RE: Buyers loading for the $500m rns10 Sep 2020 08:44
Calamari most oil companies do - debt is a useful tool. Brent is heading higher and we should get a boost today. At these prices this appear really undervalued. What amazes me is the fact that a year ago the debt was the same and oil perhaps $10 more and the SP was over £1.20.
What nobody on this board makes reference to is the 60% hedge at $57 for the rest of 2020 and the 46% hedged at $52 for 2021. The 2020 hedge had a near $200 positive impact on cash flow and I would expect the same again next year, albeit oil prices should be well in the 50's by then. Uganda news could drop at any time and we will be in receipt of $500 plus a further $75m on FID. Rahul will be focussing on getting a really good deal for Kenya and could now get upto $450-500m as we see the oil price environment improve.
The rebalancing of markets has started, with consumption in China and India getting to pre-CV levels, OPEC+ will curb output at the taps to engineer a price increase, then you have 12-18m of lack of investment that will also have an impact.
We are weathering the storm and have everything to do this over the next 18 months, by which time I believe our debt will be around $1.7b-1.8b. Debts will be rolled over and re-negotiated.
I was surprised to see this tail off at close yesterday, but then saw that 1.25m buy that was filled - MMs filling orders as per usual. Expect this to bounce back up, as what was announced yesterday was nothing we did not already know as holders - so a case of making the most of the volatility because after all said and done this will move back up without doubt.
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