Member Info for romaron

Bon Appétit

Apologies in advance as there are some technicals in this post. I don't know exactly what goes into an algo soup but imagine that it is a dash of bonds with a variety of spicy equities on a base of hard earned savings. Indeed, it may not even be EnQuest specific but just something that reacts well with the price of oil? There seems to be a movement away from bonds as the aftertaste of inflation can spoil the flavour of the soup and leave a sour bitterness.
There is something of a renaissance in old recipes and some adventurous chefs are experimenting with a threatened species of fossils which require expensive ingredients that have a waste problem but gourmets hungry for enrichment will show unbelievable patience in seaching for these delicacies which have both literally and metaphorically been forced underground. They have so far survived in hidden portfolios (from wives normally) which they cling to and refuse to give away the recipe. Some say they are an acquired taste. There are the doubters who say they can have long term deleterious side effects and attract some strident anti-vaxxer type campaigners though in the US and Asia it is still popular on the menus. I just love the taste of a plump portfolio.

I could have made this post shorter and just said "I have a feeling in my bones" but I know some of you like the technical stuff.

Be Lucky

There is that of course. They've always been more gung ho and certainly don't view the world through European eyes. Either we're oversensitive or not coming back until the amount of cash we're throwing off makes us a raging BUY. Your answer doesn't explain why companies like BP and RDS are in the doldrums though and Harbour is effectively US owned. Companies like EIG Partners favour European oil companies but not the US public it seems. Could it be a case that they see ESG as a European campaign and have joined China, Japan and probably India in ignoring it?

I make you right Modestus and I'm quite jealous I didn't get on board shale for the turn around. I have a couple of suggestions why we are in the doldrums.
We don't have much brokerage cover and one of the culprits is Mifid II. The sell side analysts who used to make a living flogging shares and research. Compliance and Mifid regulations have crimped coverage of small and mid-cap companies which because of the ESG assault we have unfortunately become. We've lost our champions!
To compensate for the revenue squeeze younger and cheaper research analysts are being used. The lucrative FTSE 100 does OK but it is then scaled back down the line with 44 per cent of AIM stocks (according to FCA) not having any research at all (I don't condider 'Malcy' as research).
I don't think we should underestimate the lack of coverage. Avertising works but it could be money down the drain if sentiment and the tide is against you. Wish.com which (imo) sells overpriced junk on the web spent $1.7bn on marketing to bring in $2.5bn of sales last year. That is what we are up against.
I see a fight back against ESG and whilst we'll never regain popularity https://www.youtube.com/watch?v=NpjdRUffWj8
there will be a need for fossil fuels for decades yet. The numbers WILL do the talking.

*Mifid 11 - EU transparency rules that, among other things, unbundled research payments from trading commissions. Most asset managers chose to swallow the cost of research rather than pass it on to clients, and as a result have cut how much they spend on it by up to 30 per cent, according to the FCA.

Typo - viewers not listeners and I was comparing it to BBC news.

Aloj, I am relaxed but I wasn't addressing you. If you appreciate moronic posters whose understanding of how markets operate is pathetically ignorant and act as though they can read the future then continue reading them. There is another narrative starting and the ESG campaign was largely unopposed. That is changing.
Look at the recently launched GB News. It doesn't represent my views but does have a growing fanbase. Its robust unwoke appoach resulted in several companies withdrawing their advertising. That resulted in possibly the quickest hand brake-turn in UK advertising history as they quickly reversed their decisions or risked losing a chunk of the public. GB News recently got more listeners than the BBC. Money talks.

BJ did well in proposing a fixed date to phase out all coal-fired energy at the recent G7. Shame it didn't work out as planned; the Americans and Japanese (number 1 and 3 in world GDP) wouldn't play ball. Something to do with consumers not prepared to pay for their leader's rhetoric. Pure tokenism as usual. The fuel price escalator in the UK died in 2000. Heat pumps looking increasingly impractical and expensive.
Update on China - it has another 247 gigawatts of coal power in planning or development. "That addition alone is larger than the entire US coal-fired energy capacity and six times that of Germany (Europe's biggest coal producer). Beyond its own territory, Beijing is financing new coal-fired capacity across Asia as part of its Belt and Road initiative. The G7 did agree last week to cease financing any coal projects in the developing world. To which China says: thank you very much - we'll pick up the slack."
In fairness China's CO2 emissions per capita are still half those of America. Meanwhile as another one of the baddies we are now responsible for 1 per cent of emissions.
The article by Dominic Lawson in today's Sunday Times finishes with a much loved sketch from 'Beyond the Fringe': the British do love a futile gesture.

https://www.youtube.com/watch?v=Y5YW4qKOAVM

Why are you wasting time responding to chilting? His obsession with EnQuest and desire to comment on every flutter of the price suggests something isn't right. The number of postings indicates this is his life! Leave him in a cupboard with Kraken Oil. He isn't that bright at all and most of his prognostications are of the could go up, could go down variety. His knowledge of trading is abysmal but he talks as though he's some kind of expert. He is not. I traded and broked FX for 27 years and there are many similarities to share trading. I am not a FX expert. I'd rather have a troll than the insipid neediness that he projects. He needs a friend; are you sure you want to be that person?

Back in 2008 EDF told us that if Hinkley Point nuclear power station wasn't up and running by 2017 there'd be no Christmas turkey as there'd be no electricity. The start date is now thoiught to be 2025 but I don't know about you lot but I had turkey last Christmas. This was omitted from the BBC2 programme 'Building Britain's Biggest Nuclear Power Station'. Hopefully it'll be corrected in later episodes. Mind you the paperwork only says that it is just an option on EDF's part as the deal doesn't actually commit it to completing the nuke at all. I'm sure these are just minor details as the extraordinarily high price (guaranteed by the government) is quite an incentive.
Hydrogen hype continues too. We know it has deficiences (cost, energy efficiency, safety) but back to cooking the turkey. In energy terms, the amount of gas used for heating and cooking (tends to be a bit chilly Christmas time) exceeds the total consumption of electricity FOR ALL USES - on cold days. The only outright technology being mooted to replace gas in homes is heat pumps. These come with huge problems for Britain; unfeasible costs being the largest. Private industry is ploughing on with hydrogen as even the government has stopped pouring money into the hole but I'm sure will return if there are votes in it.
There are even some philistines suggesting that hydrogen is a bubble and "Dutch tulip mania" all over again and bitcoin shows more promise. I'm agnostic here because unlike some I don't know what the future holds.

https://www.youtube.com/watch?v=utkMQJeiK50

It'll be raining cash.

Tim - it's only a 2 year loan if the bonds aren't refinanced. It is an insurance for the banks and a handy milestone to be slipped in. The chances are extremely low and if it needed to be repaid then we would be in trouble. A meteor hitting the FPSO is also a potential threat.
Some clever sod from tbe banks has added it and EnQuest are legally obliged to RNS it. It actually looks a bit silly and unnecessary to me. Of course our position is strengthening and it is in the bank's interest to make loans that will be repaid and collect juicy fees and interest. They would rather lend for 5/7 years than 2 years and be supportive of a company growing fast. I think our guys are fierce enough to remind the banks of our strengths. There are other lenders and that is competetive too but it is better the devil you know for both parties. I'm not concerned of a potential clause that is probably meaningless in the larger scheme of things.

Tigar - I don't have to give my thoughts to you. You may not have noticed but I do not work for EnQuest. Explaining that the bank loan and the bonds are inter linked doesn't mean they are synchronised and the documentary credit departments always have legal advice and lawyers will always edge towards caution. This isn't a book club and we each have our own interpretation of what is said, and what can be said in an RNS. I would imagine they are allowing for final decisions when EnQuest have made a decision on the bonds. I have no idea how much information EnQuest are onliged to give to the banks regarding bond negotiations. I'd guess that it is commercially sensitive. The 2 years are an additional clause unlikely to be put into play. I thought that was self-evident but you appear to want a cast iron guarantee. Nobody can give that.

Hi Tim - not sure I understand the question but the RNS was quite clear as it covers known unknowns and allows for unknown unknowns. For that reason it is short because they simply don't know what tomorrow brings but they have to try. However, many here make the mistake of confusing the RBL or whatever fancy name is attached to what is effectively an overdraft and the bonds. If you treat them seperately it does become clearer.
The bonds tend to be for specific future projects and the NS is a dynamic basin whatever the ESG narrative says. They also carry more risk as the longer future is even harder to predict. As PI's we kinda look at the debt and maturity dates and say if things carry on as they are we stand a good chance of paying off all debt. That is not the intention of EnQuest and they continually need to increase reserves to remain a going concern and debt is usually an essential part of the model (Shell and BP have debt). We are now in the lucky position (if Brent & Govts play ball) to possibly treat EnQuest as a cash cow and drive fields to end of life. That would be a mistake imo as there has probably never been a better time to take advantage of the newer slimmed down version of oil production in older basins.
My own pet hope is that they'll develop the BBK Hub (Bressay, Bentley, Kraken) and that would probably require bond support. However, with the current FCF we won't necessarily need to renew the existing bond amount. It could be higher, lower or unnecessary (known unknowns). It is usually the case to renew bonds with a decent margin to spare (say 1 year) and like with maintenance it is often more efficient to complete other tasks at that time, which is what we are seeing. There are plenty of balls in the air but the company deserves credit for issuing this RNS. It may have been pressure from Pi's, some of whom seem to think they deserve a seat on the board because they have all the answers.
There is always pressure between the RBL and Bond lenders with covenants and penalties that make things extremely complicated with equity seldom being the beneficiary when things go wrong. Then there is the order of preference and they all interlink.
In answer to the 2 year question it seems to me that EnQuest are robustly telling the lenders of the "new facility" that they will be able to repay by June 2023 whatever happens with the bonds and is also ma signal to the bond holders. There is clearly a tacit understanding that for the moment bond holders like what is happening and are onside judging by the pricing of the existing £RB and $HYN.
I don't know if any of this helps or is even accurate but I think I'm warm. The dates are indicative because nobody wants to be held to a date that may be unworkable or has to be moved.

Be Lucky

The only benefit I can see from commenting on every flicker of the sp or the UT trade (irrelevant) is that it incentivises you not too spend too long on the message boards. My wife moans about me spending too much time on here already but it would take me 25 years to match what some posters on here have done in 3.5 yeras. Had a few jobs to do today but placed a spread bet [the June spread closed yesterday] early and forgot about it. It is for September so I've plenty of time and I'm out all afternoon. I don't look at the price when I'm out out.

Purpose of this post is from a conversation with a LTH yesterday who worries that there isn't the liquidity to accomodate a large buyer of EnQuest. I don't consider that a problem. The potential buyers will be hard nosed professionals and there are brokers out there with the contacts and know how to place or buy size. It won't be at the screen price. How do you think something like Golden Eagle is/was priced? Both parties have their views and business plans and start negotiating. There is NO screen price. A fund buying EnQuest will do its own sums and calculate what a reasonable price for the stock should be. The screen price will indicate how accurate or inaccurate the market price is and will have an influence but it is not as powerful as the day traders think. An incorrect price (which I think applies to EnQuest) will add to our attractiveness and when they do decide to build a holding it will be in their interest to use pennies to strengthen the sell side and hope that the noise day traders can make will help them complete the BUY order. Of course not all trades are reported immediately which gives some cover. It is in a large buyers interest to promote a few sell orders to facilitate their main trade. It can also apply the other way round.

Good luck to all LTH's.

Does anybody know what rip-stop nylon, a tough and tear proof synthetic fabric is made from. Is it renewable bamboo?

Asking for a friend.

I don't think EnQuest is being held down. I think it more a case of nobody buying. Tullow has fared far worse than EnQuest but it depends what period you judge by (TLW was over £11.25 when ENQ was 83p April 2010) but the main thing imo is that TLW is a pretty conventional play with a decent spread of shareholders whilst the CEO is definitely Mr Conventionality and a clone for 'C' suite and blandness.
That is not the case with Harbour or EnQuest. Without looking it up EIG hold over a third and will probably reduce once their lock-up period is over. ENQ has 15% tied up wityh AB and friends whilst I don't see Baillie Gifford or Aberforth rebelling after 10 years, especially when it is all falling into place. I'd say that there is even less free float with ENQ than TLW.
There is nothing wrong with being a private company (or as good as) at present and I don't mind whether I share with private shareholders or public shareholders. The usual suspects like funds will probably not return but eventually the RFCF will attract the moe adventurous investors and they will probably be US based. That's my view anyway.

Greenpeace protestor parchuted (crashed) into the stadium holding Germany v France in the Euros. He was attached to something with a propeller. I hope it was battery or elastic band driven. What a twat. He'll have done wonders for the campaign.

I can't rememebr who it was (it may have been you Therapist) but some time ago a poster here mentioned these wells. A deserved pat on the back to whoever it was, especially from those of us who can't do the detail. It is much appreciated that we have posters among us who can zero in on important detail.

Hi E - these are mostly my thoughts too. Many of the majors cannot go back to basins they've left so any demand for more oil will be met by OPEC+ and smaller companies. To me the bet is whether the renewables will fill the energy vacuum in the West. Human ingenuity means that if you ignore price and value reduced emissions higher than money lost on moving to renewables then it can work. Unfortunately human nature and demands on our discretionary incomes means that price does matter. Emissions are unlikely to come down imo because the third world will value cheap energy against emissions and take full advantage of the economic advantage handed to them by the West and we'll just see emissions coming from somewhere else - we'll have exported them. It'll assuage our campaigners but create problems elsewhere. I expect China and Russia to look after their own interest first and economic advantage and fossil fuel income rates higher with them than promises which aren't even being met by western countries.
I no longer look at dates like 2025, 2035 or 2050 because they are practically meaningless but I would concede that is the direction regarding targets and vague promises to campaigners. I only need a steady Brent price for 7-10 years and I'll be walking away from EnQuest with buckets full of dividends. I cannot see the western plans working in the time scales they have laid out and "for that reason i'm IN."

EnQuest isn't about the unknown future 25-30 years from now. The present can be very lucrative when people are trying to read crystal balls. The damage done to the oil industry has been going on for some time and much is unrecoverable. I'd say that from 2015 it has been under heavy attack and the survivors are battle hardened. It has created a moat against new entrants and the future for at least 10 years is extremely bright for those with the right balance sheet and we have one of those.

Be Lucky

Bit of a fracas buiding in France as a campaign group called 40 Million Motorists https://www.40millionsdautomobilistes.com/
have decided that complying with EU emissions goals is discriminatory and are predicting an uprising. "The traffic restrictions imposed are discriminatory because they will most penalise low-income households." It is against a measure to ban all diesels from 2024 and 70 percent of vehicles from cities by 2025. Yellow vests are being taken out of the cupboard.

Comment on the G7 and climate change revolved around the fact that the rhetoric was more impressive than the substance. For example in the final communiqué the leaders did not set a specific date to phase out the use of coal, merely committing to "rapidly scale up technologies and policies that further further accelerate the transition away from unabated coal capacity."

source: today's Times.

There was plenty of other stuff regarding nuclear and oil. Iraq is going for 11 gigawatts of nuclear because of civil unrest over power cuts. Something to do wth problems getting gas from Iran. The Russians will be the likely providers and Iraq will pay for them by selling oil. I can't see this situation being resolved in the timescale that campaigners love to quote. 2025, 2030, 2050 etc...
Still, the expected breakthrough of unicorn tears acting as a catalyst for hydrogen is showing remarkable promise. I find it amazing that this stuff wasn't brought up at the recent G7 meeting. It's quite worrying that the world has other priorities and climate change may be slipping down the order.

We built it and the steady trickle to mEnQuest is growing fast.