Member Info for Pelle

Good morning Fernan, Nice excel sheet and detail. Using your oil price, prod, capex My file says 420 milj vs your 372 So it’s close enough. I saw some things I would like comment, Magnus 25% I have calculated to be paid off early Dec this year. And credit facility is today down 1050-195=855 milj.

Hi MO

Exactly, second part you copy paste says it all.

To drill DC4 I think maybe 90 days x0,16 x70 % = 10 milj aprox.
But it takes time before acual capex comes down lower

Dont know if you all seen this, in report they only said OZ interest lower then RCF

page 284

Interest
Interest is calculated as LIBOR plus a margin of 5.75 per cent. per annum. The interest could
be raised to 6.30 per cent. per annum, if the OZ Second Ranking Security is not granted
within 6 months after financial close.

Yes, Transocean rate so much better now.
Good the breakdown come if I remember correct
But we will still have Kraken opex in 2019.
2020 Capex should come down lower
Thats why there no reason to believe any lower H2 capex then guidance.

Page 272 , DC4 subsea

EnQuest Heather has also entered into a separate contract with Technip in respect of drill
centre 4, with an original contract price of £30,310,986. Such contract price has already
increased due to variations and is now £32,526,326. Under the arrangements, the
payment of EnQuest’s equity share (70.5 per cent.) of all invoices will be deferred and a rate
of 7 per cent. per annum applied on such deferred amounts. The deferred amounts shall be
paid in six monthly instalments, with the first such payment being due on the date falling
nine months after completion of the work, with such completion expected to occur around
15 September 2018.

Hi MO

Page 283, Guess this is for drilling before DC4

A deferral arrangement was entered into with Transocean on 28 September 2016, deferring up to
$60,000,000 of payments to Transocean over two years beginning 1 July 2016 with repayments
to be made by EnQuest Heather (including interest) over a 12 month period from 1 May 2018 to
30 April 2019. The repayments commenced on 1 May 2018 as planned on a total deferred amount
of approximately $50,000,000, with repayments expected to be completed in February 2019.

Hello L3

Regarding capex H2, I have seen in Magnus prospect, they have good payment terms.
There is a delay of invoices sometimes up to 9-15 months.
So what I understand, the capex for we pay in H2 can be for job all the way back to 2017 in some cases

Read page 272/273 and 283

Transocean rate is 0,16 milj/day

Thanks MO, So alma looks like going from 2k H1 to around 7k H2. About 2k net extra to Enq H2

Hi MO and E121, Thanks for data and estimates. 35k is 3 k net to Enquest better then H1. Wish for strong finish last 2 months and stabilise around 40 it will be enough. 50k stable looks too far away to even hope for.

Hi MO, What does your calculations tell you about Kraken prod Sept and Oct? He know H1 31k July/Aug 33

Hello I would like calibrate my excel file calculation with others here based on 2019. If we include Magnus from 1 Jan. And assume following Prod 75k Oil price sold 70 usd Opex cost 20 usd/barrel Capex 200 milj I get free cash flow 650 milj Anyone wants to share based on this?

Hi L3T Transocean Leander is delay because extended work for other company. Once finished there in few weeks as MO said it will move to Kraken. So Enquest don’t need to find job for it For capex H2 I would still count on the 125 these capex figures always been almost exact from Enquest. In Magnus prospect there some info about capex and invoices are sometimes split with monthly payments like 6-9 months later

Hi E121

I think we can all agree its not straight 62,5% from Magnus:-)
But if I understand it right with this higher 250 milj cashflow from the 75%. (witch is resonable)
The outcome in your example will be a 50/50 share over the year, just that Enquest get their part 4-5 months later.

I been in this for long started buing at way down at around 60 p then more and more at 30 p, 24, 21 p
So I know exatcly where we coming from.
And AB overall made mostly good things,
-big proactive hedges when oil was on way down
-Proactive Magnus deal
-as small as possible open offer and right issue amounts

But I wonder why AB make things so complicated and if so then try explain better.
And maybe now for the future its possible paint a brighter picture and sell in the company bit more.

What I noted also during these years, some years ago enq was most sensible to oil price changes and I thought
it would rise most when oil went from 40-50 to 70-80 but it lost most of that track and other swedish oil shares went up earlier and more.
Do you follow any of the companies in swedish Lundin group?

Hi E121

The capex payments I refered to in prospect is found on page 272/273
Guess the subsea work is paid later but drilling rig daily payment

EnQuest Heather has also entered into a separate contract with Technip in respect of drill
centre 4, with an original contract price of £30,310,986. Such contract price has already
increased due to variations and is now £32,526,326. Under the arrangements, the
payment of EnQuest’s equity share (70.5 per cent.) of all invoices will be deferred and a rate
of 7 per cent. per annum applied on such deferred amounts. The deferred amounts shall be
paid in six monthly instalments, with the first such payment being due on the date falling
nine months after completion of the work, with such completion expected to occur around
15 September 2018.

(vii) Contract for the provision of Transocean Leader
EnQuest Heather is party to a contract dated 29 September 2014 with Transocean Drilling
U.K. Limited (“Transocean”) in relation to the provision of the Transocean Leader drilling
unit. The contract has since been amended by amendment agreement to reduce the term of
the contract and the applicable suite of operating rates (see paragraph 18.4(c) of this Part 11
(“Additional Information”) for details of the amendment agreements). The remaining scope
of work under the contract comprises the workover of three wells at Alma and drilling and
completion of four wells at Kraken. The remuneration to be paid to Transocean includes an
operating rate of $135,000 per day payable by EnQuest Heather in respect of the Alma
workovers and $160,000 per day in respect of Kraken drilling (together with a bonus-malus
scheme based on rig performance). This daily operating rate is payable if the drilling unit is,
among other things, anchored on location and ready to start the work. Lower rates apply in
certain circumstances, including where Transocean is unable to proceed with the work
because of adverse sea or weather conditions or force majeure.
See also paragraph 18.4(c) of this Part 11 (“Additional Information”) on the deferral
arrangement around the consideration payable to Transocean.

Hi Fernan

I think your right, ( no offense E121)
I also read and heard that the remaining 100 milj vendor loan will be split over 5 years.
With your detail calculation Enquest will get in 2019 cashflow
82 milj from 25% + 159 milj from 75% = 241 milj that is 73 % of the total 327 milj.

and there even upside on prod numbers 17,5k actual in July + 1 well in Sept

This deal have saved Enquest beeing where we are with Kraken.

Hi E121

Appriciate your details.
So from the 75% deal basically cashflow goes like, or?
1. 100 milj to BP
2. 100 milj to Enquest
3. 50/50 split

I read on page 179 in prospect about opex cost
Around 75 milj/year
with prod 18k =6,5 milj barrels/year
Opex is around 11,5 usd/barrel
So free cashflow is nearly double your figures, or am I missing something?

so 5 milj barrels/year for 75% gives around 400k barrels/month
400k x 60 usd = 24 milj usd/month cashflow
So the first 100 milj will be done in 4-5 months

I have also calculated the 25% part to be repaid around early Dec this year and after that date cashflow goes to Enq.

Regarding DC4 capex delay, I read somewhere in this prospect ( there alot details about other things then Magnus)
Something like
Monthly invoices over 6 months like 6 months after complesion.
There was also the amount of money for DC4

Have you seen this?
Let me see if I can find it again:-)

Capex 180 milj next year is just a guess. 250 this year and I think something less next year. 51 usd next year give me 200 milj free cash flow. If included H2 2018 cash flow they can still pay the 275 milj next year at oil price 51. But oil price should be much higher then this as they have had good opportunities to hedge I was thinking who else here is interested in calibrate our excel sheet on free cash flow? We make assumptions on prod, oil price, opex, capex. And report back free cash flow.

Hi Squif, If i put in prod 74k next year and take out BP 7k and 3k half year Malaysia. 43 usd breakeven no free cashflow. 55 usd 300 milj free casflow and can follow dept reduction plan. 75 usd equal free cash flow around 750 milj Capex I have at 180 milj 2019 I would assume they hedged more % of prod and longer horizon into 2019 to secure 75 usd next year Would be nice if others also could share their numbers

Hi Squif

How much prod did you calculate with then?
Breakeven you mean they can pay all cost, but no money for amortization like H1 2018?

H1 2018 had around 58 usd breakeven so it have to be lower 2019
My calcs indicated lower but I have it at office

not double but doable