Member Info for romaron

Just messing with figures. In Jan 2016 the RB YTM was around 29% but in March 2020 it was around 56%.

And people quibble about the odd percent? History nsuggests that the oil sector can be quite volatile and it would be very easy to argue that 9% looks extremely cheap. It looks cheap to me but I bow to the experts that haunt these message boards.

BTW - I haven't even read the RNS closely. I leave that to the number crunchers who know the price of everything but the value of F*all.

Actually using the maturity date of Oct 23 I should have used April 2018 when the price was c.93 or YTM of C. 8.63. Inflation in 2017 and 2018 was between 2.13 and 2.48%. My point is that there are lots of factors to take into account and in the bigger picture inflation will help commodities. You've probably guessed I'm not an economist but i've lived through some crazy interest rates. In December 1976 I had a mortgage briefly at 18% [base + 4%] when I left a bank to go broking.

mrc - there is an active bond market which is much larger than the stock market. We are in the middle of a European war with inflation going higher. What do people expect? Jim Buckee used 8% back in 2013 as a yardstick. This is what - 5.50 year money?
The rate for the RB when it was 5.50 year money back in 2017 was priced at around 80 with a YTM of C. 12%. And that was before the shale wars, European war, Covid and Insulate Britain glueing their faces to the roads.

I'm very pleased with the news.

I don't see any problem. The RB is quite a small amount and as for the HYN the clue is in the name. They prefer that to "junk bonds". I still have 6 figures in the RB so am not complaining.
We're a small cap in a (supposedly) declining industry with a Moody's rating of B3 which is not investment grade and is still highly speculative. I'd say that's about right.

Only Learner Trader 10 compares us to Shell (Aa2 High Grade). He really hasn't a clue.

Nice sums at the end L7. I think we're both on the same page. Trying to get guidance or accuracy is a constant endeavour but the real world is sadly imperfect. You could maybe be involved at the sharp end and completely misread oil but make a fortunes because you had booked tanker space (or shorted it) and cleaned up. Because of Geopolitics we are at the mercy of tyrants and autocrats whilst our 'democratic' leaders try to craft winning elections and follow the populist narrative (ESG looking a little fragile I must say).
I think the front end (and our debt) is pretty much baked in as we've won the existential battle by a margin (it was touch and go at times). Naturally the market is concerned more with what will happen from say H1 2023 but that applies to all oil companies. I say this with some confidence as we fixed the HYN today at 101.52. That's a whopping 3/4 % higher than yesterday. A current YTM of a tad under 6%!

EnQuest is in a strong position and it would be out of character if AB and team didn't have a deal bubbling away behind the scenes to add reserves. If they roll over the bonds what will they do with the money? Much of what will be required for current plans will be organic and out of FCF if the oil price holds. I'm hoping we stay flat until next week as I need to do some ISA planning.

Be Lucky

I think JS will be a loss but winning teams respond to change.

"Dated Brent is a basket of light, sweet crudes loading in the North Sea. The range of grades within the basket has required the addition of adjustment mechanisms to ensure a consistent price."
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww.spglobal.com%2Fcommodity-insights%2FPlattsContent%2F_assets%2F_files%2Fen%2Four-methodology%2Fplatts-ice-brent-july-2021.pdf&clen=258577&chunk=true
In my earlier post I mentioned Urals which isn't in the Brent basket I imagine. I get the impression that Dated Brent is more a benchmark; even a kinda LIBOR but only gives part of a picture. The official picture could be a lot different to the actual and obviously open to manipulation e.g. SPR releases. Unless you are at the sharp end and understand the complications and jargon then we really are in the mushroom club. It isn't perfect but still a useful guide but that is all. It isn't the Holy Grail imo.

Dated Brent.
This is where I'm at. I use this page to get an idea of the "spot" price of oil in the top RHS under Brent:
https://tradingeconomics.com/commodity/crude-oil
I'm thinking that this is actually/presently the May contract where I use this page:
https://www.cmegroup.com/markets/energy/crude-oil/brent-crude-oil-last-day.quotes.html

I believe that Dated Brent is actually a composite and is made up of so many moving parts that you cannot actually get a price and instead will get something like Urals or a speculative tanker of Brent without a buyer attracting kinda auction bids etc.... In fact it may not really exist and you get specialists dealing in certain oils or be the ones with the best contacts or most cash or have positioned themselves well/poorly etc....

My point is that if we have subterfuge with (especially India/China) oil from Iran and now probably Russia with sanction avoidance being a well honed trade it is almost impossible to get the true picture. For me this means that I have to take a more macro view (or gut feel) because I'll never have this information but it is a situation I'm quite happy with because FX was/is like this and the answer is that nobody fully knows for any length of time the true picture. What I am confident in is that if I struggle with this then most of our Government will know even less.

Am I warm?

Last night on Newsnight they said that talks/announcements regarding NS energy scheduled for this week were not happening. There is clearly conflict between No.10 and No.11. The commentator also said that this means that with local elections and Easter breaks Govt goes into purdah so energy is put on the back-burner or is more colloquially "kicked into the long grass".
I think energy is far too important to be treated like this but I also concede that the situation is so fluid that reactions to a fast changing disaster needs careful consideration. I'm quite relaxed about the situation as only a recession could get lower prices. Renewables aren't the answer for at least another decade. Waiting for action on this front will now just add to the uncertainty and volatility.

No we're not Juan. I think we can ignore the daily movement of oil to an extent. Everything I read points to confusion and I got into a difference of opinion with onedb over contango and backwardisation. He was right but I stick with my theory that we are all outside observers with few knowing the true positions (except Governments, Shell and Vitol for example) and none knowing the price 3 - 15 months ahead but having to trade it all the same.
You probably have a view on the hotel trade a year forward because it is a business you know well. You might not be as up to date as the latest graduate from "hotel school" but your experience will often be overlooked.
I traded through some fierce currency crisis and it was always about not being short of cover in a currency that was being shorted. It was no good doing it once the crisis had landed but you had to anticipate and get the cover when it was reasonably cheap. I've traded overnight Euro Sterling at over 3,000 per cent and Lira was often in the 100's per cent wise in short dates. I read that Russian oil sells at a large discount and some trading houses have bought it and that means contango is already with us. It isn't in the official figures but it bloody well exists. I posted some time ago that oil had a spread (currently) somewhere between $85-125. At $85 it is a bastardised form of contango but somebody will likely make either a huge profit or go bust. The fact that trading houses are looking at these risks says everything to me.

Don't believe the price in front of you.

Well I'd say that in a rising interest rate environment and judging by the HYN and RB going in the opposite direction that the short term view for 16.50 months is that we're sitting pretty {both bonds fixed above par last Friday]. I forecast we'd be debt free by then with oil averaging $100 so the question is what is the picture at the end of H1 2023?

Nobody knows and with current uncertainty and risk off the horizon is ridiculously short. What I do know is that renewables won't reduce the shortage by Octobrer 2023 so there will be life left in the NS for many years yet. and with the investor's fear of being left with stranded assets there isn't a stampede into oil stocks.

I like these comments by Artb Berman on twitter and they sum up my feelings too.
"Hydrogen doesn't get out the "other" category in any credible projection to 2050.
Please look at data instead of relying on your nursery fantasies."

"Electric vehicles...may be the future of transportation, except the lithium in their batteries is almost 500% more expensive than a year ago."

"Renewable energy is irrelevant for the present shortage.
It has nothing to offer.
This is a time for honesty not for infantile fantasies about what may be."

It seems the bet is that by 2025 it is all over for the North Sea. I don't see that at all.

For once we don't have to make the running. We've built it and are open for business. The dynamics have changed and whilst funding will remain difficult one sector with cash is oil & gas. This obviously applies to the Majors too and there are plenty of reasons why the NS doesn't tick their boxes for investment. There aren't that many companies occupying this important role of decomm and squeezing valuable movable oil in smaller quantities. It takes expertise and this doesn't happen overnight. EnQuest was set up to do just this 12 years ago. If finance is required then vendor loans play an important role but this time we are in a much stronger position and the shareholders aren't needed to contribute.
If we need extra cash then the debt market will look at us a lot more favourably.
I've been an AB watcher for many years and he has another deal in the pipeline imo. He will play hardball. The sellers need him more than he needs them. The BBK hub has Equinor on side. We've enough to keep us busy for the foreseeable future. The pressure to make a deal isn't on us.

Its a big'un monkey. I have 2 boilers so the original installer obviously got a deal. They're only 28 years old. Glad to hear from you - I was a bit worried that with your skills you'd joined a gorilla outfit and gone East.

To save a post. Rishi Sunak didn't mention Net Zero once in his budget speech. The torch bearer for NZ is/was Boris Johnson. The good news is that he (BJ) jumps on any bandwagon and doesn't care about honouring promises. Even Nigel Farage is supporting hydrocarbons now and although I find him despicable he does have a nose for what's popular and is a key indicator imo. AB gets it. He knows the majors are departing and won't be coming back. Excluding companies and sectors becomes habit forming and there are funds who really only want to invest in companies of scale. Gord knows what they think of Harbour?
We're never gonna be popular but we are an essential part of the energy mix and the transition. Maybe we'll never have the PE we deserve but money talks.

Be Lucky.

mrc - I'll be doing the same on Monday. Retracing is a part of holding a stock but the macro on this is undeniable imo. Governments are making alternative arrangements for oil supply and tampering with legislation. I believe they'll get public support because what is happening in Ukraine terrifies Europe. Oil and gas is still unpopular but with the stark choice of accept it or go without and suffer cold, hunger and economic collapse there is really only one option.
Listening to the news even the usually gung-ho Americans aren't totally into the resurgence of oil and don't want to be left with stranded assets. AB didn't go for applause from the cheap seats but stressed that future development will be within strict financial parameters which suits an industry in decline/transition.
We all know that two years of high oil prices (maybe one) will make us debt free and AB isn't like the Shell or BP CEO's who boast about "money machines". We only need 4 years and we'll have doubled our investment at least.
I keep doing what you have done. I sell a bit of my CI spread to convince myself I can sell and then realise that the extra cash sits there doing nothing. I hope to top up my ISA in 10 days time too.
I used my spread bet for my replacement boiler which 'er indoors won't allow until "it gets warmer". I could buy 3 new boilers now but will settle for one.
Harbour seems to have reached FTSE 100 status and we'll see what kind of filip that gives to the stock. We could be FTSE 250 by year end.

*totally O/T but I worked with a guy who was a heavy gambler. In 1986 he bet heavily on Dallas in the Camebridgeshire. He had backed it ante-post and cleaned up. It was enough for him to put a deposit on a house in Battersea. His hero was the trainer Luca Cumani who is a classy, well dressed individual who he described as "a cool dude". A little bit exotic and definitely an outsider in the traditional horse-racing industry. Remind you of anyone?

Good post onedb. Most of us here rely on FREE access for data and unfortunately what costs F* all is often worth F*all. We may not be professional investors but we do have a lot of experience or different talents that come in useful from time to time. I include Londoner 7, mrc, E121 whilst Tarmak and Therapist have serious ability to penetrate figures. Juan keeps our spirits up and he's no dope either. I've probably missed a few.
I'm not interested in the day-trading view so probably 80% of posts are irrelevant to me. I like the HYN fixing only because the unsentimental bond holders have a lot more access to market data and of course the company itself and is a good indicator (100.554 today, up 3/8%). It doesn't do day-trading and unlike the pull back on the share today is immune to algo plays.
I think AB's reticence means he is unlikely to be trapped by over-promising. He does though say the figures are there and it is quite a simple exercise to join the dots.
I think we will start to have some new shareholders soon from funds but unfortunately we are still a long way from the FTSE250 Index. The figures will do the talking for us.

*I haven't forgotten you being cut out on a small bet at c. 18p with EnQuest. I had the same position but kept adding cash. Not recommended but that's the benefit of being a mini prop trader.

*The 60p party will probably coincide with us becoming a FTSE 250 company.

Be lucky

Truly bizarre. Harbour and Tullow down too. Mind you I have learned that turnover rises when companies release RNS's and updates. Volume important too. Stanley, we've missed your original thought and analysis. It is easy to forget the bleedin' obvious.

More pathetic commentary from Stanley: "Yesterday's gain was the easy bit - good sentiment and numbers."

No, that was the hard bit.

I don't know anyone that buys the IC. Alex Hamer is hardly in the same league as Jeff Currie. I'm waiting to see what the Sun and Mirror think of the figures.

You have to understand that the news industry has suffered cutbacks too. This is clearly a sub-editor who has been tasked with commenting on poorly followed stocks. The poor lad is funny but uses this is to make up for his lack of understanding.
What does this mean "Despite the surging oil prices, consensus forecasts see 2022 cash profits and cash flow at below the 2019 levels." that is blatantly wrong and poorly researched. He missed out a few events that impacted. Namely a pandemic and the explosion of shale production resulting in OPEC turning on the taps. His whole argument rests on the Ukraine war ending today and back to normal by the end of March. However, this is not the most egregious abuse of his role as a tipster. I am reporting this to IPSO. Referring to the unexpected popularity of oil stocks and EnQuest he wrote: "is similar to a disco-lover who never ditched flares and is pleasantly surprised they are now back in fashion."

Flares have NEVER been out of fashion!!!!!!!

My first reaction this morning was that the release of the good news on performance meant it could be used as a good time to bury bad news. I don't like surprises like a long term CFO leaving.
Watching the webcast has calmed me down somewhat. There was an absence of tension imo and even the analysts were relaxed and gave the company a pretty easy ride.
I think this represents a sea change in the NS and with Government backing the industry has been given at least another decade.
It could even be described as a commendation for EnQuest in that its executives are so prized. Salman Malik must be pretty good to take over from JS but he is far less well known to us.
I believe the share price is only just beginning its rerating. Due to lack of investment in the sector I'm hopeful that we have 2 years of $100 oil ahead of us. 2010-2014 averaged higher than $100. the world can live with that price. It will probably have to.
I've got FCF at 80p for the next 2 years so today's price is a travesty.

I actually sold 200 units on City Index today (equiv. 20,000 shares). It was difficult (like4 selling a child) but I had to prove to myself that I could do it. This is only the beginning. Not only will the 60p party be this year I think we should start thinking of a Rodney party to follow. Most LTHs here have a lot more shares than they first intended. Blimey, we're even cleverer than the hedge funds.

We built it. They came.

Enquest 7% 15/10/2023

100,218 i %

24/03/2022 11:27:49

There is finally support for the O&G industry in the NS. We were heading in that direction anyway and was boosted (sadly) by the war in Ukraine.
Yesterday, saddo that I am, I listened to this: https://vimeo.com/691414593
Electrification is currently not economic in the UK. Norway has had better success(40% offshore in a couple of years) but they benefit from cheaper electricity anyway. The main challenge here is "regulatory" and is all about 'grid access' which is unlikely before 2030.
Advantages to wind is that you can build half a wind farm. Disadvantages are that the life of rigs/FPSO's is (say) 15 years whilst the wind farm may be 40 years. This creates financial risks. I did think though that it could work on BBK as we work through the hub and could keep it going for 40 years. I also wondered if EP could become an electric sub-station. Being in bed with the biggest oil company in Norway cannot be a bad thing either (Norwegians have been invaded before. They know the value of O&G and there was even a fictional TV programme of their industry being taken over btyRussia). Not worth worrying too much as all this is years ahead but it will create political excuses and pretend we're doing something positive whilst making energy more expensive. We've learned the "talking b*ll*cks" narrative from the ESG brigade with hydrogen and heat pumps. It worked for them so why not use it ourselves (we might even get given public grants).

2022 EPS is by my calculation higher than today's share price. Out of interest would one of the cleverer people here hazard a guess at EPS for 2022 and 2023?