Member Info for romaron

Sorry - when I said 1 and 7 I should have said lowest and highest.

What is the point of them? This today's 3 minute read from Reuters who I usually have a lot of respect for:

https://www.reuters.com/article/oil-prices-poll-int/oil-set-for-steady-gains-as-economies-shake-off-pandemic-blues-reuters-poll-idUSKBN2AQ1IG

Some pretty graphs and the consensus that the oil forecast for 2021 is $59.07 for Brent. I've checked their calcs and we have averaged $58.80 so far this year. So after careful thought the 55 participants average guess is $59.07 for all of 2021.
In that case Juan you might as well go back to bed. Nothing likely to change until 2022.

I have set Libor rates in the past (Italian Lira) and from memory it was 7 banks provided them. They knocked off numbers 1 and 7 and took an average of the other 5 (BCI was always a bit high because Foreign Trade Moscow was a big customer).
So the unusually high criteria for the chosen 7 is that they have shown that a few brain cells still function and they aren't members of QAnon.
I invite these 6 to give their estimate for Brent 2021. I'm the 7th (my ball) and will kick off with $72
Pelle
Hitman
E121
L7
Juan
Therapist

******** I think these exercises are a little puerile but then so is the Reuters poll. It is only a bit of fun but there will be a bottle of Bollinger for the winner in 10 months time.

A recent missive from Goehring & Rozencwajg says that historically for 80 percent of the time the price of oil relative to gold has been in the 10:30 range. So that's roughly 60 - 180 dollars a barrel. Still plenty of room on the upside.

Interesting day. With the new appointments and the Chairman's influence yet to show this company continues to be enigmatic. Malaysia seems sure to be part of future plans. This is not the stock to follow or invest in if you require regular presentations and interviews. Tony Durrant did Malcy whilst AB did Davos. Take your pick.
Some large trades with a buy against reporting but the punters went elsewhere today. Not surprised as a field that was largely on the backburner has certain posters suggesting it was an inept move. That is more a symptom of negative sentiment that they post at every opportunity. Caveat emptor still exists but with the Petrofac and Malaysian connections I don't see us selling a pup or the buyers buying one for that matter. This looks like a deal that suited both parties. I think there are other deals in the pipeline and Eagle doesn't fit our plans or has the necessary scale.
I'm glad that AB has a tin ear to retail investors and message boards. His aims seem pretty clear to me.
This board used to be about how damaging the debt was and the threat of imminent maturities. Where did that go?
Well today the lenders seemed happy with the news and both the HYN and RB went higher. Most retail investors didn't really understand the deal today and $1 didn't get their pulses racing. I think it is almost a house-keeping exercise but of course has to be reported to (RNS) a market that by and large doesn't get it. We don't have to. Some RNS's are less important than others. This was one of them.

Just fine tuning of the mousetrap.

Some lumpy trades described as BUYS but flat. Maybe the Algos don't like that type of RNS.

I think it unfair to accuse gkb of being over cautious. After all with the extremes of weather we've seen who is to say that we might not hit an iceberg? It has happened before, as recently as 1912.
However, the riskiest incidents on an FPSO are crane accidents and spillage. They tend not to sink. I was shocked by this research so intend to avoid investing in docks, high rise property and anything to do with kitchens.

It's basically a Malaysian company. I read that they took a punt on not hedging or selling the crude from their existing (low) production. Seems we've moved up a stage. We're leaving the exploration to somebody else. Intriguing.

Hi E and the good news keeps coming. I wasn't going to post this because it was a reply from IR I got today and it said nothing; or did it?
I was interested in the level of stock-on-loan and thought that if anybody knows it then it should be EnQuest. Here it is -
"Yes – oil price looking good and we have a high-value proposed acquisition etc. And there is hope on the lifting of lockdown restrictions! All going in the right direction. Hope you are well.
From data we received recently (c10 days or so ago), looks like IHS Markit shorts were at a similar level as you quote below."

The first sentence says nothing new but the second sentence does. I'd imagine quite a few of us have worked at one time or another for a publicly quoted company. Most people just get on with their job and the share price performance rarely comes up or is even followed. Except, when the company is in the news and that is more likely to be because of problems. On reflection I quite like it that they're getting on with the day job and leaving the tracking and theorising to obsessionals like me. They have more pragmatic things to do than follow the ebb and flow of the share price or worry about shareholdings that are just as likely to be misunderstood as helpful. That is good news too.

Be Lucky

typo .... Jeff Currie of Goldman's

We haven't been able to say that for a few years!
https://www.youtube.com/watch?v=WdjTi-uhoqI
Listen 5.00 - 6.00 Jim Buckee was our Chairman a few years back.
Explore out of equity- tick, which means there shouldn't be any surprise calls on equity again.
Develop out of debt - after a harrowing 3 years we are nearly there. At 93.50 we are sub 10 percent.

Today HYN closed at 85.558 It was 67.341 at end of the year.

the RB is 83.525 end of the year it was 66.25 (there has been an interest payment/PIK on the RB which is worth almost 3 pips so they are marching in lock-step). I should know the interest payment dates for the HYN but I don't and am too lazy to look them up.

The point of this post is that we are getting stronger and the lenders are being awfully nice to us (I'd imagine). Having said that Jim Currie of Goldman's did say that borrowing for capex is getting increasingly difficult. Lucky then that we won't be in that position if this keeps on. It is usually reflected in the interest rate and we are seeing signs of inflation. However, that is compensated by higher oil. I'm ignoring the fact that the RB is in sterling and the HYN is in dollars because it makes my head hurt trying to work out the impact.
The company is well placed and I'd say the AB plan is coming together. He is a seriously wealthy man anyway so I doubt he's as excited as we are with recent hike as the sentiment changes and forecasts of a supply shortage become more likely but he's still in the game. That's because he is a good man and a philanthropist. If EnQuest succeeds then so does the Amjad & Suha Bseisu Foundation. I don't want him leaving the company for a good few years yet!

There isn't really another stock quite like it in the UK.

Ko - Ammu is doing very well. He's gone back into the family business. He wants to become a professional clown just like his grandad. He's got some big shoes to fill.

Before we get some news that moves the price the following might be helpful for our Swedish friends. There is (apparently) only video of the "I'm Sorry I Haven't a Clue". https://www.youtube.com/watch?v=5ohQt_P_wpU
In fact around 4.50 there are some new dictionary definitions which could help improve their English.

O/T Juan was spotted swanning around the flight deck of the FPSO in full Royal Navy dress uniform. As far as I know he was a Sea Scout back in the day. He was displaying a fine array of medals but on closer inspection one was for 25 metres breaststroke. Apparently the 60p is going to be fancy dress.

Sorry guys, he may be a little blunt but PYUECK isn't that wrong. EBITDA is probably a useful sifting tool if you're investigating a bunch of similar stocks but it then requires further investigation. If he was just a deramper I'd get annoyed too but I believe he is a holder. Even if he isn't he isn't he's entitled to an opinion. He may well have gone to the same charm school as HMH.

error 06.57 - I should have written you tend not to get sued by the lenders if you undervalue. The surveyor is usually working for the mortgage lender. There's safety in being cautious which is why the over exuberance sometimes found here goes straight into the professional's pocket.
Over valuations I believe are causing Donald Trump a few problems.

Here's a thought. Lets assume the holders of the HYNs must at some stage have to enter them on a tax return or yearly returns etc...
There isn't the convenient UT trade or LIBOR for a thinly held junk bond but there is a need for a valuation. Somebody independent must provide it and like the surveyor can be sued for negligence if they get it wrong. Now, it's a funny old world and you tend NOT to be sued if you overvalue. Which is why when you try and raise a mortgage it is usually valued less then you are paying for it. Especially in a sticky market.
That doesn't explain the RB that well but if you're getting the same advice as SIPP then it's not surprising.
So, I have a weak argument supporting my claim that the HYN will always be undervalued. Doesn't really explain the RB though but perhaps the investor attracted to bonds just reads "oil is finished" and leaves alone.

Pelle and anybody. I use the Euroclear free site for stock on loan and it is always at least behind (23 days today). I believe it is possible to get an up to date figure for stock on loan. I think IHS Markit have the latest figures. It might be worth leaning on somebody. An example (if I'm right) of the advantage the professionals have.

Thanks for the replies guys. SIPP, you got some duff advice there but TBF that is often the case. The RB spreads though are terrible. The bonds, and especially the $ HYNs are esoteric and only really for professionals (I'm not). I've had some further thoughts. Parking the RB because they are relatively new and very UK based and concentrating on the HYNs and the equity.

I believe the HYNs are in the hands of a few specialist funds. These guys know their stuff and treat the equity in the same way Ladbroke's treat their "clients". SIPP's contribution is valuable because he mentions algos. I think the important point is that IF the bond holders have an equity interest the algos are important. However, I believe there is a total absence of algos in the bond.

There is a comparison in my mind to property valuation. Because of the volume/turnover there is a (wrong) assumption that equity prices are correct and is reinforced by predictability and activity of algos. There is some truth in this because you have drive by and desk top valuations for residential property that is acceptable to mortgage lenders. This is because a row of terraces in the suburbs has enough turnover to get an idea of the prices and the risk of being sued for negligence is low. Basically, you only really need to know the house exists.
However, the stand alone building by the sea or one with extensive land with potential attached for example has no easy comparator. That is what I feel the HYNs are. They are almost a landbank to the the owners and they really only need to revalue once a year or if increasing or decreasing their holding. A daily revaluation is unnecessary. Think of it like valuing your own house. Most of the time it's irrelevant. The market certainly isn't perfect and I'd say both the HYN and share price are wrong and have been for some time. However, the HYN doesn't really come into market play until maturity or rescheduling the debt becomes due. Naturally the owners are always open to interesting "offers".

I imagine the owners of the HYNs are quite happy with their position. They have their own idea of its value and I don't think it's 83.977. I doubt they revalue every day other than allowing for accrual of interest. I'd argue 90 but it'd be the devil's own job to prove me wrong.

*I am a qualified building surveyor (non-practising). The cost of Professional Indemnity is prohibitively expensive but so too is it with Financial Advisors. That is why caution is always applied often with the caveat that "further investigation is required" and to get yet another "expert" in. It is a freedom to be able to ignore this and have a dabble in shares.

No shorts above half a percent reported. There will always be some shorts and as we saw with PMO sometimes they're not reported. Stock on loan might be a better guide. End June 5.77 End DEC 3.55 End Jan 3.04

https://my.euroclear.com/dashboards/en/guest-group-dashboard.html

Something else. I don't follow as many shares as others and only hold EnQuest (sold small PMO) and there are only a handful that I know a little about. Companies with production and bonds seem to have done well today. ENQ, PMO, TLW.
Companies with raising money likely to be an issue didn't do well HUR, RKH, JOG.
I can't explain CNE.

I wasn't expecting today TBH. I thought we'd got a bit carried away with the Covid and stimulus package. Both are only 98% certain and some weeks/months away. Still, happy to go with the flow.

This is aimed at HMH. Most here aren't that interested in the bonds but I believe they are more structured than the equity and just as important to what is going on as the share price. To complicate matters the shares are "junk". The polite term for High Yield Notes. The Retail Bond is a bit of a hybrid in that it has UK restrictions and was aimed at the retail market. The complication is that we have little idea who holds them, when they bought them, and their targets. With the travails of the past 5/6 years I'd say few are original holders. If the funds that play in distressed debt are involved they often hedge the position against the equity. Long bonds/short stock.
Today the debt/bond price weakened. The RB went from 83.93 to 83.80 and the $HYN from 84.148 to 83.977.
One factor could be the inflation threat. The TLW bonds for comparison moved both ways. The 03/2025 fell from 70.75 to 79.25 whilst the 04/2022 went from 89.315 to 90.711. A guess but inflation further out is a negative consideration for bonds.

I was surprised that with the oil cycle narrative that the bonds didn't catch the enthusiasm. I also think that the HYN's trade even less than the RB. So here is one explanation. Those holding the paper are also short of a percentage of shares. I say this because we've seen it many times as an arbitrage play elsewhere (e.g. PMO). They are profit taking. They could have bought the bonds below 40 quite easily (I have some RB there). It could be an unwind. It might even be that the company has (in their eyes) passed a medical and they no longer need the share hedge.

There isn't much of a market in the RB and I'm sure it's even worse with the HYN. They control the price mechanism so it is largely irrelevant and you can't tell that much from it. I think these shorts related to the bonds have been unwound. they are no longer needed.

What do you think HMH? Others welcome to chip in.

Have we removed the stabilisers?