Member Info for londoner7

Therapist, thanks for the insight on shrinkage (difference between produced volumes and sales volumes).

It reminded me of my confusion around the Oct OAG number posted Jan 1st. However, looking back I think I must have still been under 'influences' because with my February head the IR comments on the inclusion of Magnus fuel gas in Enquest reports from Oct and backdated to the beginning of the year now makes sense.

Early in the year I said, 'but I don't see all of the 1.700 boepd adjustment over the 10 months to Oct being due to Magnus gas. I'm confused by this!'

All year I've been using 2,068 boepd for Magnus fuel gas, which was my estimate, and like Enquest (until Oct) I hadn't been including it in my assessment of Enquest production. This explains why my numbers had been in agreement with Enquest reports of boepd up to and including the H1 results. It also explains why the reported 68,501 boepd in the ten months to end Oct prompted my unrealistically high expectations of the Sept and Oct OAG data.

Bottom line, I need to add 2,068 to the 67,543 I estimated earlier for a total 69,611 boepd Nov production number.

It looks like we're in agreement.
gkb47 - I agree with your net NS 57,218 bopd number which is a good test of my manual entries (I use a bespoke sheet)

Therapist - I have a net 'company reporting' number of 67,543 boepd - very close to yours.

Scolty came good, S/C combined came in at 14,283 bopd (gross) just shy of the Sept number which had that spectacular initial flush from Crathes. I'd expect this Nov net number for S/C of 7,142 bopd to decline towards 4-5K in the next few months as the flush effect wears off.

Good news at Magnus. Although there was a slight decline in oil production, which may be due to old wells taken offline to make space for the new wells, it looks like one DA tower for water injection is fully back on (147Kbwpd). The 2nd is expected in H1. It will take a few months for reservoir voidage to recover, which in turn will lead to oil production back towards 16-18Kbopd. This should now get a mention at the next update.

On AIS GPS positions I've got <400m. Unless they separate I've putting 19:00 into my sheet. But it's the detach that counts and I'm expecting it at 10 pm tomorrow for an 11.5 day turnaround. All weather issues unwound and a decent >40K close to Jan.

Looking out for those OAG numbers.

Interesting comments here on the relative impacts of conventional flu v this Chinese version. Time will tell.

With two important updates due in days I guess it shouldn't be a surprise that speculation here mounts, and I can't resist a piece of it myself.

On numbers posted important to point out that Pelle is referring to boepd and Ajes to bopd.

The <$1,500m net debt comment was made 21st Nov and the oil price behaved through to the end of the year. I guess Nov prod was in the bag with Kraken looking at it's best ever month, but issues in this game can come quick and Enquest are not always upfront on problems until after they have been resolved, take Dons and Heather early 2019 and the recent issues with Water Injection at Magnus which have yet to get a mention in updates, but known to the market. That said I'm expecting Enquest to hit their <$1,500m debt target but I'm as interested in the impact any reduced or deferred Cap Ex has on the year end debt number.

This weekend we should have the OAG Nov productions numbers (they sometimes post on a Saturday). I'm looking at four areas, 1 - S/C production, as I think the Nov number will mark the high (flush etc), 2 - Magnus, specifically water injection rates, 3 - what should be a great Kraken number (albeit has fallen back a little in Dec/Jan), and 4- the overall number to gauge the other fields.

Next week we may have the long awaited trading update with 2020 forecasts - I can hold off on speculation.

On todays PIK news - as expected. We should expect the same again in 3 months time on the next bond interest payment. As I've said previously interest payments deferred so monies available today to do what…. payoff the BP vendor loan?

wisdom, you ask, 'Wonder how much AB has made on his purchases at 16 - 18p?'

That's easy, 72%.

But you made me wonder about his earlier purchases and the impact of capital restructures.

In 31/5/11 he purchased 922K shares @ 131.95p for circa £1.2m. Based on a quick look that seems to have been the highest price he paid but he made other substantial purchases in 2011 at around 100p per share.

But there are other detrimental considerations - Rights and placings - which have diluted those holdings. There were placings in Oct 16 and the recent Rights Issue in Sept 18.

One way of assessing the dilution is to consider the number of shares in issue in May 2011 (802M) and the number in issue today (1,695M), representing a dilution of >100%. The relative market caps are May 2011 (£1,058M) and today (£496M).

I don't think AB will be cracking open the champagne just yet!

Over the years there has been many trading opportunities in Enquest but IMO it has never been a good investment. As an investor rather than a trader I need to consider if it's different this time. Early in 2019 I felt it was and as my knowledge and confidence grew during the year so did my investment.

Early 2019 I saw a company under the cosh from many quarters, Cairn, Barclays and RBS to name a few - those broker summaries can still be viewed on Investors Chronicle, which basically pointed to Enquest falling the wrong side of hitting the RCF repayment schedule based on anticipated Cap Ex and Oil prices. In the event, oil prices were slightly higher, Cap Ex appears to be lower (to be confirmed next month) and the RCF payments were made ahead of schedule. It appears that the brokers recognise that outcome and the recent CMD suggests a plan for fast payback and good returns on organic investments over the next few years with upgrades to price targets - that said, I'm more interested in the detail of their assessments than (IMO) a meaningless price target - does 40p make ENQ a sell?

To date Enquest management hasn't been up to the task of developing assets, A/G being one example and let's be frank Kraken may be throwing off cash now but a decent return on the original investment is questionable. I think the Magnus transaction has marked the turning point and in spite of the odd operations challenge may be the feather in management's cap – in particular the repayment structure. Risks abound with aging infrastructure but I see a greater risk with an overpriced NS acquisition. Magnus was timely, and credit to AB, brave, but the recent PMO acquisition isn't as attractive and probably represents the higher price now being asked for the oil majors North Sea cast-offs. I think the upcoming licence awards may represent a better path to growth.

Today I see a better investment case for Enquest at 30p than I did at 20p last May. I'm sticking but expecting a roller coaster (and an occasional scream).

This morning I noted the penny traders coming 4 weeks late to the party -

'Net Debt' of $7B and increasing with the proposed Canadian acquisition.

But I guess you know that over $3B of this is attributed to IFRS 16. It is right to take this lease impact into account but it doesn't incur a cash interest charge. A small but important detail.

The only guidance I have seen is that they are targeting 3x cover on pre-exceptional earnings - this is in the prospectus.

Thanks for the heads up. It was clear from recent updates that its end was nigh.

I don't believe it represents any significant change in fundamentals. The 2K bopd recovered in 2019 will largely be lost from 2020 production but the decision will be based on an assessment of profitable cash flows - I'd guess the OpEx on the field is significantly above the current $20/boepd reported at the interims, so the operating cash impact will be smaller than the production volume impact.

The decommissioning provisions and 2020 cash costs will be interesting - these should be reported at the finals in March. Unless there's been any unexpected developments in the OAG review previous decommissioning provisions should now play out (which incidentally will include any residue value in Enquest Producer), but the confirmation of timing (COP in 2020 Q2 most likely) will bring clarity on current provisions, i.e. cash costs in 2020. The timing of the documents suggest any impact may already be captured in Barclays and JPM assessments but they are not captured in mine, or I suspect other PI forecasts, which supports my argument for holding off on any 2020 forecasts until the 2019 report is published.

I'm sure Enquest will be happy to draw a line under this $100 era project. In 2012 it probably looked a low risk play to re-enter an abandoned field at a 70% water cut, but I don't think the numbers ever looked compelling. The best 2P number I saw was 29Mbo (gross) and they spent over $1.5bn (net) on CapEx. At $60 oil and a likely 8Mbo recovered by COP, 5.2M (net) my calculator says 'ouch!'

That's expensive 'on-the-job' training. I'm glad I wasn't invested at the time. With similar opportunities(?) perhaps coming up with the new licence round hopefully Enquest has got better with the maths. I for one, will be watching closely - I'm an investor, not a disciple.

An interesting discussion on Kraken pricing.

A good point on the IR update from October, 'Oil from Kraken, which has its own Benchmark and is paid $3-5 over Brent.' That was then, what is it now. Until I saw the article on the $25 premium for the special Australian grade I thought the talk of premiums to Brent was 'pocket change'. But as HMHm points out we could be talking serious numbers.

Also an interesting angle raised by chilting around the Alma shenanigans.

But bottom line it will come down to comment from Enquest either in a trading update or the next Q&A session if someone thinks to ask the question on whether a significant premium exists. After all it should be in Enquest's interest to highlight it.

I'm not sure why but I find the image of HMHm getting a hug from anyone a little disturbing. ;-)

[Upgrading JP Morgan’s rating for EnQuest, to ‘overweight’, Thompson said it may see the most dramatic positive impact.
He provided commentary around what he emphasises is a “catalyst driven” sector, saying: “Most dramatically, the improvements made by EnQuest now allow it increase drilling activity which underpins stronger NAV and CF outlook, this drives our u/g to OW.]

'increase drilling activity', now where did I see that? Oh yes.

Looks like JP Morgan's copy of the CMD presentation was stuck in the Christmas post.

Market sentiment is poor towards the industry. It's awards season so the challenge of streaming services and alternative ways to consume the latest blockbuster are very much in focus.

Yesterday, the share price of Cinemark, 3rd biggest player in the US, hit a four year low. AMC the biggest player in the US is doing worse, but it's been a poor performer operationally for years. In the US the battle for bums on seats is likely to be between Cinemark and Regal (the Cineworld brand in the US).

There's no doubt the market is in decline as it has been for over 50 years. The question is, is the decline slow enough to allow groups like Cineworld to maintain those juicy 20% EBITDA margins? I guess the Greidinger brothers believe it is, which is why they are expanding into to Canada with their latest acquisition. But cinema is the only business they know and perhaps they don't see the threat of streaming, having dealt with the impacts of TV and VHS. Some people still like popcorn with their movie.

So will cinema still get sufficient bums on seats to remain profitable? The Greidinger brothers are betting the business that it will.

As investors we're free to choose to pick and choose.

Tempus has an article on Cineworld in todays Times. It offers a well balanced view.

The deal isn't conditional on the CMA. They will look into it and where there is a local issue require Breedon to take action.

The competition issues are usually around RMX sites. In the past Breedon has been very good at identifying the impact of CMA assessments ahead of time. I'd be surprised if Breedon hasn't already drawn up a list of impacts/potential site disposals.

Excellent news. A decent sized acquisition using existing debt arrangements and no dilutive placing.

Puts the dividend I'd been hoping for back a couple of years but I'll take this as a better investment of recent FCF.

There's a presentation on Breedon's website with more detail.

https://www.breedongroup.com/images/uploads/articles/CEMEX_presentation.pdf

TW, I'm still waiting for the detail of the 2019 numbers, which might come with the update in Feb, before I'd want to firm up anything for 2020, and key to forecasts will be production guidance, which if you've been following this board could be up, down or similar to 2019.

There are still many moving parts - new wells, field declines and fixes due - but with today's news of activity underway on Thistle, I'm confident that ENQ will be in a position to provide accurate guidance on 2020 production at the next update, still a month away unless they decide to jump the gun on Cairn's update. (But not sure why they should as Kraken at circa 35K gross for 2019 is pretty much assured and known to the market)

Hi romaron, Your speculation is correct. I've just found this in the detail towards the end of the RNS:

'In return, the lenders will receive enhanced economics including an average margin uplift of 1.6 per cent. over existing pricing, amendment fees of 0.25 per cent. and a repayment fee of 0.75 per cent1. The margin uplift will be applied for the period from the extension effective date until the full refinancing. A harmonised interest rate of 8.85 per cent., based on current LIBOR rates, will apply to all Premier’s cash credit facilities from the extension effective date. '

Good to see ENQ debt profile improving. On the retail bond the next PIK event occurs 15th Jan and on High Yield 15th Mar. A $65 Brent average will not be achieved for the first date and need a $70 average from here to hit $65 average for the 2nd date. IMO both will result in PIK payments, but that $34m interest added to debt is still cash available to pay down the RCF if the net debt metric is key or the Vendor Loan if it assists any re-financing later this year - I believe Oct 2020 is still a key date on financing.

My reading of AMRC's position, based on posts to the PMO board, is that theirs is an arbitraged deal. Typically, these companies will, if the opportunity exists, attempt to de-risk the eventual outcome and move on to the next deal. However, it's possible that not all eventualities are covered. Perhaps part of the remaining risk was that PMO would extend the funding and AMRC are not happy having capital tied up for a further 2.5 years. Hence their objection to the extension. Speculation on my part.

But in the call PMO stated that they are close to securing agreement to the extension. The 8% element due to the retail bond should see them over the line helped no doubt by the proposed increased coupon on the Retail Bond from 6.5% to 8.25%. I doubt if PMO give two hoots to the position AMRC has established nor should they. Clearly other creditors are happy with the outcome.

To the wider picture, the reaction of the market to the (legacy asset) deal is good news for the likes of ENQ who are likely to be presenting their own NS deal in the short to medium term. Magnus is well digested and we may see the Vendor Loan fully repaid this year to assist re-financing. Who knows when the RNS will hit the tape.

Great to see the photo of action on Thistle - humbling for this sofa based investor, and the partial Kraken offload this morning which should have allowed continued 40K+ production. I'd guess the NO will sit out the storm near by before returning to complete. Who knows these days what logistics Ops have in mind, but I'm sure they're on the ball.

'1,000 Galliford shares plus 5,739 Bovis shares'

No 10 bagger here. 573 Bovis shares per 1000 Galliford.

Investors Chronicle has a takeovers section.

darkhorse1002, I suspect you have misinterpreted my post to support your own position.

Most construction companies, Balfour, Kier , Morgan Sindall trade on a significant premium to tangible net assets, much >> than 30%. If you want to use this measure then the new GFRD shares look very cheap. But I don't presume to make recommendations one way or the other on bulletin boards.

I don't know where you dug up Infrastructure India. It looks like a speculators penny stock. I'd never heard of it and best forgotten.

darkhorse1002, I'm not sure you are representing my post correctly.

The 92p price for the new GFRD shares is the price I determined the market was valuing the business based on BVS and GFRD shares on 3rd Dec. Yesterday afternoon I posted here that pricing pointed to 107p. At the close pricing pointed to 117p. That's the market valuation not mine.

The valuation I presented in my post was that my determination of net tangible asset value was £151m and indicated that 92p was a 31% discount to this value, so 92/(1-0.31) = 133p represents the price at tangible book value.

I would be surprised in the new shares didn't settle at a premium to book value. Currently that premium is around 30%. As an investment from here I'd like to see the new CEO outline plans and prospects for the future.

The bigger question for the original GFRD holders is what to do with their BVS shares as that represents 6/7ths of the original capital.

Congratulations to any traders who got into the new shares early this morning - not my game.