Member Info for Plethorus

All oil majors are interested in getting out of the North Sea so it doesnt have to be BP in particular. But AB has a good relationship with BP having worked a Amoco before which was bought out by BP. So its not the case of relying on BP but more of a case that a good working relationship exists.

The magnus purchase involved no cash outlay initially, so enquest might take advantage of such deals.

Magnus made Enquest stronger and allowed it to weather the storm when Kraken was underperforming. If
Brent plunges further the majors will be keen to offload even more assets and Enquest might be able to pick up an even better field than magnus at similar or even better terms with BP or another major where cash outlay will be minumal or deferred.

On the bright side, as per the operational update in February, Enquest has 2.9mb of oil hedged with a floor price of $65 for Q1, so on average 32kb/d for Q1 (half of Enquest’s production for that period). Enquest also has 1.1mb of oil hedged with a floor price of $52 throughout 2020 which equates to 3kb/d for the whole year. From early February until March, Enquest probably would have entered more hedges with a floor price somewhere in the $50s (mid or low 50s) for Q2 and Q3. So enquest isnt as naked as some fear. If oil plunges to $40 and stays there for 6-9 months Enquest can cut capex, weather the storm through its hedges and at the end of the period when brent is at $40 Enquest should raise more capital and buy another Magnus type asset producing 20kb/d-25kb/d with a breakeven at $20)

I thought enquest’s maintenance capex is $100m-$125m

Enquest should raise money in the next 12 months and buy another Magnus at sub $50 brent

Debt restructuring is a sensible path to go down assuming Mubadala dont buy a large stake in the company. The good thing is that NMC Is removing the 3 major shareholders from the company. They had been taking a lot from the compang through secret loans etc. Now that will stop and the company can be run objectively. A debt restructuring can wipe out shareholders so I can imagine that the best approach would be a debt restructuring alongside a capital raise but i dont see investors rushing to put more equity into the company unless all the dirt comes out once and for all. They need confidence to invest more

This should have been suspended in December to clear out all the irregularities but the big banks from whom Shetty and and the major shareholders borrowed funds from wouldnt have allowed their collateral to be suspended

I think US follows UK

I think the report was delayed because Louis Freeh wasnt willing to be bullied or tamed so there must have been disagreements hence the long time it took to disclose

The only positive is that the 3 shareholders are losing their influence over the company each day. They are effectively outsiders now with a less than 40% combined stake

If this RNS was the final line under the allegations and everything had come out now including the firings then the drop would be very little. But given that the RNS says it hasnt concluded its findings yet and there are financial discrepancies then the only thing stopping the fall is if Richard Chandler buys big tomorrow. Without that £5 beckons until the full disclosure comes out

He’s playing the odds. If the share price tumbles after results then he’s already in a good position to pounce and buy the company having accumulated shares. If the share price goes up following the announcement then his holding would go up but he would have to pay more for a controlling stake. So it all depends on whether he wants a controlling stake or not. But from his perspective he’s trying he’s playing the odds.

Dividend will definitely be scrapped

Sounds about right

Sino Forest has zero correlation to NMC health its like another coin toss. Just because Block was right on Sino Forest and it went to zero doesnt mean he’s right again on NMC and it goes to zero.

Because he’s cash poor. Selling his shares was to cover margin calls as in debt he took out and invested in other illiquid business or 100th floor apartments in Burj Khalifa

I think in reality those two owners still have a lot of shares pledged as collateral to banks and hence the constant selling but maybe they werent in their names directly but in a holding company controlled by the 3 shareholders. The takeover code forced shetty to own up to the fact that many more shares might still be pledged as collateral and that holdings might not be accurate. If there was no takeover offer it would have stayed a secret and shares would have kept being sold in the background. I said a while ago that this is an overleverage story by shareholders deeply in margin and the share price rout wont end until they effectively sell all the shares they pledged as collateral.

The offer would probably be £15-£18. KKR would never pay £20+

NMC health is going to £5. At that point either the accounting shenanigans are confirmed or completely proven wrong. Fair price is £5 assuming understated debt and overstated cash