Member Info for romaron

You can't even make trolling interesting Stan.

IR would probably answer that one. They won't tell you what they sell stuff at but if it is in the public domain it is already out there but sometimes needs clarification.

Hi AoK - We've tried that and it didn't work. Like in the X-files; "we are not alone". Seriously though this is the first time the cost of energy has reached crisis level for the British public and gradually the intermittancy, complexity of oil and ERoEI will reach the majority who can then come to a balanced decision based on facts rather than dogma. Attack the producers when its the Western lifestyle that we want whilst ignoring the population explosion. There is no joined up thinking on an integrated energy policy that addresses both climate and energy needs.

Remember - if attacked by a mob of clowns; go for the juggler.

I think it's bigger than that mrc - we may have to wait 6 months before the positions change. For now I expect more of the same and weather will play its part as well as repercussions from the Russian oil sanctions on Dec 5. There'll be some winners and losers in the green race with I suspect more losers. The hype around renewables has been phenomenal. The good news is that it is out in the open now and the positions of government and a potential new one in a couple of years is known.
For me the tax credits and losses give us protection and value for the next 3/4 years with more of the same from EnQuest. If nothing changes then we'll be in a position to invest more overseas or maybe invest in more end-of-life fields here. We could be producing 100k boepd in 4 years and that wouldn't be a bad return with a decent oil price and tax of 75%. Our scale could easily increase.
The stupidity of leaving oil under the sea with Bressay and Bentley may well become apparent.

Don't be silly mrc - that wouldn't suit his agenda. The attacks on energy are Europe wide except it seems in Norway. We shouldn't get carried away most other countries are envious of our energy choices. Just read that Germany is considering imposing a 90% windfall tax on solar, wind and nuclear over €130 MwH. EnQuest story leading with GE field declining faster than anticipated. Rigs heading for sunnier (in an economic sense) climes and the impossiblity for UK to get a heavy lift business etc... It appears that they expect companies to embrace zero emission theory and run on fresh air which isn't (imo) what was originally intended although Ed Miliband and juststopoil expect it to work.
I sense a fight back from the UK O&G industry with the non-stop hostility towards the fossil fuel industry eliciting a reaction that surprises few of us. Policymakers demanding more production yet windfall tax proposed in the US and shale producers obstinately preferring to return cash to shareholders rather than drill as in past cycles. What did they expect?
"Low valuations encourage companies to favour returning capital to shareholders over increasing drilling, despite strong single-well returns." The US article then goes on to explain that the entire industry trades on less than its NAV, and these extremely low valuations have tipped the scales away from drilling and towards dividends and share repurchases."
From an article titled "Why won't energy companies drill" Goehring & Rozencwajg 3Q Nov 22, 2022.
EnQuest seems to have adopted the same attitude and who can blame them?

As long as world peace remains an aim and clement weather assists we should be alright. There's always Hopium and Santa Claus if the policy makers have got it wrong. I'm still positive because selfishness and common sense is a trait the public understand.

An interesting missive fro Goehring & Rozencwajg 3rdQ titled "Why won't Energy Companies Drill? goes into it in more detail.
We have to let these things run. There isn't much we can do about it but oil companies can outwait governments. Their business is built on long term.

Not really following/understanding but is this new gas? It'd make a hell of a dent in EPL if it is.

Pathetic volume today. Guessing that US Thanksgiving Holiday hasn't helped. Harbour nothing special either and that may well include buybacks. Flat day - may be a better reaction tomorrow.

Build it. They're coming.

What would be helpful is if anyone has the current cost of, say March 2023 premium on buying a put? Looking at the average ceiling price is pretty meaningless to an extent if you don't have the figures for the premium to buy the put at the time which would have been offset at the realised price of selling closer to the spot on the contract date. If oil is higher allowing for the premium you let the option expire. Costless collars are limiting but I'm sure the banks like them because prices are set in cement and whether in a covenant or not it is the sort of thing that creditors approve of. I tend to avoid anything that has "costless" in the blurb. There's always a catch somewhere. Accountants are the only people who believe in "costless".
For me the catch is that you're allowing someone else to do the work that you could possibly do yourself. I imagine Gunvor or BP wouldn't mind writing a costless collar; but having said that it is their job.
You can't make a true comparison without the numbers.

I think it is what we expected and more importantly no major negatives or CEO misstep [a la Looney 'literally a cash machine'] We will be throwing off decent FCF for the next 3/4 years until the tax losses run out but of course the landscape will have changed quite a lot by then. I stopped waiting for the cavalry or EnQuest to release a hit record some time ago. Thye're just quietly getting on with the job in a hostile environment (both onshore and offshore) and for those of us used to the EnQuest way this was the usual measured RNS when some would perhaps prefer an AIM type one from someone like David 'Gatwick Gusher' Lenigas.
Energy Voice article today merely picked out "North Sea firm EnQuest eyeing ‘significant infrastructure reuse’ to deliver CCS" which was orchestrated imo to be their emphasis rather than "EnQuest on course".
Two things out of the EV article: 1, EnQuest says the CCS licences it is vying for are accessible from its existing owned and operated infrastructure. 2, Outside of CCS, EnQuest is pushing on with plans to overhaul the Sullom Voe Terminal (SVT) and connected offshore infrastructure to harness the abundant renewable energy that will soon be available on its doorstep. Having secured an exclusivity agreement with the Shetland Islands Council to progress new energy opportunities at SVT, the company believes it is “well placed to deliver on these new energy ambitions”. I like the words 'exclusivity agreement'. SVT remains an effective aircraft carrier in the NS larger than anyrthing the US have. Valuable real estate.
I think chasing funds to invest is (currently) a fool's errand. Speculators can play the volatility but we've become, for now, a predictable and profitable company. I think we all know that the picture never remains the same for long in the oil industry and with the caravan moving on to other topics (COP now just repatriation and fund distribution) we could have a very interesting and profitable decade ahead of us.

New board member of Equinor - Haakon Bruun-Hanssen previously chief of Norwegian Defence Forces 2013-2020.

"The move to appoint Mr Bruun-Hanssen comes hot on the heels of the Norwegian Government beefing up military presence around key oil and gas assets.
In October, Norway increased the readiness of its defence forces and boosted surveillance amid heightening security tensions across the North Sea.
Dozens of unidentified drones were spotted near platforms in the Danish and Norwegian sectors just days after and gas leaks emerged from the Nord Stream 1 and 2 pipelines in a suspected sabotage that has now been confirmed.
Sanctions on Russian exports of fossil fuels have made Norway the biggest supplier of natural gas to Europe."

*Our Sea Cadets have been training on calm days and when their mum's and juststopoil let them.

Good spot Boggi. I think AI is going to make a big difference and a reduction in time in exploration and where to drill in existing fields. It already has a big impact in all kinds of fields from law to medicine. It can for example spot early cancers more quickly and accurately than human beings. What though drew me to it was the reference to the nameplate production capacity of 80,000 bpd. Throw in some offshore wind power and we'll be off to the races. Sometimes it looks as though some clever long term planning is coming to fruition when you consider Bressay and Bentley.
You've got to be in it to win it.

Oil can help save the NHS and pay doctors, nurses and carers more.

Energy Voice today saying Ithaca better placed than us as new investments in pipeline to reduce EPL according to Moody's.
"Moody’s paints a different pictures for EnQuest and Neptune – as well as the oil majors Shell, BP and TotalEnergies.
EnQuest’s free cashflow (FCF) will be crimped, with reduced potential for investment allowance.
“Higher tax-related outflows and lower scale of growth investments will weigh on EnQuest’s FCF generation, somewhat delaying the pace of reimbursement of drawings under the reserve-based lending facility following the recent refinancing transaction.
“However, we do not expect this to significantly compromise the company’s ability to meet upcoming debt maturities.”

-----
Bit double speak to me. I don't mind being in the company of Neptune, Shell or BP. Surely the question is not the tax benefit but the return on the field once production begins. Looks more like a column filler rather than anything new. You could argue that keeping your powder dry (FCF) might be a better choice until things are clearer.

I wonder if choosing Thanksgiving Day for the update is just coincidence?

I was looking at BP and saw it was UP 5%. That is a big move for them so I popped over to read the RNS. It was only adjusting for the downward move yesterday. There was no RNS. Maybe we should invest in something more stable. Maybe bitcoin?

quoted "Markets can stay irrational longer than you can stay solvent" - seems Harbour are testing that observation. I'g go as far to say that Linda Cook and her team are as rational and experienced as the team at EnQuest. They know the intrinsic value of their stock better than those on the outside. They know and understand the physical market even better; especially compared to the pundits and speculators.

Thanks for the heads up Stevo - from the 30 June 2022 Results

"Contingent consideration The contingent consideration related to the Magnus acquisition increased by $44.8 million. In the period to 30 June 2022, EnQuest paid nil to BP (2021: $1.0 million) under the profit sharing mechanism, reflecting the unwind of the early vendor loan repayment in 2021 and timing of cargos in 2022. A change in fair value charge of $26.9 million was recognised in the period (2021: $27.5 million) together with finance costs of $17.9 million (2021: $30.3 million). The contingent consideration payable associated with the acquisition of Golden Eagle increased from $45.2 million at 31 December 2021 to $46.7 million at 30 June 2022. "

Only another $900 million for you to find. Nobody knows WTF you're talking about. We prefer the standard methods of valuation that bank analysts and CFO's use. Don't take it personal - I struggle with accounts too.

corection - Astley's didn't own them. They provided financial data. DJ had a stake in Telerate 32% that built up to 67%. This was in a time of long, liquid lunches and compliance officers hadn't been invented. Financial journalism was equally dipso.

Many years ago when dealing rooms operated on steam and analogue was a new technology information was just as valuable but not always instant. At the bank I worked for we only had Reuters. They are still possibly the most trusted purveyor of news, especially financial.
I would occasionally get burned because unsubstantiated rumours/news would move a price and I'd see nothing from Reuters [double checked and corroborated]. Something similar has just happened.
The guilty party in those days was an upstart called Telerate owned by a money broker Astley & Pearce. It morphed into another company that became known as Dow Jones Telerate and was like the Sun newspaper is to the Financial Times. The difference was that DJ Telerate would publish rumours and the odd one would have some factual basis. True or not it would cost you money if you were dealing blind. Nothing worse than not knowing what the rumouer is that you could then ignore. There was a scintilla of possible truth in the WSJ report (also owned by the Sun proprietor - Newscorp) as the Saudis need things from the US and vice versa. Plus there could easily be a worldwide shortage from Dec 5 onwards.

Plus ça change, plus c'est la même chose

Seems like they're serious about banning Russian crude shipments/imports in Europe in 2 weeks. That's 1.4 mn barrels per day that have to be found elsewhere unless demand collapses. You could say that Saudi are being helpful or you could say opportunist. Nobody knows the impact yet but the reaction on the oil price shouldn't have surprised anybody. They're like buses; another announcement will be along shortly that may well cance out this one. Or maybe 3 at once?

Hi Tarmak - I was gonna make a fresh post with the subject 'Desultory' because there is so much in the air and you should have (as I expect EnQuest do) several plans until certain things become clearer. I do worry sometimes about predictable stereotypical response from government and even boards of companies. Safety first in a quickly changing landscape isn't always the best option. I am amazed how quickly I've got over the protestors. The increased EPL has had the effect of muting their protests (plus it's wet and cold here) and they had very weak support from the public. The O&G industry has been pushed to its limits and maybe even too far. I expect retrenchment there and events to support is. This may be BS but Goldman have lowered their Q4 forecast for Brent to $100. For that to be true Brent needs to average $107 for the last 27 business days (Art Berman). He doesn't agree but who knows? Everything you read hints at deals and subterfuge where Russia, US and Saudi are involved (and yes, we have a good track record here - perfidious Albion was deservedly earned).
The renewable sector are bleating like stuck pigs about the unfairness of their newly raised taxes which kinda undermines their saintlihood. Together with EROI and intermittancy issues they are not as perfect as Boris Johnson pretended. The public are on a learning curve and massive energy & fuel bills change minds.
There's an article in the Sunday Times about ship to ship transfers allowing the UK to import Russian oil. In total £778m of Russian oil has arrived at 10 Uk ports since March according to UK trade statistics and they are probably the tip of the iceberg. Once blended or an unreported ship transfer you cannot tell. We are allowed to import Russian oil until December 5 but those doing now aren't helping their reputations. "The Iranians started it, the Venezuelans perfected it, the Russians picked it up and ran with it" - LLoyds List.
I think FCF and huge tax losses/credits are fundamentals that make us a raging BUY. Our problem is that the paper market beats the physical most times. There isn't really enough fund interest in us to counter this. We'll just have to use the cash as best we can.

*a ship-to-ship transfer took place off Southwold, Suffolk. I'm not saying spindok's absence from here for days at a time has anything to do with it. But haulage contacts and a boat means he knows this area well. Of course it's probably just coincidence.

Yeah, tightwad - he could at least have matched the £240m that Boris gave to Net Zero Hydrogen Fund in April. I typed 'gave' in case 'spunked' wasn't acceptable.