Member Info for romaron

I think this is an article which shows that once a company or sector has been discarded into the uninvestable box and more fashionable stocks promoted it is a long way back. No mention that the O&G sector has led the market this year so his opinion must be based on the situation being temporary. In the same article it quotes our PE ratio as 1.
How can you defend a SELL recommendation when the MC is earned each year? What recommendation do you have if the company exists in years 2 and 3? What does a negative PE mean?
The pundit is reiterating his advice of the 24 March and that was a better call as it did drop below that level from late May until now. He should have quit whilst he was ahead.
For him to be right would require the mother of all recessions or an early solution to the energy crisis. Neither of which are likely to happen imo. Our tax credits have been forgotten and the strategies that AB outline in the presentation are ignored. The wobble that Tullow is currently experiencing emphasises the "reputation" that debt brings. However, it is hardly helping Capricorn (CNE) either so there is plenty of upward opportunity.
Some mornings I don't even look at the price of oil because it isn't going to collapse and it makes more sense to concentrate on what may impact. Hedge funds have alighted on the TLW/CNE merger and is an encouraging sign. The good news is that nobody is getting our stock cheap because it is in the hands of LTHs with a chunk c.15% in the hands of AB + EBT. This widens and deepens our moat. The wild swings are imo because there isn't that much of a free float. I'd buy more but I already hold too many as a percentage of my pension but at least I appear to have outperformed most of the indexes which rags like the IC are slaves to. AB wouldn't be drawn on dividends at the presentation as he knows that once he mentions them there is no going back and investors would not forgive him. A bit like making promises to children. Once you promise it is set in stone. It would rocket our price and we must be very, very close. To announce now whilst negotiating with government and sorting out the HYN would not be wise.
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We built it and due to demand are adding extensions. Plans in with the planning department for new development permits.

5 Sept closing UT 31.15
9 Sept closing UT 31.15

Perhaps next week will be more interesting?

There you go again Therapist, fearmongering. It is still wet finger in the air science and this on P.34 "Without new investment UK oil supplies will only meet 30% of demand in 2030" could easily be 5% out either way. I'm surprised you didn't mention today's Reuter's article about U.S. Diesel stocks being critically low after failing to recover over summer! Mind you it's not much better in Europe:
"Europe's distillate inventories are down 68 million barrels compared with 2021 at the lowest seasonal level since 2002.
Only a global slowdown in manufacturing and freight transportation will rebuild stocks to more comfortable levels and abate the upward pressure on refinery margins and oil prices."

*they're probably over-reacting and as long as we stop driving and flying we'll be fine and not many people use oil for heating unless they live in the countryside or Ireland. Double whammy for KO though as if traffic collapses there'll be no need for bodywork repairs.

Some excellent points there Dumbly. LNG is a sticking plaster as its 3x5 times more expensive than natural gas. Our system is no longer fit for purpose but it isn't necessarily electricity generators fault but their existence is at the gift of the British Government. Things change.
What is wrong with having long term contracts with energy users? Those on existing "excess profit" deals would come to a new arrangement or be hit with a new kind of EPL. Some fields have a life of decades which puts them somewhere between the current models and nuclear. There is a requirement and a lot of chatter about base loads so why not get creative with long term contracts for percentages of fields. It is already happening with Energean a new company with huge gas finds in the Eastern Mediterranean. That is largely to do with gas but there are plenty of arguments that oil is even more important. The financial framework for capital as explained by Stuart Kirk is for around 7 years in the commercial world. To encourage companies like ours to engage in projects that can easily cover 2 decades needs Govt involvement imo.
In the link I gave at 9.05 Sokoloff is asked when he thinks oil will go up. He answered when the sector begins to outperform (53.00) there will come an understanding. We are at the beginning of this I believe.
The trade-off means that the company may never achieve excess profits ever again but their future becomes more predictable and less volatile. I'm fairly relaxed either way because the world needs fossil fuels until 2050 and beyond.
I can understand anybody being nervous about investing in EnQuest. The movements this week have been incredible but turnover negligible. If I didn't have the knowledge gained from being invested here for 7 years I wouldn't touch O&G. The general public have no idea and being fed lies and half-truths is very damaging. I am not a natural Tory but so far Liz Truss has shown that she isn't stuck with ideology and recognises that the dream world of net Zero requires fossils to make the transition. We either buy them or grow our own. There isn't really an alternative.

Agree Tarmak. No rush but if you get time this is an interesting view: https://www.thegreatsimplification.com/episode/34-kiril-sokoloff

It is all interesting and Sokolof makes the point that politicians don't get elected by telling the truth. At c.21.50 he makes the BTU oil connection and suggests one solution would have been to set the oil price at $200. He thinks presently gas should be double its price from a BTU perspective. Germany is uneconomic (high Labour costs) but cheap gas has made them competitive. Somebody needs to blink first and he doesn't expect it to be Putin. There is NO de-escalation of pinch points around the world and he thinks conflict is inevitable. It has a momentum of its own as in WW1.
I imagine some in the Conservative Party actually think he may be right. The world runs on election cycles and drivers which if you think about it doesn't really make sense. I think natural depletion of oil and the lack of new fields and exploration means that the recession would need to be very deep before it craters the oil price. I still cannot understand the low price of oil for next year.

Build it. There's a shortage.

The code for Queen Elizabeth ll during her last hours was London Bridge. When she died the Prime Minister was told "London Bridge is Down".

A sad day. A reign announced by wireless and her death announced on twitter. It feels like losing one of your own family.

https://twitter.com/PaulBrandITV/status/1567950060414959619/photo/1

Agree mrc. I think the company wants to be its own master. SM said that they were looking at a variety of options in relation to a subordinated instrument.
AB also said that other plans would gain them access to a different pool of capital other than the traditional upstream.

Amazing the effect that lowere debt and FCF have on bankers or anything that has "renewable" or "transition" in its title.

We haven't been this popular since IPO.

Something to remember about Bentley is that they actually lifted and sold to a major refining partner 135,000 barrels of oil at a better than expected price and £9.9mio for well data to Equinor. It says they lifted 149,000 barrels.
At the time, 20 May 2013 "Xcite said last month it had found more than double the oil expected at Bentley. After extensive well tests last year and a seismic survey, it is now expected to produce up to 250million barrels of proven and probable oil by 2050. The Aberdeen-based firm, which calculated daily production would rise from an initial 45,000 barrels of oil per day to 57,000, said the project was a major asset for the UK North Sea."

From memory this was called an "extended well test" over 68 days.

Hi GA - good question. Hard to explain in a few words. The coupon rate will be around the interest rates at the time of the issue and the company's rating. Rates have crept up whilst our credit rating is lower than when the first RB was issued. B1 to B3/Caa1.
They are effectively 2 seperate bonds now affected by different market rates. Both rates suggest a solid small cap rating and we are firmly in the "Highly Speculative" credit rating category but soon to move into Non-Investment grade speculative imo. Interestingly in the Audiocast of HY results the CFO mentioned the market was closed recently to the HY market. He probably meant "not at a fair price." There is always a vulture fund.
I find our debt price/rating very encouraging. It is a conservative area of the market and much bigger and better informed (imo) than the equity market. Converting the price on each I got a yield to maturity for the 2023 of 8.34% and 2027 9.63%. I am in the 2027 and expect a premium when Moody's upgrade us. Personally I couldn't care less what agencies do as long as we are solvent at maturity when our junk bond are no different to Gilts when the money is in our bank account.
I'm no expert but there aren't many RB's around. I'd like to get my hands on the $HYNs because they offer an excellent return with minimal risk. The company agrees which is why they're buying them. I doubt they would be allowed to do it with the RB.
This is a useful tool https://goodcalculators.com/bond-yield-to-maturity-calculator/

Hope it helps.

HY results available here: https://www.enquest.com/investors/reports-results-and-presentations
Very upbeat and informative.

My highlights:
Tight Labour market but we have access to our Malaysian talent Pool.
Richard Hall referred to Malaysia as his alma mater.
EP a possible early production solution to opening up Bressay.
Ahead of competition CCS (SVT advantage)
Bressay/Bentley mentioned in reference to EPL.
Dividend and buybacks closer (49.50)
Support there from banks (57.00)
Earlier on AB said something about large amounts of capital required but that was for transition purposes. CCS is a handy card to have against the ever present threat of a carbon tax.

AB sees over the horizon.

HYN UP over a half percent - 98.025 today's fix. I don't understand it. We'll just have to take the money instead.
Off to the pub. The answer lies at the bottom of a pint.

Thanks Papegoja - you could easily be right. The algo will be sensitive to what Nordea does because they are not another algo. Nobody knows exactly how the TikTok algo works but it is highly successful whilst google know I've been looking at Le Creuset cookware. Because we are particulaty thinly traded 1.2mio shares is very large and could easily trigger an exaggerated movement. We just don't have the fund involvement to iron out the swings.
Like physical oil trading is a fraction of paper trading so too is equity trading. However, if the algos are clever enough to differentiate between a real trade rather than computer generated that means the probability of the direction (along with other factors) make it more likely to be a winning trade. Don't forget even spread bets have to be offset somewhere. they do return to the equity market at some stage but the leverage is huge from actual physical trades.
Far too complicated for me. In my day we just used to try and find out what the whales were up to and go along with them. Bank traders in FEX would often run with big customer orders.
I suppose algos lose as well in the same way that casinos and bookmakers do.

For no other reason than it is the only HYN that I can reference us to I've been following Tullow's. They have 4 HYNs you can check here going out to 2025/26: https://www.bourse.lu/search
Pretty pointless as ours is only until 15 October 2023 but anything is better than nothing.
The 10.25% ones were at a premium initially but have tumbled in the last 3 months (92.719, 92.899).
Our 7% is doing far better (97.442) but not a perfect comparison but TLW's 7% although 3 years to run are c.80.00
You're probably wondering why I'm rambling here but this is important. James Carville wrote "I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody."
Everything revolves around debt and the bond market dwarfs the equity market. On the same basis they have far, far greater insight into companies than we do. Warren Buffet pays a lot of attention to debt. If we were in trouble (we're not) it would be reflected in our debt. Moody's and the like still have huge influence.
Go on twitter @aliosborne20 and read about the developing story regarding Capricorn (CNE) and Tullow. There will be markers and indicators for us and remember Jonathan Swinney almost went there (anybody know what he's up to?).
Once again. If you compare our performance to other small oil companies we ain't doing bad. The problem is that the market is thin, the sector has AVOID stamped on its forehead and FCF isn't trendy at present.

Common sense should return at some stage.

Build it. They'll come.

"One notable operator – EnQuest – has publicly stated that is has been assessing the potential of the project for its own assets."

https://www.energyvoice.com/oilandgas/north-sea/442261/bridge-petroleum-galapagos/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202022-09-07&utm_term=Energy%20Voice%20-%20Newsletter

Auson - we crossed. This stock is thinly traded. The volatility is off the scale and I'd imagine has driven away a lot of serious money. The PE is heading for 1. They're betting we won't be around in 2024. I find that kinda stupid.
Maybe we should have invested in something more acceptable that is going up - like coal.

https://www.londonstockexchange.com/stock/ENQ/enquest-plc/company-page
allowing for delay and other trading platforms this says notified deals less than £half a million. The reduction in MC £34mio. Probably some other trades not reported have gone through off-book so chances are someone has off-loaded. We don't know their motivation and it could still be in the same sector but rotation into something else etc...
The algos probably don't know but pick up the scent and follow through on laws of probability etc... again.
Warren Buffet would ignore this. Unless it is something hidden or serious (always possible) this reaction is plain silly.

For clarity the solution to the energy crisis seems to be to cap it now and the overspend to be packaged into a form of mortgage that will be paid back gradually over a period of years via energy bills.

Hi AOK - I'm not too disappointed as it was across the board for O&G so hard for the market to sort the wheat from the chaff. We're actually doing very well but oil is very political at the present (when isn't it?) but I am coming around to the ideas of Liz Truss and team. We have room to increase government debt and spread it out over next 10-20 years. In percentage terms we are better off than many othe countries with debt to GDP. I have to chuckle when Bloomberg get excited by 3% for 10 year money when in 1980 I paid 4% + base of 14% when I was temporarily moving my mortgage. Inflation also reduces the pain.
I'm not sure of your question and I don't think there is a simple answer. Most existing field reserves can be increased by workovers to a point whilst the 2 large 2C reserves of Bressay and Bentley are best to treat as worthless (c. 250mboe). Our existing reserves are c. 190 mio boe 2P. I don't think we have to dwell on them too much because we'll be either debt free soon or have rescheduled the small amount of debt left. There doesn't seem to be much concern either in the market or from EnQuest Towers. AB's default seems to be around 200mboe reserves 2P and I think they'll keep around this level until the picture is clearer from governement. If it was encouraging then we have Equinor as a partner in Bressay and we'll have a better credit rating so that is promising.
So your question is more what are our 2P reserves worth I guess. I wouldn't bother getting a value in this market. I think you have to do a kinda DCF or NPV and even then it's usually a wet finger in the air figure. Presently I cannot get away from our PE value. It indicates we only have a life of a few years which is rubbish.
The cycle never ends. We have to wait for another week to see what solution this new administration comes up with for solving the energy crisis and the market and company reaction.
There are cleverer people than me on this board who can give you a better answer but the best you can hope for is a spread. Personally I don't bother.

You could have told me today was Tuesday. It isn't a US holiday but the rest applies. It certainly feels like a US holiday.
Another point I wanted to make. In a world of struggling stock prices we've done OK and there is a possibility of profit taking not available to other stocks.
Using google
6M + 12.62% YTD +48.72% 1Y +31.82% 5Y +35.01% No dividend of course but many here would have bought in the OO and RIs. Many LTH have bought at varying prices (I have from 80p to 8p) but most I speak to are in profit.
The Algos are ever present but tend to become overactive in quiet markets. The big money is waiting for direction and it was a US holiday as recently as yesterday.

I'm probably gonna attract ridicule but I think it has nothing to do with us particularly. It is closer to bitcoin so get used to the movement. Algos like us, have good days and bad days. Using this https://www.londonstockexchange.com/stock/ENQ/enquest-plc/company-page
I realise it isn't all the trades but there are 10mio shares and this is the biggest platform. So assuming one of them got it right they might have made, what? £1.5mio. Don't make me laugh. It'll be closer to pennies but the impact on our valuation is what? £30mio just to pick a figure.
Flares do the same job as jeans but aren't selling. How would you have done in the early 17th century telling people that witches don't exist and you shouldn't burn old ladies to death, Fashion and herd behaviour will continue to rule along with ignorance.
These movements are cash sweeps taking money from mainly spread betters and assorted gamblers. Prop traders are as rare as hen's teeth so nobody stands in the way.
There aren't many funds ready to put their head above the parapet and admit to holding O&G stocks, essential as their products are.
Today is a US holiday plus we've just gone through a contentious election of a new British PM at a time of rocketing energy prices and a major European war.
We should be higher but we ain't. We will be in a few days.

Be lucky