Member Info for MatrixObserver

Appears is for Enquest Producer, not AK...

Looks like two big ships heading for EP... Maybe is part of optimising Alma wells, not sure...

https://www.marinetraffic.com/en/ais/details/ships/shipid:383384/mmsi:316027612/imo:9557458/vessel:ATLANTIC_MERLIN

https://www.marinetraffic.com/en/ais/details/ships/shipid:373261/mmsi:311031800/vessel:SIEM%20N%20SEA

Is a bit stormy out to sea...

https://www.windfinder.com/#6/59.4786/-1.2305

Good luck all

MO

Hey DeMac1...

Was an overly presumptuous statement by MO, did mean new to BB input...

Anyway, MO + rose' = welcome...

MO

Hello new ENQers...

MO + rose' so don't take too much notice...

Magnus 75%, Is damn good deal at damn good time and price, for both BP and EnQuest, is probably with current Poo weighted towards the latter.

In almost two years, ENQ has worked hard to transform Magnus from losing asset to gaining asset by reducing OpEx significantly, also new wells at reduced cost, MO realises is sensitive, but also necessary to remain viable and ongoing concern for future, hope is good for all.

MO wishes all well, MO is ENQer...

Soz + rose'

MO

Hey L3

Weather is currently rough, but compared to what have seen at AK, i.e. 70kt+ winds with 17m max waves, is fine for AK's production, can interfere with offload, but usually find a window in weather.

No shutdown required in Sep as originally planned, works already completed earlier in year...

So with exception of minor reduction due to individual well testing for a week or so, should be non-stop production for next few months... Fingers crossed...

Good luck

MO

LOL romaron...

Is essential piece of issue puzzle :-) MO must be thorough...

If excess available, can help shorters' arbitrage and can buy back disproportionately at 21p... MO happy is fair for existing holders.

Is quiet time...

MO

Cheers Fernan10

Seems much more logical... and ties-in with what ENQ mentioned and prospectus/deed states.

Pretty sure will be quarterly sweep though, daily interest etc, but will be similar results overall.

Thanks for contacting ENQ...

MO

Page 315

Is fair...

"There is no procedure for Shareholders to apply for New Ordinary Shares in excess of their entitlement."

MO

Is not quite as significant as originally thought, did think would impact 4 wells per test, but looking again at AK config, think might only be 2.

Each production DC (with four producers wells) has two 12" production flowlines to AK, so on average (depends on internal config, which cannot see) should only need one well shut-in when testing, and reduced production on tested well... So maybe 80-85% production for a one/two weeks (32k) then hopefully onwards towards 45k.

Back to cave until AK #24 or EP #3

Take care fellow ENQers

MO

OK...

MO has observed might be happening soon, trying to work-out what production impact might have (if any)... Is essential works, so is irrelevant, but may save some next tanker stress...

Have just tendered vessel ATLANTIC MERLIN for HEADING CONTROL DUTIES...

Think is to hold AK in place, to prevent rotational weather vaning, allows stable plumbing access to turret and pipes for tests... Is ultimately for performance tuning water injection to individual sections of the field.

If certain DCx wells come through one pipe to AK, to truly extensively test each well will need to shut-in all others on same DC/flowline during testing, This may have the result of some reduced AK production over next couple of weeks (ship booked for an initial 10 days), not sure of how impacted will be, Cairn think should still be in 35-40k for remainder of year.

Is just heads-up if get tanker #24 / #25 delay...

Good luck

MO

LOL E121

"Also, Magnus' 75% share of oil can't be hedged anyway, and that'll always be sold at market prices till BP is paid off."

Even that's open to interpretation, the word "Specifically" confused MO... Magnus crude Is mixed with Thistle, Dons crude etc at SVT...

"7.3.2 the Buyer shall not enter into any forward price-hedging, exchange contract or other derivative trade or swap of any kind which is specifically linked to the Additional Magnus Interest Production (provided that nothing in this Paragraph 7.3.2 or other provision of this Schedule 2 shall prevent other members of the Buyer's Group from
entering into any forward price-hedging, exchange contract or other derivative trade or swap of any kind in respect of prices or production attributable to the Buyer's Group which are not specifically linked to the Additional Magnus Interest Production).

Good luck all

MO

Hi Fernan10

MO has high confidence and think have worked the loan deal out... You need to consider all input (GCA, JS, AB etc) to understand... and read the "Waterfall mechanics and profit share" on per page 112 of prospectus.

ENQ even earn 10% interest on outstanding total amount of FCF due to ENQ versus $200m loan, loan is spread over 5 years, repayment $40m per annum, paid quarterly + interest.

Assuming deal done 01/12/18, and per estimate ENQ have accrued $100m of FCF since 1/1/17 to offset versus loan, so just for 75% guess Magnus generates $40m per quarter for first four quarter of deal, so to end of 2019 (yes is low end, but is for illustration).

So is calculated quarterly in arrears, say 1st quarter ends 28-Feb-2018

Have $40m qualifying as “Net Cashflow Gain”... Numbers a little rough, i.e. not doing daily interest etc

So first allocation "A", does not apply as currently no arrears accrued to receive first bite.
On to allocation "B" Repay ENQ for amount owed to recover FCF on loan, ENQ get full $40m

Quarter 2, 31-May-2019

first allocation "A", ENQ pay for arrears of $10m for Q1 principal and $1.8m for interest @ 7.5%
On to allocation "B" Repay ENQ for amount owed to recover FCF on loan, ENQ get full $28m ($32m outstanding)

Repeat until ENQ have recovered all FCF versus loan, then go on to profit share.

Is good deal for both, if MO's sums are correct, over 5 years BP will get all money owed against loan and some $450-500m from profit share...

Is MO's gues anyaway, good luck all

Good day L3

From H1 transcript...

"Magnus is a very large field. It is now the largest field in our portfolio. 2 billion barrels hydrocarbon is in place, with a recovery factor of about 50% to date. This compares with a recovery factor of 57% for Thistle that we do see significant upside from here. It also compares to our Seligi asset, which is 1.8 billion barrels, and Thistle is about 1 billion barrels in place. So just to give you a feel, this will be the largest field we have in terms of STOIIP.

As you know, we acquired a 25% interest in December, which allowed us to understand the asset. At that time, we booked 14 million barrels associated with that. But you can see now we are 75%, is adding 60 million barrels. So we have been able to add reserves through the last year of operation."

So sounds like aiming for a recovery factor in high 50's

Good luck

MO

Good morning Chilts and fellow ENQers (ohhh my head)

Re, BP assets, Chilts, think some are new FPSO projects, so think will keep them, may look to offload high OpEx mature assets.

Magnus is a key asset to ENQ, as shares infrastructure with other NNS assets, strategic for ENQ.

--

Re: Quarterly waterfall rake... Was clear in MO's head last night, lol

Can see on page 112 of prospectus.. For full-text

"On completion of the Magnus Call Option Deed, BPEOC and EnQuest Heather will enter into a net cash flow deed which sets out how revenue from the 75 per cent. Interests will be shared between them (the “Net Cashflow Share Deed”)."

and

"The net cashflow amount for the 75 per cent. Interests is calculated quarterly by deducting any costs paid by EnQuest Heather in respect of the 75 per cent. Interests from all income received by EnQuest Heather in respect of the 75 per cent. Interests. If this results in a figure greater than $0, such amount constitutes a “Net Cashflow Gain”."

Then lists how distributed... MO's interpretation below

i.e. Q1 Y1

Will have to pay interest + instalment of $5.265m for that period before 50/50 (of the 75%) share on any residual cash flow for that period...

Q2, Q3 etc, will slowly reduce interest amount as loan amount outstanding is reduced.

Anyway... is all there on page 112 to decrypt... Good luck

MO

If can't get from ENQ website, can get here...

https://anonfile.com/f9w0l6hfbe/ENQ_RI_2018_Prospectus_pdf

Just doing a tanker watch and just observed another tanker, just departed from SVT jetty 2, also en-route to Philadelphia, this time with 6-700k of NNS SVT Crude...

Tanker is named NS Consult... Can see...

https://www.marinetraffic.com/en/ais/details/ships/shipid:753585/mmsi:636012662/imo:9341093/vessel:NS_CONSUL

Chow bello

MO

LOL E121...

Was in MO's executive days lol, was longest drive of day out of many, was probably luck...

Will have to hunt down clubs, probably somewhere in Wales, lol

MO

LOL E121...

In MO's younger days was called robo-golfer... Have played at some very nice courses...

Hit par 4 green from drive, 300m+.....

Then 4-putted, ;-{

Was too stiff, could only win best endeavour... think would be better now, but not tried...

Cheers

MO

Is $22.5m interest, over 5 years, not $27.5m... soz all...

MO + rose' being too generous...

Cheers

MO

Anyone there !!! Sure is, but think MO is too rose' head, is true on some occasions, but trying...

Further drilling down on Magnus deal (am giving conservative figures)...

Think over next 5 years, at current Poo, excluding Gas + SVT and pipeline income, at low 15k bopd = $1.37b in profit on sales

Will pay $60m per annum to ENQ for 25%, Will fully repay $100m loan + $27.5m interest and will split 50/50 with BP $938m = $470m for ENQ and BP, so well on way to repay BP in full...

Can see why AB likes it and can see where getting 4x investment on the deal !!!

MO (no, sadly not on commission'o)

Kalispera L3

"What still puzzles me is the "(grossed up for the tax rate which is capped at 40%)", which means ENQ only stops paying at $1B...this makes a huge difference to shareholders pockets... "

ENQ have over $3b of tax to offset against gains, is due to amounts spent on projects, not expected to pay Corporation Tax until 2025, also have Supplementary Charge @ 10%, apparently ENQ have enough Investment Allowance to consider will never hay to pay any (MO says never say never, lol)

If Magnus can chuck $250m+ FCF per annum at current Poo, illustrates Magnus value, with estimated lifespan to post 2030.

BP knew was too expensive for them to run, OpEx in $50+ per barrel, so offered fair deal to ENQ at $50 oil with bonus from future production to them, remember ENQ do their decommissioning whilst still producing, so is very clever model, as wells account for 50% of decomm costs, Same rig crew, can drill new wells, work over existing and also abandon wells, is cost effective and also learn the field !!!

ENQ has the model, think will show...

Best wishes

MO

There you go Barclays...

Not complicated at all !!!

MO ;-}