Member Info for romaron

All LTHs should go on the Cape Wrath Capital web page (especially Therapist). Such a refreshing approach and he makes a lot of sense without being arrogant. The section headed Broadside shows he isn't afraid to tackle poor performance head-on as the letter to Premier food shows (3rd from bottom June 2017). I wonder if he has made contact with EnQuest? Therapist will enjoy "We Are Not Odysseus" though I tend to use the modern equivalent of beeswax (Filter) to drown out the drivel of our regular trolls.
There is another surprise which revolves around Berserkers and "Cape Hvarf". If you look under TEAM you'll find that their head of research is Anders Jegers, CFA and seems another independent and capable individual. I like it that EnQuest passes their criteria.
On a personal note I was asked for advice from a friend of my daughter. That terrifies me and is a bit more challenging than waffling on an anonymous message board. She was a Welsh swimming champion and is now a producer and model but knows absolutely FA about investing. I think Cape Wrath could interest her as unusually it is based in Llandudno. When I have some free cash I will consider them myself.

Good find mrc!

Very interesting mrc. He actually agrees with me that you harvest EnQuest for 5/6 years and he sees a 100%+ upside c.17m. He spoils it by saying that what is left would have little value. I think AB would disagree (and Tarmak) and he [AB] did refute my argument at the AGM where he said "it doesn't work that way". I think Adam Rackley was using it as an "if things continue as they are" which is unlikely to happen as we know but is one base line to consider. I loved his reference to systemise and intuition when stockpicking. Investing is a combination imo.
This is worth a read. Energy Shock & Transition from a talk Art Berman gave yesterday: www.artberman.com/wp-content/uploads/2022/09/Energy-Shock-Transition-SEP-21-2022.pdf
Plenty of interesting stats that support our investment in EnQuest.

You seem the nervous type himmatsj. The development of fields is more the concern of EnQuest than Bumi. The diesel restrictions apply more to inner city traffic and with a world desperately short of energy and coal shipments increasing for all the newly built power stations in China and India I'm not expecting a capitulation to placate environmentalists in the UK; especially with the new government. Appreciate your concern .

No, not EnQuest. Some Fundsmith. I did consider selling some of my RB but along with the herd I've decided to stay with the bonds a little longer. They say you shouldn't sell your winners but Fundsmith has been very good to me and that'll do nicely. Of course I'll now be tempted to put some in EnQuest.
Another consideration is that in our really dark days the old RB (mat. 2023) went down to 30 because we were facing existential threats.
This time around the only thing bothering the bonds are interest rates and the rating. The bond market is more risk averse, larger and possibly has a better insight into companies than equity analysts. It judges that there is minimal risk on EnQuest defaulting.
I'd go further and say zero risk. We are reducing debt hand over fist and are close to a ridiculous point where we become like a market stall and not a company. A looming problem will be where to put the money.
Like AB I'm ignoring the share price. It doesn't make any sense. Even more so when you see the latest outpourings of Putin and the importance of fossil fuels and the NS to the UK's energy security.

Build it and they will come. Everywhere else is closed or cannot meet customer demand.

KO - you could even say it's weather related. We make decent money at $83. I doubt you can choose one specific for factors negatively affecting EnQuest but imagine if you'd held Tullow or Premier as long as EnQuest?
Putin is losing the conventional war with Ukraine so he'll use energy to gain advantage. There's plenty of potential on the upside. An outright recession seems priced in. If we don't get one what happens to energy prices? You can't get extra production overnight!

*I even think reduced demand might be countered by natural depletion which isn't being addressed.

Also rollover day for spread betters. I'm sure those nice people at City Index wouldn't push it down to take some extra bunce off those long.

Back to normal fix 98.46 up 1.42

We are a thin, thin market here as in the equity. Imagine being a major investor trying to offload? I mention it this way because if you BUY EnQuest even the shares are lock-up to an extent.

Some good news at last. If a large sheet of ice sitting on a land mass melts and the water then flows into the sea, yes, then the sea level will rise. For this to happen, however, the land would have to be unusually waterproof.

I'll still be able to travel to the Seychelles (by jet).

Hi KO - I agree it's frustrating but numbers cannot lie. You've seen the "big lie" regarding the US 2020 election and how vast numbers of people can be manipulated. There is an element of this in renewables and the EU pass laws that prevent companies from investing in the sector. People are over-protected from risk and everything is subject to personal data protection whilst google know more about us than our partners. We aren't even that popular with PI's. Other message boards have more posts but that is a good sign imo. When eventually the gold nugget that EnQuest is becomes better known then I see a big jump. Look at the RB. Can you think (returnwise) of a better place to put your spare cash? The 2023 is a no brainer and the 2027 is likely to reach premium soon.
Just read this. Perhaps some of our activists should head East.
https://www.reuters.com/markets/europe/chinas-aug-coal-imports-russia-highest-least-5-years-2022-09-20/

a.k.a. smaller oil companies. Because that's how they're valued. They [charity shops] are temporary because at any revival the shops will revert to retailers and like who can afford economic rents. It can happen at quite short notice but whilst the accepted view is that there is NO future for previous renters shops will be shunned. This happens to industries too.
However the likes of Woolworths, Blockbusters, HMV and MFI were superceded by cheaper and better products and companies. It'll be decades before renewables are in the position of making fossil fuels redundant.
The companies that disappeared from the HIgh Street weren't making their MC every year or matching their EPS with stock valuations either.
They also weren't debt free as we are increasingly heading towards.

Here's another one. I looked at our HYN fixing in Luxembourg that was open yesterday https://www.bourse.lu/search

It fixed at 97.024 which is down 1.39 (98.414) from Fri the 16th. Quite a drop.

Who would want to trade a London bond on a UK public holiday? If you were the suspicious type you might wonder if you wanted to buy the notes it would be quite beneficial to sell a small amount in an already thin market in preparation for buying a larger amount when the market had more liquidity?

I wonder what today's fix will be?

*Tullow hardly moved.

Hi Juan - whatever way they spin it the midterms loom large. The US can afford to take chances with the SPR as the fracking tap is working again. It is still relatively mild in the UK but actions of governments suggest they are not so sanguine as they've got the majority of the public feeling. A cold snap will change things rapidly. My opinion is that they've sucked up the low hanging oil (SPR mainly) and are now pretty full in available storage. It is impossible to predict but electors would not treat politicians well if their country was short of energy compared to neighbours. So an initial rush and now we have nowhere to put it combined with the fact that there is no heavy demand anyway.
I keep harping on about a glut at the front end and am actually surprised oil isn't cheaper. The paper and physical seem to be at some tipping point. For me the futures are wrong. Smart money have their positions but the paper market follows the front end. That is low and may remain so for some weeks until storage levels start to deplete. We need some cold weather. For now the energy market seems benign.
I have seen nothing that persuades me that governments are not worried. I think they're petrified and we know Putin has more patience than the West combined plus a few allies. This really is "phoney war" time in an energy sense.

Steady Aloj - this is a red line for the Brits. Don't mess with our tea preparation. For all we know you might put the milk in first (or god forbid none at all). As for energy most now use an electric kettle. I have and electric oven but gas hob and I'm not sure what is the cheapest. I do know that electric panel heaters are the most expensive whilst storage use Economy 7 electricity which reduces cost. For convenience an electric kettle but the gas hob might be a fraction cheaper?

*Bin thinking about the movements of trades in thin markets in these tumultuous times. Some say it's a bit like picking up halfpennies in front of a steamroller. The algos are trading halfpennies. Spreads are a marvelous thing and they don't benefit the private investor. Betting offices, football pools and casinos made the owners rich; not the punters.

I agree Frac. It used to be that black swans were a rare event and it won’t be long before we’re tripping over them. It has also brought realism to the transition. I read that residents of Poundbury are encouraged to use gas. It surprised me as King Charles is heavily involved. Turns out that it is a mishmash of half-truths with the gas in question being biomethane “Use of the gas supply throughout Poundbury in preference to fossil fuel reliance will always be encouraged. The Poundbury Anaerobic Digester (AD) output exceeds the Poundbury community requirements.” I bet residents in Poundbury don’t get the cheapest gas in Britain still even though the boasting continues. The comparison of Biomethane prices is that they compare them to today’s price of (whatever) say $200 MWh with biomethane (starting) at $55 per MWh. [*Note they say starting from. I challenge anyone to establish true comparison prices.]
At the moment they are winning on paper but they are using the gas shortage and Ukraine war to make comparisons. I’ve tried to get gas costs for Poundbury and they are close to double those of a year previously which seems surprising when they brag about their green credentials.
Before the war average prices of natural gas were much lower (say $20 per MWh average over 10 years) but hey, when you’re greenwashing why let facts get in the way.

The mass hysteria in the UK we are now witnessing shows that the British public are quite malleable but the energy bills that will soon come through the letterbox will be more than the price of a bunch of flowers. The public will begin to ask questions and renewables don’t have the answers now that push comes to shove. When people are cold they’ll burn anything, including old tyres. Their boasting continues so their “excess profits” will come into question. They will then either have to pay up or own up. Their reliance on subsidies is essential and fossil fuel companies are often the patsy. That is ending.

I'm sure that for different reasons AB and the Trust need to have a certain amount of money in cash, just as we all do. I briefly looked at other corporate bonds and our RB stands out. I compared it to other bonds and you'd struggle to match the return. It doesn't really matter what you invest your cash in if it [the loan] is repaid it becomes irrelevant whether it was a treasury Bill or a HYN (junk bond). Your reputation in life is everything and I believe that AB would do nothing to risk either his reputation or the charity's future.
THe £500k is for Middle East Consultancy Center WLL which is a new one for me http://www.meconbahrain.com/. AB is a 25% holder & director. Same applies as the Foundation.
The only reason the RB is not in premium is its credit rating. I expect that to be raised shortly.

" Not everyone has an encyclopedic knowledge of markets as I do". Strange - you'd never have known from your postings. How is Q by the way?

I continue to hold.

Just looking in. This board has never really taken off. It has been ruined by one poster who is just a "fluffer" and follows click-bait patterns. They may be a holder but I doubt it. In turn any who respond to him rather than filtering him are guilty of adding to this disaster of a board and imagining "dark forces" and misterious shorters/manipulators.
I answered a few of his questions months back and assumed he was an enthusiastic amateur and knew little. I don't profess to being an expert but in the land of the blind the one eyed man is king.
If you look arount UT's were high in many stocks because it was the third Friday in September. If you're this ignorant you shouldn't really be investing. No more clues. Nothing sinister unless you're trying to create a theory or are part of the manipulation that isn't there.
I prefer fundamentals. Just looking in and sad to say nothing has changed. It looks like a 2 poster board to me.

AVOID (not the share - this message board)

Totally agree mrc. The biggest negative is that the sector has been considered ex-growth and in decline since I've been here (7 years). The ESG lobby held sway and renewables have made inroads on electricity supply (ignore EV's rapid charging cost now more expensive than petrol). They look good against gas and LNG but these are at record highs. I digress.
My last attempt to make sense was using the PEG ratio which is favoured by many over P/E ratio because it accounts for growth and can be applied to industry averages. It doesn't work with EnQuest, or come to that with any smaller oil company involved in production. Natural declines mean that we need new fields but any growth we've had outside of Kraken (itself a rarity) is taking over old fields from larger or exiting companies.
You can make a synthetic PEG ratio if you use the CAGR of EnQuest since IPO of c.10% (P.22 HYR presentation).
Where I don't get excited is about reserves. 9 years would do me and I don't think that's where the problems lie. The world and the UK need fossil fuels longer than that but I don't see the majors returning to the North Sea. We are the NEW mini-majors, flexible and faster, cheaper and at the technological forefront.
When you start using financial ratios the oil sector jumps at you as highly investable but isn't for all the reasons we know. Warren Buffet is an outlier.
At 30 June we have tax losses of $2.628mio. Even if reserves remain static it seems to me that if we survive the next 10 years we'll walk away with a multiple of today's price. That effect has to appear at some stage. Either in dividends or MC increase. It will be a combination. Using financial ratios is a waste of time as they've been ignored for the past 5 years. They may never come back. Cash has never gone out of fashion.

We built it. The customers came. Contrarian investors followed,

Hi AOK - we haven't engaged in buybacks to my knowledge unless you've been adding up AB & family buys. In fact we're not allowed to by lending covenants. The 33m is not the cancelling of bonds in the HYNs?
I don't particularly trust the list of major holders as that depends on how seriously they take reporting but I don't disagree with your numbers.
The point about other the "rest of us" is hard to guage but I think it is lower in numbers than you'd expect. We've never had the pages of messages you got on the Premier or Tullow message board and I have a feeling, abetted by the open Offers and Rights Issues that many LTH have increased their holding. It is not unusual to find PI's with holdings of 1mio shares and the attendance at AGMs is not particularly high. This years probably had the biggest turn out.

One thing I'd add to my earlier post which Juan just answered. Several of us (quite a lot actually) have broken accepted investment rules and are "overweight" in EnQuest. That works two ways imo. As much as it carries additional risk it also means that they aren't febrile day-traders looking for a quick turn. It also reduces the free float.
There is a trickle of new posters appearing and they seem to have weighed up the situation pretty accurately.
The O&G market is more complicated than the public perceive & fossil is moving closer toward nuclear in the longer term because of planning and costs involved (not emissions obviously but a meltdown could be problematic). The Net Zero lobby have so far proven unappeasable so longer contracts and guarantees will be necessary imo. Fracking may bring temporary early respite if adopted.
Last week was turbulent and today I read in the ST "Officials have described it as the busiest week in No 10 in memory".
an aide said. "We had no idea when we wrote 'together we can get through the storm' into Liz's No 10 speech how apposite it would come to feel."
It means little but maybe Liz Truss has some of the attributes of another Liz. She is getting on with the job and not playing to the gallery as the previous incumbent would have. She may prove to be an outstanding leader. I'm prepared to give her a chance.

*AOK - I asked at the AGM if there had been any approaches. The answer was a firm NO. A hostile turnover would need a decent NEW shareholding to launch a bid. There has been no evidence of that. A merger approach is more likely but this market stopped making sense some years ago. I wrote in another post that 2C reserves were worth ZERO. I wasn't being facetious but they are (presently) considered stranded assets imo. Look at the cost of Bentley and Bressay. You almost get paid to take them away.

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