Member Info for romaron

Last 2 years was the Tuesday in the first week of February. Could be as early as the 2cnd February this year. That would be just over 2 weeks away (11 working days).

I'm taking a liberty here but it is quiet. It is only loosely connected with what most of us are here for but it was the KO post yesterday 09:50 that got me interested. The tiny outfit is Vega Capital and this is one of the best and easiest to understand explanations of what happened on April20 last year:https://www.bloomberg.com/news/features/2020-12-10/stock-market-when-oil-when-negative-these-essex-traders-pounced
I've never dealt in oil but these "independent traders" would be very similar to the people that worked at LIFFE. There were "locals" who after a short training and an exam were let free on the floor for open trading. I had 2 guys who worked with me that ended up there. One became a "local" and was unsuccessful and came back into FX. Another who hitman knows worked there for HSBC and ED & F Man. It could be a good living but few achieved anything like the Vega numbers. I don't believe what happened there could happen again. It was a true black swan and if a recurrence could happen (doubt it) oil will never be negative again. For instance the US Government or an Exxon would just take it and worry about where to put it later.
The guys at Vega are sharp but probably closer to market traders than urbane middle class individuals with a private school education. What happened that day was because they had the right position going into the fix. There were others on the opposite side of their trades who will have lost the lot and will disappear. They've probably exaggerated the amounts made and I wouldn't have spent it until the payments cleared but an interesting story all the same.
Oil has the potential to make you very wealthy, quickly but there is another side too. My interest here is partly because of Brunei but that's another story.

*Trading sounds glamorous but it is a young man's game and most days is mindlessly boring. Routine and repetitive. Bit like fireman sitting around waiting for an "incident". It works on contacts and some is borderline illegal. When you're young an expense account and hedonistic life style with the trimmings appeals. I don't miss it [I miss being young of course].

Be Lucky

They cannot do it without compliant lenders. Not so sure it'll work this time.

“Demand worries are outweighed by supply management.” --Tamas Varga, PVM

"I see more upside than downside factors for oil markets and prices in the near term.
I suspect the true motive for the Saudi cut was to boost profits sooner than later."

"It is unlikely that tight oil will recover. Saudi Arabia’s decision to cut production acknowledges that it is unconcerned about a resurgence of U.S. output."

"Shale companies are not in business to make money. They are in business to get money." Art Berman

"At least 400 new wells per month needed to maintain U.S. production at 11 mmb/d from 5 key regions* that account for 80% of U.S. output.
These regions lost wells each month after March 2020." Art Berman yesterday.

A drop in the ocean KO.

Interesting article. BP couldn't make Innovene work and sold it in 2005 to INEOS and created 3 billionaire whilst Macondo didn't help. They are impacted by the politics and ESG pressure on public companies depresses the share price. I've built this into my model and believe we'll never be popular but attract investors on a pure ROI basis. I'm relaxed about the importance of oil (physics) but aware of the threat from green activism. However, I believe the world will not commit economic suicide by dumping fossil energy.
We are (imo) a semi-private company. If not I think most will accept we have an unusually high percentage of owner and employee shareholding. We are not like BP. Our destiny is not a public football.
Having said that Chrysaor are moving into public ownership but I think that is more to enable EIG to cash in their chips.
All reports indicate that capex was cut too far and supply will not match demand post-Covid. This is our time. Opportunities abound to increase reserves and we are in a good position. In fact I hope the majors continue their journey and we fill the vacuums they create.

Hi PYUECK - appreciate your honesty and opinion. I'm retired so can spend more time here and of course lockdown affects us all. A lot is the same drivel but you have to be selective. I wish there was a Retail Bond board because it is an important indicator. I agree nobody can predict the future price of oil but energy is so important to all of us that you have to try. BP, Shell, Goldman Sachs, Governments etc... have to try. When you bought the RB you must have had a view on oil as you don't come over as a pin sticker. I gain a lot from the posters I haven't filtered because they give a different perspective and many have useful skills and experiences. Some days this board is better than other days. I think lockdown and boredom has a lot to do with it.

Be Lucky and hang around.

KO - that's not correct. They have a better idea than us but they don't always get it right. Why don't the racing tipsters win regularly? They know most of the trainers and have spent a lifetime in racing. Why doesn't Gary Lineker get the results or league positions right every year?
The recent massive wins by traders based in Essex related to the April melt down. Usually the traders try to hide their cards and rely on being faster or more quick witted than others. Are your friends brokers, traders or do they work for a bank or oil company? I know major banks who follow what Brevan Howard does and the traders hide their orders from their own sales team.
I dealt and broked FX (hitman can confirm)and lived through some crazy periods. Those guys in Essex wouldn't score highly on University challenge I can promise. What happened that day in April is unlikely to happen again and a lot of it was right place, right time. They were closer to the settlement and had the high ground, above the carnage. The losers were funds and individuals who were effectively closed out at the worst possible prices. Interactive Brokers, America's largest online trading service, allegedly lost $104mio because its software couldn't handle negative prices.
They are similar to the LIFFE traders and you could take the exams, put up some money and take a punt. Some won large, some made a decent living and others went back to selling double glazing. Often it is handling orders for large clients who actually need to trade the futures and you are used or get a whiff of what they're up to. How do you think journalists get their "scoops". Leaks, favours and sometimes diligent hard work but it all becomes a hazy mix.
On that day in April there was only one word for it PANIC. Funds and individuals were losing millions in seconds. Pointless haggling you just hit prices. Desperation makes them say things like "if you see a bid or offer just HIT IT without mentioning an amount. Trust has been built up and you are effectively playing cards against people who have turned their cards over and you see their hands. These traders were at the centre and would know all about pocketing profitable "differences". Apparently they come from Theydon Bois. I came from the adjoining council estate, Debden. A lot of traders come from Essex. At the interview they may have been asked what football team they support, can you shout and do you like fighting.
maybe your friends are more cultured.

*In the late 80's a pal of mine who owns Taberna Etrusca had his whole restaurant booked by a guy, surname Kite. He showed me the cheque that Kite gave him. It was signed but with no amount. He told Enzo to fill it in. Armed rioters (Reclaim the Streets) attacked the LIFFE building. They didn't succeed because the traders fought back.

Don't use "supersleuth" if you ever use another avatar. We'll know it's you.

How did you swing that? You're a young man.

Don't forget Novavax hitman. I may or may not have that in me. I emailed them about my position for when I get offered the NHS vaccine and being unblinded. Not a worryguts but agonising over a skiing holiday when I think you'll require proof of vaccine if you were eligible. I go back around 9 Feb for a 3 month check up at King's. When I spoke by telephone they were very enthusiastic about the progress. By email much more guarded (its in writing). Their S. African trials are due in the next fortnight.

The challenge is not if the vaccine works. They all kill Covid. It's about the harm the patient might suffer. At my last conversation the only reaction they'd had was a girl fainting whilst being injected. She was fine afterwards.

Hi spin, I enjoy banter too. How's the midnight runs going across the channel? I have other stocks but this is the one that intrigues me the most. We each have skills that another poster/reader may not. Not saying we're right but sometimes just common sense or correcting when somebody makes a mistake is really what these boards were designed for.
Take the BP SVT court case. I don't know the ins and outs but I doubt BP are "knockers". They are possibly witholding an amount because they think it includes an amount which they don't believe they're liable for. An impasse has been reached and they've said lets get the "lawyers to decide." Our relationship is unaffected on any future BP deal. In fact they're probably a different department to those engaged in transferring fields. I worked in Property Management for a while and the LVT looms large there in disputes. A partner in the firm always said - "you go to court [LVT] for a decision, not justice."
Probably the best advice I ever received was at 16 when an older guy said "Ron, a half-truth is worse than a lie." There are plenty of those on message boards and many are not unintentional.

When you reach the end of what you should know, you will be at the beginning of what you should sense. [Kahlil Gibran]

Hi Jan, couple of things. Afraid we're subject to the same trolling and media attacks that lurk in the darkest recesses of the internet. Anonymity makes for a lot of keyboard warriors that you will never meet. I've taunted many in the past and offered to meet them at an AGM or other presentation but they never turn up. Now I just ignore [filter] them.
I wonder with what's going on in the wider world if there will be more policing of these boards. I can't remember exactly what it was about but there was a link that you were in too that got removed and another I posted that disappeared in minutes. Maybe somebody just presses "Report Post" and its automatically removed?
Pretty sure this plague of the board will pass. Some posts are so moronic that I immediately filter. One day I had a totally green page up. The bonus is that you quickly find posts that engage or provide info.
The opposite to anonymity of course is removed at an AGM or a party but in the meantime we give a little of ourselves on this message board. If there is any discussions about hotels or whisky I'll bow to you but it does mean that you have real world experiences that are worth hearing. I don't need the comments from the guy posting only because he can't get his 20p Yankee on at the local bookies due to Covid.
Anyone with half a brain quickly realises they can never see the whole picture. There is no guru in investing and most of what we learn is by past mistakes. I believe life experience is undervalued and BS is often rated more highly. I worked with a mixture of people and found that the best traders weren't boastful and we all want more information whilst cutting corners is covered by expediency. There are rules so I'll finish with what my father told me. "The Lord helps them that helps themselves; but Lord help those that get caught".

Be Lucky

Hi Modestus - I was thinking about this last night. We will probably need some refinancing at a certain stage. I think we have organic depth to keep reserves steady but it would be a dereliction of duty by our management if we didn't take advantage of the upheaval in the North Sea and oil in general. Bargains exist but the problem as always is finance. Harbour had the backing of EIG whose timing has been excellent and I wondered if there might be a possibility of a private placement by another entity? I don't know the rules here but EnQuest has always been creative when it comes to financing and is a difficult company to pigeonhole. I wouldn't be at all surprised to see something unexpected. We are one of the few vehicles in the North Sea that can take advantage of the post Covid era in oil which I think will be a very healthy bull market.
We must be of interest to both buyers and sellers.

Hi Slift - you appear to have upset people. I can only read Primetime's response as any others are on filter. We are currently going through an attack of board bursitis which usually clears up in a week or so. It seems you made 2 posts regarding EnQuest; one here and one on TLW so I'll combine them.
Like you I've followed the 3 companies but probably not as closely as you. I investigated TLW and decided against. I listened to the new CEO and the webcast and it was as expected. Not exciting but they will recover.
In PMO I have a tiny holding (less than 1%) compared to my EnQuest holding but I took it out because I need an interest however small to make me investigate (laziness). They too are out of the woods and I expect a jump when the combined group (Harbour) comes to market [a kinda IPO]. I think Harbour will be as exciting as the European majors.
You may be right on the refinancing of the RCF but it is unimportant. We will be so close and this game isn't about aiming for zero or closest to the bull.
The oil sector has been like like Spanish property for the second half of the past decade. Easy to buy; hard to sell. EnQuest is even more tricky due to the large holding of the CEO and the EBT (c.15%) and I imagine he has a few other holders who would side with him. This is both a protection and a discouragement as certain funds do not like this arrangement.
Our HYN's are quoted on the Luxembourg exchange as are TLW's. Maturities are different but they have been performing roughly in line with EnQuest's.
The value in this stock is the management and our scale. You have to be in it to win it and we can take on the sales of other mature fields that the majors want rid of. Our bond maturities are nearly 3 years away so your finance fears are a little exaggerated. A major asset is our tax losses which we have in our arsenal. Unlike PMO, whose CEO's mismanagement cost their shareholder's dearly our management took early pain to survive the recent oil woes. There is much more good stuff but you'll have to read back on here.
Suggest you read hitman, Therapist, Pelle, Londoner7, GKB and even L3Trader if you enjoy minutiae. There's probably others I've missed. the best overall imo is HMHn who gives a wider picture but knows his stuff. You can ignore most of what I write because I'm not into day to day rubbish which appeals to many.

mouse trap this way>

Stop it Pelle. You know I'm hopeless with numbers. I just don't see the point of dissecting the value of production when all that work can be wiped out with one rocket from Iran or a tweet (no longer) from the WH.
After black swans there are regular grey swans, piebald swans and dirty swans. Like women they come in all varieties (I prefer the latter).
If you mean by the $500m what I expect us to pay off on the RCF then that is what is in my mind. We are operating OK but it will be decided by the oil price.

Hi Modestus - no, he's still around and a holder but you can't blame him for avoiding this board. I spoke to him by text a few weeks ago.
PR - last thing on RB and tax losses. The tax losses belong to us, the equity holders not the bond holders. We carried the majority of the risk so deserve the spoils. Pelle, they are your divide4nds in disguise! All will fall into place this year.

Ooops - I missed my reply to PR. Depending on the timing (assume same) then the bonds will always have the 6 monthly interest payment of 3.50 percent. At different times the RB has proven the better (certainly for me) bet but I'm actually with you on this. The equity is undervalued and has a much higher topside than the RB. I think 60p for the equity will happen whereas the bonds really have a maximum capital increase of (say) 25 percent ignoring coupon payments.

Hi Therapist - that is why I filled my filter bin. The minute Zak Mir was mentioned I lost interest. These are second rate pundits who've never achieved much. Malcy got interviews with Tony Durrant which immediately makes you think of straws. I worked with David Buick (RP Martin) and never really understood what he did. Another pundit who speaks the jargon and people fall for it. David Lenigas is another. Steer clear is my advice. There are no guarantees in gambling. Bet 365 and Paddy Power make a fortune but nobody knows the winner until the race is run. We all know who the losers are. I don't know what the point of it all was but if it winnowed out the increase in excitable posters then some good will come of it.

Both Buik and Mir mention they went to Harrow although I fail to see what difference it makes. I've been there too but can't remember the name of the boozer.
U.S. joke - How do you know if somebody went to Harvard? BECAUSE THEY TELL YOU.

Be Lucky

Thinking about some of the points raised here and I never really answered PR or responded to L7 and these are some of my (I think) relevant musings. There is a link which is undeniable between the equity and the RB but is it a science or an art? L7 wants a science whilst I believe its an art as well. Algobots work from science whilst the bonds (which are illiquid) require more creativity [art]. Algobots can't work in bonds. If I was clever enough I guess you could arbitrage the futures against bond/HYN 6 monthly maturities but the spreads would not make it viable. However, if you'd taken a large position à la ARCM you'd have one side nailed down which makes it easier. Regarding the best for trading is not comparing like with like really.
I held Shell and BP for many years (c. £24 and £6) and basically swapped them for EnQuest. Using my wet finger method they've roughly halved as have my EnQuest shares. The missing part of the equation is that I'd have received dividends if I'd held the majors. But all is certainly not lost.
I want my dividends back and I believe they're to be found in the form of the tax losses [$3,086m at 30June 2020] This is where it gets hazy as I'm no accountant. At end Sept 21 we will owe appx. $1 bn for 2 years If oil is around this level or higher we could repay it standing on our heads but increasing reserves and scale will mean refinancing. Not out of weakness but a normal activity of solvent forward looking companies. If corporation tax is 18% then our losses are worth $555m providing we're making a profit and around until they are used up. Companies with this amount of tax losses are not meant to survive. PMO is proof of that yet we are still here and under no imminent threat; if anything the future looks rosy - Covid defeat and higher demand.
I haven't allowed for compounding and as for NPV and DCF I know Big 4 Accountants who don't really grasp it. My missing dividends are hidden amongst the tax losses with capital appreciation. People want them. These losses are as valuable to us as 2P reserves providing we are operating at a profit for the foreseeable.

Mouse trap this way >

p.s. Guardian Tuesday: "Electricity market prices have surged tenfold in a day to reach a high of £1,000 per megawatt hour ... wind turbines come to a virtual standstill only weeks after setting a new generation record."

Afraid I'm unlikely to respond as this board is now covered in green filters at my end.