Member Info for Pelle

Please no Q2 hedge yet, wait until Feb March

Hi L3

OZ loan, just speculating but I would assume the monthy paybacks are
(15% production x oil price sold) - (opex and leasing cost)
Opex and leasing cost I estimate to 20 usd
So assume a prod 30k = 4,5k for 15% = 1,6 milj barrels/year
Lets say they get 50 usd for oil now minus 20 for cost
30 usd x 1,6 milj= 48 milj
Minus interest rate too, dont know what Libor rate is lets assume 8% total gives 14 milj cost 1 year
So can reduce that debt with about 34 milj/year
Roughly 3 milj/month

Sounds ok?

Hi L3

Not necessary because they very moderate with infomation when it comes to problems.
It would surprise me if they dont know where the bottleneck is after more than 1 year high volume production.
Guess we will find out more at year end results when people can ask questions.

OZ loan , see P 283/284 in Magnus prospect

Hi Chilting

I aslo get impression that Kraken problems is related to AK.
Guidance for 2019 is now 30-35k with latest update , before they always said we will get to 50k.
I will be very possitive surprised if we ever get one month with 40k again as in last February.
But we dont know, maybe 30-35k includes a longer maintenance stop to fix something and after that we higher prod.

Hi L3

I also thought about this with further hedges, its not so nice situation with the game they started with not hedging at 80.
Now I think they need continue play this game and wait for prices above 70 usd before put any further hedge.

Hi Romaron

Thanks:-) I even posted that finding before. There a lot info in this prospect to be found that we didnt know.
I am also no tax expert but I imagine there value in it.

I think its very likely we will see another Magnus deal during 2019.
Enquest said themself its a raw model to be used in future.
This enquest can afford, 25% start paid with cashflow and take over remaining 75% for 100 milj cash in 2 years time.
Othwise production will start decline in few years I assume.

Magnus compensated for Kraken failure.
Combined basically same production as Kraken should have been.
But now with a longer stable production I assume.

Yes, AB is overall good, very creative and its impressive we survived last year's looking at oil price grafh last 5 years and massive investments.

Lets hope for some tailwind instead over next years and re-rating can be impressive

Hi gkb

I saw now you wrote gross production.
Thats probably correct but only because Magnus was low in Aug/Sept due to adding well.

Hi Yhyh

Yes, exactly!

Hi Squif

Yes, its really long time. I guess there will be new deals over next years 6-7 years effecting this.
And POO, its even harder to imagine prices over so many years.
Just need one really good spike to 80-100 usd in next 2 years so they can hedge a lot.
Then these 6-7 years will be much shorter

Hi gkb

Not sure where you get 6k up October vs Sept? Did you use Magnus 25%?
I have according to OGA including 8 % Alba and + 10 k Malaysia
July 53,4k
Aug 58,2k
Sept 54,5
Oct 55,6

First 6 months average accoring to enquest 54k
Using these 54k + Oga numbers above gives average 54,6k witch is close enough to 54,3 in Enquest Dec update.

POO 55 usd doesnt cut the mustard because we cant follow debt reduction plan, I would say above 65-70 we will be ok.

Hi Squif

I think it was good deal for Enquest specially as we can use the tax credits.
But I would not say BP was over generous , given the time when deal was made.
BP still get alot money back over several years without doing anything.

32p I dont see as tops longterm, just we get oil above 65-70 usd we will get good paydown on debt and climb in shareprice in teory.

Hi Squif

There is info about this in Magnus prospect P181.
So if I understand this correct, 3 bilj profit over next 7 years with oil at 70 usd.
Repay 1,8 bilj debt leaves 1,2 bilj for shareholders + remaining value's of assest.

GCA understands that EnQuest has recorded estimated CT losses of US$3,123
MM as at 31st December, 2017. Based on current 2P Reserves, oil price forecast
long term of US$70/Bbl and current planned activity around EnQuest’s existing
portfolio, EnQuest anticipate that these CT losses will be unlikely to be fully utilised
before 2025, when the Magnus 75% acquisition is taken into account. Post 2025,
EnQuest anticipates it will likely be in a tax paying position for CT.

Hi L3

Yes, maybe 65 usd can do it but not sure. I would say 70-75 range.
Q1 is only hedged to 50% so POO still have big effect. 10 usd=350k usd/day=10 milj usd /month.
Hedge horizon is also shorter then ever in past years, last years horizon maybe 6-9 months and now 3 months left.
Dont understand that comming from one month with prices above 80 usd in Sept/oct.

I also saw that comment on other board, Yes its possible as they got it before and in few months repaid mercury.
But this is really one the last things you want to do, specially when company is basically at the peak of production.
So if we would come to that its just lost 6-12 months.

I also saw the Oct prod figures. Not so much comment as it was already released with update in Dec.
Magnus, expected. Think can climb even little more to 18k. And it should be 5 goods months now Nov-March without any breaks.
Alma, dissapointing I must say with all that work done in summer.

I really hope POO continue climb now, and there been good signs of it this week I think.
Opec will do whatever it takes.
Monday/Tuesday next week is US/China trade talk. Something possitive there and we can see a really good spike in POO.

Good morning L3

Based on what oil price 4 th Feb?

Good to see you MO:-)

Its one of the few unsolved mysteries in the world.
Just went up in smoke.
Why did PMO loose 700 milj market cap in few months?

Good morning gkb

Your right, increased % in SVT and pipelines but the conclusion I got from people here is that it generates a limited amount of money.

Happy to see oil continue going up now.

https://oilprice.com/Latest-Energy-News/World-News/OPEC-To-Cut-More-Than-Expected.html

Officially I think they closed that sales, but if you put 400 milj on AB's desk I think he will take it.

Hi gkb,

Not pessimist just realistic:-)
I also believe in oil higher then 50 otherwise I would not be here. But we never know.

About hedges, on 29 th Oct I said here.
(I would assume they hedged more % of prod
and longer horizon into 2019 to secure 75 usd next year)

About UK tax and oil budget I didnt know, sounds positive.
Question is how many millions/year it can give enq?