Member Info for romaron

https://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary/XS0880578728IEGBPUKCP.html
For months they have hardly traded and now they are going crazy {OK, I know it's only showing 7 trades but in comparison!]
The reason I've posted is because they tell a tale and there aren't the hundreds of trades that make reading the equity trades usually a wast of time.
The RB closed at 52.05 on 22 May. This morning a buyer hit the 2 screen offers of 10,000 each at 55.25 {Automatic Trade]
Ignore the timing of the 50,000 trade as it would be a manual entry imo and preceded the 2 x 10k
My thinking is that the buyer of 50,000 bought them whilst the 10,000 offer/s were showing on the screen. Like me he thinks the price is too low but it is amazing how locked into a screen price people can become. The seller/s of the 10,000 are acting like day traders. The 50,000 buyer is not.
The broker would also use the screen to get an offer in decent size. It may be more than one seller and he has just reported it as a single trade, I don't know the reporting rules.
The 9.08 trade could be somebody who missed the boat or heard who bought the 50,000. I think the buyer has decided that the price should be way above 60 (pick a number, I'll go for 85).
In the past I had Goldman and other investment banks as clients. In this example they wouldn't look at 10,000 but if the broker presented (say) 70,000 they'd be interested.
Of course the buyer of 50,000 could also have been the seller of the 2 x 10k trades but it was the only way he could get 30,000 plus in. I don't have access to the screen so maybe when he bought the 50,000 it was showing 53.50 or something.
Fun and games in a thin market but the RB is telling imo.

Excellent posts. The situation though is that with the 2 share calls many here have a larger amount of shares than intended initially but at a feasible level. We don't need 80-90p to be back in profit which for many was as recently as February this year. L7 you write as though you are in at 80p.
We are a pretty big company now and in a stronger position than many of our "peers". If you're looking for perfection then you'll not find it here. What you do have is a financially sound company ready for the return of demand. Those pictures of Southend at the weekend convinced me that people have chosen to accept the low risk level of Covid and lost ground will be made up; maybe not all of it but production cuts will mitigate and I think much of shale has been dealt a mortal blow. EnQuest has already proven how creative it can be and is now in a strong position. I fully expect AB and his team to take advantage. If the deals and support are available we should lever up as HMH says. In fact, without outside encouragement and support we won't be able to do it so it'll be a stamp of approval from the credit markets if we do.

Build it and they willcome.

I've emailed IR. I think it's a fair enough question. Is the FPSO destined for the scrapyard or can it be used on another field after the requisite engineering? I'll report back if i get a reply.

The chances are that it is headed for the knackers yard and that is in the price. However, if it can be re-used then that is a bonus. I haven't come across anything that suggests it will be re-used. Aircraft carriers seem to have a life of 30-40 years but they probably don't take the pounding that a FPSO gets.

Apologies in advance - I've just had a large negroni and I'm feeling rich at the moment because with the garden at its best and the sun out I don't need to be on a yacht in the Bahamas (not that I've got one). I daresay I'm happier than Philip Green and certainly more popular.
I may be attacked for this which is why I may use alcohol in my defence. What if there is a plan afoot to move the EnQuest Producer to another field? You cannot play fast and loose with the authorities and decommission on a whim but there are only 180 FPSO's in the world and I'd guess not many on the production line. They are something of a rarity.
Decision time - carry on with a marginal field or cut your losses and move your major asset to a field that's got good reserves but lacks finance and a FPSO.

Interesting times indeed!

Hi HMH - glad to see you keep a weather eye on the horizon. I'm with you on the debt. Some investors confuse our debt with a residential mortgage with an aim (for most of people) to pay it off- go to zero basically. That isn't what a company in a growth phase does. When we took out the OZ loan we weren't in a happy place. The farm out of Kraken had failed and some might read the OZ loan as a "Barclays turned us down but Wonga were happy to lend". The rate wasn't usurous but the terms were imo but needs must. They effectively have first charge on Kraken oil. A kinda temporary farm-out for up to 5 years and quite clever and astute on the part of both parties. This could be an interesting and effective alliance going forward. The bonds aren't pressing at the moment whilst the FSA will be rolled over and as long as oil recovers isn't a problem. A healthy company doesn't fear debt. In fact it needs it for funding growth and financing new deals and projects. That is where it will get interesting in the next two years. Ignoring the majors sell-offs there are quite a few oil companies in trouble and if nothing else the M&A fraternity are creative and hungry. That is without the development of our existing assets and maybe exploration might be considered?
I don't follow our "peers" that closely but over the past year we have financially (restructuring) far outperformed TLW and PMO who are by no means out of the woods. HUR and RKH cannot survive alone imo whilst the remains of Xcite will stay in the ground. For Sound the party is over and UKOG has become a cult. Having said all that there will be value in some of their assets. It is imo a buyers market and the failure of the Spirit sale is an indicator whilst I wonder about Chrysaor as they seem to have possibly bought at the top. I put "peers" in inverted commas but I think it always dangerous to pigeon-hole oil companies. I think EnQuest is "peerless" in many ways and cannot think of another oil company in the UK with such a committed CEO in shareholding terms.

*I'm a bit confused about EnQuest Producer. When I read "taken to shore for recycling" I read it as being scrapped and so did a few others on this board. I like the idea that having an FPSO almost ready to go and with our experience in heavy oil could make a huge difference in the economics of a field. Existing or in development. What exactly does EnQuest mean by "recycling" the FPSO?

Hi L7 - the man probably said something similar when he took on Alma Galia.

I didn't say it wasn't a win/win. In a perfect world all deals would be. It was more a criticism of parochial support by LTH's on most message boards. I was inferring that in the transferring of fields some companies will end up with a disproportionate amount of them. Could be Spirit or Chrysaor for all I know. INEOS ducked out of buying Conoco's assets after they'd put down a deposit in return for 3 months exclusivity in November 2018. INEOS aren't mugs.
EnQuest are extremely well positioned in my view but I'd despair if they bought any more end-of-life fields. I think the majors are close to giving them away so I struggle to see why anybody would buy them but if Magnus can be repeated???. It is a (seemingly) cheap bet on the future price of oil but with shale in the side wings not something I'd bet on. I'd like to see EnQuest buy or farm in on newer fields that don't have quite the scale or criteria required by the majors. Not every company can be a FTSE100 but why not aim for the top? AB and his team know their strengths and situations can change dramatically. There is no magic formula but I think 10 years still makes us a young company and we are now close to being fully fledged. It's a bit early on the debt front but I think there would be plenty of interest in any merger or take-over that EnQuest considered. The time is ripe.

*I also like our Malaysian interests but from a slightly different perspective. Most companies in the UK don't have an Islamic CEO. Malaysia is mainly a Muslim country and they put a lot of value on financial probity and charity where we score very highly.

Many fans of smaller oil companies often post on these bonds that they have had the majors over. They are more quick witted and flexible than the majors etc.... That may be true but the winners here have been the majors who shifted the EOL fields to the second (or is it third) rung of companies that deal in used fields and are now more protected from the slump in the oil price. Covid is almost the equivalent of the tide rushing out and showing who went commando or is it that a rising tide lifts all boats? I haven't really got my head around Magnus as it seems to much bigger than other fields we have dealt in. It may just be that it flatters BP's balance sheet, is a strategy anyway and there are clever terms that avoid EnQuest getting a giant windfall. It does seem a good deal but I don't think BP is run by dopes either. I think Magnus may be difficult to replicate. Our tax situation was instrumental too imo.
I do wonder what our competition will do. I doubt that old fields with fast diminishing returns have any value at present. This is why (I think HMH posted something similar) I believe we are unloved but also unappreciated. I don't care. The world will soon be in recovery mode and we've already seen a tentative improvement in the bonds as the search for returns continues and we all know that the bond market is far more cautious than the equity market. I believe it is a waste of time to go on a charm offensive and AB's perfunctory (but polite) treatment of analysts is a result of them not understanding the oil cycle. The analysts are well paid but nowhere near what a top executive of an oil company can earn when they get it right. The analysts are trapped by the numbers and they are always OLD numbers. The risk for them is the price falling and like surveyor's are always thinking of accusations of over-valuing or worse being accused of professional negligence; it is a mentality which whilst not wrong really covers loss protection. There is (imo) an antipathy between the two and I'm with AB. Let the forward numbers do the talking.
At the moment the problem is Covid. Does it return with a vengeance in the Autumn? This may be the last chance of getting on the bus. Unlike some other companies we haven't exhausted all of our options. We can afford to wait for the better deals because that is what EnQuest have done, restructured the company for the next stage of development. I am convinced that AB is ambitious and driven. There will be new deals.
Nobody anticipated Covid but we are well placed to come out of it stronger.

L7 - I wasn't using specific quotes or posts. If I have misread the sentiment of others they'll soon put me right.

Thanks to Therapist for his 23.32 post I found a link to another message board that I knew nothing about, Placera -https://www.avanza.se/placera/forum/start.html
It made a change to reading this board and I even found the transient visitor to our shores HMH who seems far more relaxed from his home base. I even looked up his longer name but it doesn't translate to well "he with the horn" but I kinda get the gist and it does explain some of his bouts of irascibility. Crossing the North Sea in an open boat and a horned helmet that might be too tight is enough to enrage even the mildest of us. But I digress.
It helps to get other's views and I like the way HMH simplifies things so that the likes of me can understand them. Like him I expect that as long as the building blocks are in place we'll be fine. I think it also signals the end our interest in end-of-life fields and we have moved on. The economics of those fields mean that even if they were to become economic again they would trigger the re-entry of shale speculators which would put a cap on any long term benefit and the risk is too high for most. In fact only those with strong balance sheets can wait that long and we are almost there. I do wonder about other buyers of EOL fields as this cheap way of building reserves is over imo. Like tobacco there is now a moat around oil companies and the decimation speeded up by Covid now means that those trying to raise funds on a shoe string stand no chance. A cull can be healthy and is more the Swedish way but it has helped EnQuest in the long run.

*for our Swedish friends - han med hornen translates to "he with the erection".

An electronic AGM is a poor alternative to the real thing imo. Only one question? Hardly democracy as you had to have it sent in and vetted by 19 May. Then again it is likely it was the only question and a pretty poor one at that. Nothing from EnQuest was likely to have materially changed whilst the Virus is all about conflicting views. There is little any company still allowed to operate to do other than "bugger on". It is more a case of checking that we're storm proof and can hold on until better days. I was satisfied overall. We are in a much better position than many. I tend to ignore hedging because we judge it with hindsight but we know the management have to combat with safety v speculation and that is never easy. We can't really grumble about our position and the bonds are doing better. On balance it was a good update and no change. The market likes that and with oil demand looking to improve the rise was inevitable. I think a steady increase is on the cards.

Humour obviously doesn't travel. I'm in the age risk category for Covid. I can't really go anywhere but I was worried that if I left it any longer I would look like Worzel Gummidge as my hair is almost to my shoulders.

You call that advice? My executive decision maker called it "heads".

AGM - Martin Houston voice appears. Called it a "perfect storm" and has met with Institutional shareholders. No rush for the exit so hopefully a good job but then we know how reliable reporting of major shareholders is. Costs sharing greatly reduced once decision to decommission taken. Safety paramount - obviously, ask BP about Deepwater Horizon, false economy.
No drilling 2021 so lower capex. Debt $1.36 bn end April. Above $25 we reduce debt rest of year.

Happy now?

I can't help myself. I renewed my passport at the Post Office today. Cost £91.50 and was quick and painless. Told it will take 3 weeks but doubt that'll be material. At 71 maybe I should have waited a little longer!

Jeffrey 16.50 I wouldn't worry. We've all been there. You can sell next week at 18p. Might be a little lift tomorrow from Sweden as they're back.

correction - PFG 2021 89.75 2023 82.20 and if LSE are correct they haven't traded since end April.

Hi Jeffrey you asked me a question 14.21. The financial world revolves around interest rates and credit ratings. Indeed, foreign exchange forward swaps (which I was involved with for over 27 years) are basically the difference between 2 interest rates. Even contango has similar drivers and you get the cost of the shipping and interest charges. You'll be charged a rate for borrowing shares if you're shorting etc.... plus as always the opportunity cost. It is complicated and I don't know all the wrinkles but I do know that the ignorance of bonds on these boards is extremely high. That isn't an attack as none of us can be expert in all fields but you shouldn't ignore a market that dwarfs equity markets. That's why we have mechanics, plumbers and pilots so if you're contemplating any of those you should do a bit of reading. Looking at it from another angle HYN's is another word for "junk bonds". That isn't that the company is junk but often that it is a young company and growing through using debt. It doesn't achieve the ranking from a credit agency, like Moody's, to make it Institutionally attractive. The world loves quality when lending which is why the UK has issued a 3 year gilt at negative interest rates yesterday when you feed in inflation; the first time in its history. Nobody expects us to be compared to BP. The Retail Bond is quite novel and you can read up on it. It is cheap borrowing and suited the company at the time. It is aimed at the retail investor and they are protected. Much more than an equity investor that's for sure.
Because a lot of junk bonds are "lock up" paper our HYN dollar bond is unlikely to have retail interest and is hard to get an up to date price. The price is largely immaterial unless a redemption or interest call is due and you lack funds. That is why we are relaxed and PMO investors should be worried imo. Debt is not an enemy and our ex Chairman Jim Buckee said "explore out of equity, develop out of debt".
Out of interest you could look outside the oil industry at RBs. PFG have 2 that mature in 2021 and 2023 priced at 89.75 and 92.20 respectively. Fitch give them each BB+ (stable outlook). We aren't rated by Fitch but it is the equivalent of Moody's Ba1 and one step below lower medium grade where institutions start investing. We are non investment grade speculative and 3 steps lower. Whether it's deserved or not is subject to several tests. Because I'm contrarian I think that doing it by the book on something that can be subjective doesn't always work in my experience. I think that both PFG and ENQ are better bets than PMO. You don't have to agree with their ratings and we've seen recently how accurate medical experts are.
I think our strength is that we aren't really under any pressure from bond maturities or payments. In short I think that applying a "one size fits all" when rating companies is more subjective than they kid us into believing. DYOR has never been truer.

I thought it was funny and probably accurate.

Hi Nick - that's an impressive amount of RB you hold. That's close to £2.5 milion. I've only got a fraction of that around 100k but it is in profit. With that kind of commitment from you I assume you know more about bonds than I do. I'm happy with interest rates but the approach is very different in bonds due to credit risk and agency ratings. Have you an explanation of why the market values PMO paper above our own?

A dozen trades now. The 12.02.29 trade is the biggest I've seen and I look at them RB most days. The size suggests institutional.

https://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/trade-data.html?page=0&pageOffBook=0&fourWayKey=XS0880578728IEGBPUKCP&formName=frmRow&upToRow=15

Hi fixture list. Your post is already removed. I had to look the word up as it is Scottish slang. Kinda indicates my suspicion was right. Some just can't take it. Sad.

An excellent description fixturelist. I believe he may be Scottish and has been here before under another name. However, many here have a soft spot for him as life hasn't been too kind. He's more of a Moaning Myrtle than a commentator with anything to add. It was with some regret that I put him on filter because we are possibly his only friends, virtual or otherwise.

ooops - I can't even cut and paste properly. My family are from here;

https://spitalfieldslife.com/2015/02/10/the-lost-hamlet-of-ratcliff/