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they have to act today, even if informally, otherwise they will find themselves trying to catch up with the price fall. last time they were to slow to react.

you are right.
but saudis and russians might informally agree that each reduces production by a small amount immediately, say 150k bopd, each. and press irq to do the same. if they do not act know price might spiral down. a lot at stake for them.

squif,

if it arrives on the 14th, production is more likely to be around 35k, and not higher (loads have been almost always the same in quantity). so let us hope it arrives on the 13th.

poo: a big culprit is Libya which has increased daily production by more than 500k bopd since the Summer, and intends to go up to its 2011 level, 1.6M bopd per day by end of 2019,

Hi MO,

37 days since EP #3... Stena Sirita near Stavanger.

12 days since AK #27...

in the meantime tanker visits to PMO Catcher are going well.

china to the rescue...

https://twitter.com/OilyticsData/status/1060523167259746304

Hi E121,

Your usual optimism seems to be gone.
In my understanding the problem is that some banks/trading house have predicted an increase of the non-opec production by 3 mbbls in relation to the last couple of years. But, how is this possible, despite the 2 mbbls a day by the shale producers? A lot of companies did not invest much in production of large and costly projects since 2015 (there is plenty of data confirming the slow down in spending). If so, depletion rates should start to have an effect on production...Granted that projects have lad time of 4 years or so on average, but that is the interval of time that will have elapsed by 2019 since investment cuts. So, there is a puzzle here...

Opec production has not increased much and is not predicted to increase much further. Sanctions on Iran are here to stay, and the waivers that have been disclosed are basically drive down Iran's oil exports to below 1 mbbls.

Does anyone posting regularly here know of any site that compiles production projects entering production in 2018, 2019 and 2020?

TA

Hi MO,

Yes, those are the news we want to know about... We need Kraken's load #27 asap, and a visit to Enq producer.

Oil price: no need to panic. look at the futures.
All virtuall above $70 until the end of 2020:

https://uk.investing.com/commodities/brent-oil-contracts

Next week PMO will put out a trading update. That will give us an insight at how much indebted oil companies used the high oil prices in the last 4-5 months to reduce their net debt. Though no two companies are the same, there are similarities b/w PMO and ENQ in terms of their debt in relation to oil production.

Saudi Arabia's MBS might be challenged by other people inside the royal family, and I would not be surprised if a big coup is in the works. Instability in SA would rock the market. On the other hand, it would be bad if oil minister is eventually replaced. He is excellent at this job: after all we was educated at Texas A&M...

All

By the way, proposition 112 in Colorado did not pass (requiring oil and gas wells be at least 2,500 feet from homes and other occupied buildings) (apparently people in Colorado really want fracking under the porch of their house), but Florida passed Proposition 9 (ban offshore drilling for oil and natural gas on lands beneath all state waters). So one defeat and a victory...

I am sorry guys but this is not going to be pretty in the next few weeks... Had JS read E121 and Pelle's advice and he would have hedged some 2019 H1 production...

Wait:
https://www.reuters.com/article/china-economy-trade-crude/china-october-crude-imports-rise-to-all-time-high-on-record-teapot-buying-idUSB9N1UG02G?rpc=401&

So, demand is strong. What is missing is a bi of self discipline of the producers. Interest rates going up in the US will make the financing of the shale producers more expensive. For the most part they are still free cash flow negative...

All, but in special MO and Chilting

POO goes up then goes down, is anybody's guess what it will be next week. As long as it stays above $70 ENQ will be fine, as long as it delivers on execution.

Any news on load #27 or the next visit to Alma/Galia?

I agree with E121's take on the repayment of the Magnus loan. It will not be split into 5 yearly payments. That was just an hypothetical scenario. On tax and revenues from Magnus, Enq does not pay any tax on its cash flow, then makes the payment to BP, which has to pay tax on it according to its own profit&losses account. That is why the agreement stipulates gross cash flow payments to BP.

May be he can tell us what the sp was in 2019....

hi Pelle,

fernan's file is for 2019. he might have made a forecast for 2018 H2 in one of his posts. i cannot remember.
have a good weekend.

hi Pelle,

Many thanks.
i am still convinced that regardless of production being 55k until the end of the year, sp below 30p makes ENQ a buy, but i have been debating of adding to m position or buying more genel which has negative net debt (i.e., more cash than debt). my impression is that the potential upside here is greater, but for than i need to see improvement in kraken and algma/galia, as always DOYR...

Hi Pelle,

Many thanks for the file.
Two quick questions:
-where do you get @cost of finance loan and leasing cost Kraken@ from?
-what is @no cash flow oil@?

Your modelling points towards free cash flow in H2 2018 of around $200M.
Were production from Sept to Dec come lower than 62000 as you forecast, say back to 54000 and the decrease will be ~$170/75M.
All good news.
Many thanks.

Hi Pelle,

So, H2 net debt decrease would be $200M.

Can you please share your file as Fernan did?

TA

thanks E121,

if it is drilling that stopped the pumping, then the update in a few weeks will tell us that. otherwise we have to wait until Dec 2 to know how much production has rebounded.

july 17461 august 9042 (decrease of almost 50%)

Alma, partially good news: july 1890 august 5315 (but not yet 7k bopd)

kraken was 35k bopd.

unless Magnus increases production to where it was, sp will be below 30p, and debt will not go down.

Hi MO, Fernan and E121,

MO: based on your data the load from the most recent cargo implies a production level around 32kbop. This is disappointing. I do hope the next cargo shows improvement.

This leads me to praise Fernan for being very realistic about 2019 oil production. His Excel file is fantastic. It really can help one to see how the cash flow would be sensitive to output. If daily production were to go up to 60kopb free cash flow from the production (excluding the 75% of Magnus) goes up by $94M. I urge everyone to ply with it, to realize that the bottom line really depends on execution.

E121, the POO has just crossed its 200 day moving average (first time since late 2017). This is not good news for the month ahead. However, I am hopeful that some event somewhere will disrupt production, and stop the downfall of the poo. So, not to worry, I would say, as long as it is above $70.

"Peshkabir is on steroids," said DNO's Executive Chairman Bijan Mossavar-Rahmani.

and so are we, long term holders -:)

Hi MO,

Thanks for the comprehensive list of work that took / is taking place.

Is not work at Alma/Galia missing in your list? But was in H1, correct?

Given your list then Capex H2 should be slightly lower than just $10M-$20M less than what was budgeted, as you wrote earlier today. Because nothing is happening...

Not to worry about POO. It might dip to slightly below $70 briefly, but it will be back above it again. Hedge funds are creating volatility out of rumors. But at the end of the day, what matters is excess demand/supply. Market is tight anyway.