Member Info for romaron

And I've a suspicion that the delay in getting the new Chairman means we have plans. He has contacts with Govts and companies most can only dream about. AB with Bressay and Bentley has already shown that he thinks long term and has also shown that he can steer a company through some of the worst, some may say perfect, storms the G&O industry has faced. We are well positioned.

All serious holders should listen to this: https://vimeo.com/782935411
We can look at it without the emotions on the SQZ board. In the scheme of things retail investors opinions only really count at a rights issue. They are trying to complete a deal that will just about equal our current production. Two drivers are the tax losses of Tailwind and the need of diversify in fluid types and single commodity price (I'm about the only person here that has shown interest in this). SQZ are basically gas and Tailwind 80% oil.
So it seems that we have assets that may attract interest.
At QA (29.00) an analyst said that in simple terms it was a "$10 a barrel 2p deal" for Tailwind. I think he included tax losses so naturally I immediately converted them to our 2p and got (say) $2bn. And that is with both companies (tailwind & SQZ) working on a current 30% discount to NAV (38.50). Very rule of thumb but it'll do me. Throw in Bressay and Bentley downdn the road and a potential extra $2.5 bn. The future is unknown but if B&B got developed, even at these historically low levels and NAV we could be a company worth easily £2 a share.
So if another company came to EnQuest with the deal they'd need (say) 87p and I don't know our exact discount to NAV but its a snip [ENQ] at current valuations. Another route would be to build a position in ENQ but low volume and a hostile management might make that difficult. People assume that AB's purchases are to support the sp; they also send a signal to others who might want to use us as a vehicle which is what Mercuria, may or may not be doing with SQZ.

Build it; or someone else will. They'll come.

Hi Auson/FC - I hear that Gareth Penny knows a bit about mining. Might come in useful. I think his contact list is just as important. We certainly live in unusual times.

*I do think we need to get a better picture of the companies left in the NS who are either largely Gas and those like us who are mainly oil. It must have an impact imo. It isn't laziness. I can't navigate the NSTA/OGA site. TBH I'd never heard of Tailwind before.

*I immediately thought of Spirit as we have an ex-director there (Neil McCulloch) but they are mainly gas I think.

Hi KO - and they're on AIM. I can't be bothered to do the numbers (I'm pretty useless anyway) but my view on SQZ is positive. I missed out on them even after a NS helicopter pilot told me that he regularly flew over a gas field (Rhum) that had enough gas to provide half the UK needs (memory but it was a big number). Problem was that due to the US and Iranian sanctions etc. it was inoperative. SQZ took a massive gamble that paid off and well done them. The UK/US allowed the deal to go ahead. That indicates to me that the Govt have advisers (likely military and LT thinkers) who have leverage and it was clearly a good deal for the UK. Their management are either lucky or have impeccable connections. I think it may be the latter.
I also think it very encouraging for EnQuest although I still think the Govt hasn't got its head around oil. It's the same as gas but different. In fact from a military perspective you'd struggle without oil and to produce gas I'd imagine. It is probably too much for the average MP to get their head around. It does though suggest that our importance to security and economic recovery is understood by those who don't have to win public votes or go along the populist route.
People will be running slide rules over EnQuest and they'll be doing the same. You've got to be in it to win it and we are definitely a player.

*Having Gareth Penny on board can't hurt. He doesn't have to be nice to or agree with AB.

News alert. Someone in the Govt must have been listening. Not quite a U turn but straight from the Govt today:

https://committees.parliament.uk/committee/135/science-and-technology-committee/news/175146/hydrogen-is-not-a-panacea-for-reaching-net-zero-warn-mps/

"Hydrogen is not a panacea for reaching Net Zero, warn MPs" Headline

small detail "The Committee is “unconvinced” that hydrogen will be able to play a widespread role in heating homes by 2026, when the Government has said it could start mandating hydrogen-ready boilers in domestic homes, though it could be feasible to blend some hydrogen with natural gas. It also argues that policy for hydrogen metering in homes has been “overlooked”, with the energy regulator Ofgem unable to say whether current smart meters would be suitable for hydrogen or the cost implications for the consumer if they are not suitable."

I must admit I was a bit surprised with that last paragraph. I mean they are really cosy up in Fife with their Hydrogen heating. Only a trial and running out at about £100k a home. That's nothing if you can purloin the funding from us.
I'n not going to read the full report - I'll leave that to one of the trolls.

Another interesting article in EV -
“Marxist power grab,” is how Saul Kavonic, a Sydney-based energy analyst with Credit Suisse, characterised the regulations. “Labor is seeking to be able to take any business’s gas away and sell it to wherever, whoever, and at whatever price the government decides on the day, with no recourse.”
The Autralian Govt is forcing the producers to sell uncontracted gas in the domestic market at A$12 a gigajoule for 12 months. Thaty is above current rates but a FIFTH of current overseas spot rate. Australia sewlls about 20% of its gas locally. Similarly strident are industry voices claiming the changes will jeopardise future investment in Australia.
Yet Australia is far from alone in seeking to protect domestic consumers. The UK, for example, is implementing a windfall tax on “excess profits” from some power generators with Germany and Italy also among those levying energy companies.
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Our Govt is otherwise occupied at the moment but will revisit at some time the British G&O industry. I'd like to see the price of oil higher when negotiating a floor on EPL. We are presently only $20 above the Russian Cap which is supposed to be punitive.
Our Govt will be watching what is happening in other jurisdictions. The UK G&O industry is not without leverage and friends. It is early days and with practically a General Strike going on they have more pressing matters to deal with.

*I use EPL instead of "Windfall Tax" in the same way that Russia uses "Special Operation" in Ukraine rather than "invasion".

"EnQuest (LON:ENQ) was slapped with what is believed to be the largest fine issued by the North Sea Transition Authority (NSTA) to date, and must now stump up £150,000 for flaring an excess 262 tonnes of gas on its Magnus field.
In response to the sanctions, a spokesperson for EnQuest said: “The NSTA recognised that EnQuest made contact promptly and maintained a constructive dialogue over the course of the incident.

“EnQuest took immediate steps to shut production down on 1 December 2021 until authority to restart by the NSTA was received in writing on 3 December 2021. The regulator also recognised that the Group had fully cooperated with the enquiry and investigation that followed.

“The company also conducted its own internal review to determine the cause of the failure and to prevent any future failure to comply.

“Notwithstanding the above, EnQuest accepts the NSTA’s sanction and will meet its obligations to pay the financial penalty as required by the regulator.”

Ebnergy Voice this morning

Another late thought. You wouldn't say, a "gas and coal producer" or "oil and hydro producer". They all produce energy but I doubt Europe will be using Russian energy for some time. It is time to drop the O&G because more companies are specialising in one or t'other and (I don't know) I'd imagine that the majors have already split the divisions. It'd be interesting to understand more about the internal workings of (say) Harbour in this respect?

That's why we employ you Therapist.

Back again with this. It needs revisiting - https://www.reuters.com/business/energy/north-sea-oil-producers-seek-price-floor-limit-uk-windfall-tax-2022-12-06/
Scroll down to the chart image of “Britain’s biggest oil and gas producers”.
The message is lost to an extent when you conflate oil and gas. High Energy bills presently are due to the high cost of gas. The products are similar enough to confuse the public and we tend to go along with it. The List of 10 provided is working against the interests of oil producers. I can no longer work the figures of OGA/NSTA but even I can see how misleading the chart image is.
If you did a graph of top 10 UKI OIL producers it would include EnQuest imo. Harbour we know is 50/50 whilst Spirit is nearly all Gas. BP and Shell are hurriedly exiting oil but seem to have an interest still in Gas. I think a new list would be illuminating if it was just “Top 10 NS Oil Producers”.
Oil has always been self-regulating to a point and the “Gas problem” was created by the pricing agreement that was tied electricity to the highest price of gas; Putin did the rest. Belatedly the renewable Energy suppliers are being hit for excess profits and they are bleating like stuck pigs. You do not see activists behind a banner saying “juststopgas”.
We are being attacked because of Gas but we’re not a Gas producer.

Some other rough figures from google. We consume barrels per day of 1,583,896
We import 797,631 bpd. It gets confusing because some imports are refined. “The UK imported £30.0 billion of oil in 2021 (£17.6 billion crude oil, £12.4 billion refined oil), and exported £28.3 billion of oil (£17.9 billion crude oil, £10.4 billion refined oil).29 Jun 2022”
The Govt seems hellbent in closing the NS to oil producers. Consumption of c.1.6m bpd means that oil will be needed for decades because it is so integrated. So, we will still import oil and pay for the taxes and profits outside of the UK to foreign producers. Without a supine oil industry tax revenues will be lower. Seems kinda stupid but we are where we are. If the shadow energy minister cannot understand the G&O Industry what chance the man in the street?
Oil is a very small percentage of my greatly increased energy costs. Oil is lower now than many times before and that didn’t trigger an indiscriminate raid.

It’ll take time but a list of top UK 10 oil producers by someone with the skills would be appreciated. OGA/NSTA have the stats.

“Many” North Sea operators are now reconsidering their 2023 spending plans due to the windfall tax, the head of a membership group has said, with particular damage predicted to the supply chain.
Robin Allan, chairman of BRINDEX – an association of more than 20 independent operators including Harbour Energy, Ithaca Energy (LON: ITH) and EnQuest (LON: ENQ) – said he’s “not surprised” to see revisions as firms can no longer “safely plan on fiscal stability”.
The move will ultimately hurt the UK and its supply chain, Mr Allan warned.
He told Energy Voice: “The windfall taxes on our sector have already led many BRINDEX Members to reconsider their 2023 spending plans.
“This reduced expenditure will negatively impact and damage all of us but particularly damage the service sector in the UK”.
The comments come after Harbour Energy (LON: HBR), the top producer in the UK North Sea, said on Thursday it would shun the ongoing licensing round in the sector due to the levy.
Meanwhile oil major TotalEnergies, not part of BRINDEX, has said it will cut £100m from its 2023 spending plan due to the levy.
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I don't know if they ran this past EnQuest before mentioning their name. I'd rather things remained away from prying eyes until there is more clarity. All we need now is the next "massive profits - cash cow industry" headline when after this bout of spending attention is drawn back to "how do we pay for it?".
Read that Goldmans, Morgan Gty cutting staff so unlikey it'll lead to massive input from financial services.

I hope that AB plays it low key unlike Linda Cook of Harbour who doesn't understand us. Ithaca are 30% down since IPO in November. Events will strengthen our arguments. The Govt isn't listening at present.

This board does have its therapeutic qualities and the move down yesterday did shake me out of my lethargy towards EnQuest. This post is aimed more at the Swedish guys as they don't always get the view from the front line.
Our Govt is in an awful mess with railways and the nurses mainly with Labour realising as long as they do nothing they won't make a mistake. There will be a settlement and negotiations are progressing. It would be a major error on the part of the O&G industry to press their point home now and the Labour stance does have its merits.
For many we are still rapacious capitalists working with the oil and gas giants to steal from the poor and needy. The immediate problems with the nurses and railways (there are more but these get all the headlines and affect nearly everybody) need a settlement before they even look at Energy. That is understandable.
Once some order is restored they will return to energy; especially the EPL. When? If it's late January we'll have the results of the first O&G exploration round since 2019. With little capital around and an example set by Harbour that won't run well in the media. I think take up will be abysmal. People understand that wage and condition improvements need to be paid for. Once the injustices are corrected they will be more amenable to a more nuanced approach to Energy.
A part of the problem is more to do with Gas. We hear about the SPR but not so much about the SNGR. Gas is (imo) easier to work with fixed long term contracts than oil. We are seeing that with Qatar and China (27 years) and Energean are far less volatile than other UK oilies for the same reason.
If oil breaks $100 next year it will be hard to argue against EPL so timing is crucial. There is a shortage coming and even the US has problems with capital and the decrease in Tier 1 shale acreage and an investor revolt with oil. Will we see buyers for Neptune and Spirit in the 1stQ? Time is on our side as I think the industry will be frozen until they get some incentives and guarantees.
To encourage and revitalise the NS they will need incentives. The easiest one, and it wouldn't attract too much opposition is to put a floor on EPL. If it breaks the floor then companies will be announcing much lower profits or even losses. The market will still be able to correct itself but the risk is reduced. If it is too low the Govt isn't getting the tax anyway. Without a floor new investment will be strangled at birth imo.
One danger would be to announce record profits at this time because the media wouldn't refer to the pat 12 years of no dividend but go for the easy headline. I think we can rely on AB here as the long game is his speciality.

Build it and they will come - unless the ECO Nimby's and activists are over indulged. Much encouraging news from Scotland. That's another angle. With Sturgeon gone and Independence one day maybe they'll take the O&G industry of the English hands?

FC - It is 35% but Labour were asking for 25%. However, Labour are also asking for the rebate on new investment being revoked. It is a balls up all around.
Some simple statistics. Only a rough google but the O&G industry is 280,000 many of whom are Scottish. There are (on radio) 700,000 nurses. This is often conflated with care workers and the NHS employs 1.4m people and social care 1.6m.
Let's call it 3m. Or even more accurately 3m votes against say 150k in O&G UK as both Labour and Tories have been sussed out in Scotland..
Who is going to get the sympathy vote? I'm not taking sides just laying out the state of play.
To fund the NHS (social care may be self-funding but I doubt it) requires £billions and the socialist dream is to pay for this out of renewables, crucify non-doms and destroy the O&G industry because they think it is a money-tree that cannot be killed.
We need a Champion and sadly nobody or group has stood up to defend O&G. Once we become more like Ukraine it will be harder for us to defend the renewable stance but by then it may be too late. And all this without the UK firing a shot. And they think Russia is losing?

Usually it's only Lemmings that throw themselves off a cliff Modestus. I blame it on the ESG Kool-Aid.

No doubt the Labour opposition will twist this now to "an impulsive knee-jerk reaction by the Tory party imposing the hastily and ill-thought out windfall tax at 35% when Labour was first to advocate the tax but at 25% has led to the decimation of the UK O&G industry forcing companies to abandon the North Sea and invest elsewhere". How can they resist or they'll be left with almost complete reliance on renewable energy and people will ask "how come the blackouts and cost - you told us that renewable energy is 9X cheaper?".
A bit difficult to cast the blame then on an industry you destroyed. Still no idea where they'll get the money to fund their brave new world.

I think it was timing. FTSE down, oil down and small though they are Orcadian's results. Also digesting the Harbour statement of not going for new NS licenses hasn't helped. I think there is a certain amount of bite back from the industry and they'll want it to appear worse than it is. Call it the fog of war.

FTSE is down and other energy stocks are following our lead. It could be worse. "The last year has seen a seismic shift in sentiment surrounding the oil and gas sector. Energy security is now rightly at the forefront of the agenda. We believe the xxxx project has the potential to significantly contribute to this for the UK, whilst being a flagship project demonstrating how to reduce global emissions and make a contribution to a secure transition to net zero.

"We therefore believe the year ahead promises to be a significant year for the Company as we look to progress xxxx and deliver the value that we believe is inherent in the project. We would like to thank all our shareholders for their continued support and look forward to providing further updates in the coming year."

I left the name of the field out to make it more interesting. The small NS developer RNS'd their results today and the above is the CEO's message. They are down 22%.

VoR - I enjoyed your posts. BoA is one of our advisers. The analyst is not an adviser but there would almost definitely be a conversation between the analyst and advisers. Not saying they influence each other but protocols or plain courtesy comes into it. They then have to explain themselves to EnQuest.
I imagine the analyst treats numbers and sentiment in the same way that certain traders use TA. If that is what the market is predicting they'll go along with it. Not my method but it can be self-proving if enough follow it. Pointless standing in front of it but we also have our own TA of increased profits, lower debt and tax shelter. We are priced to fail in the next 2 years. Can anyone really see that happening? Conveniently it could tie in with the new Labour Govt.

Careful what you wish for Starmer. We still have events and unforseen consequences to come into play. Energy isn't based on magic and money trees.

Firstly, sorry to break this to you - but Santa doesn't exist. The old saying that "things have to get worse before they get better" applies and hopefully we're past the worst. If they tried any fresh attack we could take them to the Human Rights Commission under Article 3 - torture and inhuman treatment. The current mismanagement will create opportunities as well. I think AB has the intellect and talent to see beyond the current travails. I'd like to think it's us making the takeovers. We're not under threat from insolvency so I cannot see him letting us go cheap. Having Gareth Penny on board is good timing too.

Britain’s cost of living crisis is unsustainable.
We’re living through a national economic emergency, but the Conservative government is putting the profits of oil and gas giants before the British people.
We cannot continue to make working people pay whilst oil and gas giants make record profits.
That’s why Labour has a plan to slash energy bills for good, create thousands of good jobs, and make the UK energy secure.
All while providing global leadership in tackling the climate crisis and protecting the environment for future generations.
Labour would:
1. Freeze energy bills now paid for with a windfall tax on the huge profits of oil and gas companies
2. Keep bills down in the long term by insulating 19 million homes
3. Establish GB Energy, a new publicly owned company, so the UK can’t be held to ransom over energy supply by dictators like Putin
4. Create thousands of good, well-paid jobs across our country, including for plumbers, electricians, engineers and technicians
5. Make Britain a clean power by 2030 by harnessing the power of marine and tidal energy, quadrupling offshore wind, doubling onshore wind, tripling solar power and ensuring the long-term security of nuclear power
6. Safeguard nature and our children’s future with a Clean Air Act, and crack down on water companies who dump sewage into our rivers and seas

1. O&G giants have gone.
2. EPC's have been law since 2010. Cost to insulate old housing stock? - unimaginable.
3. A state run entity - like the NHS?
4. Good jobs - possible but closer to minimum wage.
5. Where's the money coming from?
6. Forgot world peace.