Member Info for londoner7

MO, you say, '80% of US production is made-up of wells producing < 15 BOE per day !!!'

Interesting!!! That's a page turner, but I suspect you're looking at Fig.1 'Total wells'.

Fig. 3 has total oil production. and shows your <15 BOE per day around 7%.

Thanks Therapist, after posting I remembered Enquest gave guidance for Magnus 2020 in their RI prospectus. It's 19,094 bopd and approx. 2,000 bopd gas for a total of 21,094 boepd, so I guess your showing Magnus you pessimistic side and favouring Kraken. The prospectus doesn't include new wells beyond this year but the CMD chart implies approx. 1K bopd p.a. growth out to 2024, which would be the 2 wells per year they highlighted, and would be replacing existing wells as they are maxed out on slots. (Just thinking out loud now).

Back to 2020. The Magnus guidance assumed a higher water injection rate but I'd be disappointed if they didn't make your number. Now I'm wondering what you have for Kraken to get to 79,600 total, but I'll leave it there. Only 6 weeks or so to the guidance.

Best londoner7 (on tour)

Therapist, I'll be disappointed if 2010 guidance doesn't exceed 2019, which is a recent change for me, but I guess I'm not totting up the additions due to new wells in the same way.

Out of interest what's your 2020 boepd number for Magnus?

HMH, I see how there might have been a 4 day delay due to weather, but I don't understand how that translates to 'we wasted almost 400k + downtime of 35kbopd/day for 4 days'.

Can you clarify?

Mo, thanks for the numbers.

That should have read, She isn't very BIG.

Odd. She isn't very - unless I've misread the data.

Perhaps a partial offload, with a full offload in plan before the end of the year. Maximising production on the cash side rather than inventory side of the balance sheet helps year end numbers. Just a thought.

svensson, there's no doubt that Thistle and Heather downtime will impact into 2020, but neither of these fields recovered their mojo post the summer maintenance cycle so their impact may not be so great. That said, I'm expecting (hoping) that these fields will have shown some recovery with the Oct OAG numbers, albeit for only three weeks of the month, which would bode well for their eventual fix. The timing of the fix, early, mid or late H1 will have a significant impact on the 2020 outcome. However, I think Kraken and Magnus will be the main drivers.

For these reasons I think a good approach is to assume same again production and oil price numbers, and as you say, anything else is a bonus. I'm looking for high 70s over the last two months of the year to close out at the top of their 63K-70K 2019 guidance. In light of issues, which I guess should be expected of a mature fields operation, I think that would be a very good outcome.

But the Feb trading update and guidance will be key. Enquest will have a clearer idea of the timing of fixes across the board and a level of confidence in Kraken (if current performance is maintained), which would give ME good confidence in their guidance for 2020 production and costs.

In a couple of weeks six/sevenths of my investment in Galliford with be converted into the highly politicised realm of house builders through Bovis. I've been wondering what to do with this part of the investment. A recent article from the news letter UK Value Investor on house builders helps.

https://www.ukvalueinvestor.com/2019/12/invest-in-uk-housebuilders.html/?mc_cid=30552ed3de&mc_eid=9507ccda2d

5.0x?

They are referring to net debt/ EBITDA metric often used to assess the weight of debt on a company.

In the Cineplex presentation guidance is given that the post synergy acquisition of 6.3x
Targeting 3x by end 2021.

Moody's are guiding/supporting around 5x by the end of 2020, which seems in the ballpark with Cineworld's numbers. My key takeout from Moody's outlook is that Cineworld's credit rating is unaffected by the acquisition so they should be able to secure and maintain similar debt interest rates. Similar interest rates were mentioned in the response to a Q from an analyst at the presentation.

I was very surprised by the news, but encouraged by the boldness of management considering market concerns around lower box office in 2019 and the competition from streaming. Incidentally, on the call they guided to a 2019 US box office of +/-2% compared to 2018.

I'm holding off a closer look at the numbers until the 2019 finals are posted.

Moody's Investors Service said on Wednesday it has affirmed the B1 corporate family rating and the B1-PD probability of default rating of Cineworld UK Holdco Ltd.

Moody's has also affirmed the B1 ratings of the outstanding USD3,375 million and the EUR212 million of senior secured term loan B borrowed by Crown Finance US Inc and the USD462.5 million senior secured revolving credit facility borrowed by Cineworld.

Moody's also said the outlook remains stable for both entities.

The rating action follows Cineworld's announcement that it has agreed to acquire Cineplex, a cinema operator in Canada with a 75% box office market share.

Gunjan Dixit, Moody's Vice President - Senior Credit Officer and lead analyst for Cineworld, said: "Cineworld's B1 corporate family rating will be weakly positioned in the rating category following the acquisition of Cineplex."

"Although the box office will likely not be particularly strong in 2020, we expect the company to de-lever towards 5.0x by the end of 2020 mainly helped by EBITDA growth from synergy realization as well as some debt reduction," Dixit noted.

Moody's said the stable outlook reflects the expectation that Cineworld will close the acquisition of Cineplex in accordance with the timetable outlined and on the terms announced.

Cineworld shares closed 1.9% higher in London at 227.40 pence each on Wednesday.

There's an interesting article in Investor's Chronical on the structure of the AIM market. It includes areas which are often discussed here, placings, leaks, etc.

It's a long article and (aside from copyright issues) I don't want to post excepts here because it's best read in the whole. If you're not a subscriber I believe you get a free article if you register - that used to be the case, don't know if it still is.

I'm going with 22:00 disconnect, just over 15 days and 566K offload tops equals 37.35K boepd. Could still be a nominal 500K offload but I see the delay as a weather impact so okay. I've no worries with current Kraken performance. Let's look out for a weather unaffected load # 54 to confirm.

Hi Qq22, I'm still here. Breedon is one of my core holding, but like all of my core holdings, once I established a holding I also operate trading blocks and the recent liquidity events around placings of one type or another have produced plenty of opportunities. Yesterday I closed some of those trading blocks.

But my core holding is intact and I'm happy with my position here.

The concern I expressed just before the interims was on margins. As I updated after interims the following day, the revenue was light but I was surprised the margin held up so well. One take out from the subsequent web call was that the maintenance of one of the Hope kilns had been postponed to H2, for operational reasons. While this makes sense I felt this postponement would have helped to support margins in H1.

With that in mind I was looking out for an impact in the Nov update. I haven't tried to quantify the impact of the kiln shutdown but the resultant revenue performance in the 4 months to end Oct was down 2.2% on the previous year. I was okay with this as I recall thinking the performance in the 2018 period had been exceptional, and was not maintained through to the year end.

With the usual weather qualifications underlying EBIT guidance was maintained at £114-£118m. With my expectations on revenue that points to a 12 handle on margins, so steady progress in a tough construction market.

To the wider picture, Breedon continues to impress me in it's discipline in maintain margin. It can't be easy in the face of increasing costs so the long trumpeted message of a better construction outlook needs to come soon. I think Thursday's election will help but I'm somewhat sceptical of party promises to build infrastructure. The quango Highways England has highly paid consultants who seem very slow to getting shovels in the ground. All the news I see is around delays. Recently government focus has been on increasing current spending while maintaining tax rates - that plays to the masses - while tough decisions on longer term infrastructure gets kicked into the long grass - HS2, third runway, etc.

My hope is that the sizable majority Boris got might lead to some longer term thinking, and the political shift in the north of the country might secure investment in Breedon's heart land. Scotland is also an important area for Breedon but the SNP still has a near term focus on it's desire for Indy2, which doesn't lend itself to longer term thinking on infrastructure.

Thanks e121, I'd missed this bit, 'Example at R/C = 1.70 and costs = $20 per barrel'.

Got it, the production volume is the 50% WI, but the revenue is derived according to the PSC formula, and the PI guesstimate is Ferna's rule of thumb, quoted by L3 as 65% x volume x oil price.

Questions:
Does the rule of thumb take the quoted $18 bbl costs into account or do they need to be subtracted?
How is the 38% tax rate applied?

e121, where does a 50% WI come from?

I'm referring to the CMD pack L3 highlighted

https://www.enquest.com/fileadmin/content/statements_reports_presentations_and_general_PDFs/151208CapitalMarketsDay.pdf

Slides 69 & 70, indicate an 59% Enquest share of production @ $60 oil.

Isn't this the production volume quoted by Enquest?

L3Trader, your comments on Malaysia confuse me. (I guess you specifically refer to PM8/Seligi)

You say, ‘Did you use the effective selling price of the Malaysia production? Fernan10 used 65% of Brent price to convert Malaysia production to revenue. And he was always spot on. There is a formula for it. Others who know better can explain, if they wish.’ My query here is ‘to revenue’.

Then in a later post you say, ‘production is reported gross.’ My query here is ‘gross’.

Your pointer to the 2015 slides is useful. It states that Enquest share of production @$60 oil is 59%. In slide 23 CMD pack current ‘Gross working interest’ is shown at 15K, so I assume from this (with adjustment for price) that Enquest share of production is 56% x 15K = 8,400 boepd @ $65 oil.

At H1 total Malaysia was 8,599 boepd so doesn’t leave much for Tanjong but my translation of the gross number from the graph could be out by 1K.

My interpretation is that the production number reported is NET production attributed to Enquest, after royalties and costs, so after multiplying by the oil price the resulting number is OPERATING CASH subject only to the 38% corporate tax.

The structure means that the net attributed production number can increase with higher production, higher oil price or a reduction in costs, but at a lower proportion to the change in oil price. This also operated in reverse, hence the Enquest comment, ‘a natural hedge against the oil price’.

Question to anyone, is my interpretation wrong? If so, where?

Hi romaron, I’ve no issue with any questions or comparisons being posted no matter how bizarre I might think they are. It’s not in my nature to criticise. But having posed the question I thought your response to a poster who answered a little insulting, particularly as I had thought about responding. That’s how it came across to me and that prompted my reply with detail to emphasise how inappropriate I thought your comparison between Enquest and BP.

chilting, I appreciate the weather can be an issue, but that is when Enquest need to manage the offloads. There's a 600K FSPO capacity so 2 days cover on the typical 500K offload but if need be a 300K offload at a higher shipping cost is preferable to shutting down the field. It will be interesting to see how they handle whatever the winter throws up.

chilting, great news. The fact that Torill is sailing means Kraken is still pumping at a good rate.

When it was looking like 13-14 days I was starting to think there's a hic-up. But no, it's just the wine. ;-)