Member Info for londoner7

If Enquest want to report any 2020 hedging next month now would be a good time to act. Let's not be too greedy on price.

Skeletor, in theory the precise split is now known so relative changes between the GFRD and BVS prices today reflect expectations for the new GFRD shares tomorrow. But because tomorrow we will be 6/7ths holders of BVS and 1/7th holders of GFRD the residue value attributed to the new GFRD share is the difference of two large numbers so is very noisy, around +/-20%, but I have it currently at about 107p.

The 50p is a nominal share value and has no relevance to tomorrow's opening.

Therapist,
Positive comments - I like the notes alignment to rows.

Constructive criticism - ask yourself, what are you trying to achieve? Personally, I have little interest in the P/L side of the account. I'm interested in cash flows available to fund CapEx and pay down debt, so I view many of the component parts such as finance costs differently in cash flow terms to how they would be treated in a P/L statement. In non oilies I would have greater focus on the P/L.
There is a lot to detail going into the revenue number $1,542m. Break it down to H1,H2, or Q1-Q4, but beyond that? My approach is 70K boepd x 365 x $65 x 0.95 = $1,578m. (95% being the sales number after shrinkage. Gas doesn't seem to be much of a factor after cost of sales adjustments)

The cash deductions have been discussed at length on this board with a focus on determining their real cash component rather than their accountancy (P/L) value. Lease payments, Vendor payments, Op Ex, Cap Ex, cash interest, Admin, Decom, Legal, etc.

Some curious numbers in the bottom section. When I use a calculator I was taught to have a number in mind before I press the '=' key. I'm not clear how you get to $0.27 EPS, it seems ballpark correct, but you've dropped a few decimal points on the EOY $ SP of $28.65. Don't you mean $0.2865, which would give you a very different PE number, closer to 1 than 100.

I don't see how you came to a EOY net debt number of $1,100m.

Now to those long awaited OAG numbers.

Best.

Just a thought on the structure of any JV on EP-145.

I don't know the detail of CP's agreement with Santos - I guess it's somewhere in the public domain - but a comment in a presentation slide suggests it was cash for a 40% stake, increasing to 70% stake on completion of the well.

I'd like to see a similar JV structure here.

From a recent update. ‘The objective of the presentations was to seek joint venture funding on EP-145 in order to enable seismic work to be completed during the 2020 year and subsequently drill a well.’

If previous years are a guide the cost of the seismic work for 2020 will be at least AUS$ 150K. In 2018 it looked to me like Mosman’s interest in EP-145 had stalled with focus and investment turning to the Baja alliance until CP’s Dukas well showed promise, raising the prospect of a JV on EP-145 which has been Mosman’s goal for years.

I am expecting news very soon on the JV. If it happens that should be very positive for the share price, with the terms of the JV guiding valuation.

If the other party declines to join the EP-145 venture, ask yourselves what Mosman should do? I think they should immediately relinquish the EP-145 license and return focus to the Baja alliance, with development of the Falcon prospect which I see as the most likely route to being profitable at a company level, but this will need funding.

From the Nov update. ‘Mosman expects to provide a further update on the timing and funding of the Falcon well in due course’
I was surprised but encouraged that Mosman did not seek funding prior to the half year closing – that has been the recent pattern to bolster reported cash levels in the subsequent report. Perhaps the terms of a JV will allow funding of the Falcon well. That would be a great outcome but I don’t see it as a slam dunk!

I think you're both getting too far ahead of events. These are 'unrisked prospective resources'.

This is still an exploration prospect.

We always knew there were free slots on DC2. The technical stuff related to the possible use of ESPs as the FSPO didn't have the capacity to support additional water heating/ injection, or perhaps it was the 'real estate' on deck to accommodate it - at least that was the assertion. That's only my recollection - it was several months back.

On Maureen, I had the impression from the CMD that there are other Western Flank opportunities before Maureen, e.g. Pembroke appraisal - Antrim and Barra evaluation. But can't be sure of timing. However, once the Drill Centre slots are full I guess any additional wells will be replacements for existing wells.

The same slot restriction applies at Magnus. In a recent update I think Enquest used the term, 'recovers slots', which I took to mean abandon current wells to make way for the new and higher producers. The RI doc page 168 has a snap shop of the current well stock and the individual well production in June 2018. Net gain in production is new producers minus old producers. Something to bear in mind when totting up production.

A few months back I was involved in a discussion here on technical challenges relating to the Worcester development and it influenced my thinking around the next maintenance cycle, i.e. it was likely to be an extended one. Text from the transcript of the H1 call suggests otherwise:

'The Worcester development is the first such program, and there, we're targeting about 11 million to 19 million barrels of STOIIP within a larger area of about 100 million barrels of STOIIP in the greater Western area. We plan to drill one producer-injector pair, and we'll do that using spares lost from DC2 -- from the DC2 subsea manifold. This will help keep development cost low at around $14 a barrel and allow production to come online immediately without further high-end work.'

I note the specific reference, 'without further high-end work'. It makes me wonder if IR had seen the discussion here and has put this out to essentially say, 'stop the nonsense'. Either way costs around $14 a barrel doesn't suggest anything too challenging.

chilling, yes that could be a factor. Enquest do talk about a level of optimisation between wells. Just commenting on what I see in Therapist's charts, which supports a post last week referring to a response from IR.

gkb47, I said a 'clear decline' not a significant decline'. There is typically a flush factor which I'm also attempting to look through. A factor we'll see play out at Scolty/Crathes over the next few months as we saw at Alma post the new ESPs.

Hi L3Trader, thanks for the additional detail.

As they say, it takes two to tango so thank you for your informative posts.

Festive greetings to you and yours.

Hi Therapist, yes interesting.

I haven't split out Kraken North from Kraken before. I'd say a fact of the industry is that all fields are in decline. A factor that might disguise that is operational performance be it up time or in some cases water injection rates. With that in mind I believe Kraken North is showing a clear decline and Kraken shows the benefit of dc4 in early 2019.

Is your trend line a manual fit or calculated within the spreadsheet?

gkb47, I wondered if your number included gas, hence boepd.

gkb47, just to be clear. Do you mean 75K bopd or 75K boepd?

Correction: Enquest Producer (Alma field), not Norther Producer.

MO, I find this whole Betty episode odd.

I noted Betty hooked up to Northern Producer for 18 hours. I'd be surprised if no oil was offloaded, but who knows, I've noted hook-up exercises before.

Then yesterday I thought Betty had hooked up to AK mid afternoon and detached at 11pm, so I was surprised to see her back on this morning.

Perhaps AB has hacked into Marine Traffic and is just having some fun with the tanker watchers here.

hitman1a, in the latest update Enquest said, 'the Group is starting to review the potential for developing the Maureen sands which lie directly beneath the existing reservoir.'

I took the use of the term 'developing' to mean Enquest already has some insight into the potential of the Maureen Sands.

Enquest did appraisal drilling in 2014/15. I found this online.

'Three well appraisal programme to acquire data and determine reserves to support field development plan. Main hole targeted Heimdal III geobody (Tyrone) and well 9/2a-7Y Heimdal I geobody (Tiree) with 9/2a-7Z a horizontal geotechnical well to evaluate injectites and Heimdal III sand on Kraken Central. Tyrone objective absent in main hole, with 32 ft oil column in unprognosed thick Maureen Sandstone from 3,985 ft TVDSS to oil-water contact at 4,017 ft TVDSS. Well 9/2b-7Z drilled full oil column in massive Heimdal II sand. Well 9/2a-7Y encountered oil in thin-bedded Heimdal I to III sands at 4,677–3,828 ft TVDSS and 98 ft column in Maureen from 3,920 ft to oil-water contact at 4,018 ft TVDSS with residual zone down to 4,070 ft TVDSS.'

In the FT a panel discuss prospects for 2020. Unsurprisingly the views are very negative towards the oil sector and investment in 'non-sustainable' resource generally. To make the point there is a very amusing observation from a recent oil conference in Aberdeen - I'm sure it goes down well at dinner parties. Best read in context, I wouldn't want to spoil it.

An interesting point made about the oil sector, is that the focus will be on cash flows rather than assets in the ground.

In my book, it's always about cash flows. I'm reminded of the tech boom running up to 2000. Then it wasn't about cash flows but clicks and views, while companies in the tabacco sector were shunned in spite of good cash flows, in large part because of poor market sentiment towards the sector.

We know what happened next. While some of the tech stocks went on to great thing the vast majority were hammered, while some like Vodafone just hung in - decent dividend but the SP is still off by 60% from it's 2000 peak (there may be some capital movements I'm missing but you get the gist). You had to be a very good stock picker in the sector.

Whereas in the tobacco sector you could pick one blind folded. Take BAT whose SP was up 20 fold by 2017.

They say history doesn't repeat itself but rhymes.

Wish I'd bought tabacco
Taking a dip in oil

Okay, I'm no poet but you get the message.

In the FT, the yearly look ahead discussion includes the question, which sctors and stocks hold the most potential in the year ahead? JG Head of Lex, says, 'Cinema stocks have been bashed by the rise of streaming and gaming, but this is one area where the Lex team thinks the correctio has gone too far'

A 'Cinema stocks' link goes to a premium Lex article title, ' Cineworld/Cineplex: Captain North America'. I don't have a premium subscription but I'd guess from the reference that the commentary was positive on the deal.

Ajes. thanks for your update. Ahead of the official guidance at the trading update in Feb it's understandable that IR would ire on the side of caution. As I've said there are many unknowns currently around the schedules. They'll be greater clarity in Feb. It's good to know what IR are saying at the moment and it ties in with a comment the Barclay's analyst made within a question at the CMD which didn't draw a response.

HMH, thanks for the clarification. 400K is additional charter costs, and 35K is NET to Enquest.

I might quibble with the numbers but I'm now clear about what you said. Cheers.