Member Info for romaron

Like it or not the US has a huge influence on energy. The US administration is going back on what it (purportedly) stands for and is going cap in hand to Saudi Arabia. What's wrong with turning on the shale taps again?
US investors - they're the problem. They demand dividends or buybacks before the companies even think of going back for another growth spurt. Naturally the UK government completely missed the signals as this energy crisis looks like turning into an energy emergency. They'll bumble through somehow and hopefully it won't be Boris at the helm.

https://www.bnnbloomberg.ca/investors-in-apathetic-coma-on-energy-firm-returns-nuttall-1.1774328

*thanks to Modestus for link

Your points are correct mrc but isn't this just what the government risk losing? We have options. Carry on as before with growth or farm ins elsewhere. When you're in an abusive relationship you should get out. Bressay depends on Equinor imo. If Bressay is valuable we can always sell our interest. Let someone else put their faith in this government. I wouldn't.

In politico speak he has just announced he will be visiting Saudi Arabia. He has been forced by domestic politics and it is pump prices yet again. The media focus on pump prices but we all know it is far more complicated than that. Will he shake hands with a murderer?
Realpolitik trumps human rights - ask Putin or Boris.

What this means is that the real situation as regards oil is far more dire than we have been led to believe. The US cannot change it in time for midterms in November. They can mess around with the SPR etc.. but fundamentally the incessant attack on fossil fuels stopping investment has been the main cause of scarcity of energy. And what has the UK done in the face of the same threat. Attacked the very companies they need to get onside. Very few companies have shown the commitment that EnQuest and Harbour have to the North Sea (and that includes majors) which meant they bore the brunt of investor reaction following the witholding tax raise losing more in percentage terms because of their misguided trust and belief in the NS and the British government.

I optimistically said in a previous post that the unpopularity of fossil fuels created an "economic moat" which is good for future competition reasons. I am recalibrating it now as I consider it more a quarantine zone around us that may go on for some time. I am pricing in a 20% tax as we must surely get some relief for the new wells on existing fields and hope the company will shelve all plans for new fields. I think that we can return a considerable profit over the next 7 years which will do me. Selfish maybe but I only bought shares. I have no interest in being conscripted to save this government and most likely its successor.

Oil $150 this Autumn.

Excellent point ukb - I hadn't thought of that. We are usually never told the amount of oil sold with actual contracts rather then hedging (commercially sensitive?) You cannot insure and include every eventuality in business. Interesting point but I think the bigger picture has just changed. Biden blinked first.

Hi E - I tend to agree but the fact that it is being discussed is encouraging. When Biden was first elected he was firmly anti-fossil fuels. Our illustrious leader was in the same camp as he preened in front of COP26 delegates.
Shouldn't they both be applauding the high prices and lack of development in new fossil fields? At these levels the renewables must surely be competitive and can fill the vacuum? This is win/win foe ESG surely? That is unless the hyperbole and faux science has been a little overdone? So many questions that they now need to answer. They have most of what they want and still they hold out the begging bowl!

We have strengths too. It won't cause too much hardship if we decide not to progress with Bressay or Bentley. If any large partner pulls out it is likely to crater a FDP. Bressay depends on Equinor I'd say and I imagine we are in regular contact with them and Harbour. If we pulled out would they step in? I doubt it. We have leverage there and in SVT. I'll also accept it can also be a lead weight around us. We are now in a position to say to Government - "you got us here, how do you plan to make energy more equable going forward - our investors have had enough of promises and taxes!".

We will still make a lot of money if we just run down our NS assets. If other companies are of the same mind then it gets very difficult for the country. The recent demos and vandalism at this weekend are an example of how confident the activists are of getting away with it. I think the people will begin to get a little annoyed if it is allowed to continue. Nobody elects a student who splashes red paint (Jackdaw, Edinburgh) or vegan****** who try to spoil a joyous procession (and I'm a republican). We even have them here and Stanley continues to chain himself to this board with his hopeless misunderstanding of energy and accounting.

recent twitter bio change by an American right wing pundit, Glenn beck.

There is a growing ESG is cr*p movement. About time. Interesting article in the New Statesman.

https://www.newstatesman.com/business/sustainability/2022/06/war-ukraine-given-business-excuse-show-true-feelings-esg

The HYN fixed higher today by .20 96.361>96.559 Luxembourg was open.

A Bloomberg side bar on TV this morning said "Oil falls below $113". So what? For best part of the previous 7 years it was below $65. A consensus seems to be that whatever Saudi Arabia does "energy is scarce". Long term investors don't change their mind every day and they are saying that the move into value stocks has only just started. Investors have had their fun with bitcoin and Tesla but at some point they will demand cash flow and returns. Many here haven't enjoyed the past few days but most are still in profit. The fall brings back memories of 2019/21. That did hurt but as they say "it has to hurt when you invest, that's where you find the bargains".

Timing wise the delayed AGM means we'll hopefully get a better shareholder attendance and some clarity on EnQuest thinking. There has been very little public dissent from the industry but that doesn't mean they will meekly accept the conditions on the Levy. With workovers we could just run the North Sea involvement down and copy Tullow and Capricorn by moving elsewhere. AB with his close connections should consider the Levant and Eastern Meditteranean to provide growth imo. I wouldn't like us to leave the NS but you do kinda get the feeling that we ain't wanted.

Let the acticists carry on with their protests but nobody will take them seriously until they add "save polar bears by paying higher energy prices" then perhaps their pseudo-science will include lifestyle and economics.

Still a strong supporter of the company and I continue to hold but I am a LTH (like Schroders) and will take the dividend and increase in value which are how shareholders are rewarded by profitable companies. I thought it was just the North Sea that was called "a hostile environment"; I didn't think it included Westminster!

The 24 March RNS said he was going to Tullow as CFO. Today they announce that following the merger of Tullow and Capricorn the new CFO will be James Smith current CFO of Capricorn. I'm sure JS will be fine but less than 10 weeks after this announcement Tullow have effectively changed their original decision. This used to be an industry that plodded along professing due diligence. How times have changed.

The Tullow/Capricorn deal announced today doesn't affect the North Sea. So we are observers mainly and I'm not sure what we can take from it. ATM there has been little movement in the stocks. That may be because it is early days and London is effectively closed until 6 June.
I got this from the Tullow site "The Group has $2.4 billion notes outstanding, maturing in 2025 and 2026. The Corporate Business Plan does not project sufficient free cash flow generation to allow the Group to fully repay these notes when they fall due, and therefore it will need to access debt markets within the viability assessment period."
This was one of the drivers.
Tullow too has large tax credits going forward (c.$5.4bn) so we are ahead of them in percentage terms of the tax credits/debt ratio but that could quickly change if production grows I suppose but less pressing as Capricorn bring cash with it.
What I am taking from it is the Bond market response. They like it.

Tullow 2026 1.8bn jumped 5% today and it looks like the 2025 is up by 14.25% on one and the other hasn't updated.

2026 $549 97.347>102.41
2026 $1251 97.343> 103.557
2025 $273 77.43>77.43
2025 $527 79.25>93.51

Make of it what you will.

VOR - most of us don't have access to Bloomberg either or is a free access page?

Hi VOR - I get it and it is a factor but quite minimal in this case. I don't usually go into that kind of detail and your intervention got me back on the right road. I'm not surprised that individuals don't know certain things. If it doesn't affect them they can afford to ignore it. I also guess that some (let's call them MSCI traders) might have lost money here. They were doing pretty well (the constituents were known on 12 May I think) and might have bought some as a punt. Then there was that announcemnt on Thursday last - oops. We see it as a profit for some between 29 and 29.85. It could have also been a loss between 33 and 29.85. I'd rather leave that to the experts.
None of this of course is actually helping the price today. I think we're in the backwaters until some news turns up which I don't see before 6 June when the UK Govt returns.

I consider yesterday exactly that. We can't trade it, will be unaware of it and it has minimal impact because larger forces dominate (oil price, company debt etc..) Would we know that yeast had gone up making bread more expensive? Not if it only made .005p difference a loaf we wouldn't and would we know where yeast comes from and is the shortage temporary?
The amounts because they were so large got me excited and I forgot that I had contacted the company 2 years ago about same (not yeast, pay attention). Interestingly their [EnQuest] broker wasn't that bothered it seemed or the company. In the world of electronic UT's there are some traders who know how to make turns on settlement days. They are expert yeast traders.
Which brings me to today's conundrum. Brent is closing with WTI. Does it mean anything. Brent went down but WTI held steady etc....

*fact - I had to buy a new fridge. I thought the guy was winding me up when he said there was a shortage of Neon which is an essential with fridges. It was because most of Europe get their Neon from Ukraine. If you'd known this and how to trade Neon you could have cleaned up.

Spirit Energy?

What if - the final play is that once Tullow and Capricorn are bedded in they merge into another company?

More likely that they approached EnQuest and got no encouragement. That tax credit is so beguiling!

Pelle - Looks like he's right and so too VOR. Effective 31 May 2022. Thanks to both for input.

MSCI UNITED KINGDOM INDEX Additions DARKTRACE ENQUEST GENEL ENERGY KEYSTONE PETROLEUM IMPACT HEALTHCARE REIT MARLOWE MENZIES (JOHN) NEXT FIFTEEN COMMU OXFORD NANOPORE TECH PAN AFRICAN RESOURCES PRS REIT SUPERMARKET INCOME REIT THG WINCANTON

Deletions AB Dynamics DOT DIGITAL GROUP Eurasia Mining etc....

Some will say technical but interesting all the same. It means there are some new holders. It seems it is a kinda after the event transaction and we don't need to stress about the impact. It is in the price.
Now - back to the present. I had a quick glance at CNE and TLW. No mention of Johnathan Swinney. Pretty sure some people at EnQuest aware of the merger. We sure live in interesting times.

$3bn tax credits and 50k production with c.200mio 2P. There has to be people kicking our tyres.

Pelle - who on discord? Guesswork or did they give more info? In FX fixings the amountswere relatively immaterial but you'd get the odd massive day and banks wouldn't quote during the fix. My point is that they are actual trades and they do move the bar. An example here would be just that. The bar was set around 29 and after the Fix (UT) supply and demand set the new bar at 29.85.
This morning they'll digest this and who knows what direction? Does it follow oil or has attention been drawn (for once) to fundamentals. For sure market prices no longer represent objective valuations.

*I did attend the Rome fixes for Lira when I went to head Office. "Dodgy" doesn't even come close.

VOR - thanks for that. I will let some of the more dogged go down rabbbit holes here but I'm not sure it's small cap but it is coincidental with this. In 2020 I wrote to IR:
"It is tricky following major shareholders. I'm not sure of the rules but it seems pretty hit and miss and compliance sporadic. It's probably voluntary to an extent and there aren't really any penalties in normal circumstances. The reason I mention this is that on the 29 May (last working day of May) there was a much larger volume of trades than normal. One of 32,313,656 at 11.82 and 3 others totaling 10.36mio. The volume on LSE was 48.4 mio. I've a feeling this was window-dressing to an extent although I read that Premier had dropped out of the MSCI Index. Other companies had larger than normal trades with large UT at closing.
I wasn't too bothered as they didn't appear to affect the price and I expected some explanation in the following days. I haven't seen anything and wondered if you have any comment?"
I got 2 replies - 6 June and 9 June
"I hope you are well. I am not aware of any of the details behind the trades you mention below but have asked our advisors if they know of anything. Likewise, I have asked them about the HYB market performance. Will keep you posted."
" Unfortunately, our brokers were unable to identify who made the large trades on 29 May either."
Some may find this useful http://www.stockchallenge.co.uk/ftse.php (we are 374)

Any further explanation appreciated VOR but this is a small stock but highly involved at present. Did BP have these larger movements does anybody know?

Pretty sure we're not allowed to by covenants. They'd need an EGM.

But that was in the days of steam and electronic trading was in its infancy. I don't think it was a buyer somehow turning up to take advantage of a perceived dip or low price. The selling that preceded it cleared out a lot of bids over 3/4 days and to get something this size away would have required old fashioned broking. There are always houses that will make a price. Salomon and Goldmans never let me down, even if it was just one side. The magic word was always "size".
The broker will now know who is holding some of the funds but he won't want to spoil their market (they may already have placed or pocketed them) because these are repeat and important customers. So is the seller and he/she may have got a directive to unload. They could be pleased just to shift the amount. Somebody may have been overridden by a senior trader and had his position closed. A covenant might have been breached. The list is endless.

What I don't see it as is capitulation in any way by AB and team. He held his nerve when we were 9p and Brent traded below $20. He is in a strong position. I have faith in him. Off out now. Looking forward to tomorrow.