Member Info for romaron

I've found the "money tree". I was watching Sky News and it's us. The UK O&G industry. Calls for more windfall tax after the results today of Centrica and Shell.
Well that'll torpedo any more new development if followed through. Renewables can't transition without fossil fuels. At the minimum you'd think the media could do joined up thinking. Tip: BUY survival gear and thermal underwear.

*Just had an outrageous offer for my teams of oxen from Uber. I'm gonna hang on.

In the Audit Committee report I was totally lost by Barry Gardiner's questions. Particularly this:
"Q246 Barry Gardiner: My question was not about that change to the fiscal regime. Look at Norway’s 79% tax take. Go to the UAE and it is 96%. In the UK, it was down to 34%."
Is it really 96% in the UAE and when was it last 34% in the UK? The comment about Norway is also disingenuous. They hold 67% of Equinor who are responsible for about 70% of overall Norwegian O&G production. That makes a huge difference if you are a Norwegian national. The company representatives seemed to be unprepared to challenge figures or the way they were presented. Is this a tactic or were they unprepared or not masters of their brief. Shell & BP don't care because they're leaving but Linda Cook was disappointing and appeared flustered.
Gardiner also said this " Before the EPL was announced, before the windfall tax, oil and gas producers were operating under an exceptional regime of tax reliefs, which placed 40% of the burden of stranded assets on the taxpayer." I've no idea if this is correct and I'm naking the assumption that what he calls "stranded" is actually to do with decommissioning?
I'm getting a blurred distinction between the committee and the people who glue themselves to roads. They all seem to want to obstruct, disrupt and annoy.

I read the Oral evidence of the Environmental Audit Committee from last Wednesday: https://committees.parliament.uk/event/14275 you can watch it as well.
Fair enough they're an Audit committee but I suggest that more tolerance and understanding was displayed by the Spanish Inquisition. Almost total hostility and a lack of understanding. Some of the interrogators statements went unchallenged when they were demonstrably loaded and twisted. If you read or watch this you'll wonder why anybody invests in the sector. What stimulated me to write was the Tigar post (16.38). It's not so much "rip off Britain" but more the way we bugger through and do things. Very little will speed up or stop the energy transition. This dabbling and tweaking will have little impact until there is a closer energy balance between fossil and renewables. We are some distance from that.
Faced with this hostility it is little wonder the majors have moved away from the NS and in their place have moved smaller and more nimble companies, of which EnQuest is one. What Linda Cook had to say applies to us as well.
There is a desperate need for oil and gas companies production but little future for investment. Faced with this public display of contempt for what the industry supplies and contributes it is a wonder anybody considers a new FDP.

But I remain upbeat because of my faith in the great unwashed; the British Public of which I am a proud member. The ESG ideology and activists have got a little ahead of themselves and will soon meet REALITY. The government will shortly face an energy shortage that cannot be blamed on the fossil fuel industry. The public in Britain can make the "gilets jaunes" look like mischievous children. Reaction against rationing and blackouts will be swift and the UK fossil industry will be innocent with the renewable industry absent from the battlefield making out they had nothing to do with the situation. When faced with an outraged public (also voters) and a movement that wallows in its self-righteousness they [the government]will side with the public with unseemly haste. The solution isn't in the gift of renewables. This country can't get the NHS efficient and energy affects everything, not just the old and sick.

Oil is a fungible product. It will always sell but we don't have to be based in the UK. The next decade is going to be a golden period for EnQuest but they are being shown little welcome by this administration and none at all from the opposition. To expect commercial companies to exist in a world where profit is banned or punished is effectively the death knell for fossil fuels in the UK. I'm here for the money and in the short term I will be well rewarded.

Winter is coming.

Hi monkey - they [heat pumps] don't work too well in tents either.

May be nothing but close to the recent round of AB BUYING. On 15 July the HYN fixed at 89.073. On 25 July it fixed at 94.374.
That is quite a jump. With current conditions there doesn't appear to be much risk of this bond defaulting and you could argue that it isn't really a HYN. If something is almost guaranteed to be paid back then it becomes almost a TB or a Gilt. Once the money is in your bank account you couldn't really care less who the payer was.
I imagine this is lock-up paper to an extent and I am surprised that someone would SELL what at the time was a YTM of c.17%.
It is a wild card but I wonder if AB bought any HYN as well as equity?

Good find Dumbly. This could possibly mean the end of AB's current round of BUYING shares. We have the H1 figures out in about a month's time and reading between the lines it has dawned on him [KK] that the majors aren't interested in the North Sea (exception Equinor who aren't actually a major) and that to have a thriving O&G industry you need the new breed of company to provide security and handle the transition. AB will now have knowledge that could be insider and when it comes to ESG he and the company have a strong culture and management framework towards reducuing emissions. My own take on the meeting is that we are in far deeper caca than the public will ever be told. It is a combination of many things but reliance on renewables and demonisation of fossil fuels has led to this.
With the current levels of oil and production it would be quite easy for this group of companies to withhold investment until a clearer commitment from government is forthcoming. We are feeling rather smug at the moment about the problems Germany are facing but we won't escape unscathed. KK is looking at the winter and it might surprise some on here that you cannot forecast the weather or energy requirements but I don't really see 30 degrees in January.

Been away for a few days and catching up. Thanks. Mrc – I think you’re right (Sat 09:26) and it is a language problem. Maybe I was remiss in not mentioning that I have BJ on filter but he seems to be harbouring some unrequited attachment to me? I seem to attract stalkers and their obsession could worry somebody of a more nervous disposition. Unfortunately it spoils the message board and I can’t do anything about it. I would appreciate them returning the favour but they will go the distance in their search for abuse (could it be be sexual?). Of course they can only do this because of the anonymity of posters and they are never seen in person.
*BTW - I did manage to get a restraining order on Pamela but now she is threatening to release the video.
Fun fact. 98% of UK homes have an electric toaster. They are a handy back up to central heating but haven’t taken off because you need to be within a metre and they keep popping up/off every 3 minutes or so. To heat the whole house would need upwards of 300 toasters and is not considered economic.
Sadly BJ has shown his ignorance on Japanese use of heat-pumps. They are used mainly for air-conditioning and most Japanese homes don’t have central heating as we understand it. A simple google could have stopped him looking foolish – also “Japan imports about 90% of its energy, mostly priced in dollars, and costs were already soaring from a jump in global oil, gas and coal”: Bloomberg.
The Economist articles are interesting. They show the ESG gravy train for what it actually is. An industry that over-promises and under-delivers. The ESG rating agencies (160 and growing) is a veritable acme of inconsistency. A study of just 6 of them found that they use 709 different metrics across 64 categories with only 10 categories common to all. No wonder the industry can whack up the charges and call it a “greenium”. The methodology is fundamentally flawed (ask Elon Musk) but things are looking up. PWC is spending $12bn creating 100,000 jobs, a fair proportion will be working on ESG-related issues. It’s all there in the Economist July 23 issue. I won’t bore you with more.
I accept that the Swedish look at the world differently to us and I would warn them that facing off Russia with slingshots and trebuchets (acceptable ”green” weaponry) is unlikely to end well. I’d hang on to those dirty jet fighters a bit longer. Their [Sweden’s] success with heat pumps is down to having a better housing stock than the UK. It’s all there if you wish to research it.

It’s a myth that ESG investment inevitably outperform. You can’t have it all.

Difficile est bonum esse

I make you right KO. I'm not the best reader of balance sheets but last year BP made a profit of $10,501bio in oil production and operations. They also made $2,133 bioin gas & low carbon energy.
Then there's customer & products $2,208 bio - Rosneft (now gone) $2,429 bio and this one
"other business and corporate ($2,777 bio) a loss.

I've no idea where windmills and energy in a jar are in there but hard to tell if they're making a profit. Oil and Gas certainly are and are by far the largest contributor to BP's profits The UK's security and fossil needs aren't BP's concern in the future. I hope they've got it right? Amazing that INEOS turned its 3 founders into billionaires by taking on BP's refineries and are now looking to increase their O&G interests in the NS. BP always seem to mess it up.

All looking good. I'm amazed that oil isn't $20 lower because if you follow the news there is a lack of demand and a looming recession. Even the SPR can't push it down. If it's like this now I dread to think what might happen in the winter!

Be Lucky

Hi Auson - afraid I'm not qualified to comment. I am a big fan of Harbour but overall it seems they all aim for the FTSE 100 so any demotion is viewed with suspicion. It is currently going through some growing pains is my simple explanation. Many on here were poorly served by the Premier management but this is a totally different, and professional outfit running it now.

In EnergyVoice today: "BP’s UK head said the government’s energy profits levy was unlikely to affect its North Sea investment plans, following confirmation that the measures would cease in December 2025.
In May BP announced it would invest £18 billion in the UK over the next decade, three-quarters of which would be focused on low-carbon sources of energy, with the rest directed to its traditional oil and gas business."

So in English - BP will spend each year in the UK;
£1.35 bio on low-carbon sources and
£450 mio on traditional O&G.

Hardly a massive endorsement of the UK North Sea. I wonder what the split is with overseas investment?

Baysil - "+9.3m UT and 2 x 6.64 trades today at £3.53 and we are up - fingers crossed."

You weren't alone thinking it was quarterly but your figures may also tell a story. I noticed a large UT and many more trades than usual with EnQuest at end of May. Naturally I came out with all kind of theories about what this meant and another poster said it was nothing to get excited about. This is what he wrote:
"Guys and girls it was month end and our official entry into msci small cap that was flagged a while ago - net add was circa 38m shs but always brings more action around it
Always happens on quarterly rebal days
How that affects tomorrow? Dont know - but its.nothing nefarious etc etc"

It is practically mechanical/automatic and was signposted to the professionals. They tend to anticipate these things. Personally, I think it is more than that but an area I know little about. What is encouraging for HBR holders is that during a relegation the price continued climbing. A corner has been turne imo. HBR interests tracking funds far more than EnQuest and you have gone through major changes with your share structure. That looks like coming to an end and I'm sure you'll be back in FTSE 100 soon. They're only numbers and some investors ignore indexes altogether as they compare silk to cement. I'd say that on balance the market reaction is encouraging.

Build it and they will come.

Actually not a bad strategy for all of us. Start taking profit through dividend resisting the opportunity to sell. That would refuce the free float of available shares as nobody would be selling in the inevitable tick up in price. I think there is a good chance that this might happen in a few months. The LT shareholders deserve nothing less. I'm in no hurry to sell after the stressful years we have been through with this share. The pain will have been worth it if this goes to plan.

Which is looking increasingly likely if the buying of the HYNs continues. It is falling into place. The H1 results and "live financials" come into play. An outside chance there will be no $HYN's. A shake up is on the way and apart from everything else AB is a shareholder. A 2p dividend would pay for all his recent purchases. A strategy. Buy shares/receive dividend. He can buy as many as he likes and fund through dividends. Might we have a regular buyer in the background?
It is easier for him in one respect because he knows the oil market better than anybody here and EnQuest inside out. Options are beginning to line-up.

My daughter's flight to Italy from Heathrow today was delayed because the crew couldn't reach the airport due to oil protestors on the M25. I hope they keep on. Their support is ebbing away with this indiscriminate targetting. There's enough stress already with airports.

I agree KO. The recent volumes haven't been high so maybe he's been buying off the algo and spread betters? That isn't the deepest pool of liquidity. With good news the topside is extremely vulnerable. Looking good.

Saudi Arabia Reveals Oil Output Is Near Its Ceiling
The world’s biggest crude producer has less capacity than previously anticipated. Bloomberg today

HYN big climbs 3 days in a row. On 15 July fixed at 89.073. Today 92.599 (up 1.5% today). Not an accurate comparison but has to be better than nothing. Tullow down 3 days in a row (total 1%). Something going on there for sure.

plus ESG Funds dipping toe back into oil stocks (thanks to Lytham)

Bored so I went back over some old stuff. I had some contacts at Xcite Energy and one of them was a certain John Crawford SHEQ Manager Xcite > HSEQ Manager Whalsay (I don't know the difference) . I was trying to winkle out information and he was always totally professional and gave nothing away. He was based in Aberdeen and it was a small operation. We got on OK because (I think) he wasn't included in the loop in London and was often as much in the dark as the PI's and a cheeky ****ney and a dour Scotsman somehow got on. He learned more from me than I ever did from him. What I did learn was how complicated an ES is/was. I used to jokingly say he'd been on it so long and it still wasn't passed and that he was stretching it out. He explained that they were always LIVE and he was very busy. I note that he moved to Whalsay Energy so according to Linked in he was doing the same ES for a decade. Now that may be due to a lack of manpower but it does go to show that the long view is often overlooked by us amateurs.
I also dug out this "Xcite announced in May 2013 that it had sold certain technical data in respect of its 9/03b-6, 6Z, 7 and 7Z wells on a non-exclusive, confidential basis for $15m. This has provided useful addition funds to Xcite’s working capital, meaning it has not needed to utilise any of its available equity line facility (ELF) of £30.8m. In November 2013 we learned that the well data was purchased by Norwegian oil major, Statoil, and that this has contributed to a decision by Statoil to delay development of its Bressay field, located c 6km north of the Bentley field. In statements to the press, Statoil has indicated that the Bentley well data “has indicated potential to simplify the development concept, reduce the number of wells required and make it cheaper”.
I'll make a prophecy. Bressay will start the process to FDP within 2 years. It will be a "simplified" project because there are new factors in the economic equation. I also read up that tie-backs for oil can exceed 30 kilometres. That brings Bressay and Bentley close enough. Tie-backs are considered 'brownfield' development. Maybe BBK is just one huge brownfield development that was until recently owned by disparate groups. Equinor are an essential piece of the equation and with political good will this could provide a lot of jobs and security for the UK.

Hi Pelle - I expect these ratios to improve but we need to tack on a few NEW projects that may not work but the green investors like them and are prepared to turn a blind eye towards their ineffectualness. The majors have had some success with this smoke and mirrors. Some might actually work.
Like most evangelical religions ESG did convert many. It will take time for the "big lie" to become a footnote but (for example) there are 8 million Jehovah Witnesses and even scientology have a substantial hard core of believers. It is human nature to invent a religion and create a bonding group. Interestingly Nazism does the same but not as well as religion (Prof. Robin Dunbar)
On the surface ESG seems to lack the essentials of religion (singing, enhanced bonding and endorphin release) but I haven't actually ever attended one of their prayer meetings. I was brought up as a RC but "saw the light" when I was about 11. I treat it now as a cultural thing.
All religions schism and split into cults. There'll be an ESG2 along soon no doubt.

Good point KO - I hadn't considered heat stroke.

Wrap up. It's 15 degrees colder than yesterday afternoon outside. Expect reduction in crazies postings. They had to remove the tinfoil lining of their caps due to the temporary heatwave. Pretty much back to normal now.
Global warming threat now downgraded from "catastrophe" to "summer" but advice is to still wear sun-screen if outside.