Member Info for mrc_mrc_mrc_mrd

Hi 44 - you are a brave man!

I couldn’t invest here while this management remains in post.

The $16m isn’t really $16m as it needs to be discounted and we are in a high inflation environment. Personally I can’t see it doing much more than covering ongoing costs. The first $3m will likely be swallowed up to repay the loan and pay Gneiss their 20% (or whatever their cut is). So no free cash for deals until Ruvuma FID.

If TR is serious about this company then he needs to raise funds and really get after the strategy with EAG. We really need a full time board member here. 4-desks Tom is just not getting it done.

44 - my view is that it may have been Gneiss/SCIR that took a free carry off the table. They needed a cash deal to get paid their fees. And TR has been off doing his own thing with fart generators so he probably was asleep at the wheel on the deal.

I don’t see that WEN would have any incentive not to offer a small carry.

SCIR have been spending the loan monies on G&A so that is why I say it could cease to exist. The loan could be immediately called in and i don’t know if SCIR can rise enough cash.

I wonder if they will tax the financial services industry more due to this new deregulation windfall?

SoG

I suspect you will see your 50p entry, but who knows when!

I doubt £1 will ever be reached.

Quite L7

I can’t get too excited about the difference between you and Jefferies (both using forecast production, oil price, costs). I don’t know your assumptions but my guess is that ENQ have generated more profit than Jefferies expected and perhaps more in line with what you expected.

Your numbers posted on 26th May are really not too far away from Jeffries - you were at about $30m for 7 months.

As far as I can see that is the only calculation you have posted?

My calculation should have pulled out the Malaysian opex and capex.

L7 - Jeffries came out with their number soon after the EPL was announced.

I expect their numbers would have used pessimistic assumptions about profit (oil price and low end production) and obviously we now have revised costs which are lower and more or less actual realised oil price and production numbers.

I’ll go back and check your numbers.

For this year I get £65m ($80m) due in EPL.

Next year assuming same costs, production, realised POO I get an EPL of £158m ($190m).

My assumptions are $85/bbl, 41kbbl/d (U.K.), 300m opex (100m deducted from headline for depreciation and interest), 5kbbl/day to BP at $45 profit, Kraken lease principle $100m.

Worth repeating Pelles post of 19th November…

“From Enquest IR to Swedish guy.

IR also confirmed in another mail hedging losses are deductible

You’ll appreciate that the details and definitions which underpin the amended EPL mechanism have not yet been released and, as such, concrete answers can’t yet be derived. This is evidenced by the disparity in cash flow impacts being modelled by analysts in their initial notes on the amended tax for EnQuest and our peers. Equally, if we did provide an estimate of the tax impact, that would effectively be a profit forecast, which is not something we have done or will do.

However, based on our understanding of the new EPL mechanism, the basic calculation is arrived at as follows:
UK Revenue
(less) Opex (excluding depreciation and interest costs)
(less) Magnus profit share
(less) Kraken Lease – principal element
Taxable Profit (pre-Capex)
(less) UK capex
(less) Tax relief = 0.29X Capex (investment allowance totals 1.29x capex)
Taxable Profit
EPL applied at 35% to taxable profit”

Londoner - yet to see your own calculation -IR provided the details of what can be offset so you just need to plug in the latest numbers / forecast to end of year.

I suspect you will find that $14m is not wildly wrong.

44 - no chance of getting $16m by end 2023 unless you expect Ruvuma to be in production and have produced 50bcf. At best $6m in 2023, though my personal view is that FID is unlikely…

If the deal does not go ahead then SCIR could cease to exist.

Total consideration of up to US$16 million comprised of:

o Initial consideration of US$3 million payable on completion of the Proposed Transaction;

o US$3 million payable upon final investment decision being taken by the parties to the Ruvuma Asset Production Sharing Agreement or the JOA as the case may be;

o Deferred consideration of up to US$8 million payable in the form of a 25% net revenue share from the point when Ruvuma commences delivery of gas to the gas buyer;

o Contingent consideration of US$2 million payable on gross production reaching a level equal to or greater than 50Bcf.

I doubt it Kirsin. $3m may be received early next year however that is already being spent and will likely all be gone within the next 6 months for G&A and consultancy fees.

So the company will need to raise funds in the near term.

50% reduction in cash balance (based on high forecast gas prices) is a big hit to PMGs prospects. Clearly TC doesn’t have anything better to spend his money on in the next 12 months?

Devon - PMG have not said how it will be funded.

There certainly has been high revenues from the Dutch assets - problem is that PMG have other calls on this cash - hence the loss for year to July.

Finncap even admit that approx £11m will be wiped off the cash balance!!!!

Revenue is pretty worthless Devon. And in any case the price of gas is now far below the 4 month rolling average.

Finncap suggest full19m spend next year. Estimating year end cash balance of £12m.

Not quite what people hope I would think.

I’m guessing the retroactive solidarity tax is not yet included in any of these calculations. Could provide a sting in the tail.

Devon- there is no cash left over to cover the 19m decomm costs next year. PMG have made a loss an are unlikely to make significant free cash flow (though there should be some FCF given higher gas prices so far and some contribution from new wells above and beyond natural decline rates).

Should be a very nice Xmas for the BOD. One assumes they will have exceeded expectations of Big Jon.

Romaron - the same thing occurred to me this morning. There are some powerful interests for POO to stay low until the cap is locked in.

China can’t continue with zero covid. Reality forces change eventually, and I don’t see what they gain with zero covid (other than an excuse to control their subjects even more).

No blood on the walls so far today. Traders get awful excited don’t they.

I hope young Ryan isn’t running the show!!