Member Info for romaron

Oh dear Stanley, you're getting overexcited again. No offense intended but I'm filtering you for a while until you calm down. The obstacles and time to get any of these ideas from concept to reality are enormous with a very high failure rate. They do though work well for Governments requiring cheap smoke screens. The ESG fraternity just love these "tomorrow" projects.

One thing for sure, they are definitely money pits.

Sounds awfully like ground source heat pumps, even the temperature. Time for you to update your placards Stanley. Been around as long as that big shiny thing in the sky.

I think most here are missing the point regarding the AGM. They are important as are getting the accounts in on time and signed off. EnQuest has been a stickler for governance since I have been invested and would not have changed the date on a whim or holiday clash etc...
Pelle is closest at 13:42 imo. Throw in the present market turmoil and our uniqueness it wouldn't surprise any of us if another deal wasn't being worked on. The AGM, for whatever reason, was inconveniently timed and it was thought best to rearrange. There is less negativity regarding the sector and we are now going through yet another transition. From being the devil's spawn to a very investible company.
My initial frustration was because it creates speculation and in the oil business that is generally viewd as bad. However, that was in the past and with so little analyst coverage of the sector I am not surprised that it attracted little attention and had little impact. I expect the reason to be good news. I also suspect that JS has left because there was no room for him in the new set-up. All guesswork on my part but AB is not your average CEO.

*You can go bankrupt Two ways "Gradually, then suddenly". That was the view on this sector for many years. The yin and yan means that where there is failure there is also success. We were threatened with insolvency imo in the recent past. So you can make a profit "slowly or suddenly". I think we're heading for a big profit. We haven't seen anything yet. Other sectors are struggling and their PE's and EPS's are showing what happens when the tide goes out.
I expect funds to come under even more pressure to adjust their ESG stance. Governments are already pushing for more production and as Jim Buckee says "Countries trump companies".

Higher.

Intriguing Therapist. Much new technology fails at economic or scaleable levels but an interesting concept. TBF you don't need much to reduce emissions and even if it is only tokenism the politicians are looking for any excuses to develop new fields and extend older ones. This could fit the bill nicely. Also another reminder of our Petrofac cross overs - none more than our CEO. Interesting find.

Surprised chilting, our resident troll and my stalker didn't comment. He goes for anything new or crackpot.

No, not the wrestling monkey (that's WWE) but the World Economic Forum a.k.a. "Davos". Starts tomorrow. I wonder if AB will attend; he has other years? Maybe this has something to do with "logistical" issues regarding the delayed AGM?

I read that Boris Johnson isn't going and has banned most other ministers from attending though it look like Alok Sharma (COP26) will be going.

Blimey M that was long - couple of points I particularly liked from the article:
"even energy hostile politicians are now calling for more upstream investment"
"We are now beginning to understand what a world looks like as it runs out of spare oil pumping capacity"
"Once investors and institutions realize the energy market has fundamentally changed and the decade of cheap, abundant energy is over, the amount of capital that rushes into this sector could be huge. The global energy crisis has just started, and it will take many years to fix."

There is also this which is thankfully shorter: https://www.reuters.com/article/global-diesel-kemp-idINL2N2XB15Q

Kemp makes the point that a recession isn't only about demand falling. There has to be some form of cutback to allow oil production to catch up. Part of the looming decrease in economic activity is caused by there not being available energy to support it. That takes time. We are very well placed but Gord knows where we'll find the labour and materials to meet the demand? Meanwhile the direction of O&G is certainly not down.
"In recent decades, distillate shortages have always been resolved by either a mid-cycle slowdown or an end-of-cycle recession and there is no reason to think this instance will be different.
Rising interest rates around the world, tightening credit conditions and the impact of inflation on household and business budgets are all likely triggers for a slowdown."

The EPS and P/E ratios of the whole O&G industry indicate we are still bouncing along at bottom valuations. Make your own call on that. I have.

Just going through it M. This hit home:

" Commodity prices remain radically undervalued relative to financial assets and we have great confidence that we will swing from commodities being radically undervalued to commodities being radically overvalued relative to financial assets at some point in this decade. What will that radically overvalued level be? If the stock market stays at present levels, commodity prices would have to surge 600% to become overvalued relative to the stock market. If the stock market falls 50%, commodity prices would still have to rise 250% for our chart to enter “radially overvalued” territory.

The biggest risk for investors is selling too soon."

What they're saying is that the FTSE could fall to 3700 and commodities would still represent good value. And here in the UK we still want to persecute the O&G industry with punitive taxation created by a false narrative for the public at large by climate extremists. The world runs on energy and its by-products - plastic, fertilizer and its importance in steel and cement without mentioning transport. The years of capital spending impairment means that the industry cannot produce enough O&G whether we're in recession, stagnation or even a depression. The essential nature of energy (at an affordable level) means that it will always be required before luxury items. Governments around the world don't want their citizens to know how badly mismanaged their economies have been. The world went "woke" and is now being presented with the bill.

We built it and they're still coming.

Just put in an order to sell my first tranche at 59.90. I don't want Juan spoiling my market.

Sounds to me like you're nursing a sick portfolio Stanley. I think cash or gilts are the investments for you. Warren Buffet seems to disagree with you. Now, who should I go with?

Yup, EnQuest. They built it and are still coming. Get in whilst entry is cheap.

...and of course there is the superior EROIE of hydrocarbons. You keep the cheapest and cull the invasive luxury energy.
Sometimes referred to as renewables, unicorn dust or fusion in a jar. Hydrocarbons beat them hands down in price and EROIE.

I would be worried though if I was invested up to my eyeballs in "renewables".

Hi M - I don't know about you but I spend more on energy than I do on tech. And then there's food which I still need and that is heavily reliant on energy. They have a much more robust approach towards "wokeness" in the US and even the mighty BlackRock has to listen.
Tech is 28% of the S&P 500 whilst energy is a tiny sector of <4%.

This from a Guardian article 9 March 2022:

“In addition, BlackRock has long stated that energy firms play an important role in the global economy and in a successful transition.
We expect to remain long-term investors in carbon-intensive sectors. We do not pursue broad divestment from sectors and industries as a policy."
In November, the treasurers of 15 US states – responsible for more than $600bn in funds – wrote an open letter to the banking industry in which they threatened to withdraw from financial institutions that boycott fossil fuel companies.
A host of other banks have also issued reassurances to Texas, after it implemented a law requiring financial institutions to certify that they do not boycott energy companies in order to remain eligible to do business with the state.
Barclays, Citigroup, UBS and Wells Fargo were among 39 institutions that made the pledge.

Climate change has become a mantra. They use the same responses as they do in religion. Religion is accepted by many and fiercely protected and proseltized. To date no God has ever been proven and there are thousands [of Gods] followed throughout the world.

*some big money has been made by those who sold tech and bought energy. I have no tech now and the last I sold to buy energy earlier this year means I made 90% on that particular trade. I don't expect to make that kind of money regularly but it does highlight what the more active could be making.

I agree mrc but sometimes you have to play a tactical game. I think we're peripheral anyway. I'd imagine the company is relatively neutral about the situation. Our tax credits aren't valued by the market anyway. Privatisation is a siren song.

From the article “If investors don’t return to the space, companies will slowly but surely privatize the entire capital stock.”
I make no apologies for bringing it back to EnQuest. Bertrand Russell said "It seems that sin is geographical" and that certainly applies to climate change. In the US, China and Russia among leading nations the activists are in a minority and don't let us even go to Africa or other regions of poverty. It follows that "capital appreciation is geographical" too. I wish I'd bought the right US or Canadian energy stocks and I know a few of you were fans of them when they were cheap, cheap but I am stuck with EnQuest.
However, because of fungibility it must all eventually even out. Ignoring local taxes a profit is as valuable in New York as it is in London or Toronto. You will though have to wait longer in London. Either way, whether private or public, you cannot avoid the inevitable. Cash is king and it is rolling in.

Stay Lucky

Good posts. They took me here: https://threadreaderapp.com/thread/1526461582850543621.html?fbclid=IwAR1PuZXZ8I_X9ZFtYCwkP4L10DKbACdNGm3Y1JnQXCVMYLTK5j47iVpo638
It's a market. There will always be gluts and shortages. Gas is an international commodity that will remain in demand for the foreseeable. There are always hiccups in energy. Negative WTI for one day in April 2020 is an example.

*Pelle - the tax is a political football at present. I'd rather it was paid and move on. The impact would be marginal on UK oil companies imo. It does reinforce though just how important investment in O&G is.

Not here but in the US: https://financialpost.com/commodities/energy/oil-gas/u-s-shale-companies-enjoy-tsunami-of-cash-on-high-oil-prices?utm_medium=Social&utm_source=Twitter#Echobox=1652803953
Hold on! Isn't oil fungible?
That means if there is no appetite by UK investors then there is plenty of money stateside (or European) to take up the slack.
You heard it here first. Fungible sayings "The days are long but the years go fast" when raising kids or "Nothing happens for decades then decades happen in days" - Lenin.
I think the same will happen for LTH's of EnQuest. Our patience will soon be rewarded.

*Juan - WTF is happening to the WTI/Brent spread? I imagine it has Biden's attention.

.... I missed 2 tweets:

Energy Transition is feasible IF we're willing to accept lower living standards, zero or negative economic growth, loss of billions in population, major civil unrest & massive immigration dislocations.

“There are no solutions only trade offs” -Thomas Sowell

...and these are some of my thoughts.
We are still a pariah sector to many. Capital flows into the sector are little to none. There is no money in this space (OK a little recovery but using S&P was down to 1.8% and now 3.90%-was once 30%). That can easily rerate as these are early days ahead of potential energy and food shortages. What we have is the result of malinvestment fed by FREE money into renewables. Cheap energy and cheap money aided by the religious dogmatism surrounding renewables.
We're under attack and a bit like the Ukranians resorting to petrol bombs because they're anti-missile. Starving people concentrate on the present, not 15 years ahead.
I hold another stock, Energean, which doesn't suffer in the same way that Harbour and EnQuest do. I haven't got the answers but more may be revealed at their AGM next week. My suspicion is that its investors are not UK based and there isn't the same hostility towards hydrocarbons. Maybe energy security gets a truer rating in the Eastern Mediterranean?

Renewables have a poor EROEI and in a time of need you aren't going to quibble about not following the creed of the evangelists. Indeed, renewables will struggle without cheap energy and nobody has explainde how they're going to rebuild Kkarkiv and Aleppo without cement.

I bought yesterday and today. 1000 companies (including McDonald's) have left Russia. Hydrocarbons are in short supply whatever way you look at it. Once we get a commitment to dividend we ar up, up and away.

*still smarting at the cancelled AGM. It wasn't our logistics causing the problem as a quorum doesn't require compulsory attendance. Another company is involved. As usual with EnQuest, Omertà applies.

Growth stocks haven’t fallen because they are growth stocks. They have fallen because they were beyond ridiculous expensive. That’s it.

Sterling is down nearly 10% year to date vs US$.

Permian rig count basically flat for the past 6 weeks despite WTI averaging $103/bbl over that time. Discipline is the new normal! (labour and steel shortages help too)

And domestic output is dropping fast -- down by 10% in the first quarter from a year earlier after companies cut investment or spent their cash elsewhere.

The global transition that we’ve only barely, unevenly, begun is not the work of years but decades, if not centuries.
Imagine a sector that is so awash in cash that it could become debt free in less than a year, and then pay a dividend yield 21x higher than the S&P500. Would you call that a "generational opportunity"???

LONDON, May 16 (Reuters) - Portfolio investors have left their petroleum positions essentially unchanged for the last nine weeks as loss of production from Russia is matched by loss of consumption from China and Europe.

Hi Therapist - Gordon's has atmosphere but so too does a dungeon. The pub gets a thumbs up from me and may well have been the one we wandered into after the last AGM according to the map. E121 might confirm and it was fine.
A further suggestion for a meal where you stand a good chance of a walk-in is Brasserie Zedel https://www.brasseriezedel.com/
I like it because the food is OK and you don't have to make an appointment for a laugh, plus it is reasonable. I have sent people there and they are never dissappointed. Bit of a find imo.
It is likely that we'll be richer by then and people might want to splash out. There is Rules and Simpson's for traditionalists - you might even get reindeer in Rules, they like a bit of game.
Also an old favourite of mine Quaglino's isn't too far https://www.quaglinos-restaurant.co.uk/ which is pretty reasonable too.
If any of the Swede's are staying longer I recommend Lupins off Borough Market - the food is sublime imo. Round the corner to it is the Boot & Flogger, very traditional and I think this is the original Davy's and is a step back in time. Nice glass of Madeira, sir; or maybe a white port?

*Almost opposite the Boot & Flogger is the Crossbones Pauper's Graveyard. It began as a prostitutes graveyard but in truth all those there were driven by poverty. Some people don't like to hear this but it was basically fossil fuels that improved the lives of millions of Londoners by the massive increase in EROEI that lifted them from abject poverty.

BP and Shell have a lot of UK ownership through funds and pensions. It is a bit circular because a proportion will lose some value in shares that will turn up as a reduction in their energy bill. The rest can have a warm feeling of helping those worse off. I ascribe some blame for high energy prices to renewable activists who stopped investment in finding and developing new reserves.
If you own oil shares it is a Peter, Paul situation in someways. Looking forward to my rebate if it happens.