Member Info for MrBuster

We blew through the moving averages on the monthly/weekly charts on Brent/Wti and now we are retesting. Declining volume is normal and expected - plus there was a gap to be filled. Gap has now been filled…the question is does the second gap lower get filled now…or later…or never. Time will tell. As I stated before this is all very normal behaviour from a technical analysis perspective IMO.

I don’t understand why various ‘share price forecast’ calculations are double counting costs…or using 2025 prices or the forward curve, or whatever… to be ‘conservative’. IMO the share price hasn’t even digested the Magnus news and the previous SEA developments, or the oil price breakout…and that was before this transformational transaction was announced.

GLTA

Not fundamental analysis Kraken. Technical analysis. In 2008 there was no overhead resistance. Now we are attempting to break through that resistance (trendline) which has become very strong. Draw a three month chart and draw back 20 years, you'll see it.

Oil is forming a very volatile pattern. Stating the obvious of course.

I have a different opinion than most. I believe the oil price is acting very normally from a technical analysis perspective. The market is not reacting to tweets - the (well informed) tweets are reacting to the market IMO

Some posters on here continue to be highly amusing. It is highly unlikely that the company didn't disclose further information as they are negotiating; given that "we are busy on a number of transactional projects in the UK North Sea and South East Asia, and our unwavering focus is to deliver a step change in both our scale and shareholder value". I hope so too -it's been a long time coming.

GLTA

Hi Malu,

I saw that too, and I'm also waiting to see how things stabilize. From what I understand, LNG and heavy oil production has been curtailed in the ME and this is the driving factor. Possibly a premium will exist for some time?

GLTA

Nah - Steveo is just looking out for others best interests! Like reappearing right as Brent was bottoming....just to remind everyone about all the negatives and to ensure a balanced discussion....while deramping Enq on other boards at the same time too. LOL

Brent just had a massive weekly breakout - now there is significant technical support below...and as the key moving averages quickly catch up they'll add to the support imo. Let's see what happens....

As far as oil stocks and their recent price action - imo it has been a combination of buy the rumour/sell the news (its a big club, and we ain't in it); and institutions running their algorithms to accumulate shares. Ideally they don't want to drive a stocks price up while they're buying - so they short it first. Jessie Livermore talked about this over a hundred years ago - there's nothing new in Wall Street as the saying goes. Just look at the recent price action of the leveraged ETNs that track oil producers....I actually tried to go long on the short side for a small bounce after the intraday mini CH but couldn't get filled).

Personally I'll chose to ignore all the "no appetite for change" noise and hang my hat on "...at the instigation of the Treasury,” and "...the meeting addressed “steps to reform” the windfall tax “this year”.

GLTA

Hi Kamrat,

Slides 69/70 of the Dec 2015 Capital Markets Day presentation may help for those who haven't seen them. There are similar slides on Seascapes Dewa Cluster presentation on InvestorMeetCompany....

Cheers

As a previous poster noted. Though development of the DEWA cluster could be a couple years away, it will eventually be a cash machine for 10+ years and a growth engine for ENQ in that area (as the PSC terms are quite generous). Seascape also commented that ENQ is eager to get on it ASAP and the PSC pre-development phase is "up to" 2 years.... A quick back of the envelope valuation of the asset is significant (based on my DCF/NPV assumptions and given this value in relation to the woefully depressed MC/EV).

My remaining wish list

- more international assets that won't suffer from a North Sea CF multiple discount and tax regime volatility

- the 'transformational' deal we have been promised and the initiation of a significant dividend

- listing of Veri (at least then the market would have to value the assets at something greater than zero)

- additional gas development/production/sales from PM8/Seligi under a new PSC (something else we have been promised for quite some time) though the current gas agreement runs through Dec 2025....

- progress on B/B, Kraken drilling/EOR and progress on any other acquired assets to maximize CF and utilize tax losses

I have been a shareholder for longer than I'd like to admit (one of the longest I bet) and I am looking forward to the future for the first time in ages. Checking the news every day to see the next deal the company had completed - I think it was two results presentations ago Amjad actually made a comment about that period of dealmaking....

btw - noticed there is an investor presentation on the website now...hope they keep it updated as events unfold…

GLTA

Hi Kamrat/Therapist,
Appreciate your insight. To be honest, I don't try to overanalyze it as the details have never been confirmed. All I know for certain is there is currently a significant VLFSO premium. Any way you slice it, we're very undervalued and due a series of rerates IMO. Sure wish we had more granularity on Kraken/Malaysian premiums....and gas production/income also....nat gas 400p today.
Regarding TA, I'll add to Stupmy's comments - the shareprice is currently slingshotting off multiple key moving averages on multiple timeframes. The price targets from the shorter timeframes create breakouts on the higher timeframes. It really is beautiful from a traders perspective....we should finally have the wind at our back.
Cheers

Hi Therapist,
From here https://shipandbunker.com/prices/av/global/av-g20-global-20-ports-average
A previous poster (don't remember who sorry) posted that Kraken conversion is 6.47 based on API
We've never been told exactly by the company to my knowledge - and it varies by sulfur content also....
Cheers

Not to mention VLSFO premium $22(before today), nat gas just below 300p again, Brent (Continuous Contract) monthly close above $100 resistance....and constructive price action under the hood.

VLSFO premium was pushing $20 as of yesterday, and ICE UK nat gas - up +36% at the moment nearing 300p

On a cash flow multiple basis - the last time Brent was in a confirmed uptrend (prior to 2015) - I recall from the Ithaca days that the going rate for UK listed companies was 2.7x cash flow. Note this was a much lower valuation multiple than North American oilies received due to multiple factors including the relatively short life of UK fields.

I'm sure that all have noticed the higher high printed on the monthly Brent chart and the broken 14 year trendline...

If we go with 700m CF (I think both production and CF will surprise to the upside - due to gas revenue and the fact that management have gotten bitten twice now on missed guidance) and debt reduction of 400m (again I think this is very conservative):
700*2.7 = 1890 - 800m YE debt = 1090/1.8b shares = 0.61

Posters here will surely tell me I'm pie in the sky ramping...but that also happens to be the price target on the monthly chart if we break out of the current channel.
I would also argue that Enquests fields should warrant a higher CF multiple as it looks like Kraken could become a producing hub with a significant lifespan not to mention a desirable API...lots of oil in Malaysia....and Magnus if management can prove it.

.....half of production hedged for capex, opex and decom. The other half mostly gravy and likely very significant . Yes, interest expense, BP/Petronas share and unplanned costs - but also gas production/crossover revenue and oil price upside....

Nice to see a plan starting to be revealed