Member Info for romaron

The truth is that climate change cannot be addressed without extreme reduction in energy use. That will mean radical reduction in population and living standard.

If leaders know this, they cannot say it. Then there are the truly ignorant true believers.

Abe Berman twitter

Final thought on their development. It doesn't matter where you look you see plastic which is another oil derivative. Lipstick, paint etc.... There will still be combustion engines past 2050 and we've seen how long some weapons last (B52 bomber). They talk of net zero by 2050 but will Scotland still be part of the UK by then? We know the finances and horizons are long in field developments but nobody can really miss the strategic importance of oil whatever its percentage in the energy mix. The country continues to consider nuclear energy and that is far from cheap. The new technolgies, many unproven, cannot exist with subsidies and stabilisers for ever. It makes all kind of sense to have hedges in place and the argument for oil remains positive. What governments fear most is people taking to the streets. The poll tax and fuel duty did that. Covid fears that the army would be used to deter people from bringing the dying to hospitals led to panic. A grown-up government can only pander to the latest populism in short bursts but people really don't care about the emissions or how energy gets to the point of use. What they do care about is warmth and hot water when you need it, travel facilitation and above all availability at a price the man in the street can afford. Basically, on tap!
Plenty of life in the old dog yet. The Government, especially Boris, have gone for quick fixes and distraction politics as business as usual. The world still needs oil. Lots of it and for decades hence. The world isn't getting safer and its strategic qualities will not go away. AB and his team are not fools. The Govt fostered the ESG narrative and will now need to build in some compensatory (get out) clauses. I think the ESG narrative has overshot anyway. There's money in subsidies but it doesn't seem to be a massive money earner except for those reinforcing the trend. Be a bit embarrassing if it goes the other way.

correction P. 26

Whoever was charged with destroying the paperwork has kinda torpedoed your interview to Energy voice. I found this.

file:///C:/Users/Smith-Galer/Downloads/Xcite%20-%20corporate%20presentation%20jun14.pdf

see page 25. 2P reserves 257mmstb. Total unit cost $/bbl $47.7 escalated- unescalated $34. I'm not the best at numbers but haven't prices come down since?

*just noticed the onedb post. I'm not a believer personally but it can be self-fulfilling. He is genuine.

Steve Kew, former chief operating officer of Xcite said there remains a big prize for EnQuest at Bentley, which his former firm estimated having 300million recoverable barrels. The problem, he said, will be cost, which would be a “challenge” for any firm.
“We totally believe in the field, but the trouble also, you’ve got to be a realist, is you’ve got to be looking at $80+ a barrel”, he said.
“We could probably get it developed for a price less than that, but it’s economic somewhere north of $80, nearer $90 a barrel.
“That’s the key thing, it’s going to require a lot of wells to get the field developed. It’s not a field that can be drained with a few wells, it requires a lot of wells which is where the expense is.”
EnQuest has recently also taken on the nearby Bressay field from Equinor, a neighbouring heavy oil field. Developing the pair in tandem would be “obvious”, Mr Kew said. “I would think it’s an obvious one that they’d try and develop both fields together. They have a common aquifer. “It is quite likely they are the same field, or they’re very closely related. They need to be developed in a synergistic way.”

SK was liked by many Xcite investors (not me) because of his "professionalism"? He is a geologist and optimism is a characteristic of the breed. He was never a numbers man yet he is here pontificating and this is a crass attempt to rewrite history. Rupert Cole (CEO) was out of his depth but this individual never once referred to costs at this level. He failed but doesn't like looking in the mirror. Costs in oil went down; not up. I refer you back to a common discussion of opex of $35 (ish) around that time which the Xcite management encouraged. What a hypocrite.

Hi HMH, Thanks for the kind words but I'm far more mercenary than that. I hope what I post is interesting but I am basically pressure testing my theories and rely on people like you who see bigger pictures to pull apart. Most commentary here is just noise.
I've dashed off some emails because I had some extremely expert input when I was invested in Xcite (good enough to make me pull out but I took a hit).
This is some of my past conversations:
" I had 4 people 24 hour days on the Bentley WT (I never call it an EWT – it was way too short). Our presence was an afterthought and we were taken out to rescue a well test that would have collapsed had we not gone out. Had XEL personnel (some of whom knew me from the Mariner EWT) bothered to contact us before they used a chemical company instead, we could have made life a whole bunch easier for them."
"Enquest. Kraken crude will be similar to Mariner crude. The brown bit is simply a red herring. It’s black for sure. But Enquest have a lot more skills than XEL and are quite likely having a chuckle at the mess Cole is making of this. Steve Kew is a switched on guy and must surely be very frustrated at what’s going on here. But I place Cole in a similar slot to Stephen Phipps. And if he isn’t reigned in, he will kill XEL. I think the question that you had to ask yourself (and obviously did) is, would RC have met with me before things got so desperate. I can only presume you have converted paper losses to tangible ones based on that answer."
A Canadian investor "Heavy oil is black that’s for sure. I’ve had it running in my eyes and down the back of my neck. When we pulled perforating guns to surface it sticks to the gun like tar and when stripping the wireline the lubricator fills up full of the tar and lets lose in big gobs of the stuff covering anyone on the rig floor, and it’s a ***** to get off. XEL had made me scitzo for the last five years. So along with your bipolar disorder maybe we can get a group rate on meds and therapy."
[The bipolar mention is a common complaint associated with investors in oil]
I have other contacts that may still be around but they really did know their stuff. I've put out the feelers. The RAR is somewhere and will make absorbing reading. My feeling is that if anybody wanted to avoid Bressay and Bentley being stranded in the current climate then you have to make it very attractive to EnQuest. I expect OGA and government intervention that will be favourable to us. Without it EnQuest will just let the licenses expire as nobody else will buy them. We have a very strong hand. It will probably go quiet now for some time but I could see a hub development attracting new money. These are probably the biggest negotiations that EnQuest has entered since Kraken sanction. My money is on AB. The man is a visionary.

I don't think of myself as a failure; just as being unspoilt by success.

Hi Slift - you're right because at different times and scheduling things can be so different. Even allowing for that its all about the money and if you don't get the investment it is a downward spiral. This from contemporaneous notes of mine at May 2015 EnQuest AGM.
I asked “Why was it that Xcite released an RNS for collaboration with Statoil and Enquest last September whilst we were greeted with silence by Enquest. Was it sour grapes that first mover advantage that Enquest had was lost because of the spot movement of oil and that Xcite were now reaping the benefit of lower contractor costs?”
I aimed it at the Chairman Jim Buckee who is known for his combative nature and instead got bemusement back. They honestly hadn’t thought about it and I’d even go as far as to say that Xcite wasn’t on their radar. They treated me with respect but I felt as dopey as the next two doddery old guys who got lost in asking about dividends (there were only 3 questions) out of the 12 PI’s attending. I think they tried to help me but in all honesty they were prepared to answer but didn’t understand the question. In fact JB tried to help when I said that Xcite was also in heavy oil he said “I worked in Canada and this [EnQuest oil] is “champagne”. The CEO also tried to help and said it was to help with gas import but we knew that anyway, it was in the RNS. {I've forgotten what the gas import significance was]
I spoke with their CFO and another Director and as soon as politely possible I brought the subject around to Xcite. I tried to restore some credibility following my question and said that Xcite were capable of getting oil out at a breakeven of $35.00. I was met with incredulity. They were aware it required diluents and once again I was treated with kindness but was clearly a dope as they assumed I had misread the RAR.
I then spoke to Neil NcCulloch.
He explained that there are 5 heavy oil fields in the NS. Alba/Captain – Kraken – Bressay – Mariner – Bentley. Alba/Captain and Kraken flow unaided; the others do not. He said that Statoil haven’t yet managed to get their fields to their economic requirements (confused here because I thought Mariner was sanctioned but I may have misheard). The $15mio for data sold by Xcite to Statoil was pooh-pooed. I got the impression Statoil bought it cheap and for peanuts. He said that EOR is irrelevant for now. After primary extraction you consider it but that is like 10-15 years away.
When I said break-even at $35 he didn’t scoff but thought that possibly it was using an Early Development Plan (EDP) which is a short term (cheap) plan and not suitable for the lifetime (kinda throws a spanner in the works of the “do it like a major” quote by Xcite for Bentley. He said that c. $50.00 was their cost of production at Kraken. [I believe this to be B/E]

Bit random but sometimes adds colour.

Matt Bower COO of Whalsay Energy is the last link to the failed Xcite team.

If Bentley ever went into production I imagine it would release tax credits to the new owner. Make no mistake here. People will be wondering what AB's play is here.

https://www.investegate.co.uk/xcite-energy-limited--xel-/rns/reserves-assessment-on-the-bentley-field/201304080700077491B/

I knew Bentley inside out and still have some contacts. I need to think this through. My interest in EnQuest was part of a fact finding mission and a nominal holding used to attend an AGM. I liked what I heard and sold out of Excite (XEL). Another reason was the CEO who I spoke to fairly regularly told me that we would be meeting at a graduation day event in Durham. His daughter was in the same college as my daughter and realised he was a man of too many secrets. Bentley is a stranded asset. The license was due (I believe) in June. The only possible future for Bentley (and Bressay) lies in tie-backs or perhaps EP. There was an EWT which proved the oil and an amount (memory $15mio) was sold to BP. Unfortunately this was another company launch when oil was $100 ish. It was never going to succeed and the finance never arrived. Statoil bought some data off them as well. EnQuest have an enormous amount of data to back up their decision. They knew they were the only buyer and here lies the crux. Undeveloped it has cost us pennies. Developed we will leap up the charts in terms of production and reserves. I love it!
A Sea Lion at half the price? So many options. If AB pulls this off as a development hub we are made!

I'll dig around and see what I have kept and throw it in the mix.

Chelsea Trust allowed 2 visitors over the weekend. Bart's performed no heart operations last Tuesday. It was because they were going back to a pre-Covid scenario where the operating theatres could deal with elective surgery rather than prioritise heart patients. Deep cleaning will be reduced and numbers of operations will climb. Another Trust was getting something like £36k a ward for making it Covid priority. A nice earner, in fact enough to employ 2 new executives. Even gifts never reached the nurses.
Covid is beaten but of course not in India, It won't be an even recovery but it is underway in many parts of the world. UK, US, and China for example.

Around the turn of the 19/20th century the old transport system of horses and carts was being challenged by two systems. One third of all of Europe's cars were electric. In the U.S.A. it was higher. The first car to go over 100 kilometres per hour was in fact an electric. The same year that Henry Ford launched the Model T, he bought an electric car for his wife.
I only mention this to counter the level of ignorance displayed on this board. Sure EV's are coming but listening to advertisising and PR companies always make older machines appear outdated and the word "NEW" isn't only used by Cadbury's or supermarkets. Once the subsidies are removed new advances have to face real world tests.
That is for others to decide but the media has begun to question the ESG narrative. Boris is fond of making promises that will not be found out until after he has gone. The "green bond" market is not so green and attracting "gravy train" comments (Mexico City $6bn bond to build (wait for it) an effing airport) where bonds only have a fleeting connection with renewables. The Hydrogen projects in the UK are laughable. As for the promise to ban gas boilers from2025 this will only apply to new builds and replace with heat pumps. To match the existing home stock of England only will take what ? 125 years by my reckoning. However, Boris "plans" to ban existing gas boilers from being replaced from the mid 2030's. Right, now can you imagine any party getting elected by promising to bill you (say) £15k + when your boiler conks out. Naturally lobbyists for those with their hand outs will want subsidies. it is fool's gold and likely that retrofitting and heat pump demand will fizzle out.
Ignore chilting because he talks nonsense. I am a plumber (qualified) and have a level 3 diploma in Green Deal Domestic Advice Training. Unlike those being lured by click bait and promises I do my own research. I can promise you that the situation in the real world is totally different to the rosy picture being painted by lobbyists. State run centralised missions stretching over decades and involving trillions of pounds that brook no dissent deserve to be coralled with the religious nutters and other evangelists that have nothing else to do.

Sometimes all it takes is a phrase or expression to condense or express your thoughts. This from the latest Adam Rozencwajg missive.
We have been relegated to the uninvestible bucket. "The ESG movement has created forced sellers and in turn, this has created a generational opportunity."
You could not have avoided the tsunami of negative sentiment out of every orifice of the media. I worked in the City and as much as greed is the goal so to is CYA and safety of the herd. They've overdone it. Plain and simple.
We've built the best mousetrap and the braver (and greedier) investors have us on the radar. EIG and what they've done is a good example. Would you rather be invested in a company that is an essential part of the transition process or in exploration or trying to finance a new development. We're in a good place.

Be Lucky

Good posts PR/Juan. It's the prudent homeowner who dreams of a zero mortgage not a dynamic oil company. Companies involved in property buy land and properties ahead usually with debt. Our debt will continue to decrease and is a lower ratio as reserves increase. The majors can't go back in the NS and we are filling the vacuum. The future is bright.

I omitted that we also have the public quotation that currently has all the attraction of a lead brick. That will change when investors start hunting yield and we are providing it.

Private equity now controls 30 per cent of NS production and heading higher. The majors are divesting from the NS and the opportunities that this throws out have not only attracted the non-public traditional players (EIG) in this space but acquisitive personal corporations, akin to Ineos. It is complicated and the traditional oil company may struggle. The HBR comparison is valid imo and although we are a public company I cannot think of another with 15 percent basically controlled by one man. We are a hybrid in some sense and you can vote (buy/sell) whether you think this an advantage or not.
We already have what HBR bought (tax credits) but they pounced on a failing company. AB doesn't have that pressure. Investec argue that the potential dividends that may be drawn from money generative producers are an attraction (when haven't theybeen). Fossil fuels are unloved but in the same spirit I only made money on tobacco shares whilst you don't often read of penniless arms traders.
The Tilt subject refers to the fact that it is likely that companies like Neo, HBR and Enquest will soon be in the majority as the majors divestment fron the NS continues.
I couldn't care less what 2050 brings as this investment only needs 10 years to bea multi-bagger. With a headline fee of 40 percent versus Norway's 70 the UK tax regime is probably the most enticing on earth. Against this th at ESG pressure won't go away which is why the majors want to exit now.

I think we are ideally placec for the next 15 years. Moving to a predictabe boring stock is my wish. I don't want popularity. I want dividends.

Be Lucky

Is the message and China and the US are having fresh talks. What countries pursue most of all is stabilty and energy security. Whatever your view, transition is here to stay. Just don't expect China and India to kowtow to Western diktat. Many oil companies have slimmed down whilst the majors divest their smaller les s efficient fields which helps their scope 1 and 2 targets disproportionately. We are smaller but arguably ahead of HBR who are risk averse and questioning the risk and huge investment required for new fields. I wonder if Sea Lion will ever be developed with decent returns on being part of "the transition" available?
Bressay remains enigmatic to me but is nearby and a useful wild card imo. We have options.

Juan - it's not the lights. It's the voices! I've turned him green. Thank f... He isn't invested because then he'd be like herpes. I worked out it'd take me something like 27 years for me to acheive his posting output. Maybe he isn't real and is an algobot?
His knowledge of green energy is lamentable but he's an evangelist for the untried or prohibitively expensive.
Be Lucky.

Agree Taverham. I cannot really think of any industry that is risk free or faces head winds from time to time. Chilting is the Stanley Green of oil and is best ignored. Regular updates of his indecision only helps him.
Back in the real world.
There is $80 bn of divestment by the majors to fight over so plenty to keep us going for reserve replacement. The majors need us for Scope 1/2 reasons and they have plenty of irons in the fire (Shell sells more coffee than Starbucks). Apparently fossil fuels have no future and common dates batted around are net zero 2035 and 2050. I'm more concerned about the next 10 years where I think EnQuest is ideally placed. Oil will be throwing off cash in the form of dividends and whilst the institutions in thrall to ESG or investor leverage cannot join in many will. There is talk around of the transition being from majors to private . That would be the likes of EIG. We're ahead of that and with a large single shareholder can ignore some of the wailing and Greta's who want walk us back to a better yesterday. To me EnQuest will have bond qualities. Predictability, lower risk and a company forged in difficult times. As always it'll be the cash we'll be throwing off that pushes the price higher. Capital appreciation and dividend - luvly jubbly