and E121,

Many thanks. but even if it is a one-off it still matters for CF in 2019.

by the way, if I were AB I would repay the $110M of the RCF due in April now, and repay some amount, say $25M, of the $100M that have to be repaid by October before the end of March, so that when updating the marker late March/early April, net debt would look much better. This can be done because most of the FCF for 2019 is coming from the first quarter, when all of Magnus's EBITDA is ending up in ENQ's hands.

Interestingly, no one is talking about the SVT earning ENQ any money. It must earn it some money, and make its working capital available to repay loans here and there in advance of receiving money from the oil sales.

I am only interested in staying invested as at the moment if ENQ can bring its net debt below $1500M by year end.

Fernan and E121,

Whether the $10M increase in OPEX comes from here or there, it will have to be subtracted from sales, so what is the big deal, apart from the fact that if it was from Magnus BP and ENQ would be splitting less FCF, otherwise the OPEX will all fall on ENQ?

Fernan,
Do you have similar calculations for PMO?

TA

F and E,

Whether the $10M increase in OPEX comes from here or there, it will have to be subtracted from sales, so what is the big deal, apart from the fact that if it was from Magnus BP and ENQ