Member Info for Pelle

Good morning L3, Your welcome, we will try keep the stand here. And once Oil reach 80 I will contact enquest and inform it’s time to hedge:-)

I have updated FCF based on Fernan’s Waterfall distribution for the 75%. Nov 2018, FCF operation about 10 milj Dec 2018, only 10 milj from Bumi. Dec BP gets 25+75% cash flow Magnus End 2018 Enquest debt 1850 milj 2019 Based on current hedge and oil price. And Jan to May Enq should get 100% Magnus cash flow. June to Dec 50% split of the 75% Jan-March approx 30 milj/month April- May approx 20 milj/month June-Dec approx 10 milj/month So total free cash flow 2019 based on current prices 200 milj And we will make the 110 milj until 1 April from FCF

Hi L3, Will be interesting see hedges. For me I hope they didn’t panic in Dec and put low hedges. I think we will have a nice recovery in oil price over next months

Any link Romaron?

Hi L3, Ok, but text was not same at all as the RBC link article E posted. Of course they can’t control Oil price, but they can hedge more when price seems good. 75-80 I would consider very good for enquest. My worries before at late summer was that they might hedged to early before the spike in Sep Oct. I could not imagine that the outcome would be even less hedge then normal. Specially also as 2019 is one of the most important year to come on top of debt reduction.

Is it the correction L3 posted below?

Hi Romaron

I looked at some of Fernans oldest post's about free cashflow, end year debt projections and so on.
And even he have been too optimistic.
Fernan is one of the sharpest in here, in my opinion and we should learn more from him.

Its not really good company performance over last year when "pessimist" turns out to been too optimistic.

Lets hope for a better 2019 and more recovery in oil price.

Thanks to everyone here and I must appologize, you were very right about error's in RBC article.

Hope they re-write it
Enquest far from breaking covenants and on solid ground with free cash flow and debt reduction even at 60 usd oil.

( even we all have bigger wishes then 200 milj free cashflow for 2019)

Think I can sleep better tonight:-)

Hi Fernan

I also understand its not important related to capacity to repay debt.

But as a value of the company.
I read on other forum there might be write down on assets due to lower oil price at 31/12.
But on possitive side we added Magnus and reduced some debt

Hi Fernan

In last 6 months report , balance sheet there Total Equity 768 milj.
Isn't this figure important for company valuation aslo?

How will it develop to end end 2018?

Hi Fernan

Your really expert on this I must say.
Do you have any take on how the equity on balance sheet will develop over the last 6 months?
Or its impossible say roughly?

Haha L3

Thanks Fernan and L3.
Think I need to read this many times to understand

Hi Squif

Shale, yes I read that article and I also posted this one before.
I guess that in 2-3 years they reached the peak and after that we will see really high oil prices

https://srsroccoreport.com/the-coming-collapse-of-u-s-shale-oil-production

Hi Squif

Yes, I assume they get waiver as they did it in the past.
And enquest now showed good will by raising cash for Magnus.

Maybe E or L3 can explain because I am not 100% sure
Debt= Net debt minus PIK?
EBITDA = is it 12 months forward forecast?

31 December 2018 1:75:1.0
31 March 2019 1.50:1.0

Hi KO

What was completely from in RBS article?

This ?

“However with the oil price having retreated to $55/bbl, we think there is a risk of a covenant breach if the oil price remains below $60/bbl throughout the first half of 2019.”

The RBC analyst noted that EnQuest is facing two upcoming tests on its debt covenants, one in March and one in June but amid weaker oil prices and continuing problems with the Kraken field, McCulloch reckons the tests will be “increasingly challenging”.

If Oil hits 80 again I will write to AB and enquest and ask them to hedge a lot. So we can sleep at night and we also been looking forward to our 60 p party now for a long time

Hi L3 According to my excel RBC is spot on with 150 milj debt reduction with oil at 60 through 2019. I put in oil price with few usd discount. Q1 63 usd and rest year 57 usd. Capex is still high 250 milj and maybe some of it can be postponed until oil price recover and hedge in place. To tired now to look at covenants as I am not expert on it. AB will have to look at it

Hi KO, What figures are wrong? The 15p target price is almost impossible calculate as valuation is only a play at higher oil price. They could have set anything from 5p to 50p

Hi KO, What is wrong with article?

Yepp, with enquest situation debt gun pointing at your head they should have hedged 50% prod all 2019 at 75-80 usd. Hopefully we get back to these levels again in Q1