Member Info for romaron

Dunno about that hitman but people here talk in 100's of millions and billions sometimes but $50mio is treated as a ransom demand. Don't subscribe. You don't have to. AB will buy them. JP Morgan has underwritten them. The shareholders have a choice. Saying NO won't make any difference. The new SFA is almost done and dusted. It takes time. There's the CPR for start.

Pelle - I think you'll find that I stressed that this isn't like double-entry book keeping and is so neat and tidy that it all matches up. I said that we were rapidly earning FCF and nothing in finance gets left to the last moment. We have to clear the SFA by October 1. We had other loans scattered around. I think I even said it would be an opportunity for a clean up. Don't make me go back over them. If you thought our financiers were happy to let it run to see how close we got then you shouldn't be investing. Cancelling the deal? Yes, we would be in a big problem because investors turn it down and the lenders enforce covenant breach. There is a fire-sale in this market and the bond holders get a share of the receipts and the equity holders get nothing. I've never considered suicide. Have you?

.... and how does that work Elitesky? Not being sarcastic. Genuinely interested.

and it has turned out not to be a problem Pelle.

Not at all. Yourself and Squif will have an opportunity to vote. I'm saying that the finances needed to be addressed and more investors would like to see the company grow. Our position is far better than PMO, TLW, RKH, SOU etc... BP, Exxon and Shell haven't set the world alight recently either.

Hi Elitesky - so you want to jeopardise our finances and not increase reserves or production. Every day 30 September gets closer. What's your alternative?

Hi Squif - I must admit my initial response was like Brenda's https://www.facebook.com/watch/?v=1435841549809802

The dust hasn't really settled in all honesty but I've had time to reflect and it actually included the solution to the existing looming SFA maturity. I am settled but we need to read the market next week when it filters through. I think the analysts will like it. I think the $50mio was unavoidable within the time constraints and a need to close the deal. I still think AB was irritated and some of it could well be that us lesser mortals weren't "getting it". The problem isn't the $50mio as such; the problem is that us retail investors had an unexpected bill land on the mat. I'll happily buy some at a discounted 8% (say) in September. Jan may cry foul as it drags the price under 60p delaying the party yet again. Joking but the current price doesn't make much sense. If things stay the same we'll be an unarguably very investible opportunity Q3/4.

AB doesn't drink and he doesn't come over as a golfer but may be. It was more that this is his company. He left a safe environment to run his own company to a large extent. He is coming up to his 11th year and I imagine it has taken him longer than expected to get to this size. One advantage I have over many here is that I've been their age. I know what it is to be 58 and getting sick up to the gills with the day job. Jeff Bezos announced he is stepping down. It is the usual cycle. A wild bet here but I think AB may step down in (say) 3 years because I see a much bigger and valuable company then. He may go for Chairman. Unusually, his ambitions are more in line with us retail investors and he has suffered loss too. I think you're wrong about him but value your opinion. You are definitely wrong about the majority of shareholders not being behind him. Look at any of the AGM resolutions. This deal is going through.

As of September 17, 2018, Davidson Kempner was ranked as the 9th largest hedge fund in the world.
Davidson Kempner uses a fundamental analysis, bottom-up approach to make its investments. The firm focuses on five investment strategies: merger arbitrage, distressed investments, long/short equity, convertible bonds arbitrage and long/short credit, with a particular focus on distressed investments and merger arbitrage. (from wikipedia)

I think we're pretty robust but these kind of firms look for cheap targets. They aren't looking for a 5 percent turn. They're here for a reason. This is a £5 share once people start spending again.

It's a backstop. Unlikely to ever be used and is underwritten by JP Morgan if my memory is correct. A condition of the new SFA being arranged. It is quite normal for lenders to require a contribution from equity. Now it has settled down a bit we can look more dispassionately at the deal. I'm beginning to think we might be running a bit low on debt in the future and that could constrain our growth.
"Debt is your friend (as long as you don't have too much). Explore out of equity, develop out of debt."
https://www.youtube.com/watch?v=WdjTi-uhoqI from 5.00

As far as I know we are a developer more than an explorer. Dumbly, it is at least 6 months away. It is common to discount an OO or RI which often indicates problems with the company which is why the market is wary of them and retail investors have been conditioned to always read/fear the worse. I almost felt the hand already in my pocket. Knowing it is some months away and we are making decent money again I am relaxed. There was no way on earth we could have increased our reserves or production without borrowing. Not because we're distressed but because of recent events. What we've done is prudent and timely. We can actually relax now because the SFA deadline pressure has gone. All we've done is borrow short term until pay day.

I'm more interested in what AB and JS have planned. AB is the same age as Jeff Bezos at Amazon. I'm sure all of them have other plans and I think AB will stop when EnQuest is big enough and he can devote more time to his other interests. At least that'll keep him going for a few more years.

Hi yeah-baby for exactly the same reason that footballers contracts are renewed sometimes a year before maturity and builders don't wait until the new owners enter the building until starting a new project. EnQuest are (have to be) forward looking. The alternative is to run the company into the ground. Lead times (and in oil they're looong) mean lots of forward planning. We don't know what goes on in the board's head but we'll have a lot more flexibility come September if oil hold up till then. Perhaps the war chest will go towards other purchases or Bressay. I don't think Bressay will be needing that much this year.

Blimey chilting I agree with you for once "The problem is that AB has little choice but to go back to the shareholders for equity"

I would write "AB had NO choice". The system employed for borrowing money requires guarantees, security and safety nets for the seller too.
If everything goes well Bressay will be a different story. We already have the FPSO and it may be a system of tie-backs. Early days.

Hi hitman - your 23.35 " I can't imagine the banks were thinking this was possible." Spot on. They didn't have to, they weren't the supplicant. Suncor would have had demands too. Pretty sure AB and his advisers would be aware that retail shareholders would be miffed. However, unlikely ANY deal would go ahead without shareholder participation. I think we all understand the need to stock up on reserves and increase production because field declines are a natural occurrence and unavoidable.
Good posts L7. I'm actually happy with the deal today. Nobody can tell the future but likely it would be more expensive if negotiations started today.

Oops

You're miles out hitman. I've got it as 60p with the OO at 57p. Could cause a softening below 60p. Are you gonna tell Jan or should I? He loves a party.

You're miles out hitman. I've got it as 60p with the OO at 57p. Could cause a softening below 60p. Are you gonna tell Jan or should I? He loves a party.

Actually Pelle you did stumble upon something there. Listen between 8.00 and 9.00 Jim Buckee ex Chairman EnQuest.
UK executives aren't as committed as those in the US and Canada. Its a different culture. I don't think AB is typical of UK CEO's. I think at times he becomes frustrated. he made his name in the US.

https://www.youtube.com/watch?v=WdjTi-uhoqI

Excellent

Friday tomorrow.

Think about it Pelle. He can't. There'd be uproar and accusations of insider knowledge. Governance is taken pretty seriously here. It is sometimes better to just accept the traditional path. The company has taken enough flak for their complicated borrowing arrangements so a bit of steady as she goes is welcome. As I said. I detected suppressed anger in the audio (c.5.40). In my vernacular it is the equivalent of "for f***s sake its only pocket money". For some it is a small amount. I think he was getting p****d about the emphasis on the wrong thing. Shame it's Thursday tomorrow so a bit late to see how the market takes it. Next week will clarify I think.

If you want certainty chilting you shouldn't be in oil. Commodity cycles are well known but never easy to forecast. Oh, I forgot- EnQuest is only 1% of your portfolio. Where do you spend the rest of the day?