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*The contingent payment increases to $30 million in the event that EnQuest sole risks Equinor in the submission of the field development plan."

Why would we pay the whole amount when Equinor is the one with the money (I assume that's what it means)? I'm discounting the Chrysaor holding as they picked up Bressay as part of the Shell deal and may farm out. If we pay for all the FDP but Equinor keep their 40.81% interest what does that mean? We pay 50% of costs but I assume that's 50% of 81.62% whilst Chrysaor pays 100% of 18.38%. I just need a bit of clarification. It's only a feeling but I don't sense huge commitment from Equinor. We could end up with the whole field. Not sure what I think of that.

Hysteria when War of the Worlds was first broadcast in 1938 - Incidences of people requiring hospital admissions after drinking bleach 2020 - Insane demagogue inciting rioters to invade US capitol 2021. Nuff said.

*shorts anecdote - I wanted to short a particular company some years back but couldn't find a spread betting firm to quote. They don't usually look at anything under £100mio capitalisation. In desperation I called Simon Cawkwell (I don't know him) because I guessed that he'd be interested too. His first question was have the accounts been delayed. He actually knew the Chairman/CEO of the company and took pleasure in telling me he had lunch with him a few days before and lived round the corner from him in Kensington. He gave me a phone number that wasn't a City number. It was based in Basildon, Essex. Everything you've heard negative about Essex could centre on Basildon. They asked me how I got their number. I explained. It helped that I wasn't a friend of SC let's say.
They made a price but it was so wide and fragile that I passed.

I say artificial price but for all I know Gamestop is worth $400 plus and the hedge funds had the wrong valuation. I somehow doubt it. Lottery tickets have the same possibility.

The small army that moved the price artificially high weren't that different to what happened to oil in April. The system has flaws and you wouldn't (I doubt) get the same cohesion over here. I wouldn't be in Gamestop on either side.
The hedge funds have to borrow stock and we may find out there was a simultaneous attack on that front too. Even hedge funds have margin calls and investor responsibilities. They are usually playing with other people's money as well as their own(2 and 20 if they're lucky). They would have been staring at an artificial loss. Depends on what happened with the platforms as well. Could be embarrassing cutting them out and telling them it cost a $100mio. There'll be court cases for sure as there are in the April oil rout. It won't happen again because people will buy physical [oil] first and worry second. Sovereign nations and the majors have options.
As for protecting their position the world and his brother knew what was happening. Tulip mania.
I'm not interested in what happened in the US. I can't see it happening here but then Black Swans are invisible till they arrive.

Bubbles and collapses repeat. The crude crash to negative in April, Gamestop and WallStreetBets, Swiss dropping the Euro peg etc... but I do think this will affect us BIG TIME. Hedge funds and shorters are getting nervous as their weaknesses have been exposed. It's almost as if we would be better off if we were shorted but oil has been ignored for a couple of years though TLW and PMO might benefit. Our shorters are the algorithmic trades. They go home square and only pick off the trades during the day that break the algorithm. They are harmless to some extent and take the small profits from the day traders addiction. A bit like bookies and the doubles, trebles and yankees they lay. It'd be rude not to take money from those so eager to pay it. They don't even bother to lay most of them off because of the size.
Because of no volume EnQuest drifts down. The 3 D's are always with us and they are SELLS. It is depressing for LTH's but quite easily explained. The ESG narrative doesn't help either even though it is not the threat some believe.
I think it possible for some of these Algo trades to be locked out if a circuit breaker is thrown. Then it will revert to old fashioned broker trading. It won't last of course but it will make them think twice. Picking up halfpennies in front of a steam roller has always been dangerous.
Outside of the majors I believe oil has become becalmed in a backwater. The world still runs on oil and that won't change for decades. The world now lives in a virtual reality bubble with Trump and QAnon becoming cults. They are aberrations that should disappear and you have to hold your nerve.
I think that when EnQuest heads North the algos and their feedstock (day traders) will not save them. A lot of holders here won't be profit taking at the RI /OO levels. This will result in a shortage of stock and I think by now we all understand supply and demand.
Throw in Covid which puts all movements on steroids and this could impact the market and certain stocks in a very positive way. The unpopular stocks are now being considered whilst the overpriced will be very frightened at what happened at RobinHood. All the moans we've had with EnQuest could become our saviours. I don't know anybody here apart from the green filters who act like an algorithm.

Those who dance are considered mad by those who can’t hear the music.

Agree hitman. Whichever way you skin it with production and oil price we'll be debt free (or near as) before the bonds mature and I'm using a conservative 50/50 ($50 oil and 50,000 boepd). I don't expect the business to be run down to zero and the bonds will be rolled into new ventures as and when. You have to look at the business as a going concern. With no surprises on the update we should be due a rerate.

Therapist O/T. I did some painting during the first lockdown and spoke to the guy at the paint shop I regularly use. He can talk more than me and he couldn't provide what I needed. He explained it was everywhere (paint shortage) and a lot was due to the demand for white paint which is often a base. What he did say though was that Dulux provided FREE to the Nightingale hospitals Steriguard paint but then had another supply problem. They couldn't source the plastic tubs they come in as they come from China. There was additional problems at the ports. I'm always interested in comments from people at the front line as it were. It is all so simple from behind a keyboard.

*Whilst pleased that I got a vaccination early I had a tinge of remorse today as I read through the UK findings. It could be a little bit of survivor guilt. Out of 62 that got Covid, 56 were in the placebo group. It is likely that some did not survive. I don't feel smug today.

hi hitman - TBH I expected it. If sanitizer can kill it then it's not the most insuperable challenge. Problem is there's nobody to play with and nowhere to go. The news is good and they should open pubs just for us. I go back on the 9th Feb for a 3 month test. Seems few are happy to take this as an all clear signal. Sometimes the media loves to dwell on trivia and misery. Doubt update will change the mind set but eventually the facts will prevail. The figures will speak for themselves. Looking forward to you, Pelle, L7, L3 and others pulling the figures apart.

Hi Modestus - I picked one sentence out of your post. The Americans are more gung-ho whilst over here we are much happier basking in misery and enjoying the rain. I am a bull for EnQuest and oil but the Seeking Alpha article would be reported differently over here.

American English: "Implied oil demand remains strong and still recovering. With COVID-19 cases already falling in the US, and restrictions likely to be lifted, more demand recovery is likely on the horizon."

UK English: "Oil demand remains confusing as conflicting signals indicate caution. Covid 19 vaccinations continue with concerns over mutant variants and the efficacy of the vaccine. Despite this there is a good chance it will stop raining."

https://twitter.com/aeberman12/status/1354823305371422720

"Investors’ focus has shifted to how quickly supply can be brought back to meet recovering demand. While most investors believe the lost production will be easily brought back online, our models tell us something vastly different. While OPEC+ production will likely rebound, non-OPEC+ supply will be extremely challenged. Instead of recovering, our models tell us that non-OPEC+ production is about to decline dramatically from today’s already low levels."

https://blog.gorozen.com/blog/setting-the-stage-for-an-oil-crisis?utm_campaign=Weekly%20Blog%20Notification&utm_medium=email&_hsmi=108370464&_hsenc=p2ANqtz--SPVw5qQiVBEW9JIVSBLW7MTlbN5a7FXi9NsGlIFcQVdGCVI6ztwGBIjfhY5Vks0dmu0kw7dQf6VHby4Gb3m9Y4lpkDg&utm_content=108370464&utm_source=hs_email

KO - I think there is an oversupply/glut. I also think smart money is taking a view that the battle is won and are storing it for now, hence the price holding up. We ignore inventory because (a) we don't understand it and (b) the data is incomplete.
Once it's safe to go out again there will be a massive rebound. I think we're close. I'm a natural optimist. it hasn't been our year but https://www.youtube.com/watch?v=fPr3yvkHYsE

Cash Flow is King

"Investors have largely given up on rewarding companies for boosting output, expanding underground reserves or timely project construction."

https://twitter.com/aeberman12/status/1354428010150191106

Well we could have told them that. Although comparing ourselves to these majors doesn't show us in a particular good light the picture will be drastically different for us at the end of 2021. While their debt surged ours didn't. Oil companies are currently pariahs (along with some other industries) and you get the feeling that they are forgotten. Good news hardly moves the needle whilst anything not so good is amplified and the price falls dramatically. Oil is inelastic. Supply is less responsive to price changes than demand. Its supply is far cheaper than alternatives. The world still needs it and that won't change.

It's not only oil. The whole world is waiting for the vaccine data and the beginning of a return to normal. It could go Boom almost overnight. I'm hoping you can't get a flight, a restaurant booking or room at the bar. We're getting closer every day.

Be Lucky

As always it's about the debt. 160 posts and no mention of it. Their bonds actually held up better than the share price today. The new guy is smooth but why did he take the post? Cairn India - that went well tax wise. Delonex Energy ?? He came over as genuine and committed as Linda Cook. Missed out on the Shell job (woman scorned) but misses the C suite. I think both are probably excellent functionaries in a bureaucratic sense and the type the lenders like to deal with. Sometimes though you need initiative and and being prepared to get down and dirty. Their commitment to their companies is superficial whilst AB has EnQuest running through him and the battle scars.
That dreaded phrase "debt-for-equity" is being bandied around Tullow. I don't really know enough about them but think AVOID is best advice for now. I'm not really expecting much from our update because everything pivots on the success around the world of the vaccines. I think Boris is (this time) under-promising with a view to overdelivering around 22 Feb. I'd like to think that other countries will have good news to pass on too around then.

The future is unpredictable and nobody knows what you are thinking (wives and mothers excluded).

One thing I took from the podcast is that Art Berman felt there was a current surplus which should depress the spot price of oil. Oil is holding up quite well and he explains that there are ways of storing oil that doesn't involve floating tankers (although a possibility). The Chinese for example might be adding to their own SPR? He neatly divides those in the industry who need to sell oil whatever the price and traders. I liken it to oranges. They have seasons and biggest buyers are supermarkets and juice makers. There are different varieties and the largest producers of oranges have long term contracts for reliability reasons. Then you have your market stall (traders) which has volatile pricing due to shortage or glut (probably just doesn't bother or can't get in a shortage). There is of course trading in the much larger wholesale market and these players keep their cards very close to their chest. Some are Sovereign nations and use middle-men to disguise their strategies. Often markets are moved by the noisier market traders who play a much shorter term game. The mention of smart money made me think of the recent interest in the NS by Harbour (Chrysaor) and Hitecvision. Neither would be classed as mugs. There's plenty of life left in the NS.

*George (from the pub when it was open) asked if I was happy now that I had a Government/Bill Gates/Soros sponsored vaccine microchip in my arm tracking every move. I replied that I thought it was a good idea to have back-up if Google ever breaks down.

The podcast I mentioned in the previous post was illuminating. Art Berman has actually drilled and is a geologist so not the usual pundit. He actually said that data produced by IEA is produced by number guys whose closest experience of oil is on the forecourt. He still uses IEA data because you have to use the tools/data to hand. It is not comprehensive.
The Saudi's selling inventory explained a lot to me. Other countries might not have the dual option they have or the scale (Russia?). No supply problems next few months but will arrive Q3. It's all about supply- demand is out of all our hands.
The US was never a swing producer.
I got DUCs all wrong. Most are stranded. The figure to watch is completed wells. They have been declining since March.
Interesting talk about "dark inventory" and an unaccountable 3-5m barrels a week.
Repeats that oil will be around for decades. Go full ESG and you get no economic growth. He thinks the world doesn't want that.
He fears for the credit markets.
I like Art Berman. He explains complicated factors and inter-relationships that us amateurs do not fully understand in a simple way. He did say that there is plenty of money to be made in oil and smart money and traders are playing a different game. By the very nature smart money has to take a much longer view [the same as what us LTH's say]
Most was not new but dark money and understanding DUCs was for me. I also learned that the Saudi's have their own version of SPR but for a different reason to the US. I'd forgotten its importance.
He also added that nobody can predict the path of Covid or conflicts which can crater all projections.

Be lucky

For me and for you. I received the Novavax trial vaccine in October/November. I asked to be un-blinded and today was told that I received the vaccine NOT the placebo. It would probably be safe to get vaccinated tomorrow but that is untested and I have cancelled.
It is good news because I asked if the efficacy of the Novavax was up to standard although approval is still a few weeks away. For example if AZ was 90% and Novavax 10% I would want the AZ. I was told that it was in the mix i.e. do any of us really know the difference of the AZ to Pfizer or Moderna. In fact final results for all are still years into the future and could end up being subjective. I suppose anti-vaxxers and the likes of gkb will still find something wrong.
The good news for you guys is that another vaccine is due to be announced. I'm the optimist and it is too early to declare victory but this stage of the war is won. That is good news for the economies of the world.
I'm listening to this up to date podcast https://www.artberman.com/2021/01/25/hot-take-of-the-day-podcast-episode-100-with-art-berman/ It confirms what us LTH's have said for some time. Especially about the masterstroke by Saudi Arabia. they sent a signal to shale by cutting production and pushing up oil 5 bucks. The reason the Saudi energy minister couldn't keep a straight face compared to the Russian guy who looked like he'd been sucking lemons is because the Saudi's had it off large. They are reducing (selling) their reserves down and income has risen.

The doctor asked me what I thought I had had. I said I didn't have any side effects so thought placebo. Relating it to my wife she disagreed. She said that since getting the jab I had become even more smug and irritating than usual.

My wife doesn't understand me.

I spy ......

hitman is right. Do you want to be subject to a postal delay? Being proactive isn't necessarily queue jumping and at the minimum avoids possible wastage. We are arriving at a very British solution. Bit untidy but it's getting the job done.

My pal in Harlow cannot get on the site because he's not70 although he is clinically extremely vulnerable and registered on QuickQueue. He's not too worried as he has actually had Covid as has his daughter the nurse. He is fine but she continues to have some residual effect and has her antibodies checked frequently. They are still there since last July. I met him when he had it but tested negative with a swab test. We are clearly buggerin' on.