Member Info for romaron

This is an angle that the environmentalists pretend doesn't exist and they are as guilty of NIMBYism as the next person. One nearer to home (very near to me in fact) is HS2. I'm not going to get into the fors and againsts of HS2 but rail travel is normally considered more environmentally friendly than driving to places.
I live in EN4 and if you google it you can see Beech Hill - Camlet Way. I regularly walk this route and it has had traffic control for months as Barhale dig up the road along the A1000.
I asked what it was for and told "water". They have now turned into Beech Hill and there were signs for a temporary blockage of the whole road so I asked if it was them. It wasn't but they told me that they would be closing or limiting access to this route for about a year as they continued westward towards Barnet. One of the operatives said it was for HS2 and I thought he was winding me up. I live miles from the route of HS2. A surveyor there then joined in. Apparently East is Thames Water whilst as you go West it is Affinity Water. My house is served by Affinity.
Apparently Affinity Water doesn't have the resources (reservoirs) to handle the requirements of HS2. Tunnelling uses a lot of water so they are purchasing it off Thames. This is in effect a pipeline so a weak association with oil but definitely a consideration. Other forms of energy have their negatives too which are mainly - unsightly and expensive - not usually vote winners.
If you look on the map you could argue why they don't use the green spaces and woodland slightly South (Trent Park - Hadley Wood)? I don't know either but the operative did say that tunnelling is a requirement to avoid knocking down mature trees and deep enough to avoid damaging the roots. Sounds expensive to me so I imagine ripping up the roads is the cheaper solution and most of us just meekly accept the disruption caused by this.
I suggest there is less environmental damage using existing forms of energy because the true cost is often hidden. I was for HS2, now I'm not so sure.
There's a lot to be said for the dense energy and multiple applications of oil. It'll be around for many decades yet.

... was going to be the subject on the basis that where BP and Shell swim we have little option but to follow. The oil narrative and sentiment is largely about the majors and it is about as encouraging as Trump's current polling is to the GOP. But there is another view and that is from the private sector and if you stretch your imagination the large holding of AB and the EBT allows this. Today in the Sunday Times they list the top 100 Private Companies with the biggest sales.
Ineos are still ranked No. 1 and more a chemical manufacturer but at No. 33 is Chrysaor with sales of £ 1,852 mio and Neptune at 37 with sales of £1,726 mio which we are closer to. This is where it gets interesting. Both are owned by global investment groups that must have initially been attracted in the opportunities to raise capital and turn it into a saleable product. Indeed, Neptune were planning an IPO this April whilst a quick glance at EIG [owns 90% Chrysaor] shows that they put Energy companies they have an interest in into categories Active and Realised.
What this means is that there are no message boards for either but it is an interesting way to look at EnQuest. Nobody is happier than me that the traffic on this board has reduced because reading the posts of the likes of steve1964 are wasted seconds of your life that you'll never get back.
AB is still under 60 and without a male heir. He has his foundation but I wonder if he too has ambitions other than EnQuest? It's possible that his aim is to get EnQuest to a valuation that he considers fair and could sell his holding to the likes of those who bought into Neptune and Chrysaor. They are backed in turn by pension and insurance companies. If they have confidence in a money stream they will invest.
Oil is cyclical and the cycle is much longer than many direct retail investors are prepared to accept. The narrative on fossil fuels is unlikely to improve greatly but in (say) 5/10 years time there is an acceptable mix of energy then surviving companies will be valued almost on an annuity basis. Until then we will just continue making money so there'll be a gradual increase in the share price as the winnowing out of uneconomic fields and companies continues creating a shortage of producers and reserves.

Build it and they will come.

Just thought I'd add. After recent experiences Hamish Paton wouldn't want to blot his copybook again. He'd have done extra diligence on PFG.

For me it's a thumbs up for the appointment. Chris Gillespie is old school and after an earlier falling out with Peter Crook returned to PFG in 2017. He appears to be well thought of [CG] by the FCA and was possibly always interim. The problems with CCD is the transition which basically affects everything nowadays and no industry is untouched by it. The term "door step collector" is often used but bears little connection with the real world which works on the internet. I doubt CG was up to it and it is a challenge more suited to a capable younger man. Hamish Paton clearly passes the FCA checks and appears to be well thought of. Amigo was a mistake of his but many of us know that it isn't until you sit down in the new place that reality strikes.
Anecdotal but a pal of mine had a tenant who worked for FCA. This was about 2 years ago and I asked him if he could find anything out about PFG through the tenant. The only response was that the level of complaints was remarkably low in that sector and PFG was considered one of the better lenders. I had a car accident 18 months ago (other driver rear ended me) and it was settled. A month or so ago it was revived and I had to press my memory to recall events. I was incensed and said that I was more than happy for it to be escalated and I would turn up at court. Apparently the accident remains on file for 6 years. I'd like to say it was me but my wife 'sussed' it out quicker. She said it's on of those try on claims that the ambulance chasers call you up about after an accident. The car that hit me was an old wreck and the driver young. If I hadn't so robustly reacted whose to say that Hastings wouldn't have just settled on an economics basis? The matter is now closed and my no claims is unaffected. There is an unnecessary (imo) industry grown up that feeds parasitically off those of us who pay our bills and work with society. The small percentage that is feckless joins in what is in reality a scam. They have little to lose by making a claim of any sort.
PFG is ahead of the field and being the biggest has strict protocols for new lending and customers. The narrative isn't good even for the big banks presently but it will change.

Hi GD - on 25 May I contacted IR by email with this "A debate on the LSE message board regarding the FPSO EnQuest Producer. Following the decommissioning of the field is there any value left in the FPSO? In short is it destined for scrap or can it be used in another field after requisite engineering works?"
The reply was vague and in corporate speak : "We are looking at both of those options (sale/use in another field and scrap) for the vessel. The final decision will be based on maximising value as far as possible."
However, since then the press has been having a field day with Shell's problems with the Prelude (floating LNG weighing equivalent of 6 aircraft carriers) with headlines calling it a "carbon disaster" and Shell hitting the panic button. I enjoyed reading it because it makes our earlier problems 'running in' Armada Kraken look like a walk in the park by comparison and shows the problems that can be encountered even by the biggest and best. The Prelude cost $11bn and rose to $17bn and has been beset by technical difficulties.
I think there is little appetite for new floating projects in the current environment and Prelude is enough to put the wind up anybody. Maybe a smaller used producer with one careful owner might attract interest?
I wouldn't place to much faith in its future value [EP] because these are usually bespoke ships usually and conversion costs are probably prohibitive. Having said that we live in unusual times and there is plenty of data available for the EP.

Hi L7 - you wrote on Friday 12.32 "romaron's desire for a more precise definition comes from the fact that he holds bonds. In which case the terms and conditions are important."
That is incorrect. My equity holding far exceeds my RB holding but sometimes approaching the rating/market price of the equity requires a more circuitous route. I would say that the terminology is just as important to equity holders, maybe even more so, as debt is often the decider in times of stress and we should understand it better. Especially to our comparators. I asked a few questions here hoping to smoke out some individuals who might have more knowledge and it didn't work. Hitman got nearest (imo) when he said "Guess their is a lien on the title until the vendor loan is repaid in full" Fri 14.48 whilst the post was flowing. The US is moving away from RBL so maybe that is irrelevant too? You would probably need it all laid out and a commercial lawyer to hand to explain why a certain action/deal impinges on another. Off the top of my head one is the Sculptor loan. I struggle with them and I doubt I am alone. Others pontificate but their ignorance of legal restrictions and impact is high. Maybe the RCF to FSA means little but it is accepted without question.
I believe there are restrictions which make certain courses of action problematic.
I haven't joined the hedging debate because it is puerile. They [EnQuest] got it wrong but they got a lot of other things right and we don't know if their hands were tied to an extent. The swap at $31 was in turbulent times when Governments were acting like headless chickens. Message boards are great for hindsight but not why I log in.
I believe Mexico used to sell their oil at fixed auctions. It might still be the case and it helps set their budget. In shale Chevron and Exxon don't hedge at all and the smaller companies that do hedge less than half (30% was Art Berman's guess but he admitted life is too short to read every companies update). Throw in the Fed buying junk bonds and it makes sense to treat anything from there with caution.
I doubt EnQuest did anything other than try to get the best financial result but getting oil right isn't as simple as some of the experts on here seem to think.

Tom - I've mentioned it a few times hoping that somebody clever might pick it up. Maybe unimportant but the institutions aren't usually big fans of change. Maybe they were forced to drop RCF and SFA is considered a more "junkier" type of loan? I basically agree with you but have a sense that these subtle changes don't get the full approval of the Institutions. We've been here years and it is still confusing. Even the professionals have to make an extra effort to understand EnQuest. Being human some cannot be bothered and I don't know about you but when I sell out of a stock I often don't revisit. The fundamentals though don't change and I think we've turned the corner.

Hi chilts - I'm aware of that. What I was trying to explain was that those stocks are attractive to the small day traders and the number of posts is probably a guide. Because of the general ignorance of day traders most are not interested in the finer detail because it means trawling through documents and reading announcements carefully. In fact it is why I continue to read this message board because there are some good posters whose attention to detail far exceeds mine. What we really want however is for the professionals Institutions to increase their holdings and they are discouraged by waffle. It might even be the large shareholding of AB is seen as a threat? I see his shareholding as a positive but then I'm not a professional. The professionals pay far more attention to the small print and definitions. As for bonds/notes for some it is the rating that decides and they may well be mandated to sell if you lose a rating (for example). I think that EnQuest takes some deciphering and that may discourage the professionals. We've still done better this year than the names I mentioned (possibly over 5 years too).

Tom - I didn't disagree that we'd be in a better position in a year or so's time but these are HYN's and not Bonds. I think there is some confusion as the RB does have "Bond" in its name and because of strict UK Retail protection I think we are at the safer end of HYN's. I don't confuse the SFA and the "Bonds" as you say. In the document you refer to it does say RCF. In the more recent RI (2018) the RCF has become the "SFA" (p. 276). It may be unimportant but why change the title/definition?

Hi Tom- I'm certainly no expert but we have to be careful with our terminology. Often it's subtle but not to the Institutions we'd like to attract. Some of it also works against us.
I'm guessing you're calling the SFA the "RCF". I still don't know what SFA stands for but surely they'd have used RCF if that's what it is. Also the company likes to use the term "bonds"when they are HYN's and quite different.
I doubt if we tried to refinance today we'd get better terms. PMO will be a good guide as they have a steep hill (imo) to climb shortly.
If it sounds like I disagree with you that is incorrect. We are on the same page. I think we are ignored to an extent because TLW, HUR, PMO and the like are more volatile and dare I say "exciting". I prefer boring in a stock.

*This from Moody's today "Moody’s Investors Service expects the global loan-only default rate of high-yield issuers to rise from May 2020’s 5.1% to a January 2021 peak of 12.1%, while the bond-only default rate climbs up from May 2020’s 4.1% to a February 2021 peak of 8.3%. Meanwhile the global default rate for high-yield issuers of both bonds and loans is projected to increase from May 2020’s 7.1% to a 11.1% top by March 2021."

I cracked and phoned my local B&Q to ask how big the queue was.

"Same size as the 'B'".

2 hefty trades today. They discounted the Moody's catch-up announcement.

"That leaves one explanation: what we’re witnessing is another algo-driven vol-cano — what happens when machines frantically trade off each other, driving up the price and luring in a few dumbfounded retail traders. But even that reasoning feels extremely lazy.
Perhaps it’s best to just sit back then, admire the market action and say “meh, it makes no sense and sometimes that’s okay. Not everything has to.” Efficient markets be damned."

I concur. Easier to ignore if you're earning a wage working for EnQuest rather than watching your investment. I doubt few of them follow the stock price as religiously as we do. Some days I'm sure they are as mystified as we are with the movements. The algos can reboot but if you're sucked in it's a mugs game.

From here: https://ftalphaville.ft.com/2020/06/17/1592402682000/Today--in-efficient-markets/

This podcast gives interesting detail on a Biden presidency: https://www.spglobal.com/platts/en/market-insights/podcasts/crude/061520-oil-gas-rapidan-biden

With currently a Biden lead in the polls there is little risk of shale growth or investment until after the election. I think we have little to fear as it is in Trump's interest to make most of shale economic (higher oil price) if reelected whilst a Biden presidency will lift the oil price as he makes shale more expensive or uneconomic through legislation and more hoops.

This has been puzzling me for some time regarding the OPEC + cuts from a Platt's link: "OPEC and OPEC+ only have more promises from those countries to make deeper cuts. The organizations have no mechanisms to enforce them."
So why did Angola, Iraq, Kazakhstan and Nigeria (especially Iraq) comply and even compensate for earlier non-compliance this time?
We know that Trump is like a little child who cannot resist dropping hints that he is involved and did allude to the fact that he was involved in the production cuts. The oil lobby is very powerful in the US and a strong element of the Republican base. I think the clincher was the US threatening to remove the military support that Iraq requires to neutralise the threat from Iran. Throw in a few difficulties that the US can use concerning money transfers in dollars and shipping disruptions and it is enough to bring them all into line. In case the pressure from the US oil lobby wasn't enough Trump also faces pressure from KSA and Russia to whom he has always been remarkably tolerant and supportive towards. Perhaps there's more to golden showers and money-laundering than we ever imagined?
Having said that the military pressure was probably enough on its own but it never hurts to keep some cards up your sleeve. It kinda makes sense to play Iran as the bogey man in all of this for selfish US reasons and Trump is, if nothing else, a bully.

OK L7, you win but "I'll be back".

There's also the fact that carbon pricing if draconically imposed will make many industries and countries uneconomic. We're basically a rich service economy but there are plenty of places in the world where it just wouldn't be acceptable. Art Berman is right and I'm not even convinced that if Biden wins the US will wholeheartedly chase it. Trump has done a lot of the grunt work by encouraging chasing a quick buck on shale. They will spin its reduction into compliance.

Final thoughts on BP/EnQuest. They need each other.

Be Lucky

They interest me but maybe nobody else. I approached EnQuest IR for a price on the HYNs and a query about the huge turnover of shares at the end of May. I got a reply today.

The HYNs are still in lock-step with the RB and I have the closings for the past year. I won't torture you with all of them but the last 3 were:
5 June 2020 60.26 (RB 62.00)
8 June 2020 60.94 (RB 65.25)
9 June 2020 64.92 (RB 65.55)

Their brokers were unable to identify who made the large trades on 29 May either. I'm gonna let it drop because there has been no fall-out and I think it probably revolved around "window-dressing" MSCI etc...which is an arcane world populated by registrars and the like who shuffle and file holdings. It could even be the same company moving from one account to another and the holding not changing. Other companies also saw big amounts go through and they were largely unaffected too. The fact that their brokers were oblivious also confirms that the number of trades were "technical" and the reason would be far too difficult for them to understand. I was a FX broker once and can confirm overall ignorance and disinterest in things that don't move prices.

Yawn! The IR must really look forward to my emails.

Hi L7 - I think you have to throw into the mix with BP that governance and transparency is very important and almost every UK pension fund has a piece of it. Chairmen and CEO's end up with knighthoods so those of a more cynical nature might say this a CYA release that really tells us little. It does of course help their defence on performance and dividend. Get your retaliation in first.
It also seems a signal to me that the Majors have put "For Sale" signs up on selected fields.
As long as EnQuest can navigate these choppy times we'll be fine but the current narrative doesn't help oil asset prices. It's certainly a buyer's market. I've said for some time that it will be plain old producing with a decent margin that will lift the stock. Cash is king as they say.

Tom8080 - regarding shale, I liked this "“From the point of view of oil-market share, OPEC will be a clear winner in the coming years. Under-investment in the rest of the industry ultimately plays to their favor.”
--Goldman Sachs

Hi Dumbly - I don't do the detail you want. Feb and August are the coupon date. Life is too short for me to care about the finer details. It has been a long time since I had to factor in the exact interest maturities sums and amounts to pay and receive. I just stick with the principles. My favourite investment tool is a wet finger which I hold into the breeze.

Who sadly died at 64. I didn't realise but I owe him a thank you. I have been going to a restaurant the Light House in Wimbledon for many years. The lunchtime menu is a steal both in price and quality. Apparently he lived in Wimbledon and was unhappy with the absence of a decent restaurant so created one. I may even have eaten there at the same time as him. He was extremely rich and I doubt maximising profit was his main aim. I hope the family keep ownership and I'll be sure to report back when it opens again if it remains the same.