Member Info for romaron

it's fashion and trends KO. They do change. See you at the party. I'll be in my flares and Cuban heels. Even got the long hair back due to Covid.

Some amazing graphs posted on his twitter account

https://twitter.com/aeberman12

With declines and lack of investment it looks like we're pretty safe until 2050. I'll probably sell before then.

Doggerel

Pelle - I don't know and I don't know if you can find out. It could be zero. Looks like the RB is a tad softer today but that's the whole bond market with the inflation talk around.

Sometimes cold weather and the condensate pipe is the cause.

I try to add knowledge but spin and primetime once again show their recalcitrant nature. It could mean detention is an option or a letter to their mum.
Two observations. Volume is rubbish again. We need professional and II involvement. Even the algos need a little encouragement. The City is still in lockdown. I believe we really need to see people meeting face to face and the normal rumour mill and herd (trend) migrations will begin in earnest. It cannot be far away, surely.
ENQ1 Retail Bond https://www.londonstockexchange.com/stock/ENQ1/enquest-plc/company-page
The page I have in front of me is frozen and hasn't changed for days. Last trade 04/02 08:50:31 There must have been some deals. Is there another page that gives details?

Hi tiny - I'd question that 4:1. They're a bit like mileage per gallon and you need to coast down hill to get anywhere close. I was involved a few years ago and I know that even 3:1 was being questioned. They're noisy too and not always easy to position.
I'm not against them just trying to use real world scenarios. If there's no way you'd ever recoup your outlay via bill savings it becomes a hard sell. They'll only do it via new builds. The real world does sometimes get through to the dreamers.

From an EDF article: "But there’s little doubt that new homes are a sensible starting point. A government committee found that the cost of installing low-carbon heating in a new home was less than £5,000. That’s FIVE times less than it costs to upgrade an old home." This is the reason it only works for new builds.
They say they'll ban gas boilers from 2025. Anybody wanna bet? It'll be dragged out. BUT- I expect it to happen. I think they've finally sold the last band B gas boilers that were still being knocked out in 2015 (banned 2011).
So the take up will be new homes. Lets say 250,000 p.a. and I'm being generous. The current stock of homes is c. 25mio.
The statisticians here can workout how long it'll take before they overtake gas but most of us won't be around. Lets say it's between 50 and 100 years. Of course you can adapt your old home. At 5 X the cost let's call it a round £25,000. Don't even start on the savings on the bill; maybe 50-100 years again. I know this is gas but worth bearing in mind when you're thinking that oil is over.

My ox-cart is handling the wintry conditions well. Those smug buggers in their heated Range Rovers don't know what they're missing!

Michael Gove criticised over 68% fall in exports to EU. The RHA study also found that 65 to 75% of vehicles arriving from the EU were returning to the bloc empty due to a lack of goods.
According to the body’s chief executive Richard Burnett, British firms are finding the new export rules “deeply frustrating and annoying”.
Burnett called on the government to increase the number of customs agents from 10,000 to 500,000 to help firms with extra post-Brexit paperwork.

Sorry mate, can't help you . We need all the help we can get to allocate green grants. Best wishes Fred Karno (a.k.a. Michael Gove.

chilting -I am a simple person, not a scientist. I don't know what you are talking about.
KO- There's always incentives and sometimes the installers or their representatives are, lets just say, over-enthusiastic. They work best with underfloor heating and if using rads they have to be bigger. The main problem though is heat loss and you need very good insulation. Most of out housing stock is unsuitable and the cost to bring it up to the required standard can be prohibitive.
We aren't talking pennies here. My house is 1994 build and I wouldn't consider a heat pump. The heat pump isn't the problem here.
I bumped into a retail analyst I know the other day and we were both ****ging off energy costs. I moaned about heat pumps and how the public are being misled. He replied that he'd had one installed. I was bowled over because he lives in a huge Grade 2 house in Hadley Green [next door to where Robert Carr was bombed]. He has a 4 bed cottage in the garden but that had to be a 100 years old so how could I be so wrong. He is not a stupid man.
It turns out he had a new gym/changing rooms built and renovated his swimming pool. The heat pump was for that.

Same article- Shell is sticking to its post-2023 assumption of $60 for oil and $3 for gas. BP is lower with $55 and $2.9 but that was in August.

There was a piece in the paper that Covid increased global warming in 2020. Due to decreased activity there wasn't enough soot/smog/shade to deflect the sun's rays. I'm a sceptic in that I don't believe the r.o.w. will eagerly grasp expensive green energy. Net zero by 2050 (2060 for China) isn't the last barrel of oil out of the ground. That gives us a run of over 30 years and it still won't be over. How many retail brands/stores and restaurants even reach a 30 year lifespan?
I know more about green energy than most from the sharp end. The outside cladding for apartment blocks was a success wasn't it? The people who make most are those involved in the grants. Green Home Grants are struggling but the bureaucrats get paid whatever. Companies make token gestures but that is only a form of lobbying and the money spent is the equivalent of medieval buying of indulgences. Fashions change but people will always require energy. To pretend cost doesn't matter is a myth. Ground/air source heat pumps only really work on new builds or if you have money to burn for installation requirements. Hydrogen. Brilliant except it costs the earth and physics is an awkward science in that it doesn't really do alchemy that well.

gkb wrote "One thing that really needs to be understood is that the break even point for shale from the USA isn't that far away from the break even point for the North Sea."
No it isn't. Not according to Seadrill, Morgan Stanley Equity Research and , IEA (April 2015) who are (I would suggest) more qualified and better read than you.
https://www.coursehero.com/file/pfh2cc/1-Source-Seadrill-Morgan-Stanley-Equity-Research-International-Energy-Agency/
Its blurry and I don't have the computer skills but Breakeven prices of Crude were
Onshore ME $27, Offshore shelf $41, Heavy $47, NAm Shale $65
These figures move around but the order won't. The gap then was $24.
Another comment that supports this is the Art Berman quote that shale never made a profit when oil was $57.

Chilting - AB isn't lucky? He's luckier than the CEO's of PMO and TLW.

This is fag packet level (it's all can do) so no heckling at the back. I'd like to compare Shell's enterprise value to ours. I'm only doing MC + net debt just for a rough comparison and to explain.
End 2020
EnQuest MC $300m debt 1.2bn = EV $1.5bn
Shell MC $137bn debt $75bn = EV $212bn
As we repay debt our MC will rise and at the end of 2022 our situation might read MC$1bn debt $500m. If the oil gods smile on us and output stays at 60k we could be generating FCF of anywhere between $600-750mio for the year 2023. That is actually a better ratio than Shell. I'll accept the point that it is meaningless but I was attracted to this in the weekend press.
"Shell has said it will return to shareholders 20pc to 30pc of cash flow from operations once it cuts net debt -which rose to $75.4bn over the last quarter - down to $65bn."
That would be a situation (ratio wise) similar to ours. The point is that looking at the lower end; EnQuest could return 20pc of cash flow to shareholders. So 20pc of $600m is $120mio. I know there will be more shareholders then (say) 2bn that's $6 cents a share minimum. It might not sound much but that's a third of the current share price.
A share price of at least 50p with dividend is quite a modest target imo.

L7 - I'm one of the remedial group with their noses pressed against the window listening to you guys in the top set discuss the accounts. The lease cost and where its shown does seem to be a recurring question. It might be a simple question to put to IR?
If it is "commercially sensitive" then there are 2 prospectuses coming out that might by law require the costs to be given. One is ours and is some months away and the other is the Chrysaor/PMO merger. I like your idea of working back by from Catcher to Cairn to Kraken. Sneaky.
Can't wait to see the conclusion of these discussions.

PR - I agree. Balls are in the air.

It keeps coming back to the demand for the $50m from the shareholders. The immediate reaction is that it is a RI from a position of weakness. It isn't. I take hitman's point that we shouldn't really include the Suncor asset until the deal is signed. We want to include it in projections but don't want to pay the $50mio. Well let somebody else pay it then. AB couldn't be clearer. You might miss out on a bargain but the $50mio is already on the table.
We knew that the existing SFA was maturing and there was plenty of chat on here that it wouldn't be left to the last minute because it was a close thing. The company said they had various options to pay off the debt. That was wise as they were still in negotiations with Suncor and BNP. You could argue they played a canny hand. This is a well worked solution and should be praised imo.
So we lost expensive production in 2020. So did the majors and most (if not all) of the shale plays. Few are happy with a cash call (me included) but it is almost certainly a demand from the lenders or even Suncor. AB wouldn't have volunteered it but the alternative is to go back to the existing position. Set up a short term loan to cover the shortfall (if any) on the existing SFA and operate without the hassle of any RBL. No thank you. I want this company to grow and take advantage of the the recovery. Instead of whingeing about this lets put pressure on for a dividend. It can't be far away.

I agree Jan. Let them vent and we can remind them of these posts further down the road. AB & JS aren't perfect but they are an excellent team. People soon forget what we've been through. This from Art Berman yesterday and he does know what he's talking about.
"2020 has been the most tumultuous year for oil markets and prices of my career."
and he's not a young man.
Holders of PMO and TLW did worse than us. BP and Shell aren't tracking Amazon.

More. Is this the first non-operated investment by EnQuest? If so it shows a maturity because it is what it says on the tin. An economic way to grow reserves and keep production up. It is a newish field so should be reliable. Might also add that it doesn't appear to have achieved its potential. Oil fields can be unpredictable but a safe level now. It appears also that fields that underperform on barrelage instead seem to compensate by going on producing for longer so maybe not a bad thing ?
I got the feeling that AB & JS got off lightly. Both were more subdued than usual (imo). They could not afford to be blasé because as they say "there's many a slip 'twixt the cup and the lip". There is roughly 6 months between now and closing the deal. As we know a lot can happen. However, Covid and the oil price forecast is the best its been for some time.
We haven't seen an analyst's report yet. The first questioner was from BNP who are also managing the book-building along with DNB. that was hardly likely to be challenging. I'm assuming it's DNB the Norwegian bank. Don't know if that means anything?
If we have a good clear run to completing this deal then the new RBL is a slam dunk. No guarantees as usual in oil but I really think they need to provide something for the long suffering shareholders. A special dividend would show that. They have these sliding arrangements for buying fields what's wrong with building in shareholder reward?

I'm thinking through so many scenarios at present and it will require the numbers guys and their pencils.
We need to pick a rough date for the sums and I'd suggest 1st September (244 days). JS said in the audio 6 months to pull it together so that's close enough. I've already given up on 50/50 because using Goldman Sachs ($65 by summer and the Suncor deal I'm going 60/60. That means we'll have FCF of what? B/E $25: 60kx244x$35=$512mio.
JS said that the new RBL debt would be North of $700k so lets say $750k. It includes the Suncor payment.
Point here is what happens to the large amount of cash sitting in our bank?
JS said that shareholders hadn't been sounded out in response to a question. Not convinced. It is inside info however the large shareholders haven't abused it in the past and it's pretty naive to think there haven't been discrete enquiries. Retail will go along. Despite the anger here nothing will change imo. What ****es people off (me included) is that this is the 3rd time and is likely creditor pressure and we'll have a chunky amount of bank cash available. Even AB will struggle with $50m and the JP Morgan deal will be for the difference while they place it. I'd rather his shareholding stayed at the current level. He already has enough leverage. I think its benign but whose to say Squif isn't right.
There's some time between the $50m raise and I'm not averse to the company doing something for the retail investor and build something in that gives flexibility or an option when the deal is closed. There will be others interested in the $50m. Some will be Institutions not averse to picking up a chunk at a discount. It wouldn't be done today but prepared in advance. If there is only a month to go variables will be less. The market could well be stronger. I expect it to be. Covid over and demand up. The company could come up with an estimate of the discount to place new shares that existing shareholders do not want. Not make it a raffle on the day but giving us the option of knowing that if we pass on the OO we know what we've missed within reason. If it's say $30 and the OO is $22 I'd want the OO but if its $30/29 I might pass. Do not underestimate derivative traders. They can come up with prices and deals. The closer to the deadline the narrower the price needs to be.
Another thought. I couldn't find it but I believe there is an obstruction to paying dividend attached to the existing RCF. Well, that's going so what's stopping them issuing a dividend as a sweetener from the fat cash balance? A $50mio dividend would be C. 2.15p a share. That would be poetic.