Member Info for romaron

Therapist https://www.youtube.com/watch?v=8tDY_hrEKPA but don't pit me against Spartacus.

KO - are you coming with him? https://www.pewresearch.org/fact-tank/2010/07/14/jesus-christs-return-to-earth/

Therapist - he won't turn up. You'll have to put me in the repêchage if there is nobody else available.

ran out of words - quote by: Georges Clemenceau, statesman (28 Sep 1841-1929) He actually had a duel. That's the way to solve disagreements.

Hi E - I've had a better look at the link you so kindly gave me yesterday .https://www.barchart.com/futures/quotes/CBM22/options/jun-22.
I'd had rather a long lunch yesterday and I'm allergic to long rows of figures, a condition only exacerbated when viewed through beer goggles. I realise (as do you) that we don't know if it captures all the option trade platforms but it supports my argument.
I don't usually get involved with hedging discussions because it's hard enough to stress test EnQuest anyway. To me they are a 'speculation within a speculation' and I think other factors are more influential. They are more an attempt at derisking an order book for EnQuest and to me should be used regularly in percentage terms [plus lender covenants] I do believe that management should not be oil traders but should have some flexibility which I believe they have.
My aversion to these figures is because I looked at them for many years and they aren't really that different to FX where option/future and swaps all overlap. Retail head for futures and options because smaller amounts are possible although they do add up.
There is NO volume in 2023. If you start at Dec 2021 and Jan 2022 you get strike prices between 80-83 and a premium of 2-4,000. Then it is Mar 79-81 premium 5-7,000. June 75-79 premium 6-9,000. Dec 73-78 premium 9-12,000.
There is nothing really for Jan/Feb 2023 or even March but the interesting difference is the strike is between 67-76 which is wider than anything previous with a premium between 8-13,000. I believe, and I could be wrong, that the 2023 prices are really more indicative than actual. They have managed to hedge at the update 1MMbbls for 2023 which is appx. 10 percent of their 2021 hedging.
In the real world you would have speculators at the front end where volatility and liquidity is best and anything past 1 year would always have commercial reasons. I don't know but suspect that brokers knock on EnQuest's doors when they have somebody wanting to lock in an oil price (could be a refiner etc.) and a price is negotiated. Hitting tops and bottoms of spreads doesn't work in these cases as they're expensive enough without making the price prohibitive.
The market likes certainty and thinks (incorrectly imv) that because Dec and Jan are closer and the spreads and liquidity better that this equals LESS uncertainty. That isn't certainty in my book and never has been but is about the best you'll get.

Looked again at Tuesday's RNS. I think it is very serious. We broke one of the "UK Prospectus Regulation Rules". An esoteric tax Lawyers!!!! don't you just love them. A deferred tax asset inconsistency. I think John Swinney should do the coffee run for the next month as a penalty. I hope we haven't broken ESG rules by having the office thermostat too high as well.

A man's life is interesting primarily when he has failed -- I well know. For it is a sign that he has tried to surpass himself. -Georges Clemence

Twitter yesterday; "Reminder: you need not believe in higher oil prices to get excited about generational low valuations. At an oil price $3 lower than 2022 strip the average company can privatize and become debt free with just over 5 years of free cashflow or pay a 27% dividend."

I think EnQuest can beat 5 years but nothing is moving valuations at the moment. We'll just have to accept dividend payments of (pick a number) say 20p plus. The mc can stay unmoved if we were receiving dividends like that but I doubt it could resist the upward pressure. You might miss a party but 3 years of 20p dividends would be compensation.

You're in the great game now. And the great game's terrifying. (Tyrion Lanister - another famous quote of his is "I drink and I know things" which I can relate to.)

romaron3rdDanBSTrader

This is the one I use for futures: https://www.cmegroup.com/markets/energy/crude-oil/brent-crude-oil-last-day.quotes.html
I find it easier to read.
On your chart go to Jan 2023. There's no volume but March 2023 has 400 against 1200. Not impressive in volume terms compared to 2022.

I could get your amount of prices up to one year in FX but struggled beyond. The point is that the next few months today are unpredictable so imagine trying to price that far out? I knew a quant guy at Chase who when I tried to pick his brains said that beyond one year pricing is extremely difficult (he also said I wouldn't understand the maths). It's OK if you can match trades because there is a physical order book supporting both sides but even that has its problems. We will be selling oil in 2023 but if you were an airline company for instance would you fill your boots today.? Probably not - because the banks and shareholders would interfere plus what happens if you've bought fuel that has halved in price when you get closer to the date. Better to plan a few months ahead and pass any excess fuel costs on to the public.
My point is that the world isn't perfect and if it was we could plan for the next 5 years for instance. There is also the point that the spread widens and you are quite easy to read if you're a producer (or an airline) for example. If it was that easy the US shale companies would have locked in sales for 5 years in their recent heyday.
Having said all that I have something at the back of my mind that Mexico did do very long term forward sales in an auction process.

romaron2cndDanFXswaps

Thyanks E. Education always worthwhile. So you're saying that whilst futures are thin out there there is a thriving options market. Can you point me to a website?

L17 wrote: " I just hope ENQ were hedging Q1 2023 production when Brent was at $81-$82/bbl. The Q1/2023 futures were above $73/bbl."

Dunno how they're gonna do that. Have you seen the voiume out there? Very hard to price which is why it's the equivalent of the punter who sees oil at $200. Worth a tenner each way but try putting on a decent bet.
The market only gets volume done up to about a year. If there's no futures it indicates the swaps will struggle too (symbiotic).
Saying the futures were above $73 (Brent still is) means FA if you can't get anything done. That is why the Helikon swap is beyond the understanding of us mortals. The likes of Goldmans and hedge funds can make figures talk and do acrobatics. We were only told it was a swap and the end date of the Helikon deal. Trying to get to the bottom of it would defeat anybody who populates this board. Still an impressive amount but more likely that it is split into tranches and the "exercise/conversion period" doesn't mean it is all weighted to the 02 March 2023. I think it means the deal is front loaded with the larger amounts. It will be a very complicated and clever deal best left to the real experts. Not the self anointed.

If you build it they will come.

Hi KO - Surprised, I thought you'd bottle it. romaron49
gmail.com

won't be around rest of the day - going to Wimbledon.

posted this on Twitter yesterday -

"I'm known by many corporates as the anti-hedger. What to do today? I would be hedging my Q1/22 (seasonally weakest) >$77WTI = ensures leverage targets met allowing for ROC...the avg. company could buy back ~7% of S/O with 1Q of FCF at that level while leaving 2H'22 fully exposed."

Just goes to show the impact of FCF with high oil prices. If that's one quarter then that's close to 30 percent for the year for an 'average' company in (I suppose) Canada. There is of course the option of reducing debt instead of buying stock. We're not average either. We have giant tax credits.

We're in the game!

..... I think I'll call him Billy from now. I've offered to meet him at a venue of his choice. Says he's a Londoner so likely he's close to a station. What's the problem? I'll even bring my portfolio. I think mine's bigger than his.

Sorry about the last line but but every sentence is a sexual innuendo if you think long and hard about it.

*monkey - if you're reading this. If you have a schedule break I'll happily buy you a pint when you're down next year. I might struggle to understand you so you can bring an interpreter if it helps.

So you sold at a recent top and bought at an all time low. I cannot compete with that. Neither can Soros or Warren Buffet.

In your dreams. Show me your portfolio. Do it now. Where do you want to meet?

Course you are. That's why you're known as "No show, KO". We'll save you some cake from the party.

F*me - A derivative expert as well as M&A expert. Has any shorter been more skilled than KO? Possibly L5, another shorter of EnQuest.

I'm only going by their emphasis on denigrating EnQuest management at every opportunity. Call me old-fashioned but I wouldn't invest in a company where I had no faith in the management.

Correction - it is of course stock on loan but we know what that's for anyway.

Another investor who doesn't post pointed out that there was an increase in SHORTS over the past couple of months. I had stopped paying attention as oil was rising but they'll all be losing money at this level so I'd expect capitulation if they already haven't cut. That'll boost the price on top of Brent!
Euroclear EnQuest shorts:
Dec 3.55
Mar 2.97
Apr 2.36
May 1.86
Jun 1.96
Jul 3.12
Aug 3.06
Sep3.99

KO - I thought you worked with second-hand cars. You kept it quiet that you're a corporate lawyer specialising in M&A.

Mrc, wouldn't you be angry too if people didn't appreciate your superiority and omniscience. Personally I think he's too modest. He should call himself Level5Trader. He's earned it with his attention to detail. They may be irrelevant in the bigger picture but somebody has to keep a financial eye on paper-clip abuse and toilet roll theft in this time of Covid.

KO hasn't had his Calpol.