The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Thanks all for the suggestions of using filter. Have employed to good effect. I had resisted hithertonow in the hope that some of the dross posters could at some stage have shared some insight but I’m drawing a line in the sand. @Stevo12 if you post analysis on twitter make sure you share your handle!
There is some good discussion about ENQ on here but lots of noise. Can we please try and stick on topic?
Speculation about politics and oil price not that helpful. If there is anything tangible by all means but posting that we think the EPL is stupid etc or that oil is due to go up or down isn't really helping anyone make better investment decisions.
Stevo, what do you see as possibility if capex allowances removed from 2025 with a labour government?
Presume capex will fall off a cliff, and continue to harvest cash from Kraken with FPSO lease cost dropping and interest payments dropping
Also does anyone know conditions of the term loan - can it be paid off early?
Sorry I was being facetious. Posters are keen to model on year highs of Brent prices within hours of them being hit but not so much in the other direction. ENQ are healthy at $80/bbl and I don't think it is prudent to model any higher than that.
Speculation on my part but I think that straight cash deals are fairly unlikely in the current climate. Lots of fancy financial engineering to be done around earn outs, vendor loans, etc - see Bressay deal / Magnus etc. At the end of the day as a holder you are putting faith in management to make good deals. At the point of investing in ENQ, I opted to back AB and team rather than the more strongly capitalised dividend paying Serica largely due to this.
Nearly all UKCS operators seem to have large tax losses on their balance sheets - perhaps there is something in that, for NS O&G investors to recognise - ie nobody is making any money here(!?)
To be honest I didn't notice AB mention the GE drilling results in the presentation. At the retail presentation on investormeetco Craig Baxter described the four well campaign at GE - first well successful, second well a failure, third well sitting currently above reservoir and a water injector still to come on stream. Subsequent comment that they would rather be operator than suffer due to other operators work. Both of these in Q&A typed up on InvestorMeetCo.
Probably not a popular view but I wouldn't mind seeing management lock in some hedges whilst oil prices are buoyant. These things can turn on a sixpence and as we all take one day of $90/bbl oil and forecast that in perpetuity, the reality is that nobody can predict well.
The same also applies to acquisitions, acquiring assets when everyone has recently started forecasting higher oil prices is unlikely to yield the best acquisitions. If labour decimate the NS even further with removal of Capex allowances, then there will really be assets for cheap.
ENQ2 capital gains are also tax free as its a qualifying corporate bond.
The hangover of the low interest rate environment is that the existing gilts were issued with tiny coupon payments (eg 0.25% due 31/01/25). To reflect interest rate rises, these gilts traded down and nearly all of the YTM is going to come in the form of value rising towards par rather than the coupon payment. Accordingly this is essentially tax free. See chart https://www.hl.co.uk/shares/shares-search-results/t/treasury-0.25-31012025-gilt
You are right though that these corporate bonds and gilts are subject to income tax.
Message for Stevo and any others with ENQ2 retail bonds.
I've got a fairly chunky holding, and the maths is hard to justify. Alas a Scottish resident, 48% tax on the income reduces the yield to approximately 4.8% effective, which compares fairly poorly to just holding a 2027/2028 low yielding gilt with a lot less of the risk. Any thoughts?
ENQ accounts are a labyrinth of confusion and obfuscation. What on earth is going on here (below)? Explains where the RBL debt repayment has come from? But where was the outgoing cash that led to the repayment? You could never have established this from the released information to date.
"With the Bressay-related farm down proceeds offset by a vendor financing facility of $141.4 million (from EnQuest to RockRose, arranged to manage the companies’ respective working capital positions) the Bressay transactions were net debt neutral at 31 December 2023. In the first quarter of 2024, EnQuest received a $108.8 million repayment of the vendor financing facility. The remaining amount ($36.3 million) is repayable through net cash flows from the Bressay field, in accordance with the agreed payment schedule. Both EnQuest and RockRose are committed to delivering the Bressay development. In the event, however, that the project does not achieve regulatory approval, there remains an option to deploy the assets on alternative projects. As such, the gain from the transaction is reported within deferred income on the balance sheet."
Also re RBL, the facility remains available to draw and therefore the covenants attached are still valid if want to use it.
a lot of the holders here could do well to stop s******* themselves with minute to minute movements in share price. now that there is a buyback mandate a lower share price is beneficial for all holders. and if the share price goes up then great.
Kraken, you post on here up and down like a yo-yo.
Please ensure your position size isn't so big it's making you anxious. Lots can go wrong with small oil and gas companies even when it seems like a sure thing.