Some thought provoking comments. The AB performance came over a tad lacklustre and I doubt Therapist is in a hurry to book him but it was typical of his previous presentations. I've suffered some very glib CEO's and the salesman technique isn't for everyone. I agree Bob Davenport was better but it would not go down well for a CEO to delegate the whole presentation. Still a bit concerned by the Martin Houston no show. AB in person comes over a little humourless but also driven and always on top of his brief.
These presentations are really about the numbers and the best chance of changing a mindset might be in conversations post meeting. The BMO guy asked a question but we'd already seen his opinion in an earlier post on this BB.
Whatever way you look at it debt has come down pretty considerably. That wasn't plucked out of thin air and will continue. For once time is on our side and the company doesn't have to worry about creditors bleating. Give it a year and they will be queuing up to offer us fresh finance.
The volume of trades today was poor and I wonder if there might be a shortage if a large buyer appears. I can't see much reason for LTH's bowing out now or a few pence higher. Financial pressure is off and all we need now is some confidence in oil and fresh buying.
Hi L7 - when have EnQuest ever been anything other than sober? Afraid that in a world of Twitter, Trump, Boris, Farage etc... anything without a big dose of hyperbole seems rather tame by comparison. You miss the headline and a temporary move in the stock price but in all honesty the real money moves much more slowly. Those chasing excitement and movement could always move to AIM.
Looks like no resetting of reserves till March and that might stop Moody's upgrading. We could always pay for a CPR over the group's assets but what's the point? The direction is set and this is a company that is forging its own destiny. With Christmas in the middle we'll soon be there anyway. I think a slow build up will impress the market, eventually.
Regarding glazed eyes it'll soon be NPV8. The Retail Bond closed at 85.675 and the stock at 18.48. Last Friday they were 83.00 and 18.81.
.....and I forgot our best of class in managing end of life fields. AB started as an engineer and gained invaluable experience at Atlantic Richfield and Petrofac. I couldn't care less that we are at the messy end of the oil industry. We are ideally placed for whatever direction the green movement, carbon capture etc.. goes. Even the cost of zero carbon will probably mean oil is still, as dense energy, more economic than renewables. Our base strengthens by the day.
It was excellent. I imagine L7 and ProdOpt understood it better than most (Engineers). Short cycle, high return - sounds like shale but we do have a better ON/OFF switch than many of our competitors. Maureen not in reservoir figures (could be a big one). BD mentioned 'movable oil' which I prefer to STOIIP. AB states our performance matches any sector. I took that to mean not just oil. We are robust because of our spread of assets [BP must have plenty of Thistle type events but it hardly effects the price.] Relaxed about bond debt as almost 4 years away and we only pay coupon so the price is irrelevant to EnQuest in some sense.
Downers: No Martin Houston, could we be vulnerable at this market cap?
"EnQuest will have a chance to promote its portfolio at today’s capital markets day but the shares already trade at a premium to peers and we continue to see more compelling upside and catalysts elsewhere in the sector"
I'd like to know which peers and how he compares them. It is very tricky trying to compare one oil company to another and a very narrow field imo. I hope they attend the CMD and can explain in more depth. Owning 69% of Spirit hasn't seemed to have done Centrica any harm today (maybe because they intend selling it?). I lean towards E121 and that debt is a kinda Ebola in the eyes of analysts. I think BMO have only given EnQuest a cursory glance, hence the quick opinion because that is all it is.
You're a bit grumpy today E121. Oil is a bit like the housing market but things do eventually change. People need somewhere to live somewhere and energy to get about and keep warm. The analysts have no need to jump the gun and will wait until the CMD (assuming they can find it) before making decisions. Next week should be better.
I expect them to react to these numbers. Meanwhile, for those upset with the progress of the stock price can I offer a suggestion that will return 35% for those with a lower risk threshold who expect the company to be around for the next few years (April 2022). Or a return of 47% if they extend until Oct 2023. BUY the Retail Bond.
Eventually the bleedin' obvious will be discovered. Institutions may not be allowed to buy junk bonds because of our rating and the amounts are tiny, though enough to attract retail investors (I wouldn't know how to buy the US$ HYN's with (likely) minimums of $100,000).
I am up to my gills in the stock and RB's.
If Moody's do upgrade us then I'd expect a very positive move in the bonds.
Kraken - "Group is starting to review the potential for developing the Maureen sands which lie directly beneath the existing reservoir."
Best place to find oil is in an oilfield. I may be wrong but from this it seems Equinor's Mariner field already extends into the Maureen sands.
Not now, but something to think about later. May even get a mention at the CMD.
Liked the SVT report. I think the decision was expected in Jan 2020 so ahead of schedule.
The Bonds weren't addressed but that isn't surprising; we are in at par and the current price suggests now isn't a time to renegotiate.
All in all an excellent update and the company has advanced whilst repaying the debt. Eventually the eighth wonder of the world will come into play; compound interest.
Build it and they will come.
Hi hitman, I was in Ikea Greenwich on Sunday evening and had fish & chips. I spent the next 2 afternoons putting together a bed and chest of drawers. When I finished I marveled at the engineering, simplification and accuracy of the instructions. I think we should get Ikea involved in the problems at Thistle. They may even have made a better stab at the FPSO technicals.
I quite like the tight rein on the price this week. Whatever we will say tomorrow its been kept under wraps judging by the price movement. An RNS at 7.00 and hopefully a listen to the CMD. I do hope some analysts turn up.
*I still had 2 plastic dowels left over and a small white thingy.
Pelle 15.46 - maybe it's time to remove the stabilisers (those little wheels on a child's bicycle). It would do wonders for the Retail Bond and in turn the stock price. However, would we be allowed to do it or is it tied down in the terms and conditions.
Looking for a volunteer to trawl through the T & C's of the PIK?
Thanks hitman - my reason for asking is that I wanted to make a comparison to shale. I was listening to a podcast that said Bakken B/E was $43 a barrel. I realise Brent is at a premium to WTI but that changes. I don't believe shale is a particular threat to EnQuest because we can produce oil more cheaply. If others can produce a B/E for EnQuest that would be helpful.
The message about shale is confusing and the following is just a small example:
"But IEA cautioned several variables, including concerns about flaring in the Permian, the availability of financing, and technology development could cause production to increase or decrease by 2 million b/d either way over the next decade."
I bow to yourself and E121 for your greater knowledge on shale.
Some good posts today starting with HMH at 10.54 and your input. I also liked (I think it was you) saying that whatever happens with Thistle the reserves are unchanged. That also augurs well for the Cairn impairment to be corrected at some stage.
I'm relaxed as long as the macro remains steady and our expertise in end of life fields is a USP.
I read recently that Carl Icahn likes mature/declining industries and is involved in a HP/Xerox tie up. He said that fashonistas of industries often exit too early because they are so 'last year' but in fact have many years ahead of them and generate enormous amounts of cash. Others not considered so cutting edge as they once were, like Microsoft, also have a big following from the likes of Terry Smith & Warren Buffet.
I think if EnQuest just keeps doing what its doing then Pension funds will be drawn to the inescapable projections.
Build it and they will come.
Hi DD, that means Morningstar has been wrong for quite some time. I contacted IR in May so they can hardly say they're unaware. The problem with 'Major shareholders' is that they have some similarities towards a Poll and we know how accurate they are. The company relies on the major shareholders keeping their holding updated (within reason as sometimes there is a need to delay trade notification) and some have a pretty cavalier attitude towards it. I'm not sure but it may be voluntary anyway. The only time I believe they are legally obliged is during takeovers, RI, OO etc....
I am p*ssed that IR haven't corrected Morningstar as it would only take a few minutes. I'd forgotten the large holding of the Employees Benefit Trust and expect they'd vote with AB. What is a tad worrying is that nobody else spotted the mistake or perhaps this board is a majority trader's site where things like shareholder makeup holds little interest. It does though illustrate the lack of research of those propounding going private. I put it in the same class as oil heading for $40/$80 or the price next week.
This from IR in May: "AA and AB are effectively the same. Most of Amjad’s (AB) shares are held through the firm Double A, with Amjad also having a much smaller personal shareholding. By adding the two together you get your estimate of c9%
To potentially confuse matters further, he has recently bought shares through his charitable foundation. Again, fairly small overall so his combined holdings across the 3 “entities” is still just over 9%."
DD, I don't think you read my posts correctly. I haven't given any thought to the company being taken private because I think it is mischief making and have better things to occupy my time. I was merely correcting your suggestion that AB has control of c. 20% with his holding, the foundation and Double A which are basically the same thing; Double A being the largest. The total is c.10 not 20%. That's all.
Sorry DD, you're wrong. Double A Limited is a discretionary trust in which the extended family of Amjad Bseisu has a beneficial interest. We've gone through this before. AB's amount is tiny in relation to Double A but it's the way his holding is structured.
Hi DD - Your 19.52 overstates the Bseisu shareholding. It was 10.12% as of 9 September 2019 from the enquest.com website. I haven't looked into the possibility of taking the company private as I believe it is a narrative created by mischief makers.
Hi Pelle, I looked because I wondered if we had any competition on Thursday and we do. Centrica have a trading statement and may say something about the proposed sale of Spirit Energy https://uk.reuters.com/article/us-spirit-energy-m-a/centrica-swm-launch-sale-of-north-sea-oil-producer-spirit-energy-document-idUKKBN1XL19S
With the paucity of sell side analysts I hope there are still enough to go around. The Centrica news may be of interest if they mention Spirit.
In the past few years I thought the company handled the PR well. If you have nothing positive to say, say nothing. Or, in the words of lawyers, say 'no comment' and I bet the Duke of York wishes he hadn't bowed to the court of public opinion at the weekend. It was better for EnQuest to work in the shadows without the distraction of pandering to those with short term horizons in a long term cyclical industry. I believe we are beginning to motor and we have a good story to tell. The company does have a measured approach which is professional but I don't like it that TLW & PMO get more publicity than us when we have the better, more positive story imo. Myself and hitman did try and get into the CMD but were unsuccessful; i.e. they ignored our request. We cannot sneak in because they know us.
Last Monday I posted that Tullow and Premier were making Trading Statements on Wednesday and Thursday. I get the info from the Monday 'The week ahead' column in The Times. Nothing earth shattering but worth noting imo. Today it writes that Aviva is having a CMD on Wednesday this week. I checked Thursday and there is nothing for us. Now, I doubt our CMD is cancelled but I have written in the past 'build it and they will come'. That doesn't mean you have to whisper it and the odd sign can be helpful. Is this indicative that our IR is slacking or the advisors. Or could it be we have dropped below a market cap that they don't report on? |Are we trying to keep it a secret?