Member Info for mrc_mrc_mrc_mrd

Basically I think the market doesn’t know how good this deal is. Good interest rate, low opex, good emissions, new wells online, future infill drilling opportunities to arrest declines, clearer capital structure, tax losses.

It’s summer and volumes are low. Lead up to September results will be a good catalyst I think.

6 months ago things were really bad for Enquest. POO has done the heavy lifting, but I think the GE deal has been company saving (albeit with low Brent it would have basically been run for the banks and bond holders)

I think the big risks have been removed with this deal, but debt is still high. Fine at $75 Brent but not at $50 which I think should be the longer term conservative assumption. I do think this will re-rate but who knows when.

We have good low cost assets now. Let’s just get some good hedging on $70-$80 range, and get the bond refinancing done sooner than later.

You are right there are macro issues which should also ease I hope.

Oh actually I didn’t include finance costs so I will revise down to $160 million for H1.

The refinancing and debt reduction is going to make a huge difference to our FCF! It was about $10 per barrel last year I think!

EV is whatever the market decides. I obviously think it should be higher and market is attaching to much risk. If we finish the year close to $1 Bn net debt then SP should be at least 40p.

It is a good indication IMHO - we know sculptor forced low hedging so some of their barrels will be the cheap hedges (assuming it works like that). Corporate overheads are not that high - would imagine each asset pays for its onshore office space, so it is really just the 20 bodies in the corporate team plus their expenses.

My assumption for FCF H1 is $200m which I think is cautious. $60 realised, $30 unit costs, 39kbpd to ENQ.

Lol yes L3 has better access to AB than I realised.

If you honestly think AB makes decisions like that then why would you invest??

They will have looked at forecasts, costs, risks and decided based on the facts and assumptions that seemed reasonable at the time.

The fields that ceased were not high margin and, yes, were constantly breaking. With GE we are back about where we would have been this year production wise, but significantly less risk and significantly higher margin.

Anyway, it is done now, so why moan (unless your point is that AB is a bad CEO - in which case, why are you invested)

GKB.

You can’t just shut in. These assets all have very knowledgeable people employed who would likely have drifted off.

They would have needed to keep a skeleton crew on board anyway.

Also once these things are shut down for a prolonged period it is not easy to restart.

L3 - not convinced they had any choice except COP. POO was expected to hit $50 this year so they could have had nearly 2 years of operating them at a loss and risk of unexpected big problem sinking the ship.

To be frank I will take their word for it.

You say it is not hindsight but it clearly is. You know none of the facts they had in front of them.

Oh brilliant Tigar, I hope you are right!

Seem to be a lot of small trades today so I expect this is happening. Some will be forced due to being fully loaded in their ISA.

It’s an easy small profit.

I’m happy to wait for 60p

Tigar - price expected to be effectively reduced by $75 million due to cash accruing after tax from the GE asset.

Why would half year results be reported early?

The prospectus is based on results for year ending 31st December.

I doubt they are going to pull results together within 2 weeks!

Romaron - I had a similar problem. I was pretty furious at nanny state.

I was basing it on the 1.8p discount, not current SP (assume this is how you get the higher figure)

There were opportunities this morning to buy around the 20.8p price on the open market, and even cheaper yesterday(though I appreciate we didn’t know details yesterday until after close)

Anyway I have added some more throughout today in my spreadbet account, as well as obviously taking up the 19p shares. Still cheap.

Interestingly AEX you can buy leveraged through IG. May as well play Ruvuma that way if that’s what you are in SCIR for?

I have been trying to work out how much gas we produce. Seems only the gross figure is stated in the AR.

Assuming we have 15% of everything we could be pulling in 18 million euros a year at 36 euro per megawatt hour.

Gross production is approx 9000MWh per day.

Still, it’s decent and we could see an operating profit of close to £10 million a year if these prices are a new normal.

Rubbish ramping. It’s a management estimate. Means absolutely bugger all. As usual, more delays, little progress, nice vague words.

Yeee Haw!

Maybe as compensation to the swedes we could have the 60p party in Stockholm to save the flight costs for them.

To be honest, on my million or so shares I’ve only really gained a thousand quid or something. Not massive in the scheme of things.

For such a small raise I’m not surprised that AB decided against paying double money for prospectus and all the regulatory stuff. I hope not, but maybe they will get rid of the Swedish listing now we are out of the EU? Brexit seems to be the reason you didn’t get the OO.

GKB - you are embarrassing.

You talk about one side of the macro and completely neglect the last year of pandemic and push on ESG issues. AB has saved Enquest and still managed to reduce debt levels.

Enquest are in a better position to 2 years ago as a business, despite challenging macro.

Has had ENQ in auction since open. Might have something to do with low volume this morning. All my other accounts seem to be tradeable.

Hi SHS - certainly good news for whoever is holding the asset when the resource is confirmed.

The upgrade is a management estimate so I wouldn’t think anyone will take it too seriously at the moment.

Cheers, Col