Member Info for londoner7

Cheapskater, thanks for correcting my decimal placements. I agree the shares in lieu will be approved given the recent cash update. Also agree with your estimate of share count if warrants are exercised. Your count seems inline with my expectation that the 0.23p warrants will expire in Feb. The exercise of the other warrants, particularly those at 0.25p are dependent on the share price ahead of the Oct expiry and to a degree that is the focus of my assessment - the degree to which Mosman will be viewed as corporate cash positive. I choose my wording, 'viewed', carefully, as I expect that to be largely speculation on this board rather than confirmation from the BOD. However, confirmation from the BOD of that position would be a very positive outcome at any point in H1. As I say, an assessment of the cash flow position ahead of any clarity from the BOD is the focus of my current consideration. I'll come back to that as any supporting information comes in over next few days, or not, as the case may be.

But this comment, "G1 I don't expect to be producing gas into a pipe in Q1 due to distance from pipeline. " surprised me. My recollection from a recent interview was that JB stated an expectation that G1 would be producing by end Q1. I didn't pick up on any distinction between oil and gas. What's the basis for you believing gas offtake might be delayed?

It begs the question if oil is produced what happens to the associated gas? Flared?

correction: I've ignored the 'small' number @ 12.5p

We've had the F1 flow rate.
Imminently, we should get the inital F1 production rate. No doubt those F1 numbers, for oil and gas, will be extrapolated out over the coming months, with I'd guess same again volumes added for G1 from end Q1 (latest forecast from JB for G1 coming on line). The hope and expectation here is that those numbers will get Mosman over the 'breakeven at a corporate level' threshold from Q2, offering the hope that there'll be no further placings/dilutions, and expenditure for future growth will come from those positive cash flows and the exercise of the remaining warrants (c870m) as the share price gets clear of the warrant thresholds between 15p and 25p (I've ignored the same number @ 12.5p).

Ignoring the Oz factor, which I appreciate is the investment case for some share holders, is that a fair representation of the US production position?

Rough weather or not, it looks like hookup sometime this PM, but it's the detach that matters for my logs.

I was thinking earlier today that if there wasn't a hookup soon then either Kraken has lost some mojo or she'd have to shutdown with full tanks.

If you have to drive go equipped!

https://d3avoj45mekucs.cloudfront.net/rojakdaily/media/btw/news/2019/december/james_bond_no_time_to_die_trailer.jpg?ext=.jpg

But I don't think they do an EV or hydrogen version - yet!

The policy push is for renewable energy, but don’t put any infrastructure in Kent.

“It’s the scale of this project that worries me,” says Ms King, a retiree who used to work in financial services in London. “We’re not against renewable energy — we just think it needs to be in the right place.”

Hi Tamak,

I posted the data because I that was the 2nd request I'd seen from you. As I said, the draught calculations were a bit of fun early on and to help my understanding of field performance. Later I came across the OGA data and that's a better reference. Today, I just make use of the rolling averages on Kraken.

I refer to Excel in it's generic status. Other spreadsheets are available. I have viewed your data and assumed you use a spreadsheet - if you don't I think you are making things hard for yourself. Each of my investments has a key metric to focus on and I find spreadsheets the best tool to examine it. For Enquest the key metric is the oil price. Given the fresh guidance, -FCF breakeven - the knowledge I built up over the last 18 months on the Oz loan, FPSO lease and much more, is interesting but these days somewhat redundant to my decisions.

For me key are the 3 factors I outlined recently, with the Feb update being an important point in time to assess Enquest's ability to make, or come close, to the payments due in Oct. Once I have a good gauge on that I'll turn my attention to the run up to the Bond repayment, alongside potential news on tie-ins, Breesay and M&A.

Beyond that timeframe consideration of the likely price of oil in 2025 and beyond are for a later time. The oil sector accounts for 15% of my portfolio and can easily be replaced if any expectations I might have aren't realised. These days I cycle to the gym, walk to the pub and catch a train if I go further a field. I dumped the car several years ago and a motor bike sits in the garage, but if Elon Musk offers a self driving EV (other fuel options are available) within the next decade or two I'd consider it.

Change is exponential, and not always obvious, as spindok pointed out earlier. I adjust my portfolio to outcomes rather than attempting to predict policy.

But I find the debate interesting.

Oops, I got off topic. You asked about Kraken and Magnus.

Kraken - refer to 2013 CMD for guidance/expectations on field decline. My interpretation is that because actual production never came close to a 55K bopd plateau, the decline rates will be more moderate. Also, the WF will alleviate that decline. If ENQ provide a same again 30-35K guidance for 2021, I'd see that as a good result, and it might surprise a few analysts.

Magnus - as L3 and others have said, ENQ has fallen short of guidance on Magnus. My current take is that things have changed. Less gas uplift (reduces costs) and not as much water support as anticipated with the 2nd tower now held in support . I've moderated my expectations down 2K bopd towards 16-18Kbopd in 2021.

But ENQ will wrap up all this detail in a handy to use full year production forecast - due in Feb. In spite of some catastrophic failures it's proven a good guide over the last two years.

Therapist, I aim to please.

It occurs to me that with your Excel skills you're better placed to help him if he needs it. Particularly, as you've also cracked the language barrier ;-)

I've just remembered a key assumption: Full ballast before loading and empty ballast after loading.

Apologies to other posters for the bandwidth I've taken on this. I think that's all of it.

I think it could be too tough without this info.

12.1 is an entry for the 'draught' value (12.1m) after the load.
9.2 is an entry for the 'draught' value (9.2m) before the load.
6.8 comes out of the calculation, as does the calculated load '467692.95'.

Hi Tarmak, I've copied my tanker calculations below as a simple tab delimited file, i.e. no calculations shown.

Below that is a link to a data sheet - I believed it's the same one I used. From this you should be able to work the calculations for yourself. A bit of fun for the weekend ;-) If you're really struggling get back to me.

Cargo max 6.29 Area Load (m) Ballast Ballast (m)
Amundsun Spirit 109289 "687,428" "10,950" 10.0 42600 3.9
draught 49 39.0%
12.1
9.2
6.8 467692.95

Fuel loads could account for max +/-12Kbbls variation

https://www.slideshare.net/teekaycorp/the-amundsen-class-shuttles

Good luck.

62 21/03/2020 07:30 26/03/2020 10:00 13.71 5 days Ingrid Knutson 66038 "635,844" "46,378" 13.4175 40.69767442 Weather interupted two stage offload
61 11/03/2020 09:30 12/03/2020 17:00 14.5 34.5 Heather Knutsen 80918 "614,169" "42,356" 12.865 40.77669903
60 26/02/2020 07:00 27/02/2020 08:00 13.5 25 Peary Spirit 67188 "503,977" "37,332" 12.0475 40.54054054
59 12/02/2020 15:00 13/02/2020 21:00 11.96 30 Petroatlantic 54865 "463,101" "38,721" 12.165
58 31/01/2020 19:00 01/02/2020 22:00 11.5 27 Stena Natalita 63051 "506,880" "44,077" 10.221875 41.09589041
57 20/01/2020 08:30 21/01/2020 10:20 11.23 27 Navion Oslo 55756 "488,220" "43,475" 9.128125
56 06/01/2020 23:00 10/01/2020 04:45 13.97 27 Navion Oslo 55756 "532,162" "38,093" 10.109625 Weather interupted two stage offload
55 26/12/2019 09:30 27/12/2019 05:30 4.1875 20 Ingrid Knutson 66038 "415,349" "99,188" 9.227125
54 22/12/2019 07:30 23/12/2019 01:00 7.125 17.5 Betty Knutson "200,000" "28,070" 11.04525 Partial offload after Alma
53 14/12/2019 15:00 15/12/2019 22:00 15.156 27 Torill Knutson 80850 "566,081" "37,350" 11.54775
52 29/11/2019 17:30 30/11/2019 18:30 10.44 25 Ingrid Knutson 66038 "500,702" "47,960" 10.58375 Dec-19
51 19/11/2019 03:30 20/11/2019 08:00 11.46 28.5 Navion Oceania 72449 "554,160" "48,356" 11.22875 41509.43396 0.229166667
50 07/11/2019 16:00 08/11/2019 21:00 9.135 29 Navion Oceania 72449 "582,253" "63,739" 11.35625 46.48886714 10.2175 48935.64962 0.125
49 29/10/2019 17:00 30/10/2019 17:45 11.3 24.25 Amundsun Spirit 66563 "467,693" "41,389" 12.5225
48 18/10/2019 11:00 19/10/2019 10:45 13.02 23.5 Navion Oceania 72449 "561,250" "43,107" 12.8175 22
47 05/10/2019 05:00 06/10/2019 10:15 11.97 29.25 Navion Oceania 72449 "596,704" "49,850" 13.7325 "Used 500K but should I have used 550k, await OGA number" 17
46 23/09/2019 04:00 24/09/2019 11:00 13.8 30 Navion Oceania 72449 "518,706" "37,587" 14.36 14.23529412
45 09/09/2019 13:00 10/09/2019 16:00 12.48 27 Navion Oceania 72449 "554,160" "44,404" 16.26 48387.09677 0.177083333
44 27/08/2019 14:00 29/08/2019 04:30 16.68 38.5 Amundsun Spirit 66563 "509,018" "30,517" 16.34

Hook up Detached Duration between detach (days) Duration on hook up (hrs) Shuttle 6.8 7
Number Date Time Date Time Name Tonnage From Draught bopd Rolling '4' interval Rolling 4 load @ 500K Tonnage Conversion 100% bopd 11
82 06/12/2020 14:00 07/12/2020 18:00 11.5 28 Navion Oceania 72449 "500,000" "43,478" 12.77 "39,154"
81 25/11/2020 06:00 26/11/2020 06:00 15.54 24 Tide Spirit 85329 "468,321" "30,136" 12.89 "38,790"
80 09/11/2020 16:00 10/11/2020 17:00 11 25 Navion Oslo 55756 "438,001" "39,818" 12.0775 "41,399"
79 29/10/2020 15:00 30/10/2020 17:00 13.04 26 Scott Spirit 66563 "495,243" "37,979" 14.27 "35,039"
78 16/10/2020 15:00 17/10/2020 16:00 11.98 25 Navion Oceania 72449 "575,432" "48,033" 13.5 "37,037"
77 04/10/2020 13:00 05/10/2020 16:30 12.29 27.5 Ingrid Knutson 66038 "550,491" "44,792" 14.3375 "34,874"
76 22/09/2020 07:30 23/09/2020 09:30 19.77 26 Navion Oceania 72449 "433,617" "21,933" 14.265 "35,051" Includes 7 day shutdown
75 02/09/2020 12:30 03/09/2020 15:00 9.96 26.5 Peary Spirit 67188 "412,592" "41,425" 12.4975 "40,008"
74 23/08/2020 13:00 24/08/2020 16:00 15.33 27 Ingrid Knutson 66038 "479,364" "31,270" 12.7575 "39,193" DC1 riser fix? 2 week shutdown two producers
73 08/08/2020 05:00 09/08/2020 08:00 12 27 Navion Oslo 55756 "456,833" "38,069" 12.425 "40,241" Worcseter hookup confirmed by IR before 3rd Aug. "Navion Oslo scheduled into Orkney 9th Aug via Kraken, currently at Aberdeen."
72 25/07/2020 16:00 28/07/2020 08:00 12.7 64 Heather Knutsen 80918 "550,051" "43,311" 12.1875 "41,026" Detatched after 12 hours with oil and rehooked 40 hours later? Offload pump problem?
71 14/07/2020 13:00 15/07/2020 15:00 11 26 Scott Spirit 66563 "495,243" "45,022" 11.9125 "41,973"
70 03/07/2020 17:00 04/07/2020 15:00 14 22 Scott Spirit 66563 "481,468" "34,391" 11.8275 "40,928" Interuption while Wocester hooked up?
69 19/06/2020 17:00 20/06/2020 21:30 11.05 27.5 Navion Oceania 72449 "518,706" "46,942" 11.8025 "44,150"
68 08/06/2020 18:00 09/06/2020 20:30 11.6 26.5 Navion Oslo 55756 "500,775" "43,170" 12.0025 "43,103" 38924.13889 "41,578"
67 28/05/2020 06:00 29/05/2020 06:00 10.66 24 Navion Oceania 72449 "398,364" "37,370" 12.7275 Top up of Eurochampion with load # 65
66 17/05/2020 08:00 18/05/2020 14:00 13.9 30 Scott Spirit 66563 "502,130" "36,124" 13.03125
65 03/05/2020 16:00 04/05/2020 16:30 11.85 24.5 Heather Knutsen 80918 "638,213" "53,858" 12.98375 "42,319" 40983.60656
64 21/04/2020 16:20 22/04/2020 20:00 14.5 27.7 Heather Knutsen 80918 "582,110" "40,146" 13.64625
63 05/04/2020 07:00 07/04/2020 07:30 11.875 27 Navion Oslo 55756 "494,498" "41,642" 13.39625 Weather interupted two stage offload

Hi Tarmak, I maintain a Kraken tanker log which I'm happy to share. It started as an exercise to see how effective the draft numbers are as a guide to loads. I produced a simple Excel calculation based on a data sheet for Amundsen Spirit to determine the load based on draft numbers, and I scale it up or down based on relative gross tonnage. That is the 'From draught' entry. It started out as an exercise for my inner 'nerd' - a bit of fun. You'll see I've already started the entry for the anticipated load due any day. To be clear, I do not believe that a tanker arrives to empty the FPSO, rather it has a pre-arranged cargo to offload, typically 500K bbls, and I now focus on the rolling average in the last couple of columns. It seems to tie up well with the OGA numbers. However, I maintain the draft calculation because it only take a minute or two to calculate each load.

I'll send the numbers in a follow up post in a 'tab' delimited format which you should be able to import into Excel. I haven't tested it but if you have problems let me know and I'll try and help.

I guess you'll import to Excel. There are three columns with calculations. 'bopd' is 'from draught' divided by 'duration between detach', the first rolling column is average of last 4 'duration between detach' entries, and the second rolling column is 2,000,000 divide by sum of last 4 'duration between detach' entries.

I hope it works for you but sorry I'm not exchanging it by email.

You may be interested in my 'From draught' calculation too, so I'll look at what I can post. More complicated to pass on usefully because of the calculations.

Hi hitman1a, in your post of 15:54 I believe you are double counting costs to your detriment.

Rightly or wrongly, I have interpreted the FCF guidance to include all cash elements including interest, FPSO lease, CapEx, maintenance costs and decom, but, as you point out, not the Bond PIK interest. The next update should confirm this interpretation, or not.

In my book, maintenance costs are a component of operating costs, which at the H1 stage were reported as $14.4 boe. Of course the main maintenance costs would have been incurred during the planned maintenance between July and Oct. Which is why I pointed to the possibility that OpEx through the last two months of the year might approach that $14.4 number and support Enquest's claim that they are still on course for a 2020 $33 FCF breakeven point, which would be a nice surprise to many, including me.

It appears to me that a large component of the reduction from a $33 breakeven in 2020 to $27 in 2021 is the reduction in CapEx from $120m to perhaps £50m. I remember JS describing $50m as the minimum expenditure to meet licensing requirements - whatever those are.

But, as you describe, the key components for 2021 are the production volumes, the oil price and the FCF breakeven number. Much has happened since the $27 FCF number was put forward for 2021. It was not reconfirmed at the last update. It should come with the Feb update. I have little confidence in the price prediction of GS or desert sheiks. Or indeed my own gut instincts. I prefer the forecasts of those gentlemen at McDaniel & associates, who last October forecast $48 for 2021. We have since had a production outline from Opec+ for Q1 which might put a '5' handle on the next forecast due early in Jan. The third component, production volumes, will also be presented at the Feb update. Ahead of that, Feb 1, Therapist will alert us to the OGA Nov number, which will be the basis for my estimates. I think we can go into the Feb update with a decent handle on two key numbers, with the last confirmed on the day. With the FCF breakeven point and the closing 2020 debt number, that day in early Feb will be a big day for Enquest investors.

Steve305, I take your point about nobody getting it right all of the time, but the Domus acquisition was about more than that. It was a significant change in direction. Headlam had built its business on a high volume of low-priced transactions and is the market leader in floor covering’s distribution. The transaction size is c£100. Domus is completely different, with a typical project size of c£8,000.

The cash payment was £30m and £23m was classed as goodwill, so only c£7m of tangible assets. That £23m would have paid for the recently completed Ipswich distribution facility. In 2019 Domus made a profit of £1m. It was the only business unit within Headlam to have an impairment to goodwill in 2019, and the Domus goodwill still accounts for c60% of total goodwill within Headlam.

Domus is still operated as a separate business unit by Jon Newey, Domus's Chief Executive. Its business is completely outside the scope of Headlam’s management experience. I would not be surprised if Jon Newey approached Headlam with a management buy-out offer, which would be for considerably less that £30m.

But I expanded on yesterday’s RNS as a focus on Steve Wilson as CEO of Headlam to stick to what he knows best. Signing a cheque for £700K should help remind him of the need to do that!

As an investor I want my investments to generate a high and growing free cash flow yield. It is my primary investment metric. The FCF is returned to me in the form of dividends or reinvested in the business by management. I have no control over the decisions management make in assigning that investment but I watch closely, as it is those decisions which will have the greatest impact on the performance of my investment outside of the market cycle.

Headlam management should be fully focused on investing capital to improve on their position as market leader thereby raising ‘barriers to entry’ to new entrants. If there’s spare cash, return it to shareholders, not pursuing investment themes outside the business model. That’s my job.

That all said, Domus is now priced into the Headlam share price. I closed yesterday’s post with a comment from the recent trading update. I like the reference to capital allocation and the comments on operational improvements that are expected to result in an additional £4m of profit. Alongside a market recovery from Covid 2022 looks very-good, although I expect 2021 to be decent too. That’s why I’m invested here.

On JHD. A great company. I've taken a look several times over the years but I've always considered the stock to be expensive. Today, I prefer Headlam's valuation.

This should draw a line under the 2017 Domus acquisition. I’d guess the £3.7m performance related contingent payment to Dec31st 2020 will stay in Headlam’s pocket. I sold out of Headlam early 2018, a couple of months after this acquisition. I commented at the time that Domus wasn’t a good fit with the existing business.

Headlam CEO Steve Wilson comment 7th Dec 2017
"Domus is a significant addition to Headlam and broadens our overall position in the industry. Domus provides us with meaningful product, supplier and customer diversification and expansion into a market segment that offers higher levels of profitability and additional growth opportunities.”

Two years on - Headlam accounts 5th Mar 2020
“Additionally, based on the Board's assessment of the carrying value of the investment in the Domus business, a goodwill impairment of £2.1 million has been recognised within non-underlying items in the year. Due to its predominant focus on larger scale projects within the London area, the Domus business in particular has been adversely affected by the weak market backdrop and political and economic uncertainty that has prevailed over the last two years, and which has particularly impacted investment in the London market. Although the market is anticipated to recover, the Board felt it prudent to take a more cautious view on the revenue recovery in Domus and hence to take a write-down reflecting an impairment in the carrying value as at the 31 December 2019. “

What isn’t mentioned in today’s RNS is that as part of the settlement Steve Wilson will also be signing a cheque for c£700K. I’m sure Steve will be reflecting on his decision 3 years ago. Hopefully, he’s now thinking, “stick to what we do best!”.
I was encouraged by the recent comment, “Company expects to provide an update on the reinstatement of an ordinary dividend as well as its wider capital allocation priorities.”. Which I interpret as the return of spare capital to shareholders in the form of special dividends, rather than splashing it on another Domus.

PYUECK, you say, "I said 6 months ago that if people thought that oil would rise, then IMHO an oil ETF was the better option than Enq. That definitely has played out until now,"

I remember our discussion, it was April 1st, and I advised you against anything other than a short term investment in an oil ETF - days, a week - due to the nature of the futures curve. As I recall lots of retail investors were pushing it (USO) at the time and got burned within a week or two.

At the time ENQ was 7.7p and the USO (8:1 split) was 35p.
Today ENQ is 12.6p and USO is 31.25p, after bottoming at 17p late April.

Were you in the USO or something else?

I would agree with your opening point, "Enquest's future almost totally depends on oil price rising." If oil hits $80 feel free to kick my ar** if I'm still invested.

I would strongly advise retail investors not to play oil ETFs unless you fully understand the nature of the instrument.

Don't expect any changes in 737 production any time soon, but if I interpret this correctly this is a good medium to longer term story. In June I posted on the argument for new over old aircraft. (Reposted below)

There was an 8 year delay on orders for the 737 max. Many carriers cancelled their orders following the crashes and pandemic, Ryanair didn't. But what I find interesting is that Ryanair has now added to their order for delivery within 4 years. I take this to mean they have accelerated their replacement cycle. That's my layman's interpretation.

Take a look at today's Ryanair RNS in which ML waxes lyrical on the benefits of the new 737 model. He has little control over the market but he knows about margins.

My post from last June
"An interesting piece on CNBC by an aerospace analyst.

We know about the pandemic's impact on the airline industry, leaving a large part of the fleet parked up in the desert. He expects the suppliers to the after market sector to feel the heat, while suppliers to the new build sector will fair better. The logic of his argument sounds reasonable.

As airlines bring aircraft back into service they will favour the newer aircraft that have lower servicing costs. Many of the older aircraft will never be brought back into service as they are replaced in the operational fleet by new aircraft. Many of the older and larger models which supported the 'hub' strategy will also be left out. Passengers prefer point to point rather than transfers, which supports demand for the new twin engine models from Boeing (737) and Airbus (A320).

The whole of the aerospace industry has taken a hit but some sectors are affected worse than others. The new build sector is expected to outperform the after market sector.

Senior supplies the new build markets. Boeing and Airbus are tough and persistent on pricing so no freebies. A tough market - Senior may never again see those 13% margins - but they are operating in the right sector. At some point the after market sector may be more favoured but probably not for several years."

Thanks for the heads up Therapist.

With the recent trading update I'd overlooked the OGA release. We know Kraken had a riser issue, which accounts for the slightly lower Sept number. Planned maintenance in Oct will also impact Kraken but the update points to a straightforward 1 week shutdown. Magnus is more of a concern. The trading update points to a dire Oct number, mainly due to a shutdown completed in Oct and a lift pump issue, which might have extended into Nov. But the water reworks are complete, so lets hope for a good number in Dec if not Nov.

For me, the highlight is SC. I nearly choked on my breakfast when I read "continued strong performance on Scolty/Crathes". The months up to Aug were pointing to a large decline but the Sept OGA number shows a good recovery to c4K net and the trading update comment suggests this has continued to date.