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gkb47

"One other thing I recall is that when Enquest aquired Magnus didn't it also increase the stake in SVT and Ninian pipelines."

those pipelines have lots of other owners besides BP. they could not buy it from others. in addition that would have been a bad allocation of capital to own the whole pipeline system outright.

gkb47,
TA for letting me know the method you used.
lots of different methods. all give different perspectives.

hi E121,

happy new year.
Thanks for the link to the oct production and info on shale.
when i lived on the west coast of Trumo's country i do not think anyone could phantom he would become president one day...hope you are having a great time there.

gkb47,

would you mid posting your excel spreadsheet?
i really would like to understand why at oil at $50 enq would be undervalued at current prices. as i wrote a few days ago, it won't go bust at low oil prices, but it will just limp along this semester at such poo.
is there any additional info that no more hedges were put in place besides the ones announced for 2019 Q1?

20% of K at $400M would result in a loss if total investment was $2300M-$2400M. need to get $460-$480M to break-even. ok a few millions (perhaps as hih as$10M?) less because in the last 17 months got the oil and profit of those 20%.

As you can read GCA is the "official" North Sea valuator. Let us hope that the Magnus deal was valued correctly. Here we have their most recent work, for FPM, valuinfg it at 225p, while Mr. Market at the moment says 150p.

"Gaffney, Cline & Associates ("GCA"), a leading independent oil and gas industry expert, concludes that the value of Faroe's oil and gas assets reflecting current market oil pricing is in the range of US$879m - US$1,076m"

Sp, perhaps it takes time for mr. market to adjust...

ended the year above the RI price of new shares. some way to go to the 32p party. but it will get there in 2019.

HK is now moving away from AK. draught is now 12.6m, before the offload it was 9.2m. if hook-up was yesterday at 13:30, and if it left a couple of hours ago, that would be about 30 hours. so, i am now confused as i thought it had picked up a smaller load last weekend.

US oil producers have hedged just 24% of their expected output for 2019, compared with 34% at the same time last year. So, they will also suffer from the poo drop if it continues.

Fellow ENQers,

I read some posts from last week on this board about ENQ becoming insolvent. There is absolutely no chance that can happen regardless of how low the POO goes. The hedges in place that have been made public about hedges up yo the end of 2019 Q1 guarantee not only that not only there is no insolvency risk until then, but also that the $175M RCF due in April 2019 will be made, Note that $65M of that amount has already been paid, and the hedges in place guarantee the rest will be available by then. Also note that the Mercury loan repayment in kind will be made at a POO of at least $60 given the contract that was firmed. By that time it will have been basically all repaid.

I am not aware of a new tanker visit to Enquest producer.

From what I gathered the interval b/w offloads #28 and #29, was 17 days (it was 6 December when tanker left and it was 23 December when it left again). Given that the load lasted 22 hours, at 20k per hour, gives 440k. This means the production is around 26-27k bopd. If anyone believes that she or he has better numbers here, I would be happy to know.

I still believe that back of the envelope calculations the Oz loan of $175M will still be paid within 5 years and Kraken gross production is 30K boepd if realized POO (i.e., after the Kraken oil discount) is above $60, assuming no further CAPEX after DC4, and OPEX of $25. However, to assess the effect of lower POO I would like to get more details about the OZ loan. For example, can the production be hedged to compute the free cash flow of the 15% working interest linked to this loan?

I have not added to or decreased my position in ENQ and I do not plan to do anything until the SP reaches 32p, which I expect will happen by April 2019. I am very much convinced the POO will now rise back to $60. (As a result I plan to add to my long direct/indirect exposure, but at this stage will go only for companies with net cash.)
The damage that has been done to ENQ's free cash flow over the last 2 months has been minimal, given the hedges in place. On the other hand many other oil companies have suffered a lot more because they had hedges a lower fraction of their production. If the drop of the POO has led to some oil companies postponing or abandoning projects, that is a price worth paying, given that ENQ's production over the last two months will have been lower than 56k given Kraken's sub 30kbopd.

I have yet to read an analysis on the shale industry that shows it can break even at prices below $50 outside the prime acreage. Anyone?

It wold be good to have some news about Malaysia's activities and other work underway, but with MO gone from this board, that is no longer info that is being posted here.

I still expect Enq's net debt at the end of the 2018 to be below $1875M. This figure excludes the $100M vendor loan linked to the acquisition of 75% of Magnus.

I look forward to reading Fernan, Pelle and E121's revised figures for net debt at the end

any views on today's announcement? my first quick reading of it is that it is good news.

1GW_

Many thanks for your reply. I have been a LTH for several years...
Agreed, a buy back is a way to signal to the market that the SP undervalues the company. The issue is whether they are generating free cash flow to embark on buy backs on a continued basis, until the SP reflects the value of the company ...

1GW_

If this company is performing so well why is its share price below 500p? It reached 485p on 12 may 2017...
I

1gw_

big increase in working capital is often a SIGNAL that not all is well...the truth of the matter is that they had close to £100M many moons ago, and it is all gone...

disappointing results, indeed.
with so much cash burning are they going to borrow money for share buyback?
is this ever going to turn around?

Acchi,
I do not think my posts in any way influenced MO's decision to take a break/quit. I never attacked him. To the contrary, I always thanked him for all he posted. Of course, sometimes I added that I did not believe that the gaps between offloads would go down to 11/12 days on the basis of all the data available at the time (until I understand exactly what the true issues with Kraken are and what requires to get them completely sorted out, it is hard to see going up to 50k daily production. Also, I suspect that when there is such a breakthrough to get production there, there might be an RNS, because this would be very much material information.) but that was the extend of my questioning his hopes of short cycles. Obviously, you can only do MO's job if you absolutely believe that great things are to happen shortly.

In short, I like all others here, have no influence over the gaps in between offloads at Kraken, Alma/Galia, or on the progress of DC4, workovers here an there, well tests, pipeline replacement work, etc. I wish I had...

I understand that some people do not like to read different views, but an investment board is not a fan club.

At any rate let me remind you my successes: my first post was before H12018 results were posted, and I stated that the payment of the RCF was going to be an issue (and so it proved, thus the Oz capital loan). In October, I posted my forecast for overall 2018 production (and given the recent OU's data, I am closer than anyone). So, why are my posts taken so badly, if my forecasts have proved to be correct? (if they were not, I would understand the criticism).

Anyway, I am also going to take a break from this board until Boxing day (I will still read E121s, Fernan's, Pelle's posts and anyone else's who posts real information rather than opinions). Until then I will not add or reduce my Enq's holdings. If I were to do, I would break my silence, and announce in advance. I am not kind of person who posts while trading in the background.

Au revoir.

Squif,
let us mourn MO's departure from this board and leave the exchange of pleasantries for another day. With MO gone, a lot of real knowledge is gone, and the board will be a lot poorer. At the moment what is left is the wisdom of people like E121, Fernan and Pelle, and some people's long philosophical essays about their past professional experience, their mates' advice, buffetology, etc.

MO,

Before you leave the sts transfer is underway at Scapa flow. Sea Amber is running away with your last offload...

MO,

Just to express my gratitude for all your hard work, and for your half-full glass attitude to tanker watching. Now that AB knows that you will not be watching he might sneak in a load or two without us noticing...
ATB and enjoy your break; hopefully you will be back sooner rather than later -:)

E121,

Super thanks for making everything so clear to everyone, I hope. 3-way collars are not intuitive to 99% of the population. If you have not you should try writing a book / setting up a web-site on these matters. Your expositional skills are truly of another planet.

If Enq went for the atypical 3-way collar that meant they were very bullish about the POO, in which case they might have not hedged beyond 1Q 2019, as they were waiting for better prices before hedging more. It is easy to get carried away. I too was expecting a spike before the Iran waivers that would send the POO above $90...

MO must be on holiday...

Have a good weekend.
ATB

Pelle,

https://www.mercatusenergy.com/blog/bid/39927/hedging-oil-gas-with-three-way-collars

the important thing is that the average floor is c.$70/bbl. won't get much higher than that. $70 is fine to get debt repayment down. As E121 wrote every $5/bbl more generates $100M FCF. So, if poo was $70/bbl, an additional $200M FCF. Anyone can live with that. AS E121 wrote being to greedy when poo was in the $80s is not a good idea.