Member Info for romaron

https://www.londonstockexchange.com/stock/ENQ1/enquest-plc/company-page

It seems that the retail Bond deals are reported up to 2 days after the trade by LSE and then we don't know if the date of the deal is not delayed so the deal at 16.33.15 may relate to a previous day? All pretty confusing unless you take stimulants.
The time, if it is almost live, is in the bewitching hour. The volume of £250,000 is the largest I've seen. The grown ups are returning and they often start with a blank sheet of paper. They'll weigh up and make their own calculations. This one trade has sucked up several weeks deals in one swoop. It is unlikely to be a retail investor. Significant imo.

It'll be interesting to see what is reported tomorrow. I'm gonna follow PMO RB too which is more active than of late.

Hi L7 - my mistake. I thought you were a shareholder. I am a shareholder so have an interest. This is a wounded company but far from endangered. I like the assets and production. Not so sure about the management but they've got some things very right. The world and his brother knew that they would have to make a RI which was adversely affecting the price. Existing debt holders have a vested interest in seeing the company survive.
Retail investors are always collateral damage and at the low end of the food chain. I would say "save your breath". Next thing it'll be a demand for a class action. There is nothing sinister here and much of the refinancing has been predictable.
A negative for me is that was the Malcy interview out of desperation? It was certainly aimed at retail investors who are often satisfied with tidbits. If it was consequential it would have been accompanied by a RNS.
RI or OO come from the same stable and it gets technical but the company has advisors and won't wish to throw money away.
I have to be honest and admit I'm not too worried about other investors but have a keen interest in my own investment. The negotiations will be around what the expected price of oil is going forward and the Institutions individual views. I feel confident that it won't be today's price which is currently facing a Saudi market share grab and who are at the same time sticking a hose in the mouth of a competitor who is drowning (shale), working through a crude overhang, dealing with a possible US administration change and Donald Trump's pinball strategies. There's probably some I've missed.
The Institutions will have their own opinions of where oil is going. For me it is pointing much higher.
Maybe there'll be a demand from the Institutions that pushes the price higher. When decent size comes to the market at a competitive price it can help demand.

Be Lucky

Hi L7 - didn't expect to bump into you in the four-ale bar. It can get a bit rough around chuckin' out time. I can't see why you're upset that Institutions will be allowed in at a placing price. This company needs refinancing and it wouldn't have got it away (imo) without the financial support that only Institutions can give. PMO have the agreement of a good percentage of the debt holders and they're the ones who count. The release of the HoT RNS on 25th may have been a bit premature but it was the elephant in the room and more people were interested in the RI than the HYR on the same day.
This company has good assets and production which Institutions trust more than C suite platitudes. It isn't the Institutions fault if they charge commercial rates and demand discounts on sizeable advances or rollover of debt. It wasn't their fault that the company got in a mess. If you'd held on through the share price movement this year you may be miffed but most of the responsibility is your own. Rights Issues are seldom good news for shareholders anyway but the alternative of administration is even worse and that could have been the next step.
I fancy that the RI may surprise. The oil price that the Institutions are looking at isn't the one on the screen today. Some may look at it as bargain basement for quality assets.

What are you going to report them for? With the amount of visibility of an auction what did they do? There isn't a shareholder that objects to a higher price whilst we know our shorts aren't at a high level and who cares about them.

I've been talking offline to another EnQuest investor who thinks we'll merge with Itahaca and he demanded I give a name if a merger is on the cards. I said Neptune though I think both are outside bets but with all the recent turmoil it would be strange if the M&A guys weren't sniffing around. The PMO CEO seemed remarkably relaxed today and we are 2 years ahead of them financially (RI, OO etc..).
I think the answer is more prosaic. Some like conspiracies but I think the world is much simpler. My experience of the City is that they ain't that clever. Cute and sharp but there is often an element of parasitical behaviour or inflating commissions. The problem is that people who have built up world class companies end up having to deal with these people. Normally it doesn't make much difference but like Estate Agents they are often unavoidable. They are driven though and some are very creative.
I think we'll see a marked change from now. The grown ups are returning and they look at market prices with the assumption that they are wrong. Some too high, some too low. They are the ones they'll play with. I also suspect we might see the return of the retail investor who is massive. I don't mean the likes that fill up message boards with puerile comment but sensible, wealthy individuals who may invest directly or give instructions. The recent tech move was blamed in part on Softbank but stocks were at an all time high. I liked this comment "No one is big enough to cause something like this. They are surfers of the wave, they don't create the wave."
We certainly live in unusual times.

Pelle - the St. Leger is being run on Saturday. It gets interesting from now on.

There are possibly dozens of potential reasons behind the trade and it's been about 4 days in a row from memory. The amounts aren't massive c.250,000-350,000 (again from memory) that go into the auction with an amount to buy that cannot be matched at the prices and amounts going into the auction. It does seem kinda perverse because it looks like you could achieve the amount more cheaply if you added on a tiny fraction that attracts an algo and purchased before the auction. It could be an order to buy at the auction/fix a regular amount which the client wants no argument about regarding timing or broker shenanigans. It is the cleanest and most transparent (if challenged) way but why go to all the effort? One thing for sure is that it affects the price used for valuations. At a small cost you can lift the price almost 3 percent (2.87 today) from last traded. It is the devious type of trade an investment bank pointy head might do to shave off an extra fraction or add to the value of the market cap. The thing is that the UT is effectively a LIBOR and there are deals like VWAP that use the average price and I imagine UT is the favoured one. It would be very important during a merger for example. It is possibly used for some of the debt as well. I'd understand it if (say) it was PMO doing it. Perhaps in dead dog days you want a price that has some semblance of reality rather than an algo that's set up for day traders? All prices are temporary screen shots imo and often become unhinged from reality. It could be a subtle way of making the MMs nervous. At least it's on the right side for us LTH's.
as you've probably guessed, I haven't a clue!

Clearly a side effect of the "clever" pill. I think you need to adjust (lower) your doseage Jan.

*back in the real world I received a phone call from researchers at St. George's Tooting. I've been selected as a guinea pig for a Covid-19 vaccine that is already at stage 2/3 later this month. You've got to do your bit. A slight concern though that they asked if I've got an alternative to public transport if I develop symptoms.

Hi Jan - I haven't said where I think oil will go in the very short term. I did say $55 by Q4 and why not? I was being a little flippant because I know it winds some individuals up but I certainly don't expect it to be today's price or lower. Economies are recovering and that was to be expected. At these levels shale is out of the equation but who knows what Trump has up his sleeve as he becomes ever more desperate as the US election closes? The economy is his best hope and also ours to clear the glut of oil.
What we are currently experiencing is to be expected but demand has stuttered whilst the overhang of crude oil stocks needs to be cleared. We don't need demand to be at pre-Covid levels to see a rise once stocks are back to normal. I expect that to happen at the end of the year.
At the current price and using the Breakeven Price of Crude only Onshore Middle East $27 and Offshore Shelf $41 (just) are profitable.
Heavy Oil $47 , Onshore Russia $50, Onshore ROW $51 , Deepwater $52 , Ultradeepwater $56, NAm Shale $65, Oilsands $70 and Arctic $75.
These figures come from a 2015 study by Seadrill, Morgan Stanley and IEA. I accept costs are lower now but you get the gist. The world has speeded up decommissioning to allow for this which further reduces supply. Economic Darwinism is at work. The world won't be the same when most are back at work but it also won't be markedly different to what it was before. People will still want foreign holidays and mobility for example.
There is a suggestion that the market will look for value stocks and there may be a sell off of techs. I liked an article by Danny Forston in the ST yesterday from the US. Investors have fled old-fashioned capital industries and funneled their cash, largely, into just 7 companies (FB, Apple, Netflix, Amazon, Microsoft,,Alphabet and Tesla). One of his sources said this isn't sophisticated institutional money coming into this market but a rush of amateur retail investors (not Softbank). The article finished with "Unfortunately, the big losers here will be retail investors....buying [while] thinking that everything will keep going up. You make money until you don't. Then you lose it all."

Build it, survive the cycle, and they will come.

chilting - and you seemed almost cheerful on Friday. "Oil seems to have followed the market down after the NASDAQ dropped yesterday. It looks to be in recovery mode so hopefully Brent should rebound quite quickly."

Must have done the same weekend reading as Ammu.

Much appreciate your cod philosophy Therapist. Keep up dispensing your mackerel insights. We are doubly blessed. You with your linguistic and analytical skills backed up by Jan's forecasting.

Hi Runner - this seems to be where we're heading reading the weekend press. The Ammu post referring to an article that wasn't weekend press and merely reported what was in the Thursday RNS the next day. The actual article highlighted that EnQuest booked non-cash post tax impairments of $252m and took a $433m hit from deferred tax assets which was debated at some depth on here. The fact that they sold oil at an average of $44 when oil was $66 a barrel in the same period last year may have had something to do with it. However I don't wish to spoil Ammu's fun and his conspiracist leanings but I would appreciate him giving more information than trawling for sub-editor spiced up headings. Nice picture though of the FPSO though because the actual newspaper didn't have graphics. Just one tiny column of less than 500 words.

Ammu you really need to do better and show a modicum of intelligence. Perhaps consider actually buying a newspaper or doing some basic research for a starter.

*I don't expect him to take a blind bit of notice so he's going into the filter bin.

Hi spin - that's for another post regarding house prices though I feel they're germane to the whole economic upheaval caused by technology and Covid.
Regarding the UT trades. The last 3 days have been similar. I had given them too much importance in the past because I thought they worked like FX bourse fixings where the banks netted out orders so the amount brought to the fix hid the amounts behind them. In my case the Rome fix which I had attended. The fix was occasionally rigged but even then the amounts were dwarfed by London's turnover. The UT is just a kinda LIBOR and the amounts involved (I don't have L2) seem to be similar to regular trades. It will be used for stock valuations, VWAP etc.. and is in reality an average.
I found this which is pretty simple to understand: https://www.thebushveldperspective.com/blog/public-articles-1/post/auctions-uncrossing-trades-and-evidence-of-manipulation-291
The reason I don't value it too highly is that you cannot get size done if you hoovered up all of one side which occasionally happened in FX. I know a few old prop traders who would have loved to "correct" the price. If you want anything consequential done you will find the limitations of electronic trading. [I know a major bank where the dealers became headless chicken when the Swiss central bank scapped the peg in Jan 2015. The masters of the universe were bleating that they couldn't get a price on the screen; two "past it"older traders took advantage and used more reliable technology. It is called a telephone and you also need personal contacts. They had made their budget by lunchtime.]
You can create many scenarios to explain these trades but I think they show a buyer who decides what he will buy at and can do it through UT without causing ripples. The amounts aren't brilliant but by allowing the algos to beat down the price it's worth delaying your purchase until the end of the day. Another argument is that it is a valiant attempt to shore up the price cheaply. Volume is still rubbish which neatly brings us back to house prices. Both stocks and housing have residual interest that happens irrelevant of the price. They are called the 3 D's. Death, Divorce and Debt. There is now a 4th but that's another post.

Hi spin - you wrote "House prices we are led to believe are." Do you want to complete it. Maybe Jan will let you have one of his clever pills?

you also said "and even the swinger club has resorted to male order..." Well currently I have a few Covid concerns but could be interested when the coast is clearer. With the direction of oil I've had to write in a few impairments myself so the extra cash could be handy.

Algorithms are very clever but far from perfect. Election polls have proven that but pollsters protect themselves with "margin of error". Newspeak for "we're right but people just won't do as they're told or what makes sense". For reasons I cannot go into I know more about TikTok than most people my age. Their algorithms differentiate them from other social networks because they get the youth following (think starter drugs). They make other companies look dated and old. It helped topple a Kennedy in Massachusetts and made Trump attack them as he is aware how dangerous it can be to his reelection. In China they are changing retail.
My point though is that these algorithms work on predictable behaviour, "buy the rumour, sell the fact" is one. This behaviour can and does change. It is possible to manipulate TikTok as well. Most ordinary individuals (including me) wouldn't have a clue but what is often overlooked is that it isn't always the media site that's playing the algos but individuals and groups also tweaking them e.g.twitter and Benamor at Amigo and possibly the greatest exponent, Donald Trump.
I believe that they [algos] picked up on the word impairment in the RNS. Normally that is a particularly bad sign but the discussion here seems to suggest that we live in unusual times and impairments in financial results have become diluvial. More will write in impairments than at any other time. Are we living in the "Time of the kitchen sink"? It seems to me that for the impairment to stick or have any lasting impact oil will need to be at a similar level for end of the year. Possible of course but do we really expect the world to be in stasis for the next 4 months? Throw in the "looking ahead" that markets used to do and I think not! At the moment it is a risk off market and algos can be self-fulfilling until those cussed investors change sentiment. The winners will be those who know when to throw away the crutch of algorithms. In the longer run, people move markets, not robotic triggers. The lack of volume also (temporarily) gives the algos the upper hand imo.
We could possibly be looking back at this as a time of golden opportunity. Tom seems to be on my wavelength here too.

"It's tough to make predictions, especially about the future" Yogi Berra.

Jan - have you been taking clever pills?
Zoom worth more now than Lloyds and HSBC added together.
On Carnival, a neighbour who worked at Lloyds says the Greeks are buying ships they don't want. I asked about EP and he knew all about hot stacking. He immediately said that they're probably looking for buyers. I pushed him to check from an insurance angle and he may get back. If it was destined for scrap (or steel as AB says) then why hot stack? Mind, in oil terms £150k a month is chickenfeed.
Tom - I'm with you. People are pretty reliable and the mean does return (eventually).
L7 - wish I had your discipline.
I thought AB did a good job. With Covid and forced redundancies it would be wrong to gloat.

*bullock carts up 15 percent overnight.

Good to have you back HMH. As charming as ever but I need to ask a question. I don't profess to be an expert on accounts but your gripe seems to be about the impairment and creditors predilection to pounce on companies that break covenants or run into temporary cash flow problems. We have a situation where negative equity is a concern. That is correct but we are among a host of other oil companies with similar problems and I don't see the creditors closing them all down and becoming the new owners. Governments and national regulatory bodies might well make a phone call if they tried that.
We make an impairment now that may well be reversed (remember Cairn) at the next set of figures. A pound of flesh is metaphorical and in reality they prefer borrowers to live. My question is that if oil heads towards $65 then will these impairments be reversed? If the answer is yes then it means that EnQuest merely followed accountancy rules even though most commentators thought the chance of a default was very small and negative equity more a book-keeping anomaly.
I like hitman and find him one of the more pragmatic posters though I sometimes disagree with him. I don't believe any of us can predict and they should be taken with the proverbial amount of salt. Goldman Sachs often get their predictions wrong.
Our tax credits/allowances or whatever you call them are real and although the result of losses that didn't kill the host and will be useful when we have decent FCF. In other industries they lose this kinda stuff and call it start up costs and we could be looking at a golden future.
Finally, and I like your straight talking, am I wrong in this? I am quite contemptuous about the "price" at any given time. Over the years I have seen people produce charts, technicals and jargon that explains a price and then suddenly the price changes. They seldom accept that the price (and themselves) may have been wrong for some time. I suspect the current price of oil is doing that. As a market participant you really just want turnover so the price is largely irrelevant but sheer weight and current sentiment makes it "the price". Oil seems to be the price 3 months ahead and it becomes cemented in people's minds. I think that today's price is the result of June physical activity and being held back as the oversupply is worked through. Demand has ticked up but the glut masks the underlying strength. Other factors are at play but I have a feeling in my water that we'll see a sudden change and it won't be lower.

Be Lucky

$55 oil in Q4

Feel better now Tom? BTW, you forgot the ridiculous price of oil today. Oil is largely priced 3 months ahead from what I can gather and that's it for markets. Unfortunately companies like ours have to look a wee bit further ahead.
Things are changing daily and it's about time some of it became good news. I'm not being a Pollyanna just saying that doom and gloom becomes addictive to some but there are some tectonic fundamentals that are beginning to impact. The 6 against 12 month oil future is suggesting close to $50 and that is (imo) held back by the front contracts. Why take a risk and punt further out when you can play the front end. The US have always been a country of extremes but unfortunately control much of world trade finance. Sanity should return otherwise we're all knackered but the next 3 months will be decidedly rocky.
As for Brexit. I am a remainer so perversely enjoying the mess that the indolent, incompetent back stabbing incumbent has landed in.

I'm a happy camper too. It seems that Bressay will be decided on the compatibility and quality of the crude compared to Kraken oil and whether the FPSO could cope. If they could solve that then it would be a huge boost to reserves. As a stand alone Bressay is not possible and unlikely to receive sanction at current oil prices. If successful they expect b/e to be $14/15 same as western flank.

*got an option (hedge) on my bullock and cart in case oil doesn't go higher. Going for solid rubber wheels fitted over the wooden ones to reduce noise as I'll have to start earlier and don't want to wake the neighbours. The extra rose fertilizer will mitigate the cost.

Hi E - agree with your post. A couple of things to add. This from Irwin Stelzer in ST last Sunday:
"Age matters. Young is better than old. The Foundation for Research on Equal Opportunity reports that nursing homes and assisted living facilities account for only 0.6% of America's population but 42% of its Covid-19 deaths."
The world is reacting as though it's the Black Death which resulted in up to 75-200 million people in the 14th Century when the world had a much smaller population. They fled the cities then too. It also affected the young too and resulted in a huge economic downturn whilst labourer's wages actually went up. Covid isn't the same and I hate writing this but Trump has a point.
I have discounted the vaccine a little as the US announce that by the "end of October" they will have one. Nothing to do with the US election then? I also see Trump's footprint all over Iraq. Even the c.5,000 remaining troops in Iraq have an exponential power in equipment and with 2 aircraft carriers nearby can quickly deploy. It gives some protection from ISIS and to a lesser extent Iran. I can't erase the comment from Trump when he does that sickly smirk and says "we got the oil". What does that mean? Lower oil till the election helps him on balance and he may have placated the oil industry by making promises if reelected.

$55 oil in Q4

Hi Poppop - I misread this part of your post "the conviction that the future will curtail plans of those who base viability on massive output in a receding market for their product." and read viability as "visibility".
Both work for me because visibility creates problems for the likes of BP and Shell. There will always be a need for the more nimble as you say. Good post.
I would argue that the receding market is receding very, very slowly. Once we're past Covid i expect the reverse for some time due to cut backs and failure of companies in the oil industry.

Well the frackers will go first along with tar sands. I hope you've got space in your garden for a bullock cart. It's called hedging your bets in some parts. Personally I prefer leather seats and air conditioning.

$55 dollar oil for Q4