Member Info for L3Trader

"Opec won't provide list of each nation's output quota: delegate"

Well, well. DT kept the waivers private; the OPEC+ countries can reply in kind...lol

will the deal in place it will easily close at 25p today. leveraged oilies all over the world are flying...
expect tweeting and threats from the White House resident.
the OPEC deal is a lesson to the US.

Hi E121,

Many thanks for the link to the post (ADVFN by Steve73).
Was informative. hopefully will find more about it.

When it comes to the Poo I am not a half-empty glass king of guy. It will go up at some point. Basically until March 2019, the effect to ENQ's bottom line of low poo is not too bad, given hedges in place up to 1Q 2019 (it would be good if they had hedges at good prices in place for the rest of 2019, like PMO), and agreed price for Mercuria payment in kind loan is another hedge.

I am still trying to figure out how SVT can help the bottom line, but cannot find any info anywhere. Would like to understand how being the operator generates EBIDTA and/or helps reduce working capital, which can the be used to pay down loans using the cash that is freed on a revolving basis (even if it is not ENQ's and belongs to the SVT consortium), thus saving interest.

All best.

NO's draught changed from 9.2 to 13.5

romaron,

a story to make you happy from Bloomberg.
"Earthquakes in Heart of Texas Oil Country Spur Water Crackdown"

Texas is considering new restrictions on how shale explorers dispose of wastewater from oil drilling as earthquakes rattle the largest oil-producing American state. The new rules would target how much and at what pressure briny water that emerges from oil wells is injected back into the ground. The new rules are likely to lead to more special conditions on drilling permits that could limit an operator’s ability on pressure and volume.

romaron this means higher Opex and lower recovery rates, so non-frackers like ENQ will benefit from these difficulties indirectly.

happy now?

romaron,

I have no agenda, and that shows by my prediction for Enq's 2018 production being closer to actual production than anyone else's. that is what is called a correct forecast.

what DID you forecast correctly about ENQ in the last year?

I just repeated what the Times wrote. They were the ones talking not me, as for filtering let me remind you that my posts do not move the sp or the poo. i suggest you be filter DTrump's tweets, which actually make you less wealthy...

interesting that you do not comment any inferences that i make that in your eyes should be seen as favorable to your cause (such as Malaysia deal in the making, evidence that production guidance by ENQ seems to have switched to be cautious, and so should expect upside of at least 2% in relation to midpoint, etc.)

this is an investment board not the ENQ fan club.

yep, we need MO to tell us how much oil was offloaded. 28hours x 20k =560K?

The US keeps using the SPR to influence the POO. This is not acceptable. They are as much market manipulators than anyone else at the moment.

Crude Oil in SPR on 11/30 649.6M on 11/23 650.6.

So, it sold 1M in a week. Therefore, actual crude draw is -8.323M

overall reserves decreased even by more than that, indeed 9.4M

https://www.eia.gov/petroleum/supply/weekly/pdf/highlights.pdf

Pelle, E121,

EIA data for the week:

Crude: -7.323M
Cushing: 1.729M
Gasoline: 1.699M
Distillates: 3.811M

Hi E121

Many thanks for this. I only have the hard copy.

Hi Pelle,

The title of the article is "Kraken delays apply brake to Enquest in North Sea". (the paper provides the name of the person writing it.)

As E121 wrote the worry is if Enq has to write-off part of those 128M 2P reserves. It would be good that more information was released by Enquest on what exactly the problem is, because the OU suggests it is not the oil reservoir.

Quoting OU "While the Group continues to see excellent communication between producer and injector wells and increased water injection volumes have improved reservoir pressure and supported production, a small number of system outages and equipment repairs continues to limit performance." From this I infer that the main issues are with the systems and equipment, not the reservoir.

But then the OU goes on to say: "With well testing now complete at all 11 producing wells, the Group is incorporating the information gathered from these tests into its plans to optimise production and maximise reserves from the significant volume of oil in place."

So, production is no longer affected by well testing. It is being kept around 31K for other reasons.

The passage that is less rosy is " plans to optimise production and maximise reserves from the significant volume of oil in place." Here they talk about maximising reserves....So, that might have been where the analysts picked up the reserves revision, as this is often "RNS speak for reserves write off"

It would be good if the people with oil technical expertise posting on this board tried to explain what they think the issue is with Kraken.

romaron,
TA for the link. that is an upbeat write up of the OU. does it add anything else not in the OU? I ask this because journalists of these industry outlets often get to talk directly to the companies.
Not worth buying the times, I would say.

Pelle,
I will try to provide quotes, but will be attacked if I post any quote that is not rosy...

POO: I stick to what I wrote around Nov 14. volatility of POO will be high henceforth, and everything i wrote. Ignore OPEC+ statement. Announced cuts will be small. The ones agreed in private by Russia and SA will be larger (they have to appear not running the market like a cartel...). SA and Russia might to do Trump what he did to them when he said there would be no waivers...

Pelle and Squif.

I suggest you read the write-up of yesterday's OU in today's The Times. I picked up a paper copy on my way to Exeter Airport, and I can only say that it does not make pleasant reading.

Squif,
this is interesting, your year end prediction for net debt $1.811M. Yes, but that will include the $27M cash to be spent on Magnus Capex in 2019. So , I prefer Pelle's calculations which focuses on net debt reduction on the basis of executing (i.e., producing oil and running SVT). it is clear to me that SVT can become a good income genrating asset in the future contributing to the bottom line. However, it is not clear how much EBITDA it generates at the moment. do you have any idea?

why would you predict 69k, if EQN is giving you a range of 63-70k? Make it 67k (as in the current year, use a value slight above the midpoint). average realized POO after Kraken discount of $68, makes it necessary for average realized POO (including hedges) to be $72. sensitivity analysis is key.

have you noticed the following in the OU: "Planning and optimisation activities are underway for the proposed 2019 two-well drilling campaign, idle well intervention programme and for the ongoing asset rejuvenation campaign, with 2019 having the highest level of activity since EnQuest took operatorship of the PM8/Seligi production sharing contract. Malaysia and South East Asia are seen as core areas for EnQuest and the Group continues to review growth opportunities."

this is RNS speak for "we are going to announce a deal in Malaysia". i guess they are going to toss the coin soon...

TA

Hi Pelle,

That is absolutely spot on. Amazing. Others should listen to you more.
Sorry, I missed your prediction. In which day in October did you post your prediction?

What you say is spot on. If the calculations are done like for like, net debt reduction of about $54M generated by operations in 4 months was what was achieved. How can anyone think that is good?

I found it intriguing that in the OU they go on to write "Cash generation enabled a further early repayment of $65 million of bank debt in November." I pretty sure this means they used some of their cash position to repay those $65M, and that this means no additional net debt reduction in November (I suppose ENQ's IR person drafting this RNS took a "writing for RNSs" class at University...) We will confirm that in the OU after the new year.

I am not going to post it, but some of the people that just rumble on this board should do the math and compare the net debt reduction of ENQ with that of PMO or TULLOW, adjusting for their capex and daily oil production, before praising ENQ's management.

I agree with you and wrote it before. A good outcome would be for ENQ to be taken over by a company with substantial net cash. I will keep hoping for that.

On the other hand I am hoping that I do not have to sell my small position in FPM to DNO...

All best.

Pelle,

Excluding 75% Magnus, at 56kboepd ENQ will have 5M bbls to sell, 60% of which are hedged. so that is good. btw they can also hedge half of the production that corresponds 75% of Magnus indirectly. it just does not enter the calculations to repay BP, but it could add to ENQ's bottom line.

Has ENQ hedged any of 2019 H2 production? If it did not...

I would like to remind the readers of this board the predictions about the
2018 full year production made by several of us back in early October (between 6 and 9 October).
I am quoting the predictions made on a Magnus 25% basis.
MO: 59k
KO: 59k
E121: circa 58k
Jan: 55k
L3: 54k
(I hope I have not forgotten anyone. Perhaps Pelle also posted a prediction?)

As per the OU, Enquest stated: "Average Group production at 54,268 Boepd in the ten months to end October 2018."

And Enquest also stated today: "Full year production expected in the range of 54,000 Boepd to 56,000 Boepd."

Anyway, let us wait for the end of the year to compare our predictions with actual year end data.

The only good news is that ENQ had given a range of between 50k and 58k at the end of H1, but fortunately the actual data point point will be somehere in the upper half of the interval, as suggested by today's OU. So, the range they gave at the 2018 H1 results includes the data point (a sign of okish forecasting). However, the lower limit of the interval (50k) was cautious, given the current interval. This is useful information to extrapolate info out of their most recent forecast.

TWalbyoff,

I do not mind. My current plan to exit at 32p.
Let me also add that I believe that at 25p, it is a bu if the POO recovers to $70. But with Trump wanting to keep the POO low at all costs, it is not clear when that will happen. I can wait though.

Hi Fernan,

Using 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. Do you agree?

SmokinAces,

I will exit when I decide to do so. And, yes, as I wrote one month ago, when I have an opportunity (POO spikes pushing with it the price of all oil companies) I plan liquidate 2/3 of my position. I will keep the other 1/3, pretty much like a lottery ticket. Perhaps some day Enq's management will get a project right... I say this with much sadness, because I really believed in the Kraken story when its oil production was about to start, and at in the few months of production. That is why I invested. I even believed in the project when it under performed early in H1. But, now it is clear that ...obviously, something has gone wrong, and it is not clear from what has been revealed in the OU if it will ever be fixed.

However, do not worry, I will not be posting often, henceforth. Let people keep believing that offloads from Kraken will eventually good down to 10/11 day cycles, if not in the next offload, in the one after that, or the following one, and so ad infinitum...

ATB