Member Info for Pelle

SaveNoTime, did you write?

Hedging 100% now 2 years gives debt free in 2 years according to future prices 74 for 2022 and 67 2023.
I have 1.2b FCF over 2 years with those prices
Idea is to hedge 50% of it and it will stabilise around this projection.
Then oil prices will need get very low for a bad SP outcome during these 2 years

Chilting, probably. But cycle is much longer then few months

Chilting, 2008 oil went down with everything else in financial crisis.

I think we might face several years with oil price 100-150 usd. It won’t be that easy for world catch up in supply once Opec capacity is gone

KO, market got spooked when you turned positive for a second.

Hello Kamrat,

If its a new cash deal like GE 2 at 500m and will borrow money for it. My view is certainly that it will push dividend further out in time.

Otherwise it would be easy just buy fields and get better and better financially faster.

If it’s a new deal with EP on the table instead of cash it’s a different story.
But before EP is modified and up and producing I am guessing it’s 12-24 months away today

Just my opinion

Hello L7,
Sorry I can’t give you heads up, that itself might cause a collapse. Lol.

I agree with you 500+500m loan is a level they mention themselves as good position.
It’s a net debt 700m then.
According to my calculations we will reach this within 9-12 months with current oil prices.

Hello L7,
To answer my own question, looking at your part 1 swap example. 72,5 oil in July basically without cost if I understand it correctly.
So around 12 month above 70 oil possible.
That’s 74 average over the 12 months guarantee.
That’s a nice situation.
Barclays don’t need look at 60 oil base case anymore

Hello L7,
Welcome back.
I think getting this as right as possible is more important than rush GE completion as I wrote before.

Hedging is not good in upwards oil market as it will cost or cause some loss.
But continue roll it and you get higher and higher levels.
The profits of hedging comes the day market start go down so that’s why it’s important continue roll.
Not like they did before, reduce or end hedge just before collapse twice.

We should also have in mind current oil price is way above any analyst assumptions.
Barclays had 30p target at 60 oil base case and 50p with 70 oil. How far horizon they can hedge with swaps above 70 oil now?

Another benefit will be a more stable future, and can promise dividend earlier for example.

Will be very exciting times

Hello E,
They need increase hedge around 15m barrels over 2 years horizon. This needs to be completed with GE deal and drawing remaining RBL.

If Enq believed in higher prices end Q3 or Q4 it’s a smart move delay GE completion getting hedge 10 usd higher equal 150m.
Downside is loosing the 40% tax on GE. That loss is 9m per month.

Regarding Enq shareholder friendliness, SP performance is similar or better then peers.
In term of dividend, I think next AGM it will be the time to confirm.
Africa oil started talk about it just a month ago for Q4/Q1 and they debt free within 6 months.
So Enquest just 6-9 months behind to get in desired position

Hello E,
I think we just in the very start of high energy prices a cycle of 5-10 years. I would bet we see 100 usd brent before end year or at least Q1.
I was to early in my predictions to get Romaron’s champagne bottle for average price but good chance hit my year end price 100.

However I like hedge downside also, probably get a better re-finance and earlier dividend etc.
You say 5-10m barrels at 2-3 usd so bet is 10-30m usd to give 70 usd price minimum ?

With new RBL loan there was rather big requirements hedge 1-2 year and we saw half year report the hedge was not fully there. And they only used half RBL.
So maybe they trying ride the upside in prices before draw remaining RBL , finalise GE deal and put additional hedge. Looks like they getting this right if that’s the case.

Squif, obviously you didn’t read the small print in last year end report?
AB bonus target is FCF vs Mcap.
Think he can collect that one already. Lol

Hello E,
I thought idea was to re-finance bonds over let’s say next 9 months.
Then new RBL gets extended to 7 years also

KO, just playing with EV 1,9b we have Mcap 600m and debt around 1,3b after close GE.
End 2022 debt around 400-500m
Maintaining 1,9b EV leaves 1,4b for Mcap.
Approx 2,5 times current Mcap.

Let’s see, I would guess we will see even higher oil prices going forward

Hello Kamrat,
My opinion
Debt / EBITDA will be around 1 in 6 months.

If a new deal cash like GE it will push above multiple upwards and delay dividend.

If a new deal with EP as part input for Enquest it’s better as Enquest might need put little or no money into it. But lead time before up and running is long.

Anyway we very fine with what we have and will be in very very strong position within 9 months.
Hopefully they will talk about dividend spring next year for H2.

I think I saw in your file 200m dividend, it’s what I also hope for approx 1/3 of FCF and AB can do what he wish with the other 2/3.

Yes its electric shortage in south again.
What I heard they run 2 lines in the powerplant 80k litres per hour each. So around 25k barrels per day.
That’s a half Enquest, crazy

Honestly I think AB just want KO’s shares, then I will fly:-)

Check out IPC presentation on top.
Even 5 year FCF estimate and H2 estimate

https://www.international-petroleum.com/investors/presentations/

Guess it’s bit down to the RNS.
Boring or hype it a bit with latest production numbers and FCF calculations etc . Magnus had zero impact at SP.
Anyway I think we looking at a very nice development for Enq with these oil prices.
But AB needs take a step up in terms of attracting shareholder, it would speed up things.
If it’s in his interest…

KO, it’s like 0,1% chance not to happen.
Doubt a 34b company crying over 10k production.
Still can’t judge the deal completely even after 9 months only. But it looks like we got a great start with oil price and production there.
13k June, hope it holds well above the 10k

Haha L3, your stealing my job.
In 9 months should be in great shape at these oil prices. 6m barrels only around 1/3 production 2022 so I also like hedge bit more.
How much extra capex we should estimate for 2022 drilling? On top of the 120m base.
80m extra enough?

Will be so nice when they can stop debt reduction