Member Info for romaron

I meant to say our bonds will need to be addressed before April 2022, a year before maturity. I'm pretty sure we'll be out of lockdown by then.

I don't follow other BB's closely as you almost need to be a regular to find anything of value among the usual posting detritus. There are occasional gems but you have to know where to look or be lucky. I followed this link posted by grippa today on the PMO board: https://www.bailii.org/scot/cases/ScotCS/2020/2020_CSOH_39.html and I feel it answers some of my recent questions regarding EnQuest. It is an area where I'm sure L7, E121, hitman and HMH are much more at home than me because it revolves around accountancy and debt repayments. I didn't read it in depth or finish it as chewing my right arm off was becoming a considered alternative.

I'm not invested in PMO so my comments aren't about them but more about accountancy and credit matters in a general sense. Because it is PMO I have made a leap and assume we would have similar requirements/arrangements as we are both UK oil companies. I still don't know PMO exact maturities but it no longer really matters.

on P.47 [77] "In this case, the Group faces a specific and concrete maturity deadline in just over a year. At that stage, the Scheme Debt Facilities (amounting to about US $2.6 billion in drawn commitments) will become immediately due and payable. Unless the Schemes are sanctioned, it is more likely than not that the Scheme Companies will be
unable to refinance or otherwise repay their debts at the scheduled maturity. These facts form the relevant comparator in the present case."
and this on P.11 "scheme Debt Facilities will become current in June 2020. In other words, if the Scheme Debt Facilities are not refinanced before 30 June 2020, they would require to be reclassified as current liabilities under International Accounting " and P.32 "very substantial risk that the Scheme Debt Facilities will not be capable of being refinanced through new debt facilities either by the end of June 2020 when the Scheme Debt Facilities would have to be classified as ‘current
liabilities’ (for accounting purposes) or by their existing maturities in May 2021”

I take this as good news for EnQuest because the repayment requirements for the SFA are baked in and our bonds will need to be addressed prior to April 2023. I think our Board has positioned us well and they can concentrate on more pressing matters. Another point is that credit deadlines don't always get paid to zero and you only have to look at BP's bonds outstanding. One is often repaid or rolled over with another bond. Creditors really want shortest maturities and highest rates. The companies want the opposite.
My accountancy knowledge is poor but I read that to have all your debts classed as current liabilities is not a good look! We are nowhere near being in that position imo.

Hi Modestus - it is interesting but almost the whole investment world disagrees with their prognosis judging by company valuations. However, I think their argument is sound but only because I expect normality to return in a few months even though there will obviously be damage and unforeseen consequences. Of course it really only addresses the supply issue and many of the risk averse expect demand to be much weaker and they could be right. I liked the simple explanations and I tend to go along with Farr's Law in that sad as it is the Virus did what nature always does by attacking the most vulnerable. This comment also resonated "Second wave - However, upon closer inspection there were a myriad of mitigating circumstances (including the transporting of the sickest soldiers from the battlefield to the cities)" as I expect many parts of the world will just shrug and accept it as "fate" or "the hand of god" and the market is looking at a worst case scenario imo. The world has indeed progressed in a 100 years and is better resourced to tackle a pandemic.
They also mention looking for companies with strong balance sheets able to weather lower prices for as long as possible. Well, EnQuest hasn't the strongest balance sheet but 2020 was to be the year we repaired it. I feel it has only been temporarily delayed and I expect higher prices that will put us back on track in a few months.
I think the US elections in November mean that the US will end the lock-down sooner than may be totally safe but it is a gamble that Trump desperately wants to win. That will be good for us. I doubt Trump can help the shalers but he will phrase it in a way that impresses voters but not credit markets. He has more important industries with their hands out than to subsidise expensive energy.
Another point often shelved is DECLINE. It is a natural occurrence with conventional wells [disastrous with shale] and is easily overlooked. AB has in the past few years moved us away from reliance on end of life fields which had terrible decline rates and as much as he sweetened it they were often closer to 20% p.a. without expensive work-overs. They have been sacrificed by many other companies too and are closer to shale "stripper wells" than (say) Kraken.
We are a slimmed down company ready for the next stage of the oil cycle.

Build it and they will come.

I've been outside washing the cars and sweeping up the last of the Birch catkins. It meant I spoke to neighbours as they went past. In the new normal people actually walk and talk. My next door neighbour is working from home and said his clients, the banks, are in their offices. Unless they have a doctor's letter they have to go in. Even so he said markets are extremely thin so I imagine the free time that AB is referring to is along the lines that any major action would rely on all the various parts working together (lawyers, boards, regulatory authorities, banks etc...) so until each leg has a quorum effectively it is relatively tedious day to day repetition (Kraken-tanker-Kraken-tanker for example). Maybe Exxon are just accepting it is a combination of lack of buyers in a market that they couldn't sell in anyway due to furloughs and the CV effect outside of their control. Is it time for EnQuest to roll over the remaining SFA loan due Oct 2021? I fancy they'll do it with about a year left but is there a period that the credit agencies like or prefer? Do we start worrying if there's only (say) 6 months left? L7 or HMH comment?
What it does make me think is that it's not only the oil price that will play catch-up but there'll be increased activity between oil companies. The zombie companies will either be absorbed by stronger companies or go to the wall. Those planning an exit from the NS will be amenable and helpful to "creative" approaches.
I assume the FPSO L7 referred to is the EnQuest Producer and it could be a useful stopgap. AB's use of "noodling " probably means more to an American and a driven guy like AB cannot help but build castles in his mind while incarcerated.

Later Monique the French neighbour passed and asked if I'd heard a dog barking. I can hear it but is a at least 4 houses away. Apparently it belongs to Lucas Moura of Spurs who is renting the house behind hers. To make matters worse he has installed a fairground sized "bouncy castle". She is not a happy lady.

Stop messing with our minds Modestus. In a few months we'll (maybe) regret not filling our boots with EnQuest. I forgot to post this yesterday from the Times:
"Exxon Mobile has postponed indefinitely the sale of oil & gas assets in the North Sea worth $2 bn." Exxon still hope to raise up to $25bn from asset sales by 2025, but Darren Woods, chief executive, said "It's going to be harder to do that in an environment like this."
This means that it is a buyers market in the North Sea. Can AB resist? There must be a strong possibility of mergers around the corner.

*Does anybody know if we can take showers now or should we just keep washing our hands?

L7 has just exposed my (lack of) research skills.

Some random thoughts. Research isn't really my game so I throw them out there along with ideas and some of you have a better stab at them than I can manage or put things in a more rational order. Regarding Director buys I remember when Jim Buckee was Chairman and at YE 2014 held 3,488,424 and YE 2015 3,936,949. JB resigned in September 2016 so we have no idea whether he still has a holding. He bought regularly and at varying prices, some over £1. This is evidence (to me) that you cannot read the future though some here (usually before they go to Filter) expect Directors to have super-powers which include knowing the future price of oil. Indeed at the 2015 AGM JB said to me that he had a bet with the CEO that oil would be above $80 by September. AB has been buying regularly throughout his tenure also.
When doing my sporadic "research" it means I often have to revisit old EnQuest releases and I've reached a conclusion that this is almost as much a bet on AB and his close associate JS as the future of Oil and EnQuest. My impression of AB is that he is a driven and complex individual. His intention is to make money and grow his Foundation. I think he is a long term planner and we may just have turned the corner, finally. What has been put in place is a springboard for the next chapter.

Damn, I've already drifted off what I was going to say. Where the F*** is Martin Houston and when is he going to dip his hand in his pocket?

Hi Pelle - your 21.27 post. Are you saying you bought the 1.6 mio?

Our volume was abysmal today. PMO and TLW were far more active when I looked in this afternoon. EnQuest wasn't in the game today even with the stimulus of the Director's BUY, or was it?
I don't think it attracted the penny traders today but whilst PMO and TLW were softer today EnQuest held up. The timing of the off-book trade of 1.6mio could have been anywhere between 08.05 and close of business. I think it was a BUY because of the performance of the share today. The time you read is when it is reported. There are always many reasons for trades above market size but I'd like to think that this was a professional dipping their toe in or increasing their holding. The amount indicates that it is unlikely to be a day trader.
If you want to be a BB loon you could say that the mystery buyer is a mate of Howard Paver. Whatever is behind it take it as a good sign. It was probably done through a broker and they pride themselves on causing as few ripples as they can. Competent professional jobs tend to bring customers back.

*Applying BUY or SELL to a deal can be pretty subjective and you can see the day's spread was 10.80 - 11.76. For example: if it was one trade and the broker made him 10.95-11.05 and the guy hits the 11.05 it is a clear BUY but what if the broker makes 11.00 - 11.10 and the guy says he'll pay 11.05 for 1.6mio and gets given. That is arguably a SELL. I've never paid much attention to annotations against the larger amounts because you just don't know what happened and the timing is not the time of the actual trade. It was the time it was reported and is hardly the most important job on the desk.

You could always filter Ammu. I have. Boards are spoilt by petty disputes or reaction to slights. If the reason you're here is Ammu then in the bin you go. Nothing personal.

I'm not sure I understand why you're here oiluser? The oil industry is never static and it has had a few headwinds over the past years. Most here are more than aware of the PIK and its impact in possibly three years time. It has proven to be a masterstroke until now and rates are more than acceptable. They are also aware of the repayment, ahead of schedule, of the SFA in the same period. Perhaps you ought to head your advice "for the attention of those that haven't been paying attention". I look forward to the hidden gems you say you're going to find. I don't know who your comment regarding the market being less than enthusiastic is aimed at but that would apply to practically every oil company at present. You don't have to answer but what is your interest in EnQuest? If you're stress testing then there are plenty here who have already answered the points you seem to think you've discovered. Reading some past posts and EnQuest's own updates and presentations will save you time.

Good, concise post oiluser. Don't really disagree but our road is longer than theirs. We have created a breathing space. We are more in control of our destiny than they are. I'm still keeping the rabbit's foot though.

Sure oiluser. The time to repair the roof is when the sun is shining (JFK 1962)

We had our travails in 2016 and 2018. It was painful and we were rapidly paying off our debt until CV19, Opec+ and shale situation arrived.
Both PMO amd TLW had much higher share prices but both seemed frozen in the headlights imo. The market continues to misunderstand EnQuest but few are as flexible and prepared for what has happened and as well set up for the future.
PMO face a battery of creditors and have imo a very weak leader but he does love a drink and a party. TLW have bond maturities in April 2022 and seem accident prone.
EnQuest shuttered the older assets that were marginal anyway and can now concentrate on 3 world class assets and SVT.

I may have got the wrong player. I think it was Tanguy Ndombele.

Mourinho - Don't take me literally Pelle. I was referring more to his chutzpah but his results have still been outstanding. He is among the top managers in the world.

O/T I was walking home earlier last month and I passed half a dozen scruffy unshaven individuals talking animatedly in Spanish. They were separated by a gate. Behind the gate was Mauricio Pochettino and his son who have lived nearby for 5 years but I'd never seen him. The same week Mourinho was in hot water for breaching Covid guidance by training Davinson Sanchez on Hadley Common which is also nearby. My window cleaner was supportive and said Mourinho is a hands on manager and that Sanchez has been carrying excess timber for some time. I'm not a rabid football supporter but if pushed to choose a team it would be Spurs.

This is one of the best articles I've read in its brevity and simplicity of language. The author is an expert and it explains some of the thinking when companies are in trouble and the remedies.

https://ftalphaville.ft.com/2020/05/01/1588338202000/Why-only-a-reverse-bail-in-can-save-the-economy-now/

I know what Nick and L7 said but I no longer subscribe to the FT and this is free and accessible. Hopefully you'll be able to read it but it may get removed. It is btw an excellent advert for the FT and Clifford Chance.

I'm betting we don't have a revenue shortfall because "A leveraged business which addresses a revenue shortfall by simply increasing borrowings is an MBA case study in mismanagement. Such cases require a recapitalisation with new equity."
I believe we are benefiting from our 2018 actions when we repaired the roof. I bet TLW and PMO wish they had followed our lead sooner.

Hi Pelle - AB is different to other CEO's and certainly unafraid of the spotlight. There is a little bit of Jose Mourinho in him. Hi Pelle - I'd rather he continued to be interviewed by top quality journalists and that they acknowledge he has the experience and market presence to be of value. I was a little surprised by the timing and I think AB is up to something along the lines that HMH (14.31) hinted at. It is probably dangerous to allow him too much free time. This is a time of opportunity for some and reinforcing the bunker for others. AB has finished off decorating the bunker and is looking for challenges.

Bye bye Mystic or whoever you once were. Filter bin for you. I suggest others do the same.

I think you'll find Mystic that Shell and BP CEO's also drew attention to the "risks" facing their companies this week but then they never had your experience as a "marketing expert".

BTW what marketing was it in. Door to door leaflet drops?

I'm a bit nonplussed by that interview in The Times. I don't know what the point of it was or if it was a kinda Op-Ed? Maybe there is less news out there than we thought and AB does seem to have a touch of cabin-fever. He mentioned he had a lot of free time on his hands which makes me wonder whose looking after the shop and the comment about £500 a month for basic utilities is pure Trumpism imo. Ignore rent, salaries and mortgages and freeze everything. I'm not sure how that would work and I certainly couldn't survive and there are millions far worse off then me. I'd rather he'd kept out of it.
Still, it could have been worse. It could have been an interview with Malcy.

*good points from Nick and L7. My daughter is a journalist and is forever pitching stories and ideas. There is though something to be said for self-promotion and the interview does also reinforce our positives but it does open the door to some criticisms too.