Member Info for romaron

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

https://www.cnbc.com/video/2022/09/06/enquest-ceo-we-are-looking-forward-to-engaging-in-energy-negotiations-with-new-pm.html?&qsearchterm=enquest%20amjad%20bseisu

I give up. i've read it through 3X and I still can't find the "profit warning".

is never good for the market. It isn't today's figures bringing us down. The sector is nervous or perhaps hearing rumours of what Liz Truss and her new Chancellor have planned for energy? For now I am going with the numbers. They'll do me.

"Amjad was on top form. Some good questions from the presenters. And Amjad was very proactive in promoting EnQuest. Solid results. Let's see how the market reacts."

Not my words. Another investor - ex Shell and worked with Linda Cook.

I didn't see it but a pal said Amjad was on and it was a good length interview. Well worth a watch later. He gave insight into oil price and windfall tax. The studio were very positive in the result and Amjad was upbeat.

"Following the enactment of the Energy Profits Levy, EnQuest expects to pay cash tax in the UK in 2022 and for the duration of the levy period"

Does this mean that for the EPL 25% we cannot offset the tax credits?

The difference is you have to own a car or be reliant on a car to be immediately badly affected by oil. Gas affects electric lighting, internet connections and heating/AC. From my perspective oil doesn't have the grid problems you get with gas and to an extent electricity. Oil is already liquid unlike natural gas.
When politicians and the Eco-Taliban chase headlines and knee-jerk solutions this is what you get.

This was one of the threats that has gone away. Maybe not for ever but O&G will be around for longer than most of us on here. This helps explain from 10.00 : https://www.youtube.com/watch?v=bfNamRmje-s
Stuart Kirk uses the PE of coal. You'd get your money back in year 7.
If he'd used EnQuest it would have been around year 3.

Just saying.

In the UK there appears to be a movement away from tying the price of electricity to the price of gas. The present system has also worked (imo) against investing in gas producers due to the volatility of gas prices. You cannot blame Putin for everything and there were concerns before the invasion.
If you go on to (say) Harbour people religiously follow the gas price whooping when it goes up and regretting hedges. That is not the case with Energean. Their business model is based much more on longer contracts with their customers and volatility is reduced. People go on about "energy security" but our production is in a part of the world where the phrase is taken very seriously. This stock will never be in a widows and orphan's portfolio but it will change the economics and politics of the region. It will also be unlikely to become a punters favourite with a busy message board.

Yesterday I attended a talk by Gillian Tett in the "green" team and Stuart Kirk in the "brown" team. GT was disappointing but SK was challenging (see. Twitter @bencaldecott 'ESG must be split in two'). She lost me when she said she's actually following the "olive" yield curve (mixture of green and brown).
He has an impeccable CV and knows the market inside out Banker-Consultant-Lex Editor-HSBC Head of Responsible Investments.
He slaughtered the definitions of "underweight, overweight etc." because he said they "don't matter". It only affects primary markets such as when doing an IPO or raising capital. This means that they are important for 00.01% of activity. The rest is TRADING. Underweight or overweight is IRRELEVANT to the company (I'd imagine Warren Buffet has a quiet chuckle when he sees some of the pin sticking that the analysts do.)
He said that trading is completely pointless with no effect on the underlying company.
He said there was resistance building to the ESG extremists as in Texas where they have blacklisted BlackRock inc, BNP Paribas, UBS and other financial companies for allegedly boycotting the fossil-fuel industry, a move that could lead state pensions and other public entities to sell their shareholdings in those companies.

As a free agent he can now say what he thinks. I cornered him later but he wouldn't be drawn on whether there is a book in the pipeline. Stories he could tell? Greenwashing and the torturing of figures is everywhere and the fact is that SK isn't anti climate-change. Just honesty and proper data collection. He got fired for speaking the truth whilst one of the passing shots of our ex PM was that offshore wind is 9X cheaper than gas.

I really hope that Liz Truss has the strength to stand up to the Eco Taliban.

Quant funds increased their holdings by more than $900mio at the end of June in this company and added 20 new hedge funds. These computer driven investment groups trade off momentum and look for less volatility than the broader market. A company meeting their criteria must be inexpensive based on its earnings compared to many other companies. Simply put “the primary factors quants look at are value and momentum, which is buying winners and selling losers.”
The company ranked among the 10 largest holdings for 22 hedge funds, while 98 of the money managers tracked by Goldman disclosed a stake in the company. The company has a large holding in an oil company and will possibly eventually take over the oil company making it an oil major in its own right.
The company is considered a low risk, value play.
The company is relatively unloved by Mutual Funds with many of them being “underweight” (more later).
A major attraction of this company is that if you want to pivot away from ‘growth’ to ‘value’ it is simple and as liquid as anything you could pivot to. You can get a lot of money in there quickly and not disrupt the price [sadly not something EnQuest can provide, but then again I’m not a hedge fund]

The company’s boss wagered in 2008 a $1mio bet that his company would outperform the hedge fund industry over 10 years. Protégé Partners LLC accepted the bet and lost. He also famously said in 2016 “There’s been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities.”

Source. FT Building positions 3 September 2022

Well we're copying them. For once I hope the quant funds have got it right.

Hi Dumbly - go on Twitter and look under @aliosborne20 Sep 1 where you can read the article and I'm sure the original letter is around on the internet somewhere. No mechanism will get universal approval but pricing electricity to the highest gas price (which bears no relation to the cost of generation) is sheer madness. Governments will always trump companies but basically you either come to a deal or get hit with a windfall tax. I like the idea that reality has arrived and at least discussions are at a time when energy is quite healthily (for us) more expensive. I also believe that renewable producers have had an excellent time living off the largesse of subsidies and grants and also have "excess" profits much higher than anticipated.
I think we have a tsunami of good news for once heading our way. The emphasis is on gas which affects all of us domestically but the fact remains that electricity generation here is only around 20% of our demands. Gas shortages have given a boost to LNG which in many ways only gives it the portability inherent in oil. I think AB enjoys being out of the spotlight as oil has taken a back seat with pump prices stabilising for now. Other good news is that Liz Truss continues to promote "energy security" and hasn't ruled out fracking. She is strongly supportive of the NS and I have a suspicion that KK is too. The public only see oil as petrol and a vague association with plastic when in reality it is in almost everything we use in its various forms. As long as the pump price is within reason we stand a good chance of being left alone.
I am feeling very optimistic. Last month was August without a government. It starts changing next week. Liz Truss said she will have policies out in a week so a very busy early September. Other stuff has invigorated me and I'll do another post.

EnQuest - Open for business.

Just thinking aloud. Issuing a bond or refinancing isn't a given. I'm pretty sure we'll invest in a new field or buy an older one. It's the new field that would probably require a bond issue and it would only make sense if you were near to a FID. There isn't much point in issuing a bond just to have a war chest. Taking over older fields often has a cost/production sharing arrangement with the major or larger company that helps with the financing and they are cash rich at present. On top of that our own FCF is building so less reason to be in hock to financiers.
There are plenty of sources of finance out there and the oil sector has been one of the successes this year. We aren't desperate and have plenty of options.

Off to listen to Gillian Tett and Stuart Kirk talk about "ESG in the crosshairs".

Sorry, omitted that Danny Gross is the Campaign Officer for Friends of the Earth.

Today in The Times:
In a speech at Sizewell, Johnson argued that fracking was "not going to be the panacea that some people suggest."
He added: "I tell everybody who thinks hydrocarbons are the only answer, that we should get fracking ... offshore wind is the cheapest form of electricity. Offshore wind is nine times cheaper than gas."
This is almost word for word what Danny Gross wrote in a letter to The Times yesterday. So we have the PM using the same twisted argument and half-truth that the Eco-Taliban use.
The letter from DG to be printed in the newspaper is several hours in advance of Johnson's speech. They either use the same source or the PM cribbed from the letter something that supports his argument. Or, maybe his wife is involved? Wherever the figures come from they refer to a past average for wind and solar but the excessive and temporary price of gas is taken as permanent. No mention of course of capital costs and use of hydrocarbon in making turbines, cement etc.... The EROEI of gas makes these numbers worthless but politicians and lobbyists use anything to make a point (not prove a point). The public won't spot the difference. We might as well use the price of oil on 20 April 2020 to support our arguments.
Thank goodness BJ has been kicked out. Propaganda is for wartime. He just cannot tell the truth. I'm hoping that the new administration is going to tell it as it really is not what suits the narrative.

Hi Therapist - a timely reminder of the challenge. I expect upward movement after the 6th. I've spoken to the committee and trustees of the challenge (me) and decided that Kraken Oil is now officially a competitor (46.6).

p.s. you have mail.

"Take back control"
Not from Brussels but from Moscow!

There were 2 other letters. One from Friends of the Earth that states new solar and wind projects are now 9X cheaper at generating electricity than gas. Totally ignoring the fact that gas prices are artificially high.
the other letter was from East Lothian noting that the SNP has nothing in common with the Green Party but it helps with their narrow majority. Hypocrisy was the message.

"Have the blokes down the pub started ignoring you or something?"

Don't be silly mrc. Passive aggressive trolling only works from a keyboard. With his lack of personality is he likely to have drinking partners?

Sir Mark Moody-Stuart – ex Shell chairman
Sir Frank Chapman – ex BG boss
Steve Holliday – ex National Grid
Malcolm Brinded – ex chairman of the Energy Institute
Mark Carne – ex Network rail boss & ex Shell
Wrote to The Times today.
They point out that electricity prices now bear no relation to the cost of generation due to ties to the global gas prices, even though gas makes up less than 20% of our electricity generation. Currently, global prices are being set by Putin.
Their solution: To “immediately” cap domestic electricity wholesale prices for non-gas generators (mainly nuclear, wind and solar) while also capping “domestically produced gas prices”. Caps to be set at levels that reflect the investment risk and ensure well-run energy producers are profitable and want to continue investing in the energy transition. As for the imported gas chunk, the government would subsidise the difference between the market price and the cap, as proposed by Cornwall Insight, paid for via electricity bills or taxation.
Yes, owners of older wind and solar plants may moan. They’ve been lucking out via old-school contracts based on “renewable obligation certificates” rather than “contracts for difference” which return excess profits above a strike price to the Treasury. But, as Carne says “they are making returns vastly above their original business plans” and the government should tell them to sign up to a new deal or face a windfall tax. Ministers may ghave to compensate for hedging losses or contracts sold forward – typically in place for a year or less.
This would materially reduce the impact of the energy crisis on the UK while lowering inflation at source. Reducing energy prices in the first place is far more effective than targeting handouts after the fact. If five energy heavyweights can spot that, you’d hope the next PM can, too.

*will EPL happen? Is AB a genius for avoiding gas? Explains HBR's struggles to a point. These guy's have influence and contacts. Liz Truss may listen.