Member Info for romaron

A PR guy who has also worked in Government told me at the weekend that his company had lost 4 consumer accounts but so far not affecting his company as existing ESG companies have filled the gap. I warned him that a handbrake turn by them (ESG) might be round the corner. Lobbying has had great success for them and it might just be doubling down. I think O&G will just have to let the cold and petrol rationing do our PR.

*Ukraine said they have their "most meaningful" relationship with Saudi Arabia in 30 years. SA has given them $400mio for humanitarian purposes. I wonder if we're missing something here? Oil seems too cheap to me.

Hi Tarmak - I don't think that's the case at all. I ticked mrc because he thinks Kraken is a success and so do I. I can remember the world and his brother praising Magnus at one time. You get a breakdown, possibly temporary or solveable, and all of a sudden it becomes a major problem. We don't know all EnQuest's strategies and have to take most of them on faith. Richard Hall was once blamed for everything that went wrong when the Kraken FPSO started production. Look at him now. Probably No.3 in the company.
I'm not sure but I think mrc has links to the industry and his anlysis has value too. L7 has an engineering background and insight - useful but not as much as O&G experience, the price of oil or government legislation and then there is a potential recession (which I fear less because I think we've had ours). With EnQuest I get the overall finance but why should I check through everything that appears on a balance sheet. I trust EnQuest management and their abilities otherwise I wouldn't be invested. If people want to talk figures to each other that's fine but sometimes it leads to willy waving rather than helping fellow posters.
You [Tarmak] have a natural affinity to figures without the arrogance which is why you're such an asset to this message board.
Compliance officers seldom get invited out after work because to be a success they need a certain amount of scepticism and look from the worst view. L7 started off benefitting the board but now he just seems to check L3's figures or answer his questions. I'm happy to ignore them as most of it is irrelevant to me. Some think L3 is a troll - possibly but I think neurodivergent is closer (he has me on Filter so he can't read this).

I worked very closely with accountants in my City days and accepted their workings but they never helped me make money. They might bring clarity to part of a problem but I'm just as likely to get the answer from mrc.

I hope we're still friends Tarmak.

Speak for yourself monkey. The usual pedantry with this particular comment "I don’t know the reasons AB participated in the RBL, but it does not represent an ‘equity’ component."
I actually wrote "effectively an equity contribution?" with a question mark because as far as I was concerned he did what was needed to get the deal over the line. I think people here have guessed I'm not a contract or credit lawyer. He's [AB] done similar in the past and I imagine the banks will get the money before equity and possibly AB if things go drastically wrong. $15mio may be small in the scheme of oil deals but then, insurance premiums are only a percentage of the total ccover. Frankly I don't really care but pleased about the timing as things could easily turn for the worse regarding the debt market.

Went to the Cheltenham literary festival over the weekend. Got into the Writers Room as a guest. One talk I went to was for the launch of "The Trainspotter's Notebook" and I hoped I might meet a few of the posters here. The Author, Francis Bourgeois is hilarious and had turned his obsession into a decent business. You'll be able to see him on TV soon (Channel 4 I think) where he takes celebrities trainspotting e.g. Joe Jonas, Jesse Lingard and possibly Thierry Henry.

Build it and they will come.

Good spot Tigar. I made that mistake. I wonder if it's conditional that there is effectively an equity contribution? At least we didn't have to cough up the extra money as in past credit agreements.
If not a condition then it means AB has shown unusual commitment by a CEO. Good sign whatever imo. It speeded things up. He did something similar with a promise to partly underwrite another deal in the past.

I'm just glad we've got the refinancing done. If the debt market closes (and it did earlier this year according to our CFO) it would have put extra pressure on the company, deserved or not.
I wonder what treatment the O&G will get regarding the raising of corporation tax. The sector is already paying more than everyone else yet our cooperation is essential.

Hi SaveMore - what is the 10% you mentioned?

Remind me. When was the last time the junior doctors, teachers and their unions were happy with any government? They weren't very happy in 1978. Doesn't really matter who is in power. We want cheap and free at delivery; not always easy to match with quality or decent wages.
Rinse and repeat. Cobble together and carry on as before. Build on the success of Brexit! The public get what they deserve; or more the case, what they're prepared to pay for.

Jeremy Hunt is a relatively successful businessman unlike KK who leaned more towards academia imo. JH will be considered a safe pair of hands and I have no problems with the appointment. I think Liz Truss has shown her ruthlessness and I think she is underestimated. She didn't get to where she is by accident.
What I will miss is that KK was prepared to go against orthodoxy and wasn't hidebound by traditional knee jerk reactions to events. I believe that every recession is slightly different and to this one you can add a pandemic and the first European war in over 70 years.
Iain Martin wrote in the Times yesterday forecasting today but what was much more interesting was that he admitted to having never heard of the infamous LDI (liability driven investment funds). He checked with one of the wealthiest and most successful financiers he knows who cheerfully admitted he'd never heard of them either. When he said this the financier checked every finance person at the table and only one knew something about them.
Enter KK who would almost definitely have never heard of them [LDI's] who immediately launches his tax-cuts and the market goes into panic mode and gilts plunged.

It remains to be seen how JH responds to the O&G sector.

Could this explain KO's unusual grumpiness? He's not in the list - must be an oversight or vote rigging. He's actually a handsome fellow in a rugged outdoor way.

1.Vin Diesel – 6.46/10
2.Stanley Tucci – 6.33/10
3.Shemar Moore – 6.25/10
4.Pitbull – 6.16/10
5.Prince William – 6.13/10
6.Jason Statham – 5.96/10
7.Bruce Willis – 4.75/10
8.Joe Rogan – 4.37/10
9.Dwayne “The Rock” Johnson – 3.62/10
10.Mike Tyson – 2.50/10

==== Hi Tarmak - I had a few run ins with KO in the past but he uses different methods to value a stock as do I. Figures are important but one failed well or an oil price collapse can make all the carefully crafted financial models just a waste of paper. You do need to know them as these are used by analysts, banks and credit agencies but they can be just as risky as 2C reserves (2P occasionally too). I have a financial question that hasn't been raised here so I've contacted IR. I'll ask you {Tarmak]the same offline as it may be just my financial ignorance.
I find very little of value in L3's posts. I don't need to know the paper clip inventory or the budget for repainting the canteen.

I could say more about PMO but I won't mrc. You may remember that I was the sole retail investor at the Energean AGM. Roy Franklin came over to me and started a discussion. I'm sure he mistook me for someone else. He took over as Chairman of PMO towards the end. Illuminating.
These are difficult times but there are still idiots who think you can outrun or ignore a storm. I'm battened down and waiting for clearer weather. Those of a boastful nature merely make themselves look stupid at times like these. I've prepared as best I can and we'll have to wait and see.
I think we need the US interims out of the way. None of us know what the winter will bring. At least we are in good hands with EnQuest.

Hi Zippy - not sure if it's possible for a retail investor to buy the $HYN but the RB is widely available on most platforms. ii and AJ Bell certainly.
Just looking at the ENQ2 and it currently has a YTM of c. 10.5% whilst the $HYN with the same maturity is c. 12%. If you take out the currency risk then they should be the roughly the same. They're not so will one go up or the other down?
At the moment it appears the retail investors think the $ bond too high but that is simplistic. The 'professionals' would think it too low. As they say "it's complicated". I don't know the answer.

I bought the RB because I wanted a larger than usual exposure to cash than I usually hold. Maybe I should have waited but I'm happy with 9% whilst I decide what to invest in and it was one of the best rates around that I felt didn't reflect the low risk of EnQuest not repaying.

I haven't seen anyone mention the fact that (AB effectively) Double A Ltd has invested $15mio in the Bond. It may have been a condition but good to see all the same. There's not many public companies out there with that kind of commitment.

Hi Taverham - because the price issued was at a discount you add that to the coupon rate. To get around 10% you would need the price to be at a premium above 100.00 and something like 106.00 would be necessary. You can almost do it in your head. The difference of 1.4 over 5 years is .28 add that to 11.625 and you get 11.91. I use this calculator to get it more accurate:
https://goodcalculators.com/bond-yield-to-maturity-calculator/

I'm guessing that they have to issue with a coupon rate as close to what they think will be the market price. I'd say they got pretty close and I doubt any of us expected a premium in this financial climate

· Priced the offering of new $305.0 million 11?% senior notes due 2027 (the "New Notes") due for settlement on 25 October 2022, at an issue price of 98.611%; and

That is a nice round 12% YTM. Easy to rememember.

They seem to be flavour of the day elsewhere. They weren't allowed under the previous (RBL I think?) - there must be some paperwork around saying if that's possible now. That will help the price as a home for cash. Dividends closer. Both help.

Bond issue masterfully done imo. Little fuss. The market will like that.

It got onto their [CNN] main news and was very positive. The ME is never straightforward but Lebanon does need income and cheap energy will help their whole economy. The US have immense power and are manipulating in the background. They want it done.

Memory lane - 28-Apr-20 Jefferies Hold 5.00 11.00 Upgrade [ENQ Broker ratings on here]

I think that's why I have so much grey hair.

Sorry - an extra $6.75 mio per annum 2.25% on $300 mio.

Thanks VoR. We need to get some perspective on what the extra cost is. We'd have been over the moon with around 10% but 12.25% means that on $300mio we'll be paying an extra $6.75mio on the debt. With the way oil flies around and trying to get hedging right that's the equivalent of a 'rounding error' although some would like to make more of it.
Tullow have a $bond with 3.5 years left at 10.25% with a YTM of c. 15.67%
EnQuest have a £RB 5 years left at 9.00% YTM 9.92%
Not exactly apples to apples but a guide of some sort.

VoR - I think your comments are realistic. In some ways the bond has become something of a distraction and managements sights are further ahead. Sort it and move on.

*worth remembering that when Tullow issued their bond in 2021 US 5 year Treasuries were about 3.5% lower and the credit market easier.

Coincidentally I was watching a FT conversation with Sir Jim Ratcliffe of Ineos fame tiltled "leading through Disruption" live earlier. Fairly routine but a question was asked about M&A. He is a bit of a big-head and couldn't resists saying almost sotto voce after a standard reply "in fact we've just given the go ahead for a large deal today". There are plenty of opportunities out there and Tullow is definitely a wounded beast and if Ratcliffe says large it is large. You never know?

Hi VoR - most of us here don't have access to a Bloomberg screen other than the FREE channel on Sky so you have an advantage on us. The TV channel has the fast music and speed delivery of excitable presenters and is impossible for me to watch more than a few minutes. Thanks for the link mrc. I think we jumped the gun a tad.
However, I think its a slam dunk. BNP are ubiquitous in O&G finance and know what they're doing. I know it's 1 year money but the $HYN fixed higher again today by 64 points and is now 99.366 (Tullow down - nothing against them but few comparisons available). That says it all to me. If we have no problems for the next year then I can't really see a hurdle for raising the finance. If we get inside 10 percent that would be excellent.
Random indicator - may be nothing. My daughter is an Arabic speaking journalist and was a shoe-in for COP27. It has been cancelled because of human rights, attacks on journalists (esp. women) and the money can be better spent elsewhere. She hasn't said it but I think the readership she connects with (Millenials & Gen Z) aren't that interested and the money men consider it a waste. I think Net Zero and media interest has peaked.

Popped out and it was quiet. Needed some deodorant so went into Boots. The assistant asked - "ball or aerosol?"
"Neither," I replied. "It's for my armpit."

Quote by an ex Chairman of EnQuest, Jim Buckee.

"Debt is your friend (within reason). You must always explore out of equity, develop out of debt."

I'd say Bressay and Bentley are paid for out of equity. We are now entering the next phase. In a few years we could double our reserves.

Build it and they will come.