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Thanks Romaron and VoR

I was more thinking about which benchmark they are using for the swaps. My guess would be standard ICE Brent futures rather than Dated Brent futures.

In normal markets there probably isn’t much difference between the two, but in the current market the spread could be significant. That would make a rather large difference to the hedge loss, depending on which benchmark the swaps reference.

I think regular ICE Brent futures are far more liquid, so hopefully that is the benchmark used for the swaps.

I’m curious to know where we hedge with swaps, I mean which benchmark. Hopefully it’s in the main market with ICE brent futures rather than the dated brent market. Maybe someone knows or could hazard a guess ? If not, a question for the AGM maybe ?

From the Harbour update a few minutes ago…

-Post period end in April the difference between Dated Brent (which most of our crude is priced against) and the front month ICE Brent future increased to $18/bbl versus $3/bbl in Q1 2026-

Norwegian energy giant Equinor says it expects disruptions on the global oil and gas market, due to the war on Iran, to continue for at least six months.

“Even if there were to be peace right now, it would take time – we think a minimum of six months – before the situation returns to normal,” Equinor’s President Anders Opedal told Norwegian broadcaster NRK.

His comments came as Equinor reported an 18 percent rise in first-quarter net profit to $3.1bn, buoyed by soaring prices due to the war.

“Many ships are blocked [in the Gulf], many others are scattered around the world and need to come back, and so it will take a bit of time,” Opedal added, expressing hope for a return to normal since “no one has anything to gain from this war.”

It is frustrating I will give you that ! But only in January we were 10p, and now look at us !. Hang in there man.

By the time everyone agrees it’s a crisis we’ll be rationing fuel ! The current Brent price beggars belief !

Rom – yes exactly, about 5p away from the FTSE250 today. But it’s a moving target, so if the companies around the 325th mark rise we’ll need a bigger market cap to get in, conversely if they fall. Next review 2nd June (20 trading days away). Don’t recall ever holding a stock into or out of an index change so don’t know what effect it’ll have. Should be positive as index trackers buy in, but don't know to what extent. Anyone guess ?

I think more important than the actual net debt $$$ number is the net debt compared to earnings. Net Debt / EBITDA was 0.9 in the FY 2025 and obviously set to fall dramatically at the current oil price. Hopefully an acquisition will improve that ratio, not degrade it.

The market will wake up and re-rate us. I don’t know when, but I know it will. The way I look at it is this – now that we’re paid a reasonable dividend (4%) I can hold this cash cow for years and years, without even breaking a sweat. I have complete faith in AB and his team. So I’m just chilling out, and enjoying the ride.

Romaron – well spotted and yep, nice pop there, to say the least ! Issued at 10.12% and currently a tad over 9%. Don’t think anything mysterious is happening, just hot demand for high yield oil related debt .

Stumpy – I’ve been thinking this for a while now. The market just hasn’t yet woken up yet to the tsunami heading our way. Iran just not interested in anything other than complete control of the Strait. No point in bombing the f uck out of them again. The IEA saying 2 years to get back to “normal” inventory. I see $175+ oil, followed by demand destruction (hopefully not permanent !). So glad to be long ENQ, but wish I’d bought more on Friday now.

Al Jazeera > Middle East > Live Updates

4 weeks ! Oil reserves depleted, Brent at +$150, if not much, much higher. I see no end or exit to this crisis.

Steve

You’ve just posted one figure ($238m). What is your estimate of FCF at $70/$80/$90 ?

Https://www.ft.com/content/b26ba4ce-4324-4ea9-926d-caf036f20832?syn-25a6b1a6=1

I added some more 3 hours hour ago, didn't even show up in the trades.

Tommo

Breakeven cashflow/bbl is somewhere between $65-$70, so take the mid-point $67.5 (who wants to argue over a couple of dollars). If you take Brent at $120, a physical premium of $20, and production of 44,000 bbl/day, including the hedge cost, I get the FCF of $335M/year.

VoR

But it’s an easy calculation. Even if you assign all the hedging to the NS (I personally don’t), then in your example (Brent $111 / hedge $71) the cost of the hedge is $17.96/bbl, not $40/bbl.

Reasoning: the hedge of 5.1 MMbbls runs from 1 April for 12 months. That rolls off^ at 13,972 bbl/day, and NS production is 31,112 bbl/day, so only 44.9% of production is hedged.

Revenue/day is 31,112 × $111 = $3,453,432.

Cost of the hedge is 13,972 × ($111 - $71) = $558,880/day, leaving net realised revenue of $3,453,432 - $558,880 = $2,894,552/day.

Divide that realised revenue by total production ($2,894,552 / 31,112) and you get $93.04/bbl realised. So $93.04 realised oil price + $17.96 hedge cost sums to Brent at $111.

^ ok, I know it’s lumpy in real life.

VoR

I don’t think it’s fair to say the hedge relates only to NS oil, because if you sell a barrel of oil in SEA (from the PSC) and simultaneously close the hedge, you’ve got the hedge drag down there too. So it’s a group wide hedge I think. It could be that they have a more specific hedge contract in place for the SEA oil grade, but as we know, they don’t give the fine detail, only the headline. The other thing we don’t get is a clear oil/gas split in SEA, so the hedging does get a bit murky. I’m sure that AB (Captain Cautious) has it covered though.

Damn it !!!

Https://www.equiti.com/jo-en/news/market-insights/real-oil-price-explained-why-crude-is-no-longer-trading-at-one-global-level/