Member Info for romaron

Large-cap funds with higher ESG ratings have seen a worse overall performance in the past year compared to those with lesser credentials. FT
In 2001 86% of world energy needs were met with carbon based fuels. In 2021 was 84% (Gavekal). That’s after 20 years of huge investment in solar, wind etc

Oddly enough that was the other part of my email request to IR. I thought it was just me interested in the shareholder numbers and I'm not sure what benefit would come from knowing numbers and averages but happy to let my mind roam. This was their reply:
"Our major holders remain much the same as at the start of June (see below)
Amjad – c11%
Aberforth – c8%
Baillie Gifford – c6%
Schroders – c5%
Hargreaves – c4%
Cobas – c4%
Dimensional - c3%
Avanza – c3%
I would suggest the majority of Hargreaves and Avanza are retail holders."

seems like Helikon have disappeared.

Jim Buckee an ex Chaiman of EnQuest did say "investors are not owners, they think they are, they are renters. They squat in a house for a bit and move on. The management own it; it is their life".
Accurate to a point but I've been in the same house 28 years and it feels even longer in EnQuest (7 years).

I think it is an interesting subject and EnQuest may be an outlier in some respects. Algo bots are not shareholders but get included in the figures to some extent. There are obviously more than one shareholder further down the line with the funds and some investors probably don't even realise they're invested in us. However, I think looking at it from this perspective does bring you more in line with how the management (and professionals) think. Day traders are good for liquidity purposes but increases volatility because they use casino methods and "systems". The spread betting companies are happy to take their money. TBC.

Some of you will recall that I was trying to get to the bottom of a converstaion I only heard bits and pieces of at the AGM. It was about debt and the forthcoming H1 update. I eventually emailed IR. I try not to bother them too much and there are limitations on what they can say but the important point is that we sometimes make the mistake of assuming that they won't tell us things when in fact nobody has asked. This is the reply from yesterday:
"You also sent me a note regarding debt – apologies I missed that one. I think what Jonathan would be alluding too would be that the next window in which we can undertake a HYB issuance/refinancing would be after our half year results – this is driven by US regulations regarding having “live financials” upon which investors can make judgements on the Company and instrument. We are certainly getting ourselves ready to do something at the time so we can act should market conditions etc. be suitable. We are also considering a number of other financing options that means we may not do a HYB but still bridge the gap between our cash generation, a re-sized RBL and the repayment required on the existing HYB. Essentially we are running multiple opportunities so we have choices on which we can act should favourable conditions/pricing etc. present itself."
That is a pretty comprehensive reply and (for me) the underlying tone is one of confidence and that things are tickety-boo.
Whilst here a comment about Harbour. They are a good company and I treat them as a bellwether but they are different to us and I think it is difficult to find a peer to measure us against. EIG may or may not have contempt for private shareholders but they are not their responsibility. They are early stage investors and often not in for the long ride. They couldn't have been clearer in their intentions and the buy-backs have facilitated the transfer of holdings. I see nothing wrong in that and some investors should maybe have read the legal small print more closely. I would happily BUY HBR but think that EnQuest will outperform them. AB will not be doing what EIG are doing at this stage but who knows what the future holds. He has my permission to offload between £1 and £3.

Build it and they will come.

.....and it doesn't hurt to have on the board the CEO of anotherGeothermal company, Rani Koya and also Howard Paver as NED of same: https://ogl-geothermal.com/team/

" the Industry doesn’t seem to have put up much of a fight"

Well they were outnumbered. A government that hadn't allowed for the eventuality of a future energy crisis. An increasingly vocal ESG movement that hadn't had any pushback for the past decade and were emboldened by the promises made at COP26. The public bribed with funds that were confiscated from the O&G industry. An opposition (Labour mainly) that is remarkably ignorant of how economics work and the importance of energy.
I don't know if Putin interfered but TBF with this motley crew he didn't really need to do anything.

I think the industry will pick the right time to respond and they don't have the same triggers or need to time everything to the news cycle as do politicians and bodies with agendas. I think time is on our side but the just-in-time systems and instant gratification that the public have been promised and cosseted by will mean they have to go through a period of cold-turkey. There is no quick answer to this. In fact. The industry can afford to outwait the incompetence that got us here and take their NEW business elsewhere and to friendlier governments.

Winter is coming!

*I don't think Biden went to Saudi Arabia to get a sun tan.

https://www.energyvoice.com/oilandgas/north-sea/427021/north-sea-exploration-prospects-few-and-far-between-edinburgh-disappoint/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202022-07-14&utm_term=Energy%20Voice%20-%20Newsletter

" just five exploration wells were completed in the whole of 2021."
"“However, several companies in recent years, including Equinor, TotalEnergies and ENI, amongst others, have targeted new plays in underexplored regions with the aim of adding material volumes and replacing production – although success has been in short supply.”

What surprised me was that the reserves of prospects are relatively low in drilling that is going ahead. With Bressay and Bentley having (each) upwards of 200 mio boe they must surely come into consideration. 15k and 8km from Kraken must be a huge advantage with geography and experience of Mariner to be brought into the conversation. I doubt we'll see anything until the new government is in place and just how hostile (or not) they'll be towards the O&G industry. For a change we might have the stronger hand if the energy crisis continues to deteriorate.

*I remember the lifetime it took to develop the Mappin & Webb building (Number One Poultry)that took half a century to be redeveloped and Bucklersbury House about the same in the City of London. Sometimes you have to strategise like the Chinese and think in years and decades. Get it right and fortunes are made. Oddly enough all this confusion means that B&B are potentially increasing in value. Nobody can tell what the geopolitical and energy situation will be like in 3 months time and more to the point, public opinion - not climate activists.

AB certainly has the resolution and ability to follow the development through imo.

It also took me here. A good read:

https://www.bcg.com/publications/2020/oil-gas-companies-need-to-transform-upstream-operations

Encouraging.

M - don't you want a yacht?

Perhaps they read this:
https://uk.finance.yahoo.com/news/returns-gaining-momentum-harbour-energy-074420629.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvLnVrLw&guce_referrer_sig=AQAAAMvmZ_qfiUSNYkHE0kY-xCGPp8YthEC1LuHg7fvIZXij40wl1Hyow0V-3N40-hazZ9oPktfAu-8twdd14uoR0lXg6jAfgRH3pjBJ4kffHw9zMan9kFm2GDASPTz4NkEfXd4TLi4SJ6FqUn19cytVB4r3IbFQUGZX4xVeOV6dky0S

I played with EnQuest figures. I got ROCE of 13% for last year and calculated 30% for this year. That is not to be sniffed at. I used $1bn for EBIT 2022 using Tarmak's figures and guesswork and the same numbers on P.119 of the last years's balance sheet. Total assets less current liabilities. I think I'm fairly close but it was a bit like painting by numbers. Could a clever person check my (rough) calculations?

You disappointed me. I expected at least one comment about my mental health because it is a little abstract. Long story short I got to know the florist at the Dorchester Hotel c.1992. He also looked after the Sultan of Brunei's other properties in and around London (about 6 large properties from memory). He had to provide fresh flowers continually even though the properties might not be visited for years. Not cheap.
I visited the Bentley factory at Crewe a few years later with a coach party and was shown around. Ostentation doesn't do it justice and many cars were destined for the Middle East where they do love a bit of chrome. With so much obvious wealth on show it is easy to get blasé and I asked the guide if he'd ever been really impressed. He thought for a moment and replied, "the Sultan of Brunei".
He sais it wasn't so much the order -30-50 Bentley's. It was the motorway he built for them!
The reason (I imagine) Brunei tops the chart is their small population.
EnQuest might have a lot of shares in issue but I doubt the number of private shareholders is that high (10,000 as a wild guess) . The production of Brunei isn't on the scale of other states or the majors. It isn't always about size. We are relevant. Nobody really thinks we're going to zero so when one side is rock solid what side is gonna move?

Just saying.

We should use this as a measurement: https://twitter.com/Mohamed_m1992/status/1546563592325046272
Look at the league table led by Brunei. Similar could apply to us.

Hi M - No future. A subsistence existence. You live from day to day.
I'm being extremely critical today because the second reading of the Bill was all point scoring and the government could only use newspaper bylines or self promotion by a tiny company (Orcadian) to support their decision. ORCA haven't even raised a post on their message board and Steve Brown is not one to miss an opportunity to promote his company.
It is interesting that we've not really seen a concerted reaction from decent sized NS O&G companies. Is it now being left to private equity and smaller 'chancers' to take the risks? There must be stuff behind the scenes and if companies like us don't join in the majors are scuppered too. It is symbiotic but the amateurs in government don't "get it".
I think we need a strike or non-cooperation from the remaining NS oil companies. We'll be OK but for now I think the Bressay oil will remain at the bottom of the sea. In fact, a responsible board would probably not support a major development like Bressay that would be counted in billions of dollars. The majors have the billions but they aren't falling over themselves to invest in the NS.
I think we'll be fine but it could have been so much better. We are saved by our tax credits which we can use up over the next few years. MC=FCF (1year) seems to be how you value oil companies now.
Our Bellwether is Harbour imo. They have tax credits, buybacks, lots of gas, and dividends yet still struggling to gain traction.
We keep hoping the real world will come into play but governments and ESG seem to be holding hands walking towards economic and social disaster.
Don't worry - I'm sure my natural optimism will return in a day or so.

After reading the transcript of the second reading of the EPL Bill I am left deflated. Labour have come out with crackpot solutions and have moved even further left of the Venezuelan dictator Nicolás Maduro. With policies like they suggest they are surely unelectable going forward (I usually vote Labour).
The sloppiness and rush involved in this Bill suggests we are in even deeper caca than we suspect.

If you are in an abusive relationship you should leave imo. That is clearly the relationship between the O&G industry and the UK government (the opposition is openly hostile and apparently doesn't even engage with the industry). Political expediency is behind the Bill and to get industry onside they have mistakenly thought that the £91.25 bung for every £100 invested in the North Sea will encourage them to invest in the urgently needed energy shortfall the country faces. In this second reading not one example was produced of any company availing themselves of this bung. Orcadian Energy is still doing the funding rounds and gets a mention.
Unless it gets finance or a farm in is doomed. They have no option and are almost a one man band outfit. Inconsequential is not too rude if applied to them.
I cannot see the case for fresh investment in the NS. As Peter Aldous said in the reading "investment in energy projects is global and footloose and, if we have an unstable fiscal regime, business will go elsewhere."
I think we continue doing what we do and look East for growth. Companies will ignore the bung because a proposed 85% tax by Labour could be 2 years away. It doesn't augur well for our share price but the FCF and EPS will still reward us but it is more a hand to mouth operation.

I think I know why Deirdre Mitchie resigned. You can only push water uphill for so long.

5.46 Lucy Frazer "Let me quote some of what has been said by representatives of the industry about our investment proposal. Orcadian Energy has said:
“We believe the immediate investment allowance, included in the Energy Profits Levy, has transformed the attractiveness of domestic oil and gas projects for companies extracting oil and gas in the UK and it should spark further investment in the North Sea.”
Cornerstone Resources has said that there has been
“more interest in partnering with us”
-----------------
I despair. Fair enough there has been a recent exodus of ministers but she has obviously googled this for something positive to say. It looks like she was called off the subs bench and wasn't warmed up OR more importantly there isn't really anything of consequence to say regarding investment! Orcadian recently had a placing for £1mio to enable them to keep the lights on and their CEO posts on the ORCA message board; some might call it desperation.
I'll study it tomorrow but first glance just looks like juvenile point scoring by people who know very little about the UK O&G industry.

thanks for posting the link LS8

O/T KO - KT13XYN CLS250 CDI AMG Blue-CY Sport A - naturally it runs on heavy oil, diesel.

O/T KO - how much should it cost to replace a rear light assembly for a 2013 Mercedes CLS? Only glass broken so a straightforward replacement?

I have one share in UK PLC. I have concerns about the management. Should I sell?

This is a few days old and is basically recycled news but it does fall into a pattern
https://oilprice.com/Latest-Energy-News/World-News/Goldman-Sachs-Oil-Prices-Still-Set-To-Hit-140.amp.html
Forecasting is there to make you look foolish but even now the narrative hasn't changed that much. The bit about "anticipatory assets" is gobbledygook to me. Aren't brewery share "anticipatory assets too". Isn't he just saying that whatever the state of the economy or shares we will still need energy?
But that isn't what annoys me. The sacred cow of ESG is not mentioned. It has become like religion and you must never mention it in a negative sense because you'll upset somebody or lose clients. So skirt around it without mentioning it by name.
What do these comments refer to? "a tight market this time around is compounded by years of underinvestment in oil exploration" and "This is an environment where we need a decade of investment ahead,”

What stopped investment? The tooth fairy!

Hi NY1 - that's an unusual publication to report on a company that 99% of the Brtitish public haven't even heard of. Is it normal with them?

Hi Martinen - I think backwardisation is due to oil never running out and it should get cheaper overtime (much simplified but the gist). I don't believe in things never occuring again or "this time it's different". However, the world has never really been here before. We go for scale and beating down prices. The EROEI on fossils is still the densest and most fungible of any competition. My bet is that the West (let's say G7) has embraced the cult of ESG and this could mean that oil is uninvestible ever again. People might scoff but many religions are still growing yet nobody has ever met god or witnessed a miracle. That means we have to live with ESG. Even if ESG is true the poorer nations will reject it if starvation is the alternative. I visited Beirut not long ago and cannot imagine a reliable EV infrastructure there or up the road in Syria for instance.
I'm seeing governments panicking and pleasing the public rather than admit their past mistakes. It makes sense NOW to build up stocks of energy. The problem is they've reduced storage capacity along with infrastrucure and capex plus few if any new fields (especially North Sea). You can please the public with a short term measure (EPL) but it does nothing to alter the fundamental situation that governments around the world have been complicit with.
At this time the O&G industry should be producing like crazy as insurance against the winter which I forecast will be colder than today. Instead the government is tinkering and now blaming refineries after raiding the only people who can rescue them longer term; the O&G industry. Anybody but the regulators and law makers.
My feeling is that the oil price is too low so they are not taking the shortage seriously or effectively. I would be a lot happier if we were in contango because that is the only thing that makes sense. Produce like crazy and create a glut because we'll be needing it in a few months. If we're relying on the largesse of OPEC and some doubt its ability then we really are in trouble. The fact that oil is STILL stubbornly high is very worrying. It is the futures that should be high and the front end awash. The SPR seems to be having little effect on the price.
All the above *******s is because I've lived through negative interest rates, US dollars at 20% and penalty rates for being short of FX during currency attacks. We haven't seen anything yet imo. The April 2020 negative WTI was a regular type of event in the past and I'm expecting more of the same. We have had benign markets for decades imo. We are spoilt and about to get a taste which other troubled countries in the world regularly face. Another thing people miss is that contango made a lot of money for some. I think holding oil stocks is as near to that as we'll get. I'm afraid an energy crisis is unavoidable now. Some think a recession will mitigate, I don't. People still feel the cold in a recession and get hungry.

Black swans are no longer r