Member Info for Profitaker

Dumbly

If I were a buyer (AB) I’d assume that EPL will be replaced by OGPM not before 31st March 2030, and I’d assume that Brent averages $80/bbl over the next 5 years.

If I were a seller I’d assume that EPL gets replaced by OGPM within 12 months, and I’d assume Brent averages $100/bbl over the next 5 years.

I can see scope for a deal, particularly if AB is willing to waste some value of the tax losses (by slightly overpaying on price) to partly offset the sellers irrational exuberance. It can be done, though less likely at $110 Brent than $70 Brent, I do concede.

I’m very surprised we aren’t closer to the Serica valuation. 40p ENQ would be a good start to close the gap, and 58p to equalise.

I agree Romaron.

Suprised he hasn't taken Kharg Island up til now to be honest. But this Easter Weekend does look like an opportune time, as you say the markets are closed for longer, and they have everything they need in place and "locked and loaded" (the phrase the orange tool likes to use). If not this weekend, then never would be my guess. He'll just walk away and let other nations clear up his mess.

The Iranians will remember this forever, and I don't think the Strait of Hormuz will ever be the same again. And neither will the price of oil !

Steve

"...and ENQ have borrowed a further $60m."

On 31st December 2025 ENQ had £268m in cash on the balance sheet, £265m of which was unrestricted cash. Why do you say they have borrowed it ? And where from ? Was it new bond issuance ? RBL drawdown ?

Hmm, so how much FCF do we generate for 2026 ? Well, I’m not an accountant, but I have got a degree in common sense.

I can see that there is potential here to double count from the FY 2025 results, especially PSC / Royalies / EPL. I’ve got FCF B/E somewhere between $60 - $70 Boed, leaning slightly towards the top end of that.

If we average $85/bbl Brent from now until year end, and accounting for the declared hedges (Ops update Feb followed by FY in March) then we should get $79.49/bbl realised. So with production at 43/000 Boed I get;

B/E FCF @ $60/bbl = $305M of FCF

B/E FCF @ $65/bbl = $227M of FCF

B/E FCF @ $70/bbl = $149M of FCF

I don’t know why there is such a big whoooo Haaaa here about $10 either way on FCF break even, when Brent is up $40 since beginning of this year !

custardpot

this crisis doesn’t prove fossil fuels give no energy security - it proves that foreign dependancy gives no energy security ! this country will be reliant on fossil fuel for decades to come. with that fact in mind, would you rather maximise our own uk production or rely on foreign production ?

as an example, the jackdaw ns gas field, not yet approved by this incompetent government, would be enough to heat 1.4 million uk homes. instead, we import gas from norway and norways nearest gas field (tommeliten) is just 64km from jackdaw !

you couldn’t make this **** up !!!

Steve

"You are on. To a charity of winners choice. Just to clear if 9% plus warrants then this is an effective rate over 9%".

Perfectly clear Steve, and we are on !

Separately - If you think they will add warrants or any type of convertible aspect into the 9% bond refinance mix, then I'll happily take that as a separate and additional bet. And I'll raise you :)

Just looking around at what might be up for grabs. Anyone care to speculate ?

Apache want out;

https://apacorp.com/portfolio/united-kingdom/

30,662 BOE/Day from the North Sea quoted in the full year 2025

https://investor.apacorp.com/static-files/ae56c683-40d4-42af-a603-a5627d06e115

(page 6 PDF)

Carrying value of $263m in their Q4 2025

https://investor.apacorp.com/static-files/6497b521-5b9e-4ea3-a9f7-fdc77b367d40

(page 9 [page 14 PDF])

Something like that (mature fields, infrastructure-heavy, underinvested UK barrels) would be right up Enquest’s street !

Noted, and my lesson learned VoR :)

Currently ENQ2 is trading around 8.63% YTM (at the bid/offer Mid). The company financial metrics have dramatically improved since they were refinanced back in 2022, so I see no reason as to why they would need to increase the coupon to refinance. I wouldn’t be surprised if they simply retired the retail bonds using the 2026 FCF and a touch of RBL. We shall see…

p.s. I’ll also take a £50 wager that the retail bond coupon comes in at EQUAL or LESS than 9%.

Serica — why it keeps cropping up on an EnQuest board is beyond me.

A lot of hope, hype and future production potential already looks priced into SQZ’s market cap. With EnQuest, very little is. That is the key difference IMO.

Yes, since the ENQ/SQZ merger fell away last year, Serica shareholders have had the better run. No debate there. But markets look forward, not backward. That was then; this is now.

From here EnQuest has much greater upside, by a massive country mile. More importantly, the risk/reward looks much better. SQZ now strikes me as a stock where the risk is increasingly to the downside, while ENQ still looks massively undervalued.

If I held SQZ — and I don’t — I’d take some money off the table and switch into ENQ.

And another thing: if I were a Serica shareholder, I certainly wouldn’t spend my time constantly analysing and posting negatively about another oil and gas company on that company’s own board. That tells its own story. The motivation is obvious to some, baffling to others.

….”it looks like NS production in 2026 will be down between 7-10k per day based on management guidances.” Have you got a reference for that Steve ???

Summer riots. Labour call general election. Reform govern in majority coalition with the Tories. My prediction.

Steve12

1. You have neglected to mention the $17.8m in fees paid in relation to refinancing the RBL (for reference Cash flow, EnQuest net debt and liquidity, 4th paragraph). Consider that in your calcs and you should conclude that net debt actually FELL by $5.3M. Not bad at $68.8/bbl realised.

2. Yes, the guidance for this year was the same as last year. You might have noticed that production was consistently above 50 Kboed for March. I’m sure they won’t do that every month, but the capacity to do so, is demonstrated.

3. I don’t understand why you say “we exchange barrels cash taxed at 38% in UK for 75-80% in Malaysia” ? You seem to imply a reduction in NS production and an increase in SEA production, yet there is no proof or suggestion of that in the FY 2025. Yes, SEA growth will probably beat NS growth, but that’s not an “exchange”.

As regards the 2026 FCF $/bbl breakeven, if you include the Magnus $60 I’ve got $71.5/bbl.

The Brent forward curve has flattened quite considerably recently, implying higher for much longer. Bloody obvious if you look at the damage done to middle east O&G infrastructure, never mind that there is no resolution on the horizon.

Just looking to get a handle on how the 5.1 MMbbl hedge at $71.3, from 1st April to 31st December 2026, affects the ENQ realised oil price.

Assumptions:

1) average daily production is 42,500 bbl/day from 1st April to 31st December

2) The hedge is allocated evenly throughout the 12-month hedge period

3) Although EnQuest says “predominantly utilising swaps”, I model it as 100% swaps

Calculations for 1st April to 31st December:

1) Hedged volume: 5.1MMbbls x 9/12 = 3.825 MMbbl

2) Production: 275 days x 42,500 = 11.6875 MMbbl

3) Percentage production hedged: 3.825 / 11.6875 MMbbls – 0.3272

So, 32.72% of production 1st April to 31st December is hedged at $71.3

Hedge drag = (Brent – 71.3) x 0.3272

Brent / Drag / Realised

$80 / $2.85 / $77.15

$90 / $6.12 / $83.88

$100 / $9.39 / $90.61

$110 / $12.67 / $97.33

$120 / $15.93 / $104.07

A buy at 41p.

https://www.research-tree.com/companies/uk/oil-gas-e-ps/enquest-plc/research/cavendish/enquest-full-year-results/129_359b36bd-0987-4748-9a97-8c7dfbf06e0a/5f4e616f-8719-47d4-8fd0-bfcaf93a0f2d

"accelerate our expansion in South East Asia" / "execute a material UK North Sea transaction"

I don't see any row-back there. I wish we had acquired the 30% interest in Kracken rather than let it go to Harbour. But I guess the prices wasn't right. Wondering if Golden Eagle might be a prospective buy with another 7500 bbl/day available ? Anyway, ENQ are locked and loaded with cash ready to transact. I am really happy that he/they are super cautious.

Looks like March production was on steroids exceeding 50 Kboed. Full year guidance unchanged.

Dividend up 33% but no share buy-backs, I can live with that. Net debt ticked up 12%, it was known, that’s ok. Free cashflow positive, only just, but that’s ok.

From 1 April 2026, EnQuest has hedged a total of 5.1 MMbbls for the next 12 months with an average floor price of $71.3/bbl and a further 3.5 MMbbls in the subsequent 12-month period with an average floor price of $64.4/bbl, in each case predominantly utilising swaps - I will need to look deeper into that.

Trump carping on about negotiating a 15-point peace plan, while the Iranians are saying he’s negotiating with himself (LOL). World markets are up and only a $3 drop in oil, should be a good day for ENQ.

VOR - if Brent holds at $90+ for the next 3 months then, given the associated increase in EBITDA, I would expect we’d achieve the <0.5 ratio towards the end of H1 2026, on an annualised basis.

Hedges. The most important single piece of information for me, for 2026 & 2027. Some of the 4.1m barrels (Feb Ops update) hedged for 2026 will have dropped off. I’d like to see them take a significant nibble at all monthly futures contract out to Dec 2026 (Dec $82.85 as I type).

Free cashflow ~ $15m

EBITDA ~ $500m

Net Debt ~ broadly flat year-on-year

Dividend maintained, or just a token uplift. Share buy-backs in addition to the dividend, total package $30m

Update on any deal (unlikely).