Member Info for MatrixObserver

Merci L3

MO's made his own version up what it means lol....

Means for 75% WI, in year 1 will have to pay of 100% cash flow towards periodic calculated repayment (incl interest), i.e. $27.5m for year, or $2 and a bit million per month etc, before can 50/50 with BP on any residual amount left.

For years 2-5, only have to pay 50% cash flow against loan instalment (so will take longer to repay in period), will by default get 50/50 with BP on the other 50% from start of period (of the 75% lol) before full 50/50 profit share on residual cash flow.

Simplified = in first year of deal, will take longer for cash flow (as all CF needs to be allocated versus loan instalment) before 50/50 profit share...

Against years 2-5, where will get some cash flow from start of period but less for longer until loan instalment repaid for period.

MO is now + rose' so will have no further attempts of comprehension, lol all

MO

Last one, then MO's gunna finish off his Hobbit film, lol

I suppose, ultimately is about realising cash flow from Magnus asset, so available towards RCF amorts etc, when will see the cash flow and how much, whilst satisfying loan repayments and profit share..

If repayments/profit share etc calculated on monthly, quarterly basis etc... sure called something like, waterfall and cash rake etc

Soz for posting so much bits, but trying to understand, is important if taking part in Rights Issue... Think have got the basics of the deal now...

Cheers all

MO

Question... Sil vu plait..

Does this bit... Refer to % amount of cash flow used towards loan repayment ?

"with 100% availability in year 1, 50% availability from year 2 to year 5 and thereafter the availability is set to 100%."

MO is unfamiliar with the "availability" word in this context...

Thanks

MO

May help decrypting the repayment structure... From CPR

"The repayment is made from 75% of the Magnus asset cash flows with 100% availability in year 1, 50% availability from year 2 to year 5 and thereafter the availability is set to 100%. The target term of the loan is 5 years with an annual interest of 7.5% on the outstanding loan amount.

In addition to the purchase price, BP also receives earn-out payments equal to 50% of residual Magnus asset cash flow, subject to a maximum of U$600 MM (grossed up for the tax rate which is capped at 40%). The residual Magnus asset cash flow is equal to 75% of the Magnus asset cash flow adjusted for the purchase price related loan principal repayments, interest payments and any other allowable adjustments as per the sale-purchase agreement."

*Note word "residual" for cash flow in second paragraph, as in "what's left" post loan repayment for that year...

Hope is helpful, is to MO

Cheers

MO

Have just read in CPR, that BP loan interest rate is 7.5% (not 5%)

So for $100m over 5 years is $22.5m in interest (not $15m)

MO

Fleshing it out for FY 2018... Based on Magnus gross CAPEX / OPEX from CPR for FY 2018

Using GC&A mid-range figures (are in GBP, so will use 1.3 USD rate).

CapEx $49m
OpEx $94m + $3m for well workovers

So total gross costs of $146m based on 15k gross production bopd averaged over FY 2018 (is MO's guess, currently is 13.5k average, yes know will be in 18k+ current levels), not including Gas.

So total costs per barrel (all rough numbers) = 15k x 365 = 5,475,000 barrels, $146m to produce = $27 per barrel (all-in)

So if Brent @ $77 = $50 FCF per barrel... Makes payback even quicker

Is all rough to give an idea...

MO

To add, as per E121 mentioned...

25% WI will be received in full, when remaining $39m is settled, maybe Q1 19 (based on $27m repaid in H1)

With 75% - Think each years' loan will paid first then ENQ get access to 50/50 split of 75%...

I.e. Yr 1 - $20m + $5m interest (total for year $25m) paid to BP first, then profit share for rest of year
Yr 2 - $20m + $4m interest (total for year $24m) paid to BP first, then profit share for rest of year
.
Yr 5 - $20m + $1m interest (total for year $21m) paid to BP first, then profit share for rest of year

Yr 6 - Vendor loan is fully repaid, profit share to continue until BP received their $1b cap (if not had already).

So if Magnus doing 15k per day, say FCF $35 per barrel = $0.5m per day, 75% = 375k per day (is all rough numbers)

So in approx first 66 days $25m loan paid off (during this period ENQ will get their 25%), and for remaining 300 days 62.5% to ENQ...

Is rough idea...

Cheers

MO

Gets my vote, cheers

MO

Cheers L3

"A cozy relationship b/w BP and ENQ opens the possibility for the deal to be more flexible to help ENQ divert cash flows to pay down its other debts," -- Is good to have a good working relationship, BP trusting ENQ to deliver...

Makes much more sense, cheers...

$100m over 1 year.. = $105m repaid...

20 + 20 + 20 + 20 + 20 = $115m repaid, but access to significant Magnus cash flow each year, whilst debt is reducing...

$100m off the debt was Brucey for MO, so happy with how looking...

Thanks for input

MO

Please ignore " + their initial 25%" in first paragraph... was thinking of ENQ when typing, should've been thinking BP, lol

For the $85m (initial 25%), based on Pelle's (hello from MO) figures.

Initial owed $85m
FY 2017 paid $19m
H1 2018 paid $27m

Owed as per 1/7/18 = $39m

MO's not been keeping track, does the above match accounts ???

Cheers

MO

Good morning E121

So what you are saying (if correct), is that ENQ will not receive any cash from Magnus until almost 2020... Following this time, ENQ will no longer owe anything on the loan to BP, just 50/50 on the 75% + their initial 25%.

From what I've read so far and from many sources, the structure of the deal is far from concise, and many conflicting opinions offered.

Your interpretation conflicts with what ENQ are talking about, i.e. improved cash flows from Magnus, mentioning about paying $100m over 5 years etc, that does not compute with all debt repaid first prior to cash flow.

This deal is widely open to interpretation, so will primarily listen to AB and JS words for clues...

MO not saying you're incorrect, just that repayment of the deal is not explained enough.

Anyway, sure will become clearer in time

Good luck all

MO

LOL all, nothing like a bit of clarity on a Friday night :-)

How about this one...

ENQ Pay $100m, as per agreement...

This leaves a balance which is to be converted to a vendor loan, balance split over 5 equal yearly payments...

Balance is $200m, but with adjustments, call deed etc, is now $100m

This is split over 5 years at $20m per annum + 5% interest...

Once that amount is paid for the current year, profit share for remainder of that year...

Is MO done for evening now... Fancy some Hobbit film lol...

Have great weekend all

MO

Cheers E121 for info on SPV, makes sense...

$20m per annum for 5 years... Pretty sure Magnus at current Poo will generate much more than $20m FCF, especially if it has already generated $100m since 1/1/17 at lower Poo and production levels, suppose will be more CapEx this year with new wells, but think will be more spare than $20m per annum.

Cheers

MO

Cheers E121

MO's still a little confused, as ENQ said 15% in SPV...

i.e. "The financing is ring-fenced on 15% interest in the Kraken oil field, which is being transferred to a special purpose vehicle. The financing will be paid out of the cash flows of this SPV over a maximum of up to 5 years, and is at a lower cost in the current interest on our existing senior credit facility."

and

"The 15% financing is ring-fenced around Kraken. So there is no repayment schedule. There are no loan covenants. It is cash flow from Kraken that comes out, including the reduction of CapEx and OpEx. So this is ownership, the special purpose vehicle is owning Kraken."

Sure will find out for sure at some point...

Have good weekend all

MO

Hi E121

Suppose as from now will have to discount Kraken from 70.5% to 55.5% WI, as will probably be drawing down some of that $175m for Oct RCF repayment.

Have been analysing Scolty/Crathes numbers... Realise fix is not until next year, but numbers up until Jun 18

On 21 November 2016, EnQuest delivered first oil from Scolty/Crathes. (is approx 15MMboe 2P gross in place ), every little helps... not sure of cost of new pipe, but is approx 25km of pipe in total.

Ownership: 50% EnQuest Heather Limited and 50% MOL Growest (II) Limited (is now owned by TOTAL)

Nov 16 – Oct 17 (365 days)
Scolty 200385
Crathes 1867705

Nov 17 – Jun 18 (242 days)
Scolty 0
Crathes 659692

Scolty Total Oil to Jun 2018 = 200,385, 330 bpd avg
Crathes Total Oil to Jun 2018 = 2,527,397, 4,163 bpd avg

Could get 4-5k gross from Scolty when fixed, has been shut-in almost since first flowed due to wax blockage in daisy-chained flowline. Crathes has been producing more or less continuously since first oil, but at reduced rates due to wax also... needed bigger pipe or heated from start, better to learn pre Eagle dev... may add another 1-2k gross. reserves not affected, are deferred.

Good luck all

MO

Lol KO... Is also front news press :-)

http://www.shetnews.co.uk/

MO

Just to add for tanker watchers...

HK retained approx 20k metric tons of ballast (seawater is 7 API and just over 120k barrels) with her draught of 12.7m

If calculated with no retained ballast would = 625k barrels of 14 API crude...

See is tricky

MO

Nice one WEny...

Also confirms ~500k offload

"A ship-to-ship transfer of crude oil has been carried out at the Port of Sullom Voe, Shetland, for the first time in almost three years.

On 13 September, the transfer of around 500,000 barrels of crude oil produced from the EnQuest-operated Kraken field in the East Shetland Basin was completed at the Port. The transfer was made from The Heather Knutsen, a 277 metre long Canadian-registered shuttle tanker, to the Speedway, a 274 metre long, Greek-registered tanker."

Some pics too !!!

https://www.facebook.com/EnQuestPLC/photos/pcb.1123020914515456/1123021107848770/?type=3&theater

Cheers all

MO

PS.. L3 Current production is much more than 54k, June figures do not include Alma fix, NNS post maintenace shutdowns and an extra few k on AK, plus new wells in Malaysia and 2nd Magnus well.

More like 65k-70k, is MO's guess

Hi NSeaOG

Is very complex, need many attributes about ship, cargo, i.e. 14 API, bunkers, constants, volume, lightship draught etc...

... and even with all that info is still impossible to know how much ballast has been retained on the vessel, so can only get a reasonable idea, usually a range of 100k...

Below Is good starting point...

https://www.myseatime.com/blog/detail/here-is-all-you-wanted-to-know-about-draft-survey-calculations

Good luck

MO

Good day KO

MO accepts hedgies, funds etc have massive power, so not saying won't affect SP as have seen can do, but if can say 21p, then also MO can say 47p, so is fair. Is possible some clever RI arbitrage is going on...

Is interesting to observe, but requires some patience...

Thinking about AK's production for remainder of 2018 (pre DC4), Cairn stated...

"We’re about to go through an extensive well testing program to try and better understand that and just think about where we want to distribute the water within the field. Just now it’s pretty uniformly being injected across the field should we distribute more in the North and the South versus the centre, and these are some of I guess the plans that the operator is contemplating in terms of trying to optimize the performance of the field further."

Not sure if will significantly impact production levels, as will be extensively testing each well, possibly through test separator, so may be slight hit on overall levels, CNE suggest 35-40k for remainder of 2018.

If can keep tankers around 12 days from departure to arrival is about that level, if can get to 11 days is better, but also patience required, ship is moving in right direction.

So onto #24

Would also be nice to have an Enquest Producer offload before 2/10, question is, will be baby tanker (i.e. Siri Knutsen) or something more accustomed to like at AK.

Anyway, good luck all, still have 2 1/2 weeks to ponder...

MO