Member Info for romaron

Not a lot of good news out there. Inflation up, oulook poor, bear market threat etc.. - so just to increase the misery I put Bloomberg TV on. Nice lady from BlackRock on. When asked what to do gave some waffle about front end of the curve and cash.
What she said was that as the cash builds with them (dividends, pension inflows etc.) they will most likely retain most of it and not spend it.
Simply put they are moving percentage wise into more cash as it builds.

I think we're ahead of the game here. They are copying us. Cash is King.

Hi E - I paraphrased Emrita Sen - what she actually said in reference to Canada and US companies was "so little incentive to invest because of ESG concerns". I think that is more current and up to date. The pandemic affected all of us.
It will take a long while to change the narrative and it may already be too late. You cannot blame the industry if it has reduced its horizons and length of prospects. I don't think it's revisionist. The pandemic and shale orgy of growth at any cost has been superseded. This is what Jeff Currie said would require a 3 year track record and we are only 18 months in. Whatever the cause we are where we are. The NS is an old basin but the sentiment is global and definitely Western leaning in ESG concerns.
Serica already had an corporate update in the pipeline. Their AGM isn't until the 30th June.

You're right mrc. I expect an RNS at 7.00 on Friday morning but no idea what will be in it. AGM's aren't looked forward to by boards. Not because they might face a grilling but they are pretty boring and procedural as you say. They take up valuable time and involve a lot of executive travel. It will give them an opportunity to respond to the EPL without making it looked forced. I'm glad we have had longer to consider it. My own view has altered slightly since the announcement.
People are already expecting too much from the AGM but in fairness it is the only chance we really get to meet and question the board and management.
I'd like to ask what the appetite for developing Bressay is with the partners. The problem is that unless AB volunteers it in a RNS he will give a non-answer along the lines of - "we have not heard or been contacted and expect discussions to continue as normal" or "they are digesting the impact of the EPL" etc....

I live in London so it isn't such an effort to attend. I hope to enjoy it but I'm not expecting too much.

Not a comment you usually find concerning oil. It relates to the current undersupply of energy.
https://twitter.com/eri****tall/status/1535273732045950979
This from Eric Nuttal twitter and it is an interesting comment fro Amrita Sen who says that Jeff Currie followed her lead. The interesting bit is towards the end where she says the problem in Canada and the US is that years of underinvestment from incessant ESG attacks have driven away any incentive to invest longer term and the current high prices and undersupply could last a decade. Nobody wants to spend on potentially stranded assets. This is a self induced problem which will take years, not weeks or months to correct.
I think we should not build too much into the AGM. They aren't normally that significant to be honest and refer more to the little g (governance) at the end of ESg. There are plenty of investors who think they're a waste of time.
I was thinking more along the lines of what has happened specifically affecting enQuest.
On 17 June AGM the EPL will only be 15 working days old since its announcement. I don't think that is long enough to dramatically alter plans and may well have landed a bombshell amid ongoing negotiations. This isn't a time for knee jerk reactions.
To add complications there was the resignation of JS and a few days ago another announcement about a potential merger of TLW/CNE. Why was the original AGM cancelled at short notice?
It looks like we'll quickly burn through our 40% tax credits and we are in the unusual position of for once being in the driving seat. Imagine if we have no tax credit left by 31 Dec 2025. That would add up to a sizeable chunk of cash.

AB and his team should be congratulated for keeping us afloat when the market had us priced to fail.

How do you find this stuff Therapist? I fall into rabbit holes but you live in them. From memory I think the Hibiscus CEO didn't hedge production. Bit of a punter. Great info.

....and another thought. Equinor are heavily involved with Bressay. Can the tax allowance of EPL be of any value to them as a foreign company? I have no idea. If accountancy is a challenge for me then tax is definitely a step too far.

Great debate. Who'd have ever thought it would be a Tory government that brought in draconian taxes higher than those suggested by Labour. If Bressay can be funded with tie-backs and possibly our FPSO it might be a goer. SIPP is right in that any major project probably wouldn't have the safety buffer of tax credits by the time it commenced production.
I'm in the middle somewhere. A large development would need to be funded through debt. That is almost as big a problem for the government. In the current environment would lenders be prepared to fund a new field at an economic price? It ain't the tax capex benefits but what happens once the field is pumping. They'll need to commit to guarantees as with Nuclear energy. That may prove impossible.

That's a pretty long list SIPP and some will come up as a matter of course. Dividend is a regular. You probably could have attended as my shares are held by AJ Bell and I get a "Letter of Representation". Even if you cannot get one if you contacted IR they might let you in as an observer without one but you couldn't vote and that is no great loss. With the system as it stands most resolutions are passed with high 90's voting FOR.
1. There should be an RNS first thing Friday morning. It could answer some of your other questions.
4. is an easy one as it is largely another compay's decision.
6. Tricky - AB has to be diplomatic here.
7. Unless in the RNS he won't answer because of econmic sensitivity or non-disclosure clauses.
8. Maybe more colour but could relate to 7.
9. Good question. A common ploy in answering is that if they're worried about giving forward guidance they sometimes say something along the lines of - analysts have projected so and so which because they haven't strongly disagreed with makes the assumption that it is in the ball-park.
12. Will be asked I'm sure.
The EPL was/is a negative because it is a tax that could still be around with oil at $60. For EnQuest we'd like it to go up in monetary terms as that would relate to higher oil and super profits. As oil has become inherently volatile pricewise they (analysts) NEVER allow for it to be higher for longer. Might not be a public question but the 2 updates we have had are suprising in their divergence. That would be an interesting question.
AGM's are seldom attended by analysts (I suppose they'd have to be investors and that raises questions of impartiality) and this one will be no different so questions are by and large from private investors. The bigger investors can ask most of these questions directly and get an appointment. The answers will be similar but the less witnesses the better. There are subtle hints and you can sometimes get the surprise reaction or a worried look between directors.
We'd all like to know the Swinney story Therapist and we might get more.

Remember this: https://www.reuters.com/article/us-enquest-m-a-idINKCN1LS21P

There are similarities. Unforeseen events and a looming debt deadline. However, we are in a much more comfortable position this time around and who is to say that recent events didn't crater certain plans. That isn't always a bad thing and the price of oil combined with the tax credits makes me think that another Och-Ziff deal would tide us over in the short term. Short term loans are usually frowned upon but an OZ type loan could be useful to calm down the financiers whilst AB and the team sort out the next chapter in the EnQuest story. It sure ain't all about repaying the HYNs in October 2023.
With all the linear attention that credit agency attach to business models the "looming" repayment will be making all kind of flashing light signals that normally put a company "on watch". It couldn't really be further from the truth. It could though get in the way of a deal and needs to be addressed. We have the contacts and the money is available. It was far worse on previous occasions.
I think the AGM may be just a tad too early for any announcement but I'm guessing that there are a lot of spinning plates in the air presently. So mrc I think they may park it because there are probably bigger fish to fry. It might cost a few per cent and have fees attached but the freedom it could give us would more than compensate. This time we don't have the tail wagging the dog. We might need more time for tailoring the debt that fits in with our future plans (or opportunities).

BTW - I'm not sure we have any peers. If you look at BBK and SVT we have been looking further out than most,

Good points ukbb. Ah Glasgow, the only place I have suffered a r*cist attack. It was in the Corinthian Club. Something to do with my accent apparently.
I'm not ignoring the green agenda but when will it take off its stabilisers and start acting like a grown-up and pay its own way? I would be happier if the public were told the true cost of going green. As for all the other over-hyped breakthroughs I'll believe it when I see them. I won't fill up this board with all the problems they're having. I have always avoided subsidised companies because in my experience once they remove them [subsidies] they are like stabilisers. Most wobble and then fall over.
I was short of EAGA back in 2011. The government took away its highly profitable Warm Front scheme. I was counting my profit when a white knight came in and bought them. That company was Carillion who knew more than most about feeding from the public (funded) trough (PPPs anyone?).
It was a good lesson learned imo. Carillion followed EAGA .

EnQuest gets little help from the government so is a lean and efficient outfit. Still standing after shale and covid is actually quite an achievement.

So ukbbb - whilst I agree that there are some excellent posters and knowledgeable people here who know their stuff and most, if not all, are holders of the stock. That is a commonality and why most pop in here.
How would you react if somebody came into your virtual local and kept harping on about the price and quality of the beer, the staff and clientele and that the pub is due to close down anyway. They bring no humour or interesting tales or skills and butt into conversations that in the real world they wouldn't be invited into. On top of that they are proselytizeing a vegan wine bar across the road. First of all you'd ignore them hoping they'd go away. Then you'd move away. If they followed you (well I would) say something along the lines of can't you take a hint.
He has made many mistakes about renewables and I was discussing ASHP with Mitsubishi some 14 years ago (claims didn't meet performance) where many experts were present. I met Grant Shapps at BRE. I sat on a committee at Eland House when Insulating Britain really was an aim and attempts to quantify the housing stock and its energy performance were discussed. I have plenty of certificates (I can bring photos to the AGM) but bow to people who work or have worked in the industry or have relevant experience elsewhere. mrc, ProOpt, hitman, Tarmak, Therapist etc....

I haven't read anything from Stanley that told me anything I didn't already know. Throwing in David Attenborough is the equivalent of using Mother Teresa. I just find him (DA) boring and Mother Teresa set women's progress back decades and fed off poverty and ignorance https://www.youtube.com/watch?v=GZiKAeJ9mAU

Stanley is a troll but in the spirit of avoiding being disagreeable I'll let those who value his wisdom to continue pleasuring him as I have now permanently filtered him. I find Ammu much more fun but then he shouldn't be in the pub - he's not old enough.

"A key sticking point on reopening Rough is reportedly how the scheme will be paid for, with Centrica concerns that it will only be viable with state support."

That'll be an interesting decision! Subsidising the fossil fuel industry.

I wonder what Centrica will do with Spirit Energy?

Stanley, you are crackpot. Wind and solar have made some inroads. What we produce is fungible therefore global. You know so little about actual energy but promote every new version of angel dust or Unicorn tears as a solution. You could burn 'old master paintings' to keep warm but it wouldn't make economic (or cultural) sense. Time for the Filter bin for you again. I can't read your rubbish any longer.

Who has been calling it "nonsense". Only Stanley's crackpot and expensive solutions are nonsense. We can afford to be preachy in the rich West and I'd say everyone here has more disposable income than most in Africa for example. My daughter attended COP26 and will shortly have a piece out exposing the hypocrisy of a section of the "renewables industry" and her story is dependent on an international expert in his field doing a scientific analysis. The scientist may confirm the "renewable claim"? I am open minded but it explicitly demonstrates the almost total self absorption on the fringes and extremes of the ESG industry.
Why is Stanley here. He's not invested and only gets more excited (does he pleasure himself off attention?).

I read yesterday that climate change is being blamed for TB in Meerkats. It has certainly had an effect at romaron towers. My wife moans even more that the lawns need mowing or the roses need dead heading. The weather used to be so reliable years ago if you ignore Canvey Island 1953, winter of 1973, summer of 1976, or the Icelandic volcano 2010.
Thankfully that'll all be in the past once we become vegans and cycle everywhere.

Of course there's the majority in the world who'll just go for the highest EROI because that's all they can afford. That's where Stanley should take his missionary work.

It's on that little red thing above called "Enq Share News"

Look at small caps and it reads "JPMorgan cuts EnQuest price target to 41 (47) pence - 'overweight'"

I think when negotiating with the authorities and for public consumption you'd rather have the negative. Hard to ask for mitigation if the "analysts" are screaming 'fill yer boots' or it's 'a raging BUY'.

Leave that to me.

So google is wrong - "Sweden does not currently produce any of its own natural gas or oil, instead importing these from the countries above. The country generates the majority of its electricity from a mix of low carbon sources; hydro (45%),** nuclear** (38%) and wind (10%)."

I think the Uk should ban growing pineapples.

Stanley - stick to glueing yourself to another flagpole. You are becoming ridiculous.

Therapist for thinking out of the box and his computer skills and Tarmak with his talent and doggedness in letting the figures do the talking. That's the true benefit of a message board that can actually improve your knowledge and investment decisions. There are others too including Pelle's roving ambassadorship between us and the Swedish investors. The bad news is that our tax rate went from zero to potentially 25 per cent. Clever minds on here think it will be considerably lower but that means capex goes up. It still means we get it before the government and it may be the decision the company makes.

The industry's ability to avoid the EPL were unavoidable and I was among the chest beaters and wailers when it was first announced. It has highlighted just how valuable our tax credit is. Forget the mitigation the EPL has for investment it should really only impact at current oil prices with the promise to remove/reduce if and when the oil price subsides. Let's face it, we are major beneficiaries whilst it stays above $120 and can easily go higher.

We built it and they continue to come.

I won't challenge you on development costs and plans but I think we are in a new ball game. Yes, there is a desperate need for energy security and a transition role but what company our size would risk the asset being retired before payback? A new field could be obsolete before it even breaks even. ROI still matters. Why build when governments are making increasingly ambitious pledges to render the necessary infrastructure obsolete? COP26 anyone?
Maybe shorten the payback period by lowering the cost of capital for private firms in exchange for the right to retire the asset after the investment yields a certain return (that'd bring the funds in and put a rocket to P/E's)

I think there must be a bit of a face off atm between the companies and government. The government have shown their hand early and it ain't that strong. Nothing gets solved overnight and the longer this lack of leadership continues the stronger EnQuest becomes. Our business plan works whatever the outcome of negotiations.

We built it. They're still coming.

Hi mrc - I found another link that described Bressay as a look alike Mariner. My whole point is more that they talk in billions of dollars. Even at $3bn that is currently probably more than $2.7bn above what we're prepared to spend - unless we get something to support the government's professed new found enthusiasm for a fossil fuel future.
The EPL was political imo but it now moves towards economics and the grown-ups at the OBR (Therapist video). They have some seriously big brains to call on and have experience of the real world. There are ex Goldman and Morgan Stanley people plus quite a few professors. I think RS showed his ignorance in the video and will get a rude awakening. I'd love to know Kwasi Kwarteng's thoughts.
Describing a new field as "phased" is just semantics usually and is the same as buy now pay later but conditions and technology has moved on so there may be a cheaper plan. You'd know more about that than me. I'd imagine finance has just got trickier.
I wouldn't be suprised to see foreign companies (how many are left?) continue to repatriate or move elsewhere and provide our bread and butter. We will be a totally different company in a year's time and if we stay independent will be a go-to company for those involved in the NS.
I doubt we'll learn much at the AGM but it is serendipity that the delay means this one will be so much more interesting. We should get an operations update on the day which may answer some of the questions that were going to be asked at the AGM but you always garner something useful/interesting.

I hope you're not gonna start demanding accuracy mrc. I think it was actually Mariner on reflection, sorry but I knew I was warm.

Profits: Amount less EPL 25%
2022 $750mio $600mio
2023 1,000mio $750mio
2024 900mio $675 mio
2025 850 mio $637mio
2026 338mio $338mio
Total $3,000mio NetZero

During this time all loans have been repaid and some small dividends paid out. The 2bn in the bank after the now exhausted tax credit is divvied up among shareholders who receive the equivalent of $2 bn ($3bn less repaid loan) $1.06 (say) £0.85p per share. The residual (if it is worth anything) is split between a home in Aberdeen for destitute oil workers and a centre for fallen women in Malmo.

I realise it needs some fine tuning and the fall off of profits in 2026 is because it needed to add up to $3 bn. There is also the chance that the industry doesn't last another 5 years. Unlikely you might say but at least 4 years to long for Insulate Britain, XR and the mayor of London.

A bird in the hand is worth two in the bush (English saying). There is an argument for sitting on our hands and doing nothing other than work through existing assets. The more I look at EnQuest the more I like what I see. The share price takes no account of our tax credit, current trading (even the present shower think it'll last until 2025) or the uncertain future that has come to soon for renewables.