Member Info for mrc_mrc_mrc_mrd

Hi L7 - not sure if it is available anywhere on PMG accounts or issued RNS - it’s the Finncap estimate.

The business IMHO has suddenly (for me) become quite risky. The producing assets can’t cover day to day costs and the much touted war chest has now evaporated.

I always assume it was worth a punt on GPA at the right price (40p with cash pile IMHO). Without cash pile we lose the safety net and make growth through acquisitions or big capex spend next to impossible without a large recapitalisation. I also really liked platypus, and despite what some people hope, I can’t see that coming back (in any case we can’t afford it without new equity issue).

On Platypus, my feeling is that the NSTA may have factored in PMGs tardy decomm when deciding not to let them keep the licence.

SoTB - well the decomm costs have gone up £7m so that is obviously an unexpected hit, even if you had already factored in the £12m liability.

The cash pile is reducing even with record cash flows from NL.

So you are hoping for a placing to fund these acquisitions that TC is dangling? (And has been for a decade). Previous acquisitions have turned out to be a disaster.

GPA through Scott will cost in excess of $100m (believe me or not, it’s my opinion based on some knowledge of the asset and what is needed for a sour gas development).

My view was that with £30m in the bank we could retain 50% and fund it ourselves with that + cash from the Netherlands wells and potentially a bond issue or placing from a position of strength.

That is out the window now.

Best case that I can see is keeping a carried 10%. Still a step up in production (net around 1000bpd initial production), but hardly a game changer….

SoTB - with respect, £19m is material for a company that is loss making and only has £23m to its name…..I hope TC doesn’t share your attitude to money. Placing required now to drill Skerryvore.

Buzz - private investors would not have been expecting this £19m hit. All the talk on here is about the cash pile. Well that is gone now.

I’ll admit I am one of those that didn’t do their due diligence on this.

I was aware there was still a decomm liability but had a much lower figure in my mind.

So since the update we have gone from expecting a large net profit and sitting on a huge cash pile, to losses and no cash runway of a few years at current burn rate.

How can that not change your view of the company’s prospects.

The EU windfall tax will be implemented post period (retroactively) - that is why it isn’t mentioned IMHO.

It makes the losses even worse.

$90m less than guided

Salman said…slight shift in orientation towards protecting cash flow, maintaining exposure to upside. Thinking about other instruments, particularly PUTs. Expect a slightly higher orientation to upside exposure in addition to downside risk management.

Yes - and ENQ have specifically said they would now look to hedge the downside only and remove the ceiling. I think it was on the half year results call?

GPA is the only glimmer of hope supporting the SP and the EPL has made that very unlikely IMHO. PMG also in a poor negotiating position with effectively zero cash to fundtheir remaining % of development costs post farm out. So looking at possibly retaining a small percentage and free carry to production. Any income from that is at least 3 or 4 years post farm out.

I expect this to fall considerably from here. I wouldn’t be surprised to see the 20s again. My plan had been to get in at low 40s on a pull back but like you say without the cash, and with net losses for the group there is a lot of potential downside!

When you take the governance issues into account I don’t think I would invest even at 20p…

Thanks Tarmak

Debottlenecking is always good though. Current gas price is $175 per boe so any extra is good news!

The tax will actually be more than reported as the Dutch are levying a 33% windfall tax on excess profits retroactively for 2022.

Ouch

At £3 per therm and 20mmscfd (205649 therms) we get (up to) £225m.

That sounds rather positive.

Anyone confirm my calculations?

This is what I like about ENQ. They get after opportunities.

Agreed Romaron.

GE the only disappointment, but balanced by some positives on costs, and success on the Magnus well.

Production stable and at the mid point. Assets all running steady.

No mention of Bressay and Bentley. Perhaps best to focus on near field and SVT opportunities.

Hopefully we can wait until POO gets back into the 90s before hedging.

2nd half of next year we can get around $80 at the moment. Not bad but $90 would be very nice.

I wonder if Xi will be forced to change course soon. Populous not very happy seeing what the rest of the world are up to at the World Cup.

This isn’t bad

“average Magnus production during October of c.17,000 Boepd. Accordingly, the Group is progressing plans to drill a water injection well in the first quarter of 2023 to provide pressure support to this well.”

3545 boe

https://www.convert-me.com/en/convert/energy/mscfgas/mscfgas-to-boe.html

Delivery is as guided as far as I can see.

Stupmy - you want ENQ to be punished a third time for the EPL increase? Once on rumour, once on news, and once on confirmation by the company?

Oh and we could include a 4th for the Barclays analyst telling us about it.

Lol, well steveo is going to get a nice surprise.

Though I doubt ENQ will speculate on next years tax.

I think PMG have probably been told that if they don’t stop dragging their heels with decomm then they won’t get any new licences. Doesn’t bode well for getting Platypus back IMHO

At best the drills replace the declines from the other wells. If PMG cannot make a profit at these gas prices then it is in deep trouble IMHO.

I agree there is a lot of smoke and mirrors in the reporting.

For me there are too many red flags. Nephew employed in senior position I believe (Ryan). Certainly seems like some shareholders are benefitting from the company performance (E.g. the Cross family).