Member Info for Pelle

Hi Gkb, I also agree with you basically:-) It was just small note and don’t know if we finally got each other. About the multiple 3-5, I agree with profitaker around 3 today and maybe in 1-2 years stretch it to 4-5. Anyway the potential is massive over the next years if oil prices stays above 65 usd

Hi Profit and Gkb, Yes, we are aligned with numbers. Pumping up EBITDA and reducing debt the only way is up over 1-2 years. With oil 10 usd higher we might already have a 60 p party this year

Hi Gkb, The 1,36 debt is already net debt so I would not consider the cash. I need check more when I come home because just on mobile now

Hi Gkb, You say EV 2,3 billion Debt 1,3 Then marketcap must be 2,3-1,3=1 billion Or maybe I am confused with numbers today:-)

Hi Gkb, Yes, I got your numbers with separator. But it doesn’t add up for me. Billion GBP Mcap 1,3 Debt 1,3 EV 2,3 I think we can get these multiple of 3-5 once debt is reduced with 800 milj usd and it should be doable in 2 years if things stay normal. So it must be great investment hold on to this a few years. My first post gave 50-160p in 2 years. Even 50p in 2 years is great return on money. If we end up in middle 100 p its fantastic!

Hi Gkb, I think you mean mcap today of around 1 billion GBP. Debt is today 1,3 billion GBP. Your assuming a multiple close to 5 if I got it right. Plethorus mention before we get these valuations 3-5 multiple once debt is around 1 to 1 with EBITDA. So that why I talked about valuation approx 2 years from now.

Good evening all,

Looking at this more on the longrun it surely must be a good holding given the debt reduction comes out as estimated over next 2 years and things stay normal in world and say oil price average 70 usd.
Lets assume marketcap today 500 mill usd
Debt reduction 2019/2020: 300+500 mill usd
What would marketcap be then 1300 mill? or does it come additional value with much less company risk and 200+200 mill reduced on Kraken leasing and BP cashflow?
So given this model we should marketcap around 2,5-4 times higher then today around 50-80p.

Another valuation EV/EBITDA
Plethorus mention multiples of 3-5 for similar companies depending on size
If we again assume debt is down to 1 billion in 2 years
EBITDA 1 billion
So then we are looking at marketcap between 2-4 billion? = 80-160p

Am I thinking right?
Then it surely it must be difficult hold this SP back

Hi L3 I can hear you in shock and denial stage to others investment strategies

I think Jim must be in the Acceptance and hope stage. If he want my lot of shares for 100p he can contact me. Sounds like it’s the guy who can afford it.

Hello E,

ok, if both you and L3 agree that its 600 mill i will take that number and start work on the oil price:-)

Interesting that the RCF went down 1,5%, every thing helps.

Must say things are starting to look good with both production and oil price.
Roughly we should generate the same FCF today with 70k and 67 oil as in autumn with 54k and 80 oil.
About 1 mill/day

Hi Fernan

Thanks for offer:-) but its not needed at the moment.
I built my own excel sheet for FCF calculation.

Hope you stay around here, you see here is like in life.
Everyone is not best friends with everyone

Hi L3

Regarding Magnus, its bit over my understanding so I cant judge if your right.

But if your right it slighly effect my retirement plan:-)

Hi L3

regarding the Magnus deal Moodys wrote:
Based on pro-forma financial statements published in the rights issue prospectus, EnQuest has a provision of $418 million immediately post closing, representing the outstanding vendor loan and BP's entitlement under the cash flow sharing arrangement discounted to present date. Moody's will treat this provision as debt.

So I calculate some rough numbers based on 37,5% to BP
20k prod x 0,375 = 7,5k x 365 = 2,7 million barrels x (65-25) = roughtly 100 milj/year they can return to BP.

About the debt, I thought the RFC was the highest interest burden.
I would assume they pay down the RFC first and then re-finance the bonds somehow and keep a debt of 500-1000 million in long run.
Once the RFC is paydown they can give 25-50% FCF to shareholders and reinvest the other FCF.

Thats how I see it in longrun

Hi L3

haha, downhill skier.. good that lift system is well developed in the mountains!

Yes, Magnus is really good surprise.
21,5k in Dec/Jan was about 7k more then those months 1 year ago.
And in prospect the "big" lift in production was supposed to come in 2020.
So maybe in 2020 the average can be closer to 25k

Is it around 400 milj Enq own BP for vendor loan + cashflow deal?
I calculated roughly that would take 4 years to payback.
And after that FCF for Enq will increase even more in 2023 given that production not declined more the 37,5% witch is not likely.

Hi DK

No, hedge is not the reason for not moving higher, 1,5 milj barrels with floor at 56 is just a small part and its just a floor price.
Enq have less hedging then ever in last few years so we more open to oil price change then ever.

Can even reason that the limited hedging now is the reason we went down so much and one day at 66 usd this week doesnt really make a difference for Enq. We need atleast 2 good years with price above 65 and hopefully more.

I hope they build up more and more hedging the higher oil goes, even as long as 1-2 years for some % of prod if prices really good. Once thats in place analysts can calculate best they can give shareprice targets of 60p+.
This should have been in place already last autumn when oil was as high as 80-85.

Evening E,

Your right, last weeks been ramping bit too much to balance all the negative here.
Even Miner thought I was too much when I wrote oil will go to 70-80, he didnt like the word will:-)
But I think we can have a bit of fun here to right? And take some things with pintch of salt.
I can be serious too, and always try post my best knowledge numbers FCF and other info and have a balance view.

Its great you share the possitive view on oil even though I think it will be go bit faster and higher.
Things tend to go faster and higher/lower then you can imagine, even so in Nov/Dec.

My previous post was just if people here judge Fernan correct, I think he done some good here in past and should not be judged only based on one single last post.

Good evening

I am not sure you judge Fernan correct, he been around for 1 year here and always provided as accurate
economic data as possible.
Sometime ago I looked at his earlier forecast and they even turned out to been to optimistic compared to results.
He helped us with some things and even got in contact with Enq IR.
Magnus waterfall and RBC analyst conviants breaks error. It was in our favour he posted these findings!

What his motive about last post is I dont know, but he is always conservative and maybe worried too about such things like EP.
But you never find a perfect company very cheap.
Most here have similar investment case as I and see the potential in few years down the road

Hi E, And I believe since quite some time we paying them of already with 20% extra from Alma do they can get their investment back.

Hi January, I think this is only the start of oil moving up. Cuts just started and getting deeper + Venezuela and Iran. Demand goes up. Should easy see 70-80 in spring We have a good position here

Hello, Yes, I also read it somewhere but Enq saw limited risk with this EP claim if I remember correct