Member Info for romaron

I don't know if this will work but Open AI has a far wider range and resources than any of us possess although it is often guessing. This was a chat I had with ChatGPT - https://chatgpt.com/c/695e1b2f-9034-8325-bba4-6d976a830c17

Stevo - you're missing the point. Innovene was the biggest disposal ever by BP at the time ($9bn in 2005) and there was secrecy because Ineos had to raise finance under strict BP criteria (one bank originally ) and the deal was all last minute because it was expected to be an IPO with existing employees. John Browne of BP didn't even meet Jim Ratcliffe for another 10 years. It was all last minute and you're telling me that you have to have organised NED's standing by double-checking the wording and finding holes. I've attended many AGMs and it is obvious that the NE's aren't up to date and some have even had to be introduced to executives and not at the first AGM. Every board room will have yes men and quorum's etc. EnQuest isn't run like a Parish Council and neither are dynamic thrusting companies anywhere else. I'd be very disappointed if AB relied heavily on his NED's. The actions of BP_ throughout the Innovene deal had a lot of buccaneering spirit from the BP side. I'd expect nothing less and Browne ran BP not a group of NEDs.

Be honest. If Craig ever moved into politics he's already trained into speaking at length and saying nothing apart from the bleedin' obvious. He could do the early morning briefings when a bland stonewaller is sent in front of the cameras. Oliver Dowden could bore for England and was unchallenged until James Murray came along. The last sentence is protected by "market consensus" and it is clear that EnQuest don't see it as being widely wrong.

Call a Board meeting. I've been invited to lunch by Shell. I think they're gonna suggest a JV or offload some assets.

Oh dear, it was just lunch and a bunch of other people were there. It was Fred celebrating 20 years service. Any excuse - he does love a party.

Still not a waste as I'd like to discuss the wallpaper and colour scheme for updating the boardroom.

Facts are that a lot of early discussions are informal and you can never be sure. Even when it is serious there is a lot of desk-work and chatting between the top executives. Then there are those that land from a blue-sky and cannot be anticipated. The other party might demand secrecy.

If it is decided to go further and start due diligence and employ expensive counsel then is the time to think about the NED's.

Your list Stevo is a regular agenda and unlikely to frighten the horses. I have no doubt that if AB had something near conclusion it is likely the NED's would be involved but at the tail end unless they have specific skills, knowledge or contacts that relate to the specific deal. Not every NED needs to be a qualified accountant.

I'm sure there are instances where NED's have been summoned or informed in the last 24 hours to rubber-stamp a deal. It'd be a brave NED to abstain and be the odd one out. EnQuest have always had good governance imo but it is run by AB and Penny of that I have no doubt.

Interesting that Shanks is distancing Labour somewhat from EPL and putting the blame on the Tories. Hardly a ringing endorsement for it.

So how many companies do you know where the founder holds 12.50% and has had the support of other institutions since inception Stevo? Then there's the EBT share and the SAYE but of more consequence is the PSP/RSP which are very close to the 5% discretionary limit. Aberforth and Baillie Gifford were holders in 2016 maybe earlier I only go back 10 years. There are even some pension funds holding share but below the major shareholder threshold.

So you're trying to tell me that AB requires to tell revolving NED's his every move. Even Craig who is harder to nail down than jelly says that they have bids out "all over the place" which actually tells you nothing because many deals fail at different rungs.

I'm prepared to wait. Not happy to but this is how negotiations go. You don't have to tell the tea-lady or Craig if you work at EnQuest but they aren't deaf or blind. On important deals it is normal to keep important details to a small coterie. I also disagree about the due diligence. Because of secrecy you have to put your trust in people of the calibre of people like AB, Penny and Copus. When Ineos bought Innovene back in 2005 BP threw in 2 Refineries and Jim Ratcliffe says in his book they had to read up about how oil refineries work and this was in the days before AI. He also pointed out the secrecy involved ON BOTH SIDES. I guess that BP have NED's too. They didn't know.

Forget Greenland. Scotland should form an alliance with the US and give Trump honorary status and a passport. It surely cannot be worse than the position they're in now?

Maybe not exactly growth but it looks like Phillips 66 are buying the Lindsey Oil refinery. Their shares jumped 7% yesterday as beneficiaries of Trumps's actions along with Chevron and other US O&G companies. Ours dropped 4%. It just shows the difference between one government valuing an industry and promising an economic future whilst another does everything in its power to hasten its demise.

And of course the activists and campaigners would be up in arms and making the usual threats. That scares Starmer and Reeves. However, I doubt this would be reflected in Scotland and although it probably wouldn't be enough to swing support towards Labour it could stop or slow the complete collapse of Labour in that part of the UK and it might create a different more positive narrative that spreads to England. The Labour party doesn't need Scotland with the majority it has. That is clear in the treatment of Scotland by Westminster imo and Scotland is seen as a lost cause. Wales is the canary.

I'm not Scottish and I wonder if they feel more of an affinity towards Norway than England? My NY's resolution is to try and approach the Unite Union in Scotland because they certainly don't care about the O&G industry in London or at my branch. Most Unite members will not have read the latest report from "Unite Investigates" https://www.unitetheunion.org/news-events/news/2025/october/unite-report-uk-energy-companies-making-30-billion-a-year-in-profits

It is so full of half-truths and lazy tropes that it is hardly worth reading but is catnip to campaigners. From the O&G section just these 2 items grabbed my attention - they headline a 53% profit when if they worked back from EPL they'd find that many lose money and highlighting this: “The biggest winner is the Norwegian government, which we estimate made £5.9 billion profit from UK households and businesses in 2024 alone” somehow squeezes in foreign upstream profits into a narrative about UK energy profiteering.

Sharon Graham is up for election in August so will start campaigning in May. The Union cannot ride 2 horses at the same time so this is where I will concentrate. I made an official complaint and had a rep from SG's office call me. She was based in Glasgow and was surprised when I told her that comparing us to Norway is puerile. The have a tiny population compared to UK (5.6m v 70m) and the true comparison is Qatar to Norway in O&G terms. We used a lot of our production whilst they exported almost all of theirs without allowing for another export of theirs being hydro-electricity.

Frac - if you're reading this - what part of Scotland are you from? I intend to concentrate on Aberdeen - any tips appreciated.

A middle manager and administrator since you asked Dumbly. Whilst here it is interesting that Venezuela supported Argentina's attack on the Falkland Islands. The US supported us. I hope we return the favour.

Will be interesting. The US invades a foreign country because its government has dramatically failed to raise living standards and ignores the voters. It followed a policy of deindustrialisation and Nationalisation. Couldn't happen here - could it?

Anyway, the US want Venezuelan oil because it is heavy and their Gulf refineries need it. Everybody kinda discounts heavy oil but the US don't. Does that make them stupid?

EnQuest have heavy oil which the Labour government doesn't value and makes sure through the EPL that there won't be further development of ANY oil in the UKCS. That was the position before the US kidnapped the President of Venezuela as long ago as yesterday. The world, progress and standard of living relies on ENERGY. Renewables have a role but they don't really cut it when immediate dispatchable power is required and electric tanks, jets and battleships are still on the drawing board. They haven't overcome nighttime, clouds or windless days yet.

Not sure where it leaves our SEA plans but if anything I'd say our assets are due a rerate - upwards. EP looks an interesting card to play.

There is a cult of ignorance in the United States, and there always has been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge." -Isaac Asimov, scientist and writer (1920-1992)

He has a point but where it breaks down in the UK is when the politicians join a cult of populism because they think there are votes in it for them and their parties. Even more dangerous when pseudoscience and modelling is used to produce evidence that a god exists. That particular God is Net Zero.

There is also the opinion of that modern philosopher, Jimmy Carr who says "You can go Net Zero but there’s no solutions only trade-offs. You can go Net Zero but only if you don’t give a f*ck about poor people. Energy becomes more expensive. Energy is prosperity isn’t it; in the abstract? Everything you buy has got energy in it, so you’ve got to keep the prices down."

https://www.youtube.com/watch?v=ZSlnupUBXA4 (10:45)

I think Donald Trump has hit the mark here:

Rome – half of it is in ruins. No one even tries to repair it. Superbowl at the Colosseum? Wouldn’t happen.

Britain – so lawless, they drive on the wrong side of the road. Fact. Without care, or even the risk of being pulled over by Sadiq Khan’s Sharia law traffic police.

France – everyone’s so hungry they’re reduced to eating frogs’ legs and snails. They don’t even have French fries! It’s all over for them.

Germany – the Germans are so dumb, they think burgers are people who live in the town. And they even talk their sausages down – they call them the Wurst. True fact.

Greece – look at the top of the hill in Athens. Just pillars, no roof. Beautiful temple vandalised. And have you seen what they do to plates after dinner? They just throw them on the floor!

Spain – they don’t ride the bulls like in a proper rodeo, they stab ‘em with sticks. Brutal. And Spain is full of Hispanics, where did they come from? How did they get in? Losers!

Belgium – Never heard of it! (sorry M)

Vatican – the guy’s wearing a dress. And he’s from Chicago. What’s gone wrong? Send in the National Guard!

Israel - great country. Home of Eurovision. Only decent country in Europe.

Norway - they’ve lost it completely. Don’t even know who to give a Peace Prize to. Idiots!

As reported in Private Eye so it must be true.

A recent article by the always excellent Kathryn Porter https://watt-logic.com/2025/12/30/offshore-pipeline-closure-risk/ got me thinking. The criminal incompetence of this government and misunderstanding of how the industry operates only compounds. The threat she describes isn't one that directly concerns the Kraken field because of the FPSO. This probably means that the value of the EnQuest Producer is enhanced by this realisation.

Just looking at the news I noticed that Orcadian Energy have increased a convertible loan that appears not to have affected its price. I looked at their chat and noticed someone had mentioned EnQuest. Their biggest asset, Pilot field, will need an FPSO. I looked into ownership of the field and it is operated and owned by Ping Petroleum (81.25%) with the balance a carried interest with Orcadian. Ping is Malaysian owned and specialises in older fields (ring any bells). I realise this could be a Christmas quiz and I am probably making wrong connections but I did see 6 magpies in my garden this morning. The Kathryn Porter message does matter though.

Back to the subject. I was reviewing the infamous "9X cheaper" quote by Ed and for some reason watched the whole interview with Kuenssberg back in November 2021 before he scooted off to COP27 in Egypt: https://www.youtube.com/watch?v=pNt9aHSbX8Q (watch from 09:35)

He seems to think that being jailed for social media posts is "for the most wrong-headed reasons" but he was still going to Egypt and giving them a piece of his mind. Even Greta Thunberg couldn't stomach the hypocrisy and stayed home. Much safer demonstrating in good old UK unless you're born here where internet policing is taken very seriously. Lucy Connolly got banged up whilst Alaa Abd el-Fattah gets granted citizenship.

*at a Grangemouth rally in Westminster I spoke to one of their Union reps. He said he looked after 60 members and 57 would be voting Reform.

Hi Frac - I was told that Unite are starting a campaign in January likely to be called "Keep Scotland Working". It was basically from a juststopoil representative of Unite operating from Glasgow. I had made a complaint that was handed down to a junior who actually defended the government stance by quoting Norway to me. They have stopped replying to me but I log my emails and have contacts with a few who will maximise the split around May when Sharon Graham starts canvassing for re-election (25 August 2026). I'm doing my best to get thrown out and publicise their double-standards. Unite doe NOT prioritise jobs, pay and conditions BUT make sure the priesthood is safe. The Union is infiltrated by far Left activists who actually don't like Labour either. The O&G workers are a bit like the police in that they cannot strike. A rig for many reasons needs to be working 24/7 so not easy to strike. I'd march with them. GMB and RMT are different outfits and still have some old school warriors - I trust them much more.

The RBL facility includes an "accordion" option that could potentially increase the total capacity by an additional $800 million if needed for major transactions.

Upside, Equity uses higher oil prices than the RBL deck, better operating performance and incremental reserves. However, equity discounts this by concerns over political risk, execution risk, tail risk and refinancing risk. A rule of thumb suggestion is to calculate the upside and halve it. It helps marry the two valuations. Hunbah has already pointed this out but this post is from the shallow end which is where most of us swim. I am trying to mix a bit of AI with MY understanding. Banks are not wrong and equity is not stupid – it is pricing the FRAGILITY of what’s left. Equity value is not the absence of asset value but it is the price of surviving the full life of the asset. Presently the biggest fear of Equity is the tail. Equity is not waiting for upside. It’s waiting for fear to go away. For EnQuest to double it doesn’t need to become exciting. It needs to become boring, predictable, and shrinking its risks.

What has got me excited is that in practically everything I have read they ignore the tax losses/credits. That is AI and the market. I’ll tell you who haven’t ignored them – the remaining producers in the UKCS and LTHs of EnQuest. Make NO mistake we are a very valuable asset to the right partner and NDA’s ensure we’ll hear little before an announcement. That is why I suspect it wasn’t Serica who merely barged in imo. It isn’t the “EnQuest way”. I’m not anti-Serica but just feel there are better deals with bigger producers who recognise our uniqueness. My real takeaway though is the $800m “Accordion”. That’s a lot more than the last one of $300m in 2022. I fancy it is for a material transaction that only enhances our attractiveness to the right partner. The banks are onside and we must now convert Equity. We can also delay whilst the pressure on Labour continues. We are not defenceless here either. The Unions are getting closer to us out of necessity. We saw what the farmers did. The Jocks are being victimised because they are a small industry in UK terms. It is for them to fight like the farmers. Offshore have split shifts so those on land need to picket and demonstrate. Their families and associated industries can join in. The farming industry has twice our numbers but half our GVA. Worse though is that O&G is largely Scotland based. That is unadulterated discrimination.

I’m looking forward to 2026 and wish you all a prosperous New Year.

I was trying to reconcile the low value of EnQuest equity against the bank’s enthusiasm to lend us up to $800m in the November RBL facility. It only got worse when AI explained that banks apply a discounted oil price deck. They do not use spot prices and discount the long-term price by 15-30%. So the fact that oil was c. $65 in October has little bearing but the forward pricing means they used something between $71.5 - $83.34 (McDan October 1 forecasts) so the price deck is c. $50-$60 rising to $58-$71. I also learned that the bank’s don’t worry about decom so much and that isn’t surprising with their 6 yearish time span. It also explained that this means the banks are working backwards from a potential $1.2bn-$1.5bn valuation. Their money is pretty safe. Another consideration is that the banks base the risk on 1P whilst Equity and analysts go for Probables. In simple terms they are valuing different slices of time. Equity cares about full asset life which includes discounting the long tail which banks mostly ignore.

I think we miss this when debating certain aspects of EnQuest going forward. I am however much more positive regarding 2026 now I’ve finally got my head around what can be easily misunderstood by us retail holders. Decom is ignored by the banks but is to a certain extent by the analysts also. It is only certain commentators who act as though decom starts tomorrow. We have a liability but it is almost halved in real terms due to tax relief on decom.

In short the banks let the numbers do the talking and cover a relatively short time when compared to the life of fields and other assets. It convinces me that we are in a finer shape than the market thinks we are.

If we are doing a deal with Harbour it may be delayed as Harbour management is concentrating on the future whilst in their opinion the UK isn't "the future". If a deal is agreed in principal then there is no rush and it can be parked whilst time important stuff is dealt with. Maybe there was some risk of today's Harbour announcement not happening that could impact a UK deal? There are a lot of large chess pieces currently being moved around.

The OilViking post of 21:21 and this morning Lochnagary's opener neatly sum up where we are. I was going to post that the debt discussion may well prove moot as we have the best part of 2 months before the Feb OU and more than 3 months until YE. The conversation (and sp) is likely to be very different then and the debt argument may well be be rear-window trivia if we have morphed into something else.

It is clear that Harbour have plans set in motion and the UK part of their business is not screaming "growth". I think they will look across at NeoNext+ and Adura with the major's involvement and Harbour certainly fits in with this category of company and HitecVision is a financial sponsor as is EIG. Not the same but many similarities and if it worked for them then it'll work for Harbour. It could be some creative deals and may well result in EnQuest continuing but not as we are today.

It doesn't really matter if we do the deal now or 2026/2027. The geology won't change and the fiscal front can't really get any worse? Years ago I worked in Property Block Management. I called it my 2 years of dealing with trivia and misery. BUT in the bad times it had kept the larger property business solvent. It kept the company alive when many failed. Looked down upon by the larger business but a lifesaver. SEA is not glamorous at present but it is reliable income. We are in a stronger position than most people realise.