Member Info for romaron

In today's ST a mention of the Chairman of John Wood Group, Roy Franklin (RF), the oil and gas engineering giant and its approach from private equity group Apollo. RF is described as an O&G veteran and AB cannot be far behind. RF has worked with, among others, Statoil, Serica, Premier, BP, Talisman and Energean. Their paths must have crossed many times because I believe that at the top in the North Sea it becomes quite incestuous because if not at the time they do seem to (as they get older) populate other boards that eventually get absorbed into another company they are or have been involved in. You also get companies that are formed through M&A where people get retained but under another nameplate. I said earlier that it gives me a headache because frankly you only get a fragment of the story. Those in the know see a lot more which means we waste days on research that is pointless.
At my first EnQuest AGM I asked a founder, Nigel Hares about Xcite (the reason I went) and he replied that they had looked at Bentley but thought Kraken the better choice. So they've known Bentley intimately for over a decade.
People might just say that EnQuest is left alone because of the blocking shareholding retained by AB and family + EBT.
Movements we've seen with other companies are ones in trouble and have run out of ideas or lack scale. Cairn, Premier, Serica, Tullow and other smaller ones like JOG, RKH or HUR. I've probably forgotten a few but you get the drift.
The analysts are few in number as well and no doubt hear stuff in the hope of a trade. Gossip never stops and as long as it isn't insider stuff acted upon is not illegal but it is a fact that retail investors usually are the last holders and by extension the last to hear the facts or gossip.
We only seem to move with the overall market and not specific EnQuest drivers of late. I cannot believe private equity isn't sniffing around us. Reversing into a listed company is still one of the best ways of cashing out for them.
I believe the renewable stuff is a bit of a smokescreen and making Rani Koya a director is window dressing. Geothermal has only made an impact if you're next to a volcano and is as far away as tidal, hydrogen etc... It is still our fossil reserves and infrastructure that others are after. Having said that she has survived the cull along with Farina Khan and Liv Stubholt. If renewables do advance from what I read all the engineering relies on O&G experience.

You can see why I get headaches. I do hope the 19th isn't a damp squib.

Hi Stevo - that wasn't what I said or meant. A delay occurred using what for me was a flimsy excuse. It could even be true. I did state it was speculation on my part and may even have been a shortage of personnel. Ian Wood who is important in several areas also looks after the financial team responsible for EnQuest annual accounts. Its closeness to the Board renewal process suggests there is some connection. At the announcement of the delay I was particularly nervous because in financial matters delays are rarely good news.
The changes in the industry have been massive and I think Howard Paver had already indicated that he was resigning some time ago. The gap created by removing two more may have something to do with Gareth Penny or a new venture. If there was a dispute then they lost the argument. We just don't know. I'd imagine there would be plenty of disputes in a healthy company with strong personalities but I'd be surprised if this caused a delay. It may be very prosaic and the presentation on the 19th will be a repeat of the 5th. I hope not. They seem to be squeezing a lot in lately and it just looks like something is happening but we haven't seen any significant price movement. I think this qualifies as unusual activity and AB hasn't bought any shares recently. (It might be due to releasing accounts.)

I hope plans are announced as I'm getting a headache. We are one of the few remaining decent sized independent companies who haven't been partnered up or gone through a reverse-takeover with a private company. This is largely due to us surviving the last few difficult years, unlike Premier & possibly Tullow, and AB's large stake. We have interesting assets and tax credits. With the level of activity we are seeing elsewhere it is highly unlikely we haven't had at least preliminary talks. We are quite a rare incumbent with a main market listing.

p.s. If anybody spots the quote being used since the beginning of April by anybody who should know better (in the public eye) or on a public platform can they please post it here. The continued use of "9X" is ammunition. We can also use the Lazard's data that Londoner 7 posted on the 13th:

https://www.lazard.com/research-insights/2023-levelized-cost-of-energyplus/

It is P.2 on the download that is most relevant according to L7 and he is better at reading these things than me. One thing that P.2 doesn't have is LNG which is being embraced as a transition/intermittency solution by all and sundry ignoring the increased carbon emission over NG due to transport and conversion. Don't let up. Stuff does leak through eventually and as well as Dr. Evans getting a bad name so too is the BBC. It isn't honest reporting and somebody somewhere will collect the data on how many times rent-a-quotes like Caroline Lucas, Red Ed and Tessa Khan are used as "balance". The energy industry has very few champions other than the one's wrapped in a green flag.

Excellent Dumbly, very well written. I would send it as a letter too. It's very cheap to have proof of delivery. I'm gonna crib some of your points for my communications.

I listened to the webcast of the 5 April again. This time imagining that something was cooking that required a major Board change. AB's sometimes ponderous delivery reminded me of other presentations when the directors almost need a lawyer beside them. He had a script that the lawyers had certified. He had the weight of market moving inside knowledge. I remember an early Harbour presentation when Phil Kirk of Chrysaor was terrified of saying the wrong thing and his nervousness showed.
AB is an old hand at this and during the QA there was a long pause (c.49:45) when he gathered his thoughts and carefully said "they will continue to look for new shareholders and a new shareholder base in the future."
Malik mentioned financial as well as strategic partners and other stakeholders (c.50:50).
Then around 56:40 it seems that AB took back control of a question that Malik was answering regarding "a capital market day type of event. We will look at it when we have enough progress to warrant it."
I'm speculating here but a reason for revising the FY 2022 results and guidance from 23 March to 5 April was because there were intensive discussions going on elsewhere that resulted in the removal of 3 directors. I think they were getting pushed for time and came up with a plausible reason to delay the FY results. They used EPL but that happened back in May 2022. Most fell for it.

I'm looking forward to next week.

From Oxford Economic's analysis:

"• Neptune contributed $2.9 billion to Norway’s GDP, and supported 1,616 jobs. For every Neptune employee in Norway, the company supported four elsewhere.

• In the UK, Neptune contributed $771 million to GDP and supported 3,285 jobs. For every Neptune employee in the UK, around 12 jobs were supported elsewhere in the domestic economy.

• In the Netherlands, Neptune contributed $356 million to Dutch GDP and supported 1,867 jobs. For every Neptune employee in the Netherlands, around four jobs are supported elsewhere.

• Neptune contributed $771 million to German GDP, supporting 2,482 jobs. For every Neptune employee in Germany, around six jobs were supported elsewhere.



Analysis carried out on Neptune’s economic impact in Indonesia showed the company’s activities supported 7,856 jobs and contributed $510 million GVA. For every Neptune employee in Indonesia, 435 jobs were supported elsewhere.

*I don't think Ed Miliband has read it.

That ENI (Italy) and Total (France) have been sniffing around Neptune Energy. It is only the UK that sees no future for the North Sea.

ttps://www.energy-pedia.com/news/general/totalenergies-reported-to-be-considering-bid-for-neptune-energy-191183#:~:text=The%20French%20company%20is%20among,around%20%245%20billion%20-%20%246%20billion.

I've slept on it and hitman does have some points but I think they're minor. At the time of the last rollover of the existing 7% RB there was a lot more nervousness around and holders of RB are compared to equity holders, more cautious. The part rollover of the 7% maturing 15 Oct 2023 was announced on 30 March 2022 and the Russian invasion was in its early stages. Some holders sought advice and I daresay it would have been to do nothing and of course there is always inertia. The inertia this time works more in our favour as they've got a decision to make or they may be rolled over by default. Others will have a decision to make and even kin these inflationary times, savers rates are low. If I've any cash I'd BUY some RB.
I did a quick check on current prices.
The 7% RB is roughly at par.
The 9% RB is 93.50 appx. 4.5 years giving a YTM of c.10.90% This demonstrates the risk premium of longer dated bonds.
The 11.625 $HYN appx. 4.5 years is at 94.25 giving a YTM of c. 13.37%
The RB is lower (imo) because there is extra protection given to retail investors.
A new RB also requires a prospectus which is a kinda audit and I think they will tie it up with other deal/deals. A healthy (we are) energy company will always be doing deals. It is what they DO. We have seen in the past that they try to 'kill two birds with one stone' and I don't expect this time to be any different.
At (say) 12% I wouldn't be worried [in 1980 I had a mortgage of 18%] because fields are so cheap because of the uncertainty surrounding EPL and senseless utterings of the Left that you almost get paid to take it off the owner's hands and you get your money back in a year with plenty to follow. We are expert in this.
The company will offer sweeteners to existing holders and I expect the RB maturity to be no great shakes. I'm more intrigued by the change of Directors and future plans.

Hi Pelle, there'll be a lot of speculation but AB did say they would be looking into producing more gas and the Rhum field is HUGE. More chance though that it is a blueprint for our next move. Our production and reserves is twice what Serica's was before the Tailwind deal. We're still bigger than the combined Tailwind/Serica.

*all from memory so needs double checking.

What are you on about hitman? The situation is nothing like previous occasions. We have a maturing debt and various solutions. Maybe the RB holders will be offered an incentive of cheaper equity if certain conditions are met. Creative yes but only presenting options.

Hi hitman - none of these dates are accidental imo. Something is being tied together. If I'm right about a prospectus it requires a certain amount of time and there is extra protection when bonds are offered to "retail" as they are not professionals. Monday is an odd date but it might be the only date that works for the various parties involved. RB is only a part of the deal and a minor obstacle. Rolling it over won't change targets for dividends. If it is rolled over I expect the funds to be used in a new JV.

RNS after business. More to come. I expect at least one more by the latest 19 April. There were some clues. Salman Malik mentioned there was more than one way to skin a cat (my words) regarding the upcoming rump debt of the RB (Apr 5). Then the strange wording in the same RNS "EnQuest investor relations team will be hosting a presentation via Investor Meet Company, primarily focused on the Company's retail investors on 19 April at 14:00 - London time."
Why mention 'Retail'? I think they will rollover the remaining rump of the RB due October. It will require a Prospectus and will be underwritten. Inflation is coming down and I expect they'd get it away quite easily. There are plenty of bargains around and as WB said "the stock market is the only shop where, when there is a sale on, everyone dashes to the exit." That doubly applies to O&G imo. I think there will be a JV that requires seats on OUR board; room has been made. The company has never played fast and loose with governance. We are a serious company led by a CEO with integrity.
Waldorf is a potential partner.
Pelle - just come off phone with K. We basically agree with you. AB was going through the motions and I don't know about tired but I'd say definitely bored. He is probably a good poker player but acting isn't his thing.

5 June. Is that the first time this date has been announced? I liked the RNS. Time for fresh thinking. Maybe a promotion from within for one and two from outside?
https://www.google.com/search?q=a+change+is+gonna+come+sam+cooke&rlz=1C1GGRV_enGB751GB751&oq=a+change+is+gonna+come+sam+cooke&aqs=chrome.0.0i355i512j46i512j0i512l8.9394j0j15&sourceid=chrome&ie=UTF-8#fpstate=ive&vld=cid:f1540ea8,vid:fPr3yvkHYsE

So much in there. I'd love to see a round table discussing renewable claims and costs including someone who produced this report. I'd also like to see Tessa Khan and Ed Miliband part of it. No doubt they'd say these figures are meaningless because to save the planet (and the NHS) we need to increase the carbon tax until fossil fuels no longer make economic sense. Perhaps that is what they mean by 9 X dearer? Artificially increase the price of fossil fuels to make the figures work? If that happened the world would grind to a halt and there would be rioting in the streets as people go hungry and freeze to death. Of course they'd use LNG to strengthen their case but that is twice as expensive as NG and carbon heavy with conversion and transport. I wonder how long it will take for this report to filter into mainstream discussions and media?
It needs simplifying for the public (and me) to understand and I'd hope that this work is going on in the background. Thanks L7 for bringing it to this message board.

Good stuff Dumbly but the BBC have done what their Charter says. They've got comment from another reputable source - thin as it is. Uplift again. She is a reliable rent-a-quote with a patina of credibility. Articulate, attractive and with a superficial knowledge greater than the average member of the public who frankly isn't that interested or that woke.
OEUK are duty bound to reply; that is their role. In my earlier post (08:11) the City A.M. article finished with "Harbour Energy declined to comment." It seems they never asked EnQuest but it probably would have been the same answer.

I had some fun messing about with twitter and number of followers
Enquest 216
Harbour Energy 6,763
Malcolm Graham-Wood 8,522
Tessa Khan 8,619
IKEA 75.2k
Extinction Rebellion 1058.3 [juststopoil less than EnQuest]
BP 113.5k
Greenpeace UK 250.5k
Micah Richards 563.1K https://twitter.com/hashtag/MOTDTop10?src=hashtag_click
Caroline Lucas 621.6k
Ed Miliband 809.4k
Katie Price 1.8m
Gary Lineker 8.9m

Tessa Khan has about as big a following and is as much use as Malcy yet she is given enormous media coverage. That is how flimsy and superficial it all is. This research is knackering. Can I call myself Dr. Romaron now?

Agree Juan. If the assault continues there is no other option than to halt developments and natural declines ensure the industry is literally, "dead in the water".
Nobody paid attention on here to Neo's approach to JOG. They [Neo] paid peanuts and it is a punt imo. If the EPL gets a floor at a sensible price then that would probably mean that Neo made a favourable bet at big odds and JOG shareholders will see a decent bump in their price. I hope Neo win.
We have options and whatever decisions are made this country cannot exist at present standards without fossil fuels. If we decide to import them instead then that will become "a price we needed to pay to protect our grandchildren and future generations" meaning we can spend time now on "World Peace". There is also another possible alternative. Russia having completed their occupation of Ukraine and Iran having defeated Saudi Arabia in a brutal but swift conflict whilst the US returning to a policy of isolation under President Musk bringing us the joy of an agrarian economy. France and Ireland [now the 51st US state] have set up border controls to stop refugees from the UK in small boats flooding their countries by those trying to get away - they're called "Exiteers" in the press.

Sensibly though I cannot see a business that is essential and demand remaining high for decades to come can be abandoned. Sometimes when a relationship is just that bad you have to leave. Some have already made that decision with funds and institutions leading the rush for the door. If common sense ever returns we'll do well.

Don't be silly Juan. AIM is a much busier and deeper market. I think the tide may have gone out for JOG.

at it again - https://www.cityam.com/green-groups-slam-north-sea-industrys-calls-for-windfall-tax-price-floor/

Why are we still facing eye-watering energy bills with gas lower than before the Ukraine war and renewable electricity "9 X cheaper than gas"?
If you go on the Uplift site you'll see that most of their core team are individuals who have made campaigning their life's work. In another time they would have entered the church or become nuns. Tessa Khan is their Founder and Executive Director. She is a human rights lawyer with the inference that those of us who are not in her team are by default against human rights. The group is a loose association that pretends to be bigger than it is. The statements they make are full of bravado and confidence but fall apart when investigated. I attended a juststopoil meeting and the Tooting Popular Front gets a bigger turn-out.
Tessa Khan would turn up at the opening of an envelope. People who do know what they're doing prefer to work behind the scenes because to question the veracity and cost of climate change risks personal and physical abuse that stretches to their home and family. Can you imagine AB or Linda Cook agreeing to sit on a Question Time panel? They'd be hounded and attacked throughout. It is a carefully curated left-wing audience.
The lies and misrepresentation continue. Challenging them is deemed not a good look by the politicians whose priorities are not to alienate any voter. The O&G industry is a soft target.

*I doubt Tessa Khan got anything other than expenses for appearing on QT and if a fee was involved it will be tiny. She spoke at the UN - so what? My daughter has too and I doubt any of you will have heard of her. She (Khan) is useful to the media for "quotes" and bringing "balance" (I'd call it imbalance) to a discussion. I just looked her up on twitter. My daughter has 5 X her followers and a blue tick. She (Khan) is a bogey-woman without substance and City A.M. is a FREE newspaper for a reason. What costs nothing is usually worth the same.

p.s. does anyone know of a "North Sea Energy Giant"?

Windfall tax highly popular with the public? - freebies and subsidies usually are. Leave them in the cold and unable to fly or drive and see how popular a government that allowed it to happen is.

This makes for a neater summary:

https://www.proactiveinvestors.co.uk/companies/news/1011896/harbour-ithaca-and-serica-energy-rated-buys-amongst-north-sea-oilers-1011896.html

and at the end "The ratings changes were part of a wider update of Jefferies ratings and targets for London's E&P sector."

I think the release of these broker ratings is more prosaic and pointless getting annoyed. In fact they probably help us. No point in adjusting Shell or BP because the North Sea hardly impacts them from a production perspective. Remainers are private or overseas companies and a few that Jefferies follow. Energean is an outlier without NS involvement whilst Tullow seem to only be involved in NS decommissioning but have other assets and problems elsewhere. It is therefore a bit of a mixed bag and may well have been on their schedule to report to their clients. This was the date for delivery and the work into the analysis would have been over many weeks/months. Let's face it this isn't the best time to write about the NS with a rabid Labour and activist opposition with media sympathy. Jefferies had to publish or be damned. I'm sure they'd rather have had nice things to stay but the EPL casts a dark shadow over the whole NS. It isn't personal and they look after AB's shareholding and there seems to be a cordial relationship between their analyst, Mark Wilson, and AB judging from the Q&A's over the years. Harbour also got a slight knock and they're paying dividends and involved in buybacks but the price held.
The price hardly moved. You could make an argument that it suits these companies to use the Jefferies analysis and forecasts when they discuss EPL with the Treasury. Next week will be more interesting with the investors presentation on the 19th than the screen shot of oil companies today.