Member Info for romaron

Harbour seem to have blown the doors off and are not holding back with an upbeat RNS with the HY figures this morning. Hopefully they'll have a good day and that will augur well for us for the 6th September. Then there is the blow that the ESG movement suffered with the energy charter treaty (ECT) award to Rockhopper (RKH) c.£200 mio that compensated them for the Italian government's action over retrospective banning of the Ombrina Mare development in offshore Italy. Might only be a postscript as the money isn't in their bank account yet but an unusual reminder to climate activists that there are commercial laws and protection towards companies. It would be nice to dream that we could charge activists over here for money lost to to prevention of O&G companies being allowed to go about their legal business.
Climate changes. We all know that and much is due to population growth that energy made possible. I can just about remember the Canvey Island disaster of 1953. My Gran took me to see it when I was 4 (I think she was disappointed that the drowned bodies had been removed.) To lazily blame everything on fossil fuels ignores the efforts that the O&G industry have made in reducing emissions and the benefits that fossil energy brings. For now it is essential.
I think Tarmak's 24 Aug post is worth repeating:
"If EV was like -17, 1.11 would be the year-end cost per share
If EV was like -18, 0.66 would be year-end cost per share
If EV was like -19, 0.63 would be year-end cost per share
If EV was like -20, 0.45 would be the year-end cost per share
If EV was like -21, 0.57 would be the year-end cost per share"

Build it and they will come.

Today Barclays lifted the TP of Harbour by 32.40%. They raised EnQuest by 23.80% from 15 July for both.
Harbour are covered by a dozen analysts. We are covered by 5.
I can understand the rationale behind their actions. If you want to be more subjective EnQuest (imo) has far more potential. Don't forget AB and the EBT holdings either. Some don't like that . Warren Buffet's holding in Occidental isn't exactly the same but closer to what we are. He isn't a day trader and takes a long view that is more akin to what Oil executives have to contend with whilst balancing it against government/macro actions which swing from longer term to tomorrow's headlines.
I would be worried if Barclays didn't raise our TP today but we have advantages and disadvantages in scale and area of activity. Bit of a non-event really with our HY results in 8 days time.
Harbour have their HY results tomorrow. I'm not invested but think they're a good stock. Should get some clues there.

Be lucky

The market can make us all look silly. I have a feeling that Barclays have a computer model that tends to be more right than wrong so they kinda just go along with what it says. Bit like an algo. Sell side analysts are a threatened species now and cannot cover the number of stocks or as deeply as in the past. They have us as 'underweight' but aren't anti O&G. They have Harbour as 'overweight' which apart from the scale shows the effect that buybacks and dividend have. Maybe Barclays favour gas above oil?
I don't take it personally and for now it's all about gas. For the public, with oil it is all about petrol pump prices with oil but we know it is far more complicated than that. One form of energy cannot move too far away from the physics and there is a point where they become interchangeable. Either gas comes down or oil goes up. That could be part of the explanation? Energy is so important no wonder you have conflicting interests contradicting each other and politicians have to get involved; never good news.

I ignore it [hedging] anyway. Trying to hit tops and bottoms never worked for me either. However, if you're in the physical market you have to commit at some point or just sell/buy spot or near as. As you can see I'm stumbling around in the pricing at present. I'd be much happier if we moved to contango but maybe Russia and Iran are supplying the extra barrels? I'd BUY everything in sight if I had the storage and there is probably just as much confusion there. In the past they left it in sea going tankers but I've no idea how much spare tanker supply there is? Something just isn't right imo. I'd expect futures to be $100+ but they ain't. The front end rules it seems in what is fundamentally a long term market.

Befuddled, Barnet

I am mightily confused by all of this. The US can always flick the frack switch at short notice so the SPR isn't such a problem for them. Canada is increasing LPG. However, in Europe and r.o.w. there are conflicting interests, plus the rent seekers from the ESG lobby muddying the waters. The Labour party are spouting lies and half-truths but some will always stick.
A narrative is beginning that says this winter is survivable but they are concerned about the next winter 2023/2024. I am still convinced that we aren't short of energy at present but panic/forward buying means that if we're not burning it, where is it going? Then a bit of conspiracy - whose to say Europeans aren't secretly using SPR already? Throw in the suggestion that Saudi Arabia may reduce oil supply and it says that supply is currently adequate and they can blame the recession as a convenient excuse. The current prices have so much volatility and political concerns that I doubt anybody has a real handle on the correct prices.
LPG seems to be seen as some sort of saviour. It needs checking but I think it is around double the price of natural gas and (very) roughly the price of oil although we know that fungible as energy is (esp. oil) if the infrastucture or supply is in the wrong place it just increases volatility.
I know we're out of Europe but the media keep talking about Norway for gas & oil. Will this country ignore the desperate needs (and profit taxes) of other countries to placate the climate lobby? They certainly haven't shown much support for the industry up until now. I think Kwasi Kwarteng may be a convert and has been shown some quite alarming figures. Existing renewables will be fluffed up to suggest that they are saving us from Armageddon but they are almost exclusively suppliers of electricity. Our energy needs are far larger than their percentage 20/80ish? and it is an unavoidable truth that fossil fuels will be required for decades yet.

*started doing my revision for HY update. Probably a waste of time as AB may throw in a surprise. That OU of 2 Aug confused me. We may not even have the hedge requirement now if the RBL is zero?

Hi grotty - it wasn't a dig. I've done it myself. I enjoy the breadth of investor info available on these boards and the help freely given but you have to be selective. TB want us because it is a cheaper way to add to their stable. I just don't see the rush to abandon our independence at the first approach. We could easily be 10 X as desirable in a couple of years.

Be Lucky

They write that ties to Autonomy have “prevented a number of public market investors from buying the stock." Conversely the opposite can apply too. I'm hoping this is the second big win I've had from backing Mike Lynch. I invested in Autonomy when it was heavily shorted. He had his detractors then and they may have been right but I think he would have been better treated if he was a US citizen. On top of that he has invaluable insight into how the bidding will work. The US have a much more nuanced approach to politicians and business leaders. I hope we stay independent for the foreseeable future. Darktrace have a product that will be in even more demand as AI takes over. Call it "early mover advantage" or whatever you like but it does harness the remaing prowess and abilities of this country.

*Isn't the Filter button wonderful. Only 5 posts today and one of them is a duplicate.

Build it and they will come.

https://www.investing.com/news/stock-market-news/buffetts-berkshire-receives-approval-to-acquire-up-to-50-of-occidental-petroleum-432SI-2876748

A company as small as EnQuest would never attract the attention of Berkshire Hathaway but then again most of us here don't have the same firepower as WB. He likes what he sees, hears and reads. So do I.
The ESG camp aren't our enemy but some of their extremists are. The too-fast move into renewables has had the unavoidable result (physics is like that). A lack of understaning and incessant attacks on O&G companies produced a decline in investment, development and exploration.
The US holds the whip-hand presently but are relying again on fracking and its 60/70% decline in the first year. Then there is the conventional oil production decline that is probably >10% + due to the ageing fields and lack of investment. Recession will mitigate but that is some gap. Those hoping for a quick fix as in the past will have to recalibrate. The narrative against ESG is growing and that's fair. We suffered their pollution of this board long enough and it is our time now.
We'll have the HY results in 2 or 3 weeks and maybe a clue about the new Chairman. The HYN fixed the highest it has since early May (97.072) and jumped almost one percent yesterday. It's all looking promising.

Build it and they will come.

"There is only one reliable, sustainable long-term path out of this crisis. That is to get on, now, with the clean energy sprint Labour has been calling for month after month. We should be investing in homegrown onshore wind energy, offshore wind, solar, hydrogen and nuclear energy as well as a national mission to insulate homes."

Ed Miliband - Labour MP for Doncaster North and shadow business, energy and industry secretary

We've been getting this wrong. Apparently it's a sprint not a marathon. He missed sunbeams from cucumbers.

Correct Frac but you aren't allowing for hopium or sunbeams from cucumbers which are showing promise in trials.

Of course if you wish to widen the discussion we can start with why is natural gas up to 10X more expensive in Europe than the US and why does a litre of petrol (gasoline US) cost them the equivalent of £0.90 and in the UK £1.72.
We are saving the planet because we're responsible for 1% of CO2 emissions. The US is responsible for 14% and best we don't include China and India.

The scale of the task towards net zero is far, far more challenging than the evangelists preach. The emissions produced in the infrastucture of solar and wind are considerable but you'd have to increase further if you required the same EROEI as fossil fuels. Arguably the quest for net zero does not really change the emissions if you wanted to eliminate fossil fuels altogether.
15 years ago I sat with engineers at a Mitsubishi presentation of heat pumps. Much cleverer experts than me challenged the multiples (COP) claimed by them. They never achieved what Mitsubishi claimed. What wasn't focused on was the leaky housing in the UK. I am a believer in heat pumps but they wouldn't work for me and my house was built in 1994. Only new build really make heat pumps an option. This was probably known by Mitsubishi but their interest was only to sell heat pumps. I surveyed new builds c.2010 that had Economy 7 meters fitted but installed cheap panel heaters. The cost of them is prohibitive and I remember people wearing coats indoors in 2010 because they couldn't afford to turn on the heaters (advertised as 100% efficient).
I read that public electric chargers are increasing prices. A quantity surveyor for a large contractor (my brother-in-law) says they are concerned about unintended consequences of wind power. We plant hedges as windbreaks. A US university has found a difference in temperature on the protected side of the turbines. Solar panels cost $20/30 dollars to recycle. You can bury them for $1/2. It goes on......
If the public were told the truth they would be more amenable imo. We have enjoyed cheap energy for decades. It was always underpriced. It is only expensive today because we never paid the true price in the past.
My head has never been in the sand and I have worked in the insulation industry. The public were only told what they wanted to hear. Politics works that way. If it fails, find a scapegoat or pass the buck.
The narrative is changing but those criticizing the childlike understanding of the climate activists are not the enemy. Pretending that people have climate concerns as their no.1 priority is just nonsense. Money in their pocket is no.1. If you have politicians lying to them is it not surprising that they go for the cheapest solution (another handout). Telling people the truth isn't easy but is the best way forward imo. It hasn't been tried before.

Romaron Level 3 Diploma in Green Deal Domestic Advice 2012.

got us into this mess - article by Iain Martin in today's Times. Some gems.
"This was not the impression given during COP26 in Glasgow last November where the evangelism was childlike, as though wind power is endless and solar is free because it comes from the sun. Nicola Sturgeon grinned for selfies. Boris Johnson whirred away generating hot air."
"Milliband like many climate activists, complains the government didn't do net zero properly and spent too little on insulation. In the context of this emergency, the scale of dependence on gas and the difficulty of making quicker progress on renewables, that is trifling. What was needed was an urgency to source more of every scrap of energy and to tell the public. That would have involved levelling with people and admitting the too-fast race to net zero was a mistake. Neither the government or the opposition were prepared to do so.
They were warned. Last October American and British intelligence said a Russian invasion of Ukraine was coming. The prime minister failed to make the connection clearly enough between war and energy."
He finishes with mentioning that Liz truss sat in cabinet throughout this saga so should use her shapeshifting skills to formulate a different, final approach to what is a national emergency that may last several years. She might as well try the truth.

"Renewables cannot substitute for fossil energy
Wind, solar, hydro & nuclear are only used for electric power generation.
Electric power only expected to be 19% of US energy consumption by 2050" Art Berman twitter today.

Meanwhile existing oil fields continue to decline and are not being replaced. LNG is expensive but needs must. We are experiencing a glut which isn't as pronounced as it should be. This is because rich countries (W Europe mainly) are hoovering up available production. What do they know that we don't know and what are they afraid of? Paper traders read today's inflation figures and recession indicators. The habit of backwardation means you can buy production at sub$90 for 2023 looking at Brent futures. As you roll into the contracts the current liquidity kinda makes them right but 2023 is stubbornly refusing to come down. There are 2 players here. Paper and front end traders and longer end physicals. I'm sticking with those who take the longer view.

*I often back the man in my investing. Terry Smith and AB are two of them. I have done very well following Mike Lynch and bought Darktrace earlier this year when headline chasers were concentrating on his court case and ignoring the fundamentals and need for cyber defence. I hope they rebuff the approaches because I'm sick of our growth companies being hoovered up by private equity. "The trend is your friend" they say, but it also means that if its wrong you'll have plenty of company.

FT Weekend Festival 3 September

"As fossil fuel companies return to the fore and amid greenwashing scandals, is ESG at risk of becoming outdated and discredited? "

Speakers Gillian Tett - Stuart Kirk - Tom Braithewaite

GT is always good value whilst SK achieved fame for daring to speak out about the hypocrisy and double-standards of the subsidy industry. I've got complimentary tickets and will attend. Gradually the real world is intervening into the world of unsustainable platitudes and promises.

"Poll: Majority of Scots back North Sea industry ahead of aspiring PMs visit north east
A vast majority of Scots say they are in favour of the UK producing its own oil and gas rather than relying upon imports from overseas, according to a poll published as the two who are competing to be elected the UK’s next Prime Minister come to Scotland." source: EnergyVoice

Well that flies in the face of what Nicola Sturgeon has been saying as recently as 11 May "we must not focus primarily on securing oil and gas from other sources. We must instead intensify our efforts to build a low carbon and eventually net-zero energy system."

At least we now know where the "angels' share" of whisky lost during maturation goes - straight to the SNP.

Odd really. Norway has a Left leaning government but still respects and values oil & gas and is Western Europe's largest petroleum producer. Starmer's present role is to irritate and make absurd promises which he can do because he is in do danger of being called to account. If it was in the real world I daresay quite a lot of Trade Union pressure would be applied on the party. Wait until we are in the throes of blackouts and shortages. It really is "the silly season" with thin markets on auto-pilot but hopefully the grown ups will return in September suitably refreshed.

Today, Reuters: "Norway has an electrical grid largely powered by hydropower, but it still isn’t on track to hit its 2030 climate goals - and the oil and gas fields are being eyed as the next way to cut emissions. The country has only cut emissions of greenhouse gasses from 1990 levels by 4.5% - when it had a goal to cut by 55% by 2030.

Climate Minister Espen Barth Eide broached the idea of perhaps closing some of those fields in an interview with Reuters, but it seems like a tall order. The country’s center-left government has pledged “to develop, not to phase out" the petroleum industry, and would upset the country’s oil labor unions."

Damn you M. I started listening and then stayed. It is 1 1/4 hours long. The "Mining Clock" (40:20) is a simplified and imo very accurate. I was invested since 2 o'clock but did the correct move in buying the dips in a bear market for O&G. The rewards are about to appear and we did marvelous to survive the wee hours. Bit confused about the midnight raising of taxes by government but you could argue that the windfall tax is self-defeating and at the wrong time. I've a feeling that Liz Truss has been persuaded here and fraccing is on the UK agenda. I'm ambivalent but it is handy to have coal and fraccing between us and the ESG/renewable mob.
I think things will change when the UK starts suffering blackouts. My wife panics when the odd one of about 15 minutes happens whilst my daughter experienced them everyday when she lived in Beirut. The difference is that in Beirut diesel generators are ubiquitous. I wouldn't be surprised if the price of generators in the UK are already high and likely to get higher. Great find. Most here have the advantage of 'time arbitrage' and we are already getting a positive return and it's not even 7 o'clock. I might take a bit of profit at 10 o'clock.

*weird thought. Could EP be turned round and go back to Alma/Galia? The economics are dramatically changed.

Morning Dumbly - maybe Liz Truss holds BP shares and knows the truth. Reading some press articles you'd assume O&G companies shot up more than bitcoin in its heyday.
As it begins to bite we'll see headlines that swing the other way.
"Why can't we be like Norway" - "US petrol 87p a litre" [as of yesterday] - "Beirut better prepared than London"

It is a mess. I dropped my daughter off at the Wilderness Festival last weekend and one of its themes was Wellbeing with a big emphasis on being 'green'. Surrounding fields were full of solar panels. The other fields were full of parked cars as far as the eye could see. Without fossil fuels the event couldn't have taken place but you could stay in a Yurt.

October will be interesting.

Surely you're not suggesting that politics have anything to do with it VoR? If you kill the scapegoat who else do you blame.