Member Info for romaron

I think a legal challenge by the likes of HBR and ENQ might have a chance of success if tried. Both are companies that lost a lot of money in oil and not always by poor management but geopolitical games by world powers and a pandemic. That would be seen as a huge negative by business and a Government that is supposed to be "business friendly" plus it would be portrayed as capitulation to noisy activists. Then questions would be asked about just who does run the country?

Hi Pelle - I hadn't seen that before, thanks. A few of observations. They talk of mid-life assets rather than end-of-life which I like and I wonder how accurate the other comments were.
"We assume a 12% cost of capital for the business, up from 10% historically."
and "Future investment plans are based on expanding/enhancing core assets and acquiring similar ones, not new ventures."

I read this after my posts but the last comment feeds directly into plans for BBK. Continuing as we do will prove an excellent investment but development of BBK would be explosive. The historical cost of capital may well include Sculptor and I did a fag packet calculation and never got above 8.5%.
A year ago when the HYN was c.55 cents the YTM was around 31 % but the company never paid above 7% (I know there were a few fees with PIK changes). I'd say 12% is an overprotective allowance and expect us to beat that with a margin both for rolling over remaining bond debt and also raising finance for BBK if we're allowed to develop. I doubt we'll do a Retail Bond again which is a shame because it gave me access to another play which has proved highly rewarding.

Be Lucky

Some years ago I asked the helicopter pilot a question about oil production. He told me all the stats were there on the OGA site. I went on it and posted the results here with the source. The figures were hidden in plain sight. Matrix Observer (MO) an excellent and knowledgeable poster saw their importance immediately and did a far better job with them than I could. The older OGA page was easier for me to navigate but I can't handle this modern one and rely on Therapist who has taken over from MO. I mention this because I'd like to know the position of Bressay v Cambo. If they put a moratorium on new fields will it start with exploration only or will we be entitled to kind "grandfather rights" on existing licenses (+Bentley later) to continue? Cambo is planned to be "electrification ready" but is in much deeper waters to BBK.
This feeds into other adverse developments. We have the activists getting 3 directors elected to Exxon, the Shell decision in the Dutch court and what comes out of COP26. I can argue why these developments aren't an existential threat to EnQuest but they exist and are dissuading many new investors and increasing selling pressure on existing holders of stock. I even disagree with Eric Nutthall on Canadian oil sands and suspect they are doomed. Where is Heavy Oil in the picture?
Oil majors are apex in our industry and are being forced to move into renewables much faster than they wish but they will fight back. We need them but they also need us. An old basin like the NS is not their preferred base and will not just close them as even this Government is not that stupid or afraid of schoolchildren and retired vicars. Then there is security of supply and a need for oil that isn't gonna evaporate overnight.
We'll get our 60p party but it might be a 40p share price and 20p dividend. The returns will be heavily dependent on dividend and buybacks with hopefully the reserves lasting 25 years. We already have what? 10 years at 60,000 bpd with what looks like a higher oil price. I don't know what is so scary about a transition from a cheap to expensive form of energy by countries under pressure from their nationals to keep the standard of living high. It won't be easy doing both but hey - I read that the money tree thrives on Unicorn tears.

I don't know if you can get this: https://f.hubspotusercontent40.net/hubfs/4043042/Content%20Offers/2021.Q2%20Commentary/2021.Q2%20Goehring%20%26%20Rozencwajg%20Market%20Commentary.pdf
but the 2021 Oil Reserve to Production Ratioon P.7 has
Exxon 10.5
RDS 7.0
Total 9.5
Chevron 9.0 These are historically lower and may even indicate a further lowering but that will require nuclear and hydrogen technological advances. AB and the board see these numbers too and they will be viewed as a mixture of threat and opportunity. The time to worry is if they [EnQuest] start whingeing on this message board.

Build it and they will come but the planning department keep objecting!

My first oil purchase was Xcite in 2014. It was a steep learning curve and I attended an EnQuest AGM in 2015 to get some information from them about Xcite. It may sound convoluted but I was sitting next to a guy from Aberdeen Asset management checking up on Ophir doing the same. You don't always get a straight answer from executives so sometimes need to be "creative". The following year we had two activists turn up and I had a drink with Andrew who was deeply into Sound Energy and tried to get me interested. Their price was doing well and they had beanos to Morrocco and such like with the CEO getting ****ed with them. I felt quite jealous. I was also encouraged to invest in Hurricane by shed an engineer from Dundee. I'd actually visited a project he ran south of the London Gateway port and saw a Marsh Harrier there but not the newts that cost £500mio in extra costs. They were building a replica of the marsh environment that was being concreted over on the other side. Jools Holland lived close to the site (I did say it was O/T). I didn't invest in either but increased my EnQuest stake whilst reducing and eventually exiting Xcite. I lost a bundle on Xcite but I would probably have gone down with the ship like many LTHs did. I ignored PMO because a pal of mine was a regular at Santini restaurant and told me of the champagne fuelled Friday afternoons that they enjoyed whilst the MC was falling.

My point is that EnQuest stuck out because it was BORING but incredibly well run and the executives have always answered my questions professionally and in some depth. The company isn't covered by Malcy or Zak Mir which is another plus for me. If you wanted excitement there were and are other companies with much more voluble CEO's quite happy to share BS with all and sundry. That appears to be what a small vocal group of posters want here. I want success and a team that can bring it. If I want entertainment I can go to the Circus.

*The CEO of Xcite was not an oil man and lied by omission to me. I found him out but that's another story. I know both the guys at Whalsay Energy who were ex Xcite. One had no oil experience and the other had a Master Mariners License. It wasn't enough.

*I know little about First OIl who went bust in 2016 but nobody wanted them so we got 10.5% and Cairn 4.5% which was a precursor to us getting the Och-Ziff loan when Delek pulled out of a Kraken farm out later that year. We've sailed some tricky waters and don't get me started on declines. Like any company we've made some missteps but we're still here and not in a zombie state.

The O/T is to warn people that it may not interest many of you and some certainly not at all so stop reading now. Some complain about my posts but seem to read everything I write and cannot resist commenting. They may not know about the Filter button but it works for me (chilting, KO and now squif). I suppose it actually isn't in the interest of trolls, shorters and day traders to filter anybody. The impact any of us make is relatively ineffectual but we can learn from others with skills in certain areas. The posters I've filtered bring nothing to the table other than simple headlines and superficial analysis. Don't thye realise we have google too?
The phrase "Build it and they will come" works for the oil industry. One of the biggest hurdles is just to build it and FDP's elude some of the most promising e.g. Bentley/Xcite and RKH/Sea Lion. If you believe that fossil fuels will be needed for the next 15 years, especially oil, then future revenues look pretty guaranteed. AB and his team have built a great company but more in the next O/T.
Not everything you build will be a success but we're sticking with oil fields. The climate activists are doing their best to crater the fossil fuel industry and I'm counting on self-interest keeping countries selling and using them for the next 15 years minimum. It may surprise some but this is my first pandemic, whilst Brexit, Scottish Independence and Insulate Britain are relatively novel. We may be entering an age of "common sense" but don't count on it.
I'll post more O/T and promise the next one will be more interesting. It will deflate some of the spurious and nonsensical postings of some with verbal diarrhoea or Tourette posting. I expect very low trading whilst COP26 is on but a strong surprise fiat (unlikely) could change that as would a political act from (say) Iran.

*Let the world know you as you are, not as you think you should be, because sooner or later, if you are posing, you will forget the pose, and then where are you? -Fanny Brice, entertainer (29 Oct 1891-1951)

I'll attend (if I live that long).

Best,

Squif - I'll make you the same offer that I made to KO to meet.
My email is romaron49@gmail and the only stipulation is it's in London. I've never run away from anything in my life. You're a crybaby.

Pelle - the bond debt is less than two years from maturity. Even the RBL or whatever name they give it has a limited life. Equity goes on forever (until it doesn't). The RB & HYN say that we are safe for the remaining two years. Equity bears the greatest risk but of course the greatest potential returns. Even the likes of Alphabet and Apple issue paper but their stock returns have been phenomenal. In cases of receivership bonds are paid before equity. Pension funds split holdings of equity and bonds with pension funds holding more bonds than stock. Practically all advice is for older investors to increase their bond holding percenages to avoid volatility. The UK pension funds are 63% into bonds and fixed income. Equity is probably less than 25%. Some funds are set up specifically for bonds and the market is much bigger than the equity market. When I have more time I'll add more colour over the weekend. Apart from possible Government intervention and rule changes EnQuest is in a very strong position but funds will sit on the sideline until COP26 is out of the way. Some Funds have been adding to EnQuest but matched by retail selling and still some funds divesting. Advertising works and the media here is obsessing over climate change. I guess it's the same in Sweden.
Interestingly we had a budget this week and the Chancellor never mentioned Climate.

Squif - you'd never say it to my face. Keyboard warrior and coward. You and your kind pollute this message board. Grow some.

You have no class squif. I thought you were more grown up than that.

You're both wrong at the moment according to google

24.28 GBX
+15.11 (163.48%)past year
29 Oct, 14:56 BST • Disclaimer

but Pelle is closer and I can't be bothered to look at the FX effect . You do talk a load of twaddle squif.

We're apples and pears to many other oil companies but it is the same industry. A Yorkie is still a dog as is a Great Dane. When we get peer comparisons they are a motley bunch but you can only work with what you have and perfection is hard to find in this industry. I think you have to ignore those that are so far off the scale but it is quite a simple task I'd imagine to use net debt and estimated cash flow to produce a table. It might be interesting to get a table as at end of 2021 and work forward. I'd expect us to be at the top of the table - certainly for NS.
I feel I'm in a minority being happy with AB's performance and his statements. The tide has been against us for the past 5 years and to be over optimistic (like Tony Durrant PMO) would have done more bad than good imo. Crow when you have something to crow about. I like under promise and over deliver. Leave populism to the politicians.
The majors will have more bearing on the overall market and able to persuade the politicians more than little EnQuest. That's why I'm glad it looks like we will partner mEquinor if Bressay gets developed. It is wrong to think they don't count in respect of our position. They are essential in fact.

Browsing I came across this:
https://assets.contentstack.io/v3/assets/bltc7c628ccc85453af/blt3dbbabebb3dbed9d/611e6bf1e8898d66a7c9495c/Investor-Presentation-May-2021-v2_(1).pdf
It is about an attack on Exxon (seems well overdue) and one of the main arguments is the lack of oil industry executives on their board. I reread our Board of Directors and we have a surfeit of oil & gas experience. You could argue that we are over-qualified. Exxon look bloated and complacent in comparison. I also like our representation and I have a great respect for women when it comes to spending. They can be very controlling and mean. To get to the top in a male dominated industry means they are tougher and better than many men.
The other thing I think is useful to us is on page 8 under Balance Sheet. I understand what Pelle and Tarmak are discussing but for all of us it would be easier if we had a title or shorthand for what the subject is. Not me staking a claim where I have limited input but using an accepted term that is immediately understood by us in the shallow end and useful for comparison with peers. Indeed, some of you more au fait with accounting would probably be able to enhance it. We aren't asking for accuracy to the decimal point but a broader understanding and more importantly; how long have we got to wait and under what oil price regimes (prices) until us long suffering shareholders can expect a return?
The acronym is CFO and is "Cash from Operations" which is then used against net debt to get a ratio. Lower is better and it is to tell how long it would take a for company to repay all debt if it used all of its cash flow from operations.
I think the formula could be very helpful and make the board easier to read and is a very useful marker for where we are heading.
Our net debt/CFO is due to get very attractive. We are heading towards 1X at speed imo. There is a lot to be cheerful about with this company.

Be Lucky

https://www.insulatebritain.com/

What is odd is that on Tuesday their Crowdfunder had 12 days left and now it's minutes. Bit smaller than I imagined but at least we know Stanley does have some friends. Perhaps they're heading North to Glasgow. I bet that's some party. Elderflower cordial and nut roast. They only need another £20k to reach their target, superglue ain't cheap. Please give generously.

Doubly surprised - assume it's the US but RDSB dropped briefly to -4%. This is a heavyweight stock and it usually only moves in fractions of a percent. Crazy.

But we know these valuations and percentages ebitda, debt, FCF etc.. have become subjective and can change on the latest media headline or government leaks. I'm still very happy with EnQuest but was surprised at what little is needed to make investors nervous. My feeling now is that we pivot around this price and FCF drives our debt down. We'll just have to hold them for longer than anticipated and count the dividends. I cannot see a massive rise but hey - unlike some others I cannot read the future.
We'll see higher prices but it'll be a combination of dividend and appreciation imo with dividend providing the lion's share. Glad to see the sterling work with the numbers from Pelle and Tarmak. I like Pelle's simplified projections whilst Tarmak must be the nicest and most helpful guy posting.

Be Lucky

I know Shell missed consensus earnings but -3.21% is a bit of a slap and massively overdone imo. The actual figures are remarkably good but we are now in crazy season. Best review after COP26.
If I wasn't so into EnQuest I'd buy Shell, BP, and HBR.
The majors have sailed these waters before. They know the drill.

I’ve just seen some idiot at the gym put a water bottle in the Pringles holder on the treadmill.

Modern Fairy Tale - "Once upon a time an acorn fell on a trolls head -

https://sacredheartliverpool.school/wp-content/uploads/2017/01/chicken-licken-story-book.pdf

Yes E - geopolitics is never far away in oil. Masterfully played by Iran and you can see why they enjoy the leverage that becoming a potential nuclear power gives them.
There'll be a lot of hot air accompanying relaxation of sanctions. "They are a rogue state. What about security of supply. Israel go on war footing. Saudi Arabia seek nuclear accord with ****stan. India enter into long term agreement with Iran".....the list goes on but have the West and US blinked?
Could even be because of the dire shortage of fossil energy currently and getting worse. Certainly Iran wouldn't be entertained in a time of plenty and it also gets a few people out of a hole. Xi Jinpingand Biden for two and what a coincidence with COP26 days away.
I'm happy with my position and will watch events play out.

Golden Geese don't normally get slaughtered.

Metaphorically one campaigner has glued himself to this message board.

Complimenst to Auson and mrd for their perseverance in continuing to engage with Stanley. I had to stop engaging with him and KO on medical advice. I was diagnosed with Coulrophobia and immediately put on a "Filter diet". It works.