Member Info for romaron

Hi Juan. I watched the Eric nuttall video which was very informative although some will say one sided and he was talking his book. It confirmed what a lot of us have been saying for some time and is encouraging. I especially liked the slide at 36.30 which illustrated how many years of FCF at $60WTI and $70 it would take for a company to buy back all of its outstanding shares and debt. The answer is 7.6 and 4.9 years respectively.
For EnQuest it is about 2 years (although the MC would keep rising so would lengthern this period).
His point that other investment advisors willo have some explaining to do as to why they avoided fossil fuels and miissed out on the recovery whilst governments are nervous of how far they should go in banning fossil fuels and the continued attacks on them. The third world cannot join in the EV evolution and when have they ever been mass air travellers. Meanwhile millions of children die because of the effects of burning wood indoors without ventilation for cooking. The West can carry on its "nimbyism" because they can afford it but even that is hitting resistance. It looks very, very good for at least a decade which will see us set up pretty.
Personally I think climate effects take thousands of years and human beings just cannot accept that they are another form of ants whilst another group think there are deities in heaven and the time here is temporary. The human condition is to have beliefs. Some are irrational but unshakeable. At least the M25 will be free from nutters for a while.

We built it and they came!

Hi Aloj, unfortunately I am under a NDA regarding expansion of my ox-cart business. I have been in negotiations with a secretive group using the code phrase "a load of old bullocks" for several months. I suspect that Juan and Northernmonkey may be involved. A stumbling block is the "just in time delivery" because even with the best carrots we cannot get more than two miles an hour out of them but every innovation has teething problems.

https://twitter.com/sommervilletv/status/1438840029779005444

XR wins. Forced into vegetarianism and back to an earlier time. And some of you laughed at my ox-cart hedge! I'll be able to take it onto the M25 in a few months.

I read this on the Swedish Placera site, posted by investor 1 yesterday:
"Everything about raw materials is now completely bombed out, virtually all serious oil companies have an FCF around 50% (some more) of their market capitalization. The leading base metal producers generate substantial free cash flows but are valued at PE around 8-9 (bad for me). On the other side you can see Tesla PE 344, Netflix PE 100 + many others with three-digit PE. Does money from oils and metals smell bad or how does the market reason?"
PE used to be useful measure but if you look at the LSE calculations it suggests most energy stocks are negative and therefore potentially bust.
Here is a selection
RDSB -7.07
BP. -4.119
CNE -2.942
ENQ -0.848
TLW -0.704
SQZ 62.20 (an outlier no idea why)
HBR 0 (maybe too early for new company).
Google then states that for energy stocks the PE ratio for past 7 years is an average of 19.49 with tops and bottoms of 7.91-35.82. I assume they include US stocks as well (or only) so even that is dubious but I've halved it and still get an average closer to 10.
I remember in the past that building stocks were also volatile and when under pressure 4 was around the low PE. In my mind these are clearly ridiculous swings and the obsession with NEW means that majors are cast aside too. "Transition" is no longer a concept more a label of an "also ran". I still like the "E" in PE and ours is growing while debt is receding. Forget the ratio which seems like nailing jelly to a wall and just look at the investment credentials. I don't expect us to EVER be popular again but I do expect us to be around a decade from now. On this short term view (for commodities) EnQuest is a raging BUY.

Build it and they will come,

High gas prices forcing commercial production of carbon dioxide to shut down. The gas is critical to the production and transport of a range of products, from meat to bread, beer and fizzy drinks. One retail boss is calling it a national emergency. Talk about "be careful what you wish for".
Front page of Today's Times - Soaring gas prices hit food supply!

I think they're getting a bit overexcited. Can't they eat cake instead?

I share the frustration of many here that we aren't seeing the rapid improvement in reserves and production reflected in the MC but we are hardly alone in that respect. I think promoting the company in the recent past would be pointlessly fighting a strong adverse tide and can understand letting the numbers do the talking but I agree with KO that it is now time for a change. Forget Facebook - that is for boomers and old people but twitter does have impact and judiciously controlled should be used. Social media is dynamic and many PI's are ignoring the funds and looking after their own wealth and pensions. The old model is no longer relevant imo. Tulchan are a safe pair of hands no doubt and a useful insurance so maybe it's time to take matters into our own hands and increase the IR dept. and give them a wider role.
Miffid ll was the death knell for investment advice and you only have to look at the H1 update. Three analysts Mark Wilson, James Thompson and James Hosie who couldn't give a toss about us but report back to Jefferies, JP Morgan and Barclays. They are talented individuals (MW is a Chartered Engineer and JT a Geologist) but their research has a firewall and doesn't include us. There was an interesting comment about Magnus having a "great future" from John Penrose an Enquest Director recently who is more upbeat than AB - more of that please!
We have a reputation for good Governance but shouldn't slavishly keep schtum rather than risk breaching a guideline that many other companies ignore. Maybe they're waiting for GE completion to release more news and I do understand it has to be managed.
On a negative note another investor is suspicious that the reluctance to bang the drum about EnQuest is simply to keep the price low and take the company private with the PI's losing out. It happened with PMO but the situation was completely different. However, there are many more companies out there like EIG and Neptune is a worry.
I'm hoping our 'shyness' is more a reflection of Covid and a busy board but isn't it about time that we started on the offensive ?

I can smell the salt air - HYN fixed @ 98.596

Higher domestic energy prices were baked in anyway imo but I am comfortable with my hedge against higher gas and electric prices at Roma Towers. My holding in EnQuest will climb higher than any bill landing on my mat plus the wife can always wear gloves and a coat indoors if things get really tight. I'd like to see the XR mob demonstrate when people are freezing and petrol is £2 a litre.

KO - you are right. There isn't a simple answer but the technological breakthroughs in drilling and lifting oil haven't been adopted in other importants areas, one of which is alerting potential investors to the opportunities that are there in being an EnQuest holder. Busy at mom but hold your ground on this one.

In many ways I think you're asking the impossible. How well are fur coat manufacturers doing and what is the price of a second hand fur? We're out of fashion and we all know why.

Let the weather get colder and people suffer a few power cuts and you'll see a change. Travel, holidays and back to normalcy will make a big difference, eventually. I don't think oil will ever be popular again but will obstinately be a necessary evil. Even guns are more popular in the U.S. We need the attractions of a bond which we are gradually achieving. Forget popularity. We ain't ever gonna get it but bonds will always have their fans.

*Once we assuage our conscience by calling something a "necessary evil", it begins to look more and more necessary and less and less evil. -Sydney J. Harris, journalist (14 Sep 1917-1986)

Quality answer - I did chuckle.

Charts are guides for ships which doesn't explain why so many lie on the seabed. In economics though they do serve a useful purpose in being historical reference points. Almost exactly 7 years ago the Brent dollar price which had been bubbling along at around a $100 + a barrel for a couple of years began its downward path. It was also the last time the HYN had been at par. It was then attacked by shale production and most recently Covid and ESG concerns.
Today I am feeling remarkably smug (even more than usual).
Now, I don't wish to be premature but we are a cat's whisker away from par again. Today the HYN fixed at 98.087. A year previously (14/09/20) it fixed at 61.011.
Mark Twain said "History never repeats itself, but it does often rhyme." In today's 08.10 post on Bloomberg TV (yes I know it was KO but a monkey can possibly type a best-seller) the BOA head of commodities said that the gas price points to oil at $120 a barrel and even potentially $180. That is possible but it would be of a short duration imo. I wonder what oil at $120 for 3 months would do to our debt?

Build it and you'll eventually bump into an oil spike!

You've got me wrong there Therapist. He wasn't speaking directly to me but about 200 of us who'd just been taken over. He didn't stay long anyway and moved into vulture funds and distressed lending. Bit like comparing my football skills with Ronaldo. One thing I do admit is that the closer you get to certain individuals is that you find they also have a lot of normal, ordinary drivers too. AB and his board have more EnQuest information than we'll ever have but the macro is beyond practically anybody's control.
We have to read between the lines and take our own stab at the future. On the PR side I was wondering what the impact and value of Tulchan is. Is it a bit like an AA subscription in case you break down? I'll try and find out more. They seem to have good Conservative connections but in my experience votes count for more than donations or access to a minister. KO's point about modern media is true. It has changed beyond recognition and perhaps it would be wasted anyway against the tsunami of ESG and associated bandwagons.

Be lucky

I'm impressed by your research Therapist but I doubt its impact on the company. Maybe we're holding back a payment due to unsatisfactory work etc... The company will have to report on it if its consequential in financial or operational terms. I doubt it's either.

A company I once worked for was bought and briefly run by Quadrex Holdings which in turn was run by a certain Mr. Gary Klesch. He always said that a company running without any live law suits against it wasn't being properly run.

1. Highest HYN fixing since 2014 today (97.336) giving a YTM of 8.42%. Makes a nonsense of the share price.
2. Come on Tullow. A good interimn on Wednesday could pull us with you.
3. What is the point of Corporate and financial public relations firm Tulchan Communications LLP and Martin Pengelly?
4. https://www.reuters.com/world/uk/exclusive-citi-hsbc-prudential-hatch-plan-asian-coal-fired-closures-sources-2021-08-03/ Expect a taxpayer revolt as it's the only way it can work.
5. Lock up XR activists for their law-breaking on stopping normal people going about their work (blocking M25). Even Stanley knows the costs for insulation are mind-blowing once you've done the loft.
6. How many of you have never taken part in a survey?
7. Has Juan got a foot fetish?

Well AB is in good company because few of the majors "got it right" and declines are a fact of life. Don't drill or reduce maintenance and that's what you get; especially if you deal in end of life fields (8-15% p.a.) Unfortunately in oil you have to produce through the good and the bad times. Some go to the wall whilst the better ones survive.
I wasn't expecting fireworks at H1 but the base has firmed. We're past the worst - touch wood.
Don't you think with your outlook you should use Ladbrokes or like L3 look for a company investing in (say) bitcoin?

St. Leger run on Saturday. Expect a better week next week.

....... and Stanley always caveats his posts to such an extent they are meaniningless. The amount of time he hedges his posts I'm surprised he hasn't sprouted leaves.
"say it as you see it" - well he says, rubbing his chin or pruning his forelock - "if things don't change they stay as they are".

I agree with Pelle & Tigar. I haven't a clue what L3 is on about. He reminds me of the guy who knows all the specifiacations of a super-car but will never own one, drive one or even sit in one but feeds his ego by talking as if he does own one and of course is a superb driver. The Magnus asset stands on its own feet and a rising oil price enhances the deal. That's why BP have claw back and windfall clauses. Not unusual and even in footballer's contracts. I'd say a pretty run-of-the-mill clause and those paying will have raised benefits so arguably the winner. It is too early to say but at 32.00 on the H1 update AB states that their "best resources lie in Magnus" and it is rare for AB to be so seemingly "off script" that I believe it carries extra weight imo. I actually agree with L3 that Kraken saved the company but it almost sunk it too and is of course dealing backwards.

The point that BP benefited from the vendor loan is minutiae as the benefit to them would be minimal. I appreciate those who can dig deeper and have a better understanding of accounts than me and there are always events that might lead to greater insight so will add a couple of points. I hear on the grapevine that Jonathan Swinney was late for work 3 days in a row and that AB is 2 months behind on his office coffee kitty dues. Probably means nothing but thouight I'd mention it. Perhaps L3 can investigate?

Build it and they will come.

What is the point of a message board when incorrect information gets more recommendations than a correction? Perhaps I have been too harsh on KO and Stanley. Nonsensical drivel is what really counts. The 13.04 post takes some beating but no doubt Stanley will counter with the usual caveats and hedges. In fact I could sum up his posting history much more concisely than he manages - "could go up, could go down" or maybe "two ways of looking at it - this way and that way"

The HYN reached ................ forget it.

That's it. I tried.

typo: It isn't a £2mio trade