Member Info for romaron

Hi Auson - I did bring up windfall tax with IR in early January. This was their reply:
"Regarding windfall tax – yes, if (ever) enacted in a similar way to prior “raids” we would expect to be able to use our tax losses to shield us. Of course, they could implement a new tax, which would then require us to review its rules and applicability of our tax position etc."

I think the likes of Shell and BP are who they're after. The media won't go after us because their readership would say "who?". We aren't clickbait so remain in the background as do Harbour who also, I believe, have a tax shield. I'm not understanding our low rating but the world feels sick at the moment and we don't know the direction it will take. I remember the financial papers talking about the bonanza that will happen when they start rebuiding Syria. I think Ukraine will dwarf that. There will be plenty of demand returning once the Ukraine situation is resolved; or maybe not.
We are protected to an extent in both directions.

My thoughts on windfall tax is just get on with it. It won't be crippling and by then the media might be hunting a different story. The debate has highlighted just how important O&G is in the wider scheme of things.

*I think we can have some interesting debate once the OU is produced and we have fresh figures. I'm still a bit suspicious about the AGM delay but it seems I'm in a minority there. I think Harbour is a well run company but I'm confused by what EIG's role and actions will be.

Hi Banana - sorry to hear about your plumbing problems but your example of dogma is one of the better ones. You wrote " I do not think anybody ignores the huge benefits of oil "
Er, I think they do and they populate our media everyday and even stop some people getting to work.

Don't really understand what you're trying to say about India and China but all I know is that they're in love with coal. Meanwhile, here in the UK we'll try and bump our emissions up to 1% of the world's total.

Be Lucky

For those of a technical nature look away now. It's bad enough for us so gord knows how HBR shareholders feel? It doesn't make sense but I am much happier these days as I look at the carnage all around. Why am I so relaxed. Because oil prices cannot (imo) go much lower. We've been through what is happening in tech stocks and as for crypto/bitcoin just don't go there; tulip bulbs were a safer bet.
We had almost got to the stage where the next logical move was for us to pay somebody to take our oil. It was heading in the direction of a collapsing company or a cryprocurrency losing 99% of its value. Meanwhile people were carrying on using O&G for heating and transport as well as refinery products. It didn't make sense.
So with millions realising big losses on their portfolio holdings they must cast an eye towards a sector that is still relatively unloved but is (say that again) threatened with a windfall tax? In a sea of red someone is making big profits????

The effect of a windfall tax will be marginal and the public will hardly notice. They're talking about £2bn in total and that per household works out about £72 each. It will hardly impact us with our tax credits I guess. Probably better to let the politicians and noisy activists get some cheap points and have a one off hit.

Perhaps the narrative might change for the better. O&G companies might get some credit for surviving the onslaught from all sides. Some complain about the cost of having a military. Sentiment changes quickly if you're invaded. Things are definitely looking up and I wonder if some of the recent selling of O&G was to plug holes (losses) in other investments. There are very few more attractive alternatives to park your wealth/pension. Cash has little present value unless you want to hold it because you see the market much lower in the future. I'm betting we don't go back to the stone age and carry on using a mixture of fossil and renewables with the only difference being that the sector's importance is now an accepted fact and the climate changers have been preaching dogma. A bit like religion; people accepted being burnt at the stake in the hope of the resurrection and heaven. Something that cannot be proven must be true then? Billions around the world believe this.

I'm not against reducing emissions but prefer to see the real costs quoted that ignore the benefits that hydrocarbons have brought and continue to bring to societies around the world.

If they need it they will come.

Smashed it today. "Profits at Neptune Energy rose more than sixfold at the start of the year, adding to a string of strong results from UK oil and gas producers as they face political pressure to play their part in alleviatingthe country's spiralling cost of living crisis." Source FT.

*only about 10% of Neptune's production comes from UK waters.

Also heard on the radio that BJ seemed more amenable to a windfall tax on his return from Sweden.

I'm not invested in Harbour so have a relatively unbiased outlook but agree with onedb - it makes no sense. If there is a large seller wouldn't it be EIG? They've made a pretty decent return so they are taking advantage of the relative strength and depth of HBR now you're FTSE100. You're also likely to be pulled around more than the small caps on a day like today with the FTSE down 2%.
I suspect that negotiated trades like the large one you're talking about could well be the parties agreeing to make the strike price the closing UT of the day - a kinda LIBOR settlement. It does avoid arguing and is a price that most accept is accurate.
EIG have other fish to fry and it could even be moving from one country to another or using the funds for a new project with higher expected returns. I hear fundamentals are going to be the next big thing and become fashionable again.
I hold oil stocks and expect them all to do well.

Be Lucky

The Government does actually have to think ahead. I imagine they got shown some pretty awful projections if they obeyed the renewables lobby. The Ukraine war put it into much clearer focus. The Tories do have a backbone when their own survival is in question and I commend the sea change since COP26. I imagine they also did a fair amount of research into the appetite of the public (voters) for legislative reform making it illegal to obstruct key national infrastructure. I listened to the immediate outcry from the usual suspects who likened it to bringing in gulags for dissidents but I have yet to hear any support for XR and offshoots from people I know and talk to including under30's (and we also have more votes than them). There does seem to be an appetite for locking them up and cheaper energy. Seems to me that democracy is working the way it should do.

From an Eric Nuttall tweet today:
"Russian oil = bad
Non-Russian oil = good = ESG friendly

Canada = highest rated ESG barrel in the world
Canadian energy stocks = ESG greenlighted now???

Imagine if the $$$ that fled due to ESG mandates now returns? Think of the multiple rerating..."

I think he misses the point that the economics of ESG are coming home to roost as well. It's no good blaming oil for supply train and inflationary problems alone. Ammonia has gone up 6 fold and that is essential for growing crops. Wind and solar don't supply it. Forget being cold, you can wrap up and it's summer now anyway. Being hungry is a different story. There is no alternative but to increase production of fossil fuels. Renewables had their chance and failed. Maybe in 10-15 years but we live in the present.

2 quite lumpy trades recorded after close:
184,293 @ 09.02:31 1301
200,000 @09.04:34 1300
For some reason the PI's haven't shown the enthusiasm for this share that they do with the penny stocks. The funds seem to have its measure.
There was a good write up in The Times Tempus column on Tuesday with a BUY recommendation.

Afraid I'm gonna have to mention names this time. I can't think of a way around it and martial law hasn't been declared yet so here goes. There is increasing silliness in the wild swings and pundits quoting seemingly erudite words that I've been hearing for over 50 years. It is firstly risk on/off. Flight to value or growth. Overbought or oversold - usually in hindsight blah blah. After a while you ignore it but something did cause me to check some figures. I was listening to this rubbish on Bloomberg radio and it was the usual stuff about inflation and the damage it does to cash which if you believe a fraction of what these "experts" are pontificating on is the only/last resort. In short most haven't a f**ing clue but like to publicize their company's by sounding as if they do. It isn't their money usually.
It confirmed my opinion that it is best to just treat it as noise and follow the fundamentals which for EnQuest have never looked better. Out of the blue a commentator (can't remember name) said that although energy had done well in the recent upheavals it was ridiculous that Halliburton had a higher PE than Alphabet (Google). Halliburton was subject to the whims of Putin whilst Google was a reflection of "the world" whatever that means.
When I got home I checked it out. She was right about the PE. I googled macrotrends and Halliburton was 29.88 and Alphabet 20.94.
Now, before you jump on me and say "but Halliburton is a O&G services company" I think it a fair stretch to say its business is more connected and closer to us than google's. Petrofac's is 21.51 BTW. They said that the average for energy stocks was 9.00 (these are only numbers-pick your own) and I refuse to accept the ratios ascribed to EnQuest or Harbour. A relative newcomer REDACTED with lower production and more debt than us can have a PE of 5.8 with the difference being mainly long gas contracts and a dividend policy starting Q4. Maybe I'll find out more at their AGM later this month.

Has the world gone crazy or just me? It seems subjective and more an art but I've seen 2x for us and zero for HBR. I also heard the rubbish about green investing and the trillions diverted away from fossil fuels.

I think I'll ignore the background noise and just take the profits. My conscience can handle it.

Hi Auson 12.24 - and that may increase substantially. PetroChina can't make money out of Grangemouth and are looking to unload their stake in Petroineos, the oil trading and refining venture co-owned by Ineos. Through some alchemy Ineos have managed to lump a lot of costs onto the Chinese. Possibly Jim Ratcliffe will help them out and buy it back - who knows?
What I think it emphasises is that the world liked hydorcarbons too much and the activists have ratcheted up the cost to make them expensive and they are the feedstock for so much of the modern world. That appears to now be leaking into the renewable world and I understand the cost of wind turbines is now up 20%. I'm all for innovation but I find that wind turbines are noisy and have an irritating whine, example "Offshore wind power developers are calling on the government to raise the budget of an auction to support new projectsthis month. Otherwise it may not be feasible to invest in UK factories." source Times today.

Even kids know (and want) that the stabilisers have to be removed one day. It's called growing up. Later they learn that things have to be paid for by themselves.

"Growing ESG mandates that preclude some institutional investors from fossil fuel holdings, plus inherently unpredictable revenue streams, mean oil and gas producers often come with a bargain valuation. REDACTED shares are no different with a similarly cheap price tag of 5.8 times forecast earnings before tax and other charges.
Peel Hunt forecast that the energy group will switch into an adjusted pre-tax profit of $311mio this year compared to a loss of $91mio last year.
Net debt has ratcheted up, standing at just over $2bio, or 9.5 times earnings before tax and other charges at the end of last year. But management expects that to reduce to a multiple of 1.5 by 2024. That will also mean the introduction of a dividend, which analysts say will total 47 cents a share next year and 220 cents in 2024."

I redacted the name as I understand many of you prefer to bathe in ignorance by not having other companies mentioned here and I wouldn't want to spoil your day. For the free thinkers amongst you I suggest that we already smash these ratios and wouldn't mind their "cheap" price tag of 5.8 X earnings.

Source: Tempus - Times today. Advice BUY. Why? Risky, but offering a generous dividend yield.

The power of a dividend.

Assuming we got something like $70 a barrel last year it seems likely we'll get $30 and possibly $40 more for 2022. This is an extra (on 50k boepd) $547,500 - $730,000 OR as it basically goes straight to the bottom line anEPS of $29-$38.7 or in £sd
23.50p - 38.70p. Last year's figures said EPS was 21.70P and (I'm no accountant) but added together we could have a basic EPS of c. 45 - 60p. Theses are quite phenomenal figures when compared to today's price.

Now there will be speculation over what the NEW resolutions may be included and does it mean that JS does not have to attend now? Clumsy unless it was unavoidable. We don't need this sh*t.

Reply received at 12.46 today:

"Apologies for the delayed response to your original query, but we have been dealing with some logistical issues regarding the AGM. Accordingly, the date of the AGM is now confirmed as 17 June 2022, and the notice of meeting and resolutions will be issued in due course.

I do apologise for any inconvenience caused."

I'm afraid that is not good enough. I'm hoping that it is a smokescreen for a big deal increasing reserves and/or sorting out the covenants that restrict dividend. It has already possibly cost some of our Swedish friends travel expenses that may not be reclaimed. Very, very sloppy and not what I expect from this company.

Apologies. My last post. It should have gone under the subject of electrification.

I am not a qualified wind engineer so am I now expected to bow to your superior knowledge Stanley? I posted about this months ago and there was a limited debate about the distances involved from floating wind farms and its effect on their efficacy. You didn'y contribute which in itself is a miracle but thankyou for your continued repetition of its importance which makes our BBK potentially economic due to the scale. It has been discussed here a few times. Maybe you were off touting Hydrogen dust or fission in a jar somewhere?

Common sense is not a GIFT it is a PUNISHMENT. Because you have to regularly deal with people who don't have it!

Juan - it's a hedge against my energy bills, I'm just about winning. I think it more likely that there was an article in the Times that Germany will be sourcing gas from amongst other places, Israel. You'll notice also that Italy uses energy too.

Be lucky

RNS or yet another Steve Brown "pitch"?

Not only does Stanley clog up this board he is now into promoting other O&G companies. I thought that attracted the ire of the gazpacho police.

For any new readers. chilting is an oddball who frequently drops leaflets or gives us the benefit of his "wisdom". He is always on the look out for 'projects' and remains a non-investor in hydrocarbons though he might go for Steve Brown who is a crackpot inventor always looking for the next game changer and was also famously the founder of The Steam Oil Production Company OLtd which morphed into Orcadian Energy.
On offshore wind Steve Brown is playing catch up and is basically looking for funding. He has a promising field but the clincher as always is funding and emission concerns complicate things.

*EnQuest share the Bressay oil field with Equinor the world's leading floating offshore wind developer and OPERATOR.
Try and keep up chilting.

P 62 ARA: In Chairman's statement "This year I hopethat our shareholders will also have the opportunity to meet with the Directors at the Company’s Annual General Meeting (‘AGM’), due to be held on 19 May 2022 at Sofitel London St James" which was where the last physical AGM was.
There is also this from KPMG "Every company must hold an Annual General Meeting (“AGM”) in each calendar year. The first AGM must be held within 18 months of its incorporation and thereafter no more than 15 months can separate one AGM and the next. It is also important to note that every company must hold their AGM within 9 months of their Financial Year End."
I am not unduly alarmed as if there was anything untoward it would be reflected in the price and to date governance at EnQuest has always been correct. I think they are stretching it for reasons of flexibility. They won't want to get resolutions passed when there could be another a few days later. Better to squeeze it in with this year's or delay the AGM. There could of course be last minute negotiations and TBF there has been plenty going on in the world of energy. This may well have required special dispensation and we certainly do "live in unusual times" and an application with Government involvement, security threats and commercial sensitivity certainly gives mitigation but it looks like they are allowed to make it between the "hoped" for date and August (15 month rule). Markets don't like uncertainty so there is probably a good reason for this delay in informing shareholders. The AGM isn't usually attended by analysts which lowers it in importance imo and proxy voting usually means it is a rubber stamp event anyway. I'm also assuming the "hope" was more a reference to Covid.

So far we are pinning the notice on a date in the diary of the Financial calendar and the Chairman using "hope" when it comes to the AGM.
I doubt I'm the only person to have contacted IR so we should have an answer soon.