Member Info for londoner7

Catcher has been a great performer for PMO and CNE but it had an outage recently, which has been fixed. I didn't see any mention on the PMO board but it was a significant event, albeit during a low oil price period. Working the numbers I see an impact here of c500 bopd on the 2020 guidance of 19,000-21,000 bopd.

There's confusion here about the Cineplex deal, its financing and the relevance of today's AGM to the Cineplex deal.

Financing for the deal was agreed with banks BEFORE the acquisition was proposed last Dec. It consists of secured (and a small unsecured component) term loan facilities. Cineworld DOES NOT have any bond holders. Read the reports, the closest you'll get to a reference on bonds is James Bond.

The Cineplex deal was agreed by Cineworld shareholders at a general meeting in Feb. Today's AGM had no relevance to the deal. Perhaps people here are confused by talk of pre-emptive share allocations. These are standard resolutions for most companies.

I trust Cineworld management to look after shareholders interests. If you don't I suggest you sell. Trust is fundamental to an investment.

If you believe that the deal will go ahead as originally outlined (C$34 / share) I suggest you buy Cineplex shares - you can buy them today for C$14.

Good to see some relief for LTHs, and from an unexpected source - EP155.

Looks like MSMN got their cash investment in EP155 back, circa Aus$20K. A modest sum, but if the framework of this deal can be repeated on EP145 that would be several Aus$100Ks cash back. No guarantees of course. I continue to watch the Mosman story unfold with interest.

I think I saw Spary1 posting this morning, new name, same old spiel, but more restrained than usual. Doubt that will last long.

I sense Boris pulled back on opening schools sooner (Sturgeon influence?) – maybe half term impacted, but who needs a half term after the recent closure. Otherwise, the plan makes sense to me.

Good to hear a strong call to get construction and manufacturing open. Although the big house builders had already said they were reopening, the call from Boris lends support.

Following the statement, I detected a conciliatory tone from Sturgeon. I wouldn’t be surprised to see construction in Scotland getting the green light very soon – perhaps by this time next week. Should be remembered Scotland only has a population one tenth of England, and less in terms of economic value, but there’s no doubt Sturgeon punches above her weight. Breedon’s weighting to Scotland is around 20% of revenues – reducing over time.

On the negative side, talk in the Scottish press is that the finance minister is moving money to the current budget from the capital budget. Socialists never change. Without the occasional outbreak of financial discipline and capital spending, a socialist regime only goes one way – Soviet Union, Cuba, Venezuela, Zimbabwe – Scottish Nationalists take note.

oops, I hit the post key before completing. Continued:

But another key condition is the 'Debt Condition', namely, Cineplex shall have no more than $725 million outstanding under its credit agreement., on or prior to June 30, 2020 (the "Outside Date").

Cineplex has delayed the publication of its results to no later than 29th June - the day before the "Outside Date".
In a recent briefing on Cineworld Moodys did not expect the deal to go ahead as outlined.
The Cineplex share price sits at c$14, well below the $34 offer price.

I suspect Moodys has it right. The question then is, are there revised terms?

Cineworld reaffirms plans to close deal.

I guess the fact id, Cineworld are legally obliged to close the deal, subject to certain conditions. One condition is the agreement of the Canadian regulator - I don't know the status on that agreement - but another key condition is the 'Debt Condition' - Cineplex shall have no more than $725 million outstanding under its credit agreement

My interpretation of the Q&A discussion was that Kraken was NOT included in the Q2 'hedging' programme.

A $10-$12 seems high to me but I guess it would need to be substantial for it to be treated different to Brent production. Or perhaps the spec for Kraken production ( I understand it has its own specification) does not satisfy Brent oil deliveries.

I was confused by the commentary around the Q2 hedging. Was there a premium or was it that the large discount to Daily Brent had been reduced? The H1 numbers will reveal all.

A correction to my earlier post.

I've learnt that the UK furlough scheme extends several weeks into the future, possibly to the end of June which makes the gist of my post redundant.

The UK may have pushed cinema back in the chain of 'openings', we should get some insight on Sunday, but that might not be a bad thing. The first blockbuster is Tenet due for US release July 17th. There may be an argument for a preliminary opening a week or two ahead of that - I trust Mookie to make a good call. But if the UK decides that cinemas can't be opened before say, the end of June, then presumably the furlough support will also be maintained until then. Otherwise 8 weeks is a long time to be showing re-runs.

The UK plan is to reduce the support over time to encourage companies to get back to work, but if they don't allow the likes of pubs, restaurants and cinema to open surely the full 80% should be maintained.

There's much talk about the R number etc. I understand the maths and have an R=0.8 on UK deaths (R data from Scotland supports my numbers). While the lockdown is maintained the R number will come down further, but if any relaxation just holds the R=0.8 for 8 weeks it will have a dramatic impact on reported deaths. Circa 600 per day today will be circa 100 per day by the end of June. Of course if R returns to '1' then there's no change.

I point out these numbers to make the case that we could be in a very different world by the end of June and many of the concerns the general population have about their safety today will have eased, even without the measures which will be put in place to isolate within the theatre.

The fly in the ointment is the US. I'm less certain they can manage an effective release from lockdown, but I'm hopeful. That represents 75% of Cineworld revenue, so fingers crossed.

Hi romaron, you ask, " Is it time for EnQuest to roll over the remaining SFA loan due Oct 2021? I fancy they'll do it with about a year left but is there a period that the credit agencies like or prefer? Do we start worrying if there's only (say) 6 months left? L7 or HMH comment?"

I'm sure your assessment is as good as mine. I'd be very surprised if no action is taken this year. Also, when creditors accept a relaxation, they typically look for additional equity to be put into the business by shareholders. Rightly, or wrongly, I'm quite relaxed about that possibility. I looked in some detail into the placing a few years back and the retail shareholders didn't come out too bad, but that may have been due to a supporting recovering oil price. We may see a similar pattern later this year. I haven't looked so closely at the events around the recent Rights Issue - I keep meaning to get around to it.

I suspect that a Rights Issue is more likely if some sort of transaction is announced alongside - perhaps something in relation to the licencing round. Speculation on my part.

If a $40-$50 oil price is on the cards later in the year that will support the loan talks. I've no doubt that AB's reference to 'fantastic cashflow's (I think that was the phase) at those prices was a nod to the creditors rather than the shareholders.

Today, at First Ministers Questions Nicola Sturgeon is sending a clear message to Boris, it's my way or the highway. Okay, not those precise words, but I see a marked split in the response between the UK and Scotland if Boris announces any significant change in lockdown on Sunday. Of course Boris may pull back in response to Sturgeon's threat.

A possible relaxation in construction - to any proposed UK change - is the only concession I can see .

"This means that it is a buyers market in the North Sea. Can AB resist?"

Until an RNS is released we can't be sure what is going on. Perhaps AB made an offer when oil was at $65 last Dec , Exxon turned him down, and today AB is sitting in his office wiping his brow, 'phew, that was close!'

That said, I understand all of Exxon's interests in the North Sea are minority holdings operated by Shell and Equinor. I'd guess those are not the type of assets ENQ would target.

I see three key areas of focus for AB over the coming months, in no particular order, Magus type acquisition opportunities, refinancing the c$425m due for repayment Oct 2021, and the outcome of the 32nd licencing round due this quarter (Q2).

The licencing round could be interesting, with The Dons looking underused and, as HMHn pointed out recently, an FPSO going spare later this year.

One would think he has a busy desk, but he say's he has "a lot of free time on his hands, so I'm noodling through these things" (Wikipedia - Noodling as a term has also been applied to various unconventional methods of fishing)

Perhaps he fancies himself as a member of 'Sage' rather than an oil executive. I see from today's front pages there's a vacancy.

Ade1234, thanks for your general comments. I've been invested in Breedon for many years so I understand the cost structure.

I'm interested in what you see specifically at the facility you work. Is it a quarry?

When demand peaks at your facility what is the impact and how is the impact alleviated to increase supply?

Ade1234, I'd be interested to know where the pinch points are in the business.

I understand the business, in the main, operates at a nominal level of fixed costs. As demand exceeds the normal levels at your facility, where do the pressures on supplying product first appear and how are they alleviated?

1st Oct 2019 Martin Houston bought 500,000 @19p.

Generally, non execs only have a nominal holding in their hobbies.

Shame you didn't come back as '10p Party'. You could have put a floor under the price ;-)

I said, "if the water cut from 7z continues above the FPSO handling ability. "
I should have said, "if the water cut rises above the FPSO handling ability"

And, to adoubleuk's later point, when I refer to 'current configuration', I'm referring to the choke settings.

I agree with nicktheglobe's comments, but would also point out copyright laws.

Anyone generating good original content deserves to be rewarded for their efforts. The good stuff generally comes through the medium of our quality press. There's plenty of 'free' junk available on the internet, with associated 'click bait'.

I'm far from perfect in this regard, but try to limit myself to links or typed copy of key points - in its way a form of 'click bait' for the publication.

adoubleuk, interesting comments as always (when on topic ;-))

I agree with your comments on the tie in of Lincoln, but take issue with your comments on the option to re-enter 7z.

Lincoln - I don't follow this board closely so wondered if I'd missed something on the issues around the tie-in. I follow the RSN updates closely but didn't find them illuminating on the topic. In a way, good to see I'm not alone in failing to see the full picture.

Rightly or wrongly I'd assumed that it was a problem in the HUR/Spirit partnership that had put the tie-in off course and the OGA had subsequently taken the option off the table. Now it seems the partnership want it back on. I'm a bit confused by the is it, isn't it needed, WRT the WOS gas offtake. But that's history, I guess we'll know the outcome later this year.

7z - the issues with water are well documented. I think the debate here has little relevance to the HUR share price, although I know that retail investors have a larger than usual holding in HUR as opposed to most North Sea oil companies. Is it perched water? I think Dr T presented good arguments to settle the question, but the fact is, the water cut is increasing and Dr T updated the market on his options. I for one am relieved that there are options if the water cut from 7z continues above the FPSO handling ability. In the current configuration I calculate that the water cut will force a change in configuration at the 43% level. You point out one option, if available, move to ESP on 6 to maintain high production - that was a known option. We now know of another option, isolate a section of 7z, albeit at a cost of $30m-$40m, and an interruption to production (I'd rather an interruption to production with oil at $30 than oil at $60.)

You say, "Such a notion should never even have been mentioned. Not to cover anything up, but simply not to give non-experts any new ideas to worry about."

I think retail investors should get the same facts as those known to the institutions, and other well informed investors. If the picture gets distorted on this board, as it will, it is for investors here to sort the wheat from the chaff. Which they should be doing anyway.

Oops, beaten to it.

On operations, one interesting point is that The Dons are under review. But then I guess we knew that!