Member Info for romaron

I've been following the discussions and my summary is that we are upset that we didn't gain a "windfall" from timing our oil hedges or increasing the percentage.
I also wish they had been "luckier" but there are mitigations.
Hedges are by and large annual and appear to be quarterly. The result of poor hedging is only on the books for a year max and then you start again. A bit like farming and you have to factor in the poor harvest years. Better years are ahead imo and you have to take a cyclical view.
There is only one way to hedge if you're a producer and it is very important so I doubt it's left to a relatively junior to make the decision and is likely to be a joint discussion by directors and I'd expect JS and AB to contribute.
Consumers of oil get it wrong too and Ryanair will take an estimated Euro 300mio hit this year from a wrong way bet on fuel prices.
Covid-19 has had a huge impact and NOBODY anticipated that.
Are we to assume that sales are black and white? Either hedged or sold at the spot price? We don't really know if there are some other fixed sales or contracts that because of commercial sensitivity are not disclosed.
The company on evidence so far were light on hedges and would be a good question at the AGM (unlikely to go ahead imo) as investors might ask questions that analysts ignore with their forward thinking hats on. They also don't usually like to publicly criticise management whilst most investors don't suffer from that inhibition.
I doubt an email to IR would licit much more than a standard corporate reply. Better face to face imo.

If it is only the hedges that are a problem then we are luckier than many other oil companies which have fundamental structural and debt situations that won't have disappeared in a year's time.

Ooops - slow today apologies for posting twice

But he isn't a reliable friend. He gets you used to him and then he suddenly ghosts you. The overpricing of TLW and PMO had been mentioned on this BB for several months before gravity finally took effect. What happened yesterday isn't so surprising and I have my own opinion. This might help from an article in yesterday's paper.

"As last week was a relatively tepid one for US equity markets, this suggests that, as many people – including this blog – have pointed out, short selling is a net positive for markets as it provides a floor on for equity prices. Indeed, perhaps counter-intuitively, they tend to be net buyers when share prices fall. 
Even Jim Chanos, perhaps the most famous short seller of all time, admitted as much on CNBC last week, telling the hosts of the Half Time Report show that his various investment funds at Kynikos Associates had been buying stocks in the past few weeks.
Yet while short-sellers are seemingly taking profits in equities, that doesn’t seem to be so much the case in high-yield debt with over 25 per cent of the HY ETF still on loan:"

Add to this the fact that there is no sport on which to gamble and the stock market has suddenly become Las Vegas with a host of small punters (TLW had nearly a 1,000 chats yesterday) already bored with isolation and missing their daily fix. I'm also concerned about reporting. The FCA hasn't produced the shorts as at 6 April and they're usually updated daily. I realise that reporting shorts is almost an "honesty box" system but it is better than nothing. If they can stop Parking charges in Hospitals then anything is now possible so I suspect that smart money can smell the potential anarchy and it is as dangerous to be caught short in a stock just as much as to be caught long. Nothing has really changed with TLW. No RNS whilst PMO are awaiting a court case decision. We live in unusual times.

EnQuest is getting on with the knitting and I hope this "hot money" effect in what must be the thinnest of markets keeps ignoring us. Fundamentals are better friends than trends.

Modestus - filter their inane commentaries.

But he isn't a reliable friend. He gets you used to him and then he suddenly ghosts you. The overpricing of TLW and PMO had been mentioned on this BB for several months before gravity finally took effect. What happened yesterday isn't so surprising and I have my own opinion. This might help from an article in yesterday's FT.

"As last week was a relatively tepid one for US equity markets, this suggests that, as many people – including this blog – have pointed out, short selling is a net positive for markets as it provides a floor on for equity prices. Indeed, perhaps counter-intuitively, they tend to be net buyers when share prices fall. 
Even Jim Chanos, perhaps the most famous short seller of all time, admitted as much on CNBC last week, telling the hosts of the Half Time Report show that his various investment funds at Kynikos Associates had been buying stocks in the past few weeks.
Yet while short-sellers are seemingly taking profits in equities, that doesn’t seem to be so much the case in high-yield debt with over 25 per cent of the HY ETF still on loan:"

Add to this the fact that there is no sport on which to gamble and the stock market has suddenly become Las Vegas with a host of small punters (TLW had nearly a 1,000 chats yesterday) already bored with isolation and missing their daily fix. I'm also concerned about reporting. The FCA hasn't produced the shorts as at 6 April and they're usually updated daily. I realise that reporting shorts is almost an "honesty box" system but it is better than nothing. If they can stop Parking charges in Hospitals then anything is now possible so I suspect that smart money can smell the potential anarchy and it is as dangerous to be caught short in a stock just as much as to be caught long. Nothing has really changed with TLW. No RNS whilst PMO are awaiting a court case decision. We live in unusual times.

EnQuest is getting on with the knitting and I hope this "hot money" effect in what must be the thinnest of markets keeps ignoring us. Fundamentals are better friends than trends.

Modestus - filter their inane commentaries.

I've been pottering about and realised I hadn't looked at the price of oil all day. Not even when I logged on this morning. More or less where it closed last night so awaiting new news.

Hi Squif - I'm neither for or against banks or hedge funds. They're a fact of life and I accept them. They get better and quicker data than us plus they're always live. There is no conspiracy (different to fiddling or skimming) and people love to say things like "Goldman Sachs are shorting the dollar/oil/Easter eggs" when in fact directives don't come down from the management like that. Diversity avoids a massive loss and as we all know, timing is everything but WB and Soros can't get it right either. If you follow GS prognostications you'll see they get a lot wrong as well.
I guessed you'd get my tongue in cheek comment as I consider you one of the more intelligent contributors but I refuse to signpost a joke or comment to help those of a more moronic leaning.
I prefer it when this stock behaves more like a major because I'd like to think we are a mini-major. I don't wish us to be modeled on the likes of UKOG or SOU whilst I wouldn't wish the tribulations of TLW on anybody.

*When Hongkong Shanghai took over Midland they had a FAF (fierce as ...) Chief dealer who was in a small group (high rollers) that included the Singapore Money Authority in their day the Brevan Howard of dollar/mark. A pal of mine worked for Midland and FAF was introduced to his new workmates. My friend at Midland was also FAF and achieved fame by being escorted off the premises at Banque de France. The Hkg guy was a scruffy nondescript individual and many missed his shuffle through the dealing room. He asked a few dealers their view on the dollar and the consensus was it was going higher. He merely nodded. He got in his office and sold the F out of the dollar. A new regime was in place. A few squealed but he'd made his point. He didn't give guidance but would intervene if any position was over traded or in trouble. A diversified portfolio has its benefits (which I continually ignore).

My next door neighbour works for TP ICAP doing some esoteric derivatives. He is working from home now after the computer whizzes secured the lines (or whatever). For professional traders the current pandemic is a golden opportunity to make money. It's like every day is Cheltenham or the Grand National. If their markets are closed might they not switch into the retail area? It is going crazy over on TLW which also suggests that with betting shops closed some need their daily fix and there is likely to be a closer than normal social distancing (albeit electronic). I'm just glad we're behaving like a sensible stock and are ignored by the hoi polloi. My best stocks have always been under the radar to an extent.

Hi Squif 07.25 - you've really got to give it a rest calling people who work for major banks and hedge funds crims. Some don't even wear suits and quite a few lose money. The job doesn't come with guarantees.
This comes into effect today but I doubt it'll change anything: https://www.fca.org.uk/markets/short-selling/statement-short-selling-bans-and-reporting
EnQuest doesn't appear to be under any attack but that may be because they always go for the weakest in the herd and that certainly isn't us. Above half per cent current shorts are:
CNE 0.60
TLW 6.30
PMO 19.80 which is complicated because ARCM are long of their bonds.
I made the most money on a share that was the most heavily shorted stock when I initially invested in 2009/10. That share was PFG and my thoughts were that the "poor are always with us" and if they hadn't lent my parents money I couldn't have had a uniform to attend grammar school. I've bought them again because they took a caning when they moved away from door-step lending and Vanquis gives the poor the ability to purchase cheaper online.
Shares on loan to ENQ were 4.66% end March -CNE were 5.38% PMO 29.73% PFG 7.82% TLW 11.71%

BTW - I'm guessing you're not clergy?

One of Trump's favourite go to words. Can anybody explain to me how they'd work on Saudi oil? Wouldn't it just make the US more self reliant in oil and maybe import from Mexico and Canada at a push? It wouldn't help their competitive edge if they have to rely on shale break even and fast depletion.
Trump spoke again last night, notes. "I don't care about OPEC. They're destroying themselves. I've been against them for years. US (me) built & created to become No. 1 producer. US drivers getting 90 cent a gallon prices not seen since the 50's.
Tariffs possible. Will do whatever I have to."

Hi hitman - Trump thinks he's an expert on everything. His bankruptcies and fear of his accounts and tax returns becoming public tell us all we need to know. He cannot stay out of anything that is likely to get prime time coverage and his petty jealousy of anybody else getting credit or air time for anything means he has to interfere. I suspect he did something like that with the oil negotiations. He's probably the one that cratered the deal if it is cratered. He was questioned at his daily self-promotion rally on 2 April about 5 p.m. He then does his usual act of hinting that there is more and that of course he is at the centre of things.
The journalist asked a question and whose to say it wasn't choreographed. It was also a handy diversion from that small thing messing up his projections, namely Covid-19 or as he likes to call it "the scooorge". The man is an imbecile. He probably thinks he gets things done and is a disruptor. Well so is my 10 year old nephew.

*bad news - sign outside Spearmint Rhino "Clothed until 30 April".

I was having dinner with a trader from Morgan Stanley who had spent time working for a Saudi bank in Riyadh in the 80's. He told me this story. He was going on holiday back to England and everything was tidied up as he didn't have a lot of faith in the locals. Basically they had nothing to do apart from a bit of housekeeping. He knew there was a large transaction for land going through in his absence between two Saudi nationals but the funds were there for completion.
On his return there was a lot of yawning and unshaven individuals who looked like they hadn't slept. They were looking for attention and eventually my pal asked why they were so dishevelled. It was due to the land transaction he was told. They said they had worked through the night. My pal didn't believe them and when he delved deeper was told in no uncertain terms-"but Mr. Simon you have no idea how long it takes to count 800 million dollars."

I celebrated my 65th in Morocco. Splashed out a bit and got a suite. A butler came with it but don't get excited. He looked after some other rooms too and labour is cheap in Morocco. This led to a problem in the mornings because I couldn't get a spoon to stir my coffee. There wasn't one on laid on the table and every morning I'd ask. The head waiter would get a girl to disappear and come back with one. My suggestion that perhaps they could lay one on the table was countered by the "personal attention" that the hotel prided itself on. The wait meant the coffee was cold. Minor you might think but I was getting paranoid.
On about the 3rd day a neighbouring table started chuckling at my efforts and in an American drawl said "you won't get one; (a spoon) I've been trying for 10 days."
Turns out he was a pilot on a Boeing 747 and was working for the Saudi Royal family. Turns out they stay in their palaces in Morocco and the hired help stayed in the same hotel that I had saved up for. I asked him how he fitted in his tourism and he replied. "I have every morning. They don't do early." He had a suite too!
When he left a few days later he was all uniformed up with a co-pilot and two of the most beautiful air hostesses I'd ever seen. The amount of money spent was disgusting but also indicates that it'll take a while before the Saudi's have to say "uncle" due to a shortage of funds.

There you go L7 being sensible when I was enjoying my rant. Maybe KSA aren't doing heavy lifting but that's what they think. They set up a system/cartel and the free riders (shale) come along and take advantage of their benevolence. It is the perception and we know that MBS is as touchy as Trump and also not a lover of journalists. Both have a distinctive outlook and like to get their own way.
Pelle- they keep bandying this "10 mio bpd cut" but it is impossible that it would be Russia and KSA. That's like 50% of their production. The 10-15 must represent the total if all countries did their bit. We've already issued a RNS saying we're reducing.
It'll be interesting to see how Trump spins this. I thought the Yanks loved cheap oil!

Hi L7 - I think chilting answered for me. OPEC has to cut to boost the oil price whilst shalers sit there and take quick easy profits. The conventional producers need stability for the longer gestation period of new wells whilst the US shalers are the ultimate parasite. Fed cheap money due to QE and then to scrounge off the heavy lifting basically done by OPEC. I know it's a bit simplistic but the US also acts in its own interest by sanctioning Iran and Venezuela. I get wound up by the hypocrisy of the US. All the sanctimonious pontificating and obeisance toward Jesus and the "Military" especially by the orange one with bone spurs.

I expect KSA and Russia to continue to play hardball. They can give the fragile impetuous Trump some headlines and play to his childlike ego whilst allowing the weakest oil companies to choose bankruptcy or a zombie existence. A cut of 10 mio barrels would finish off many as it is less than the overproduction. If they capitulate now it will have been in vain. It is the US that tried to rule the oil world and why should they be shown mercy because their selfish policies created the situation. You don't think MBS would be callous enough to use CV19 to speed up the demise of shale or Putin agree to help him? Kinda two culls for the price of one. The buying up of tankers by KSA was seriously smart.

Thing is he goads everybody (except MBS and Putin) as he practises distraction over his inept handling of this crisis. An attack on Iran is anti humanitarian to a country on its knees economically. They [Iran] embrace pain and are a formidable foe. The US will run out of options eventually and the temptation of a war; any war might be just too much for Trump. It is a fact that wars help reelection.

I was thinking again about Trumps implied threat if Russia and KSA don't play ball. A cut of 10mio barrels would only put us closer to where we are now i.e. a cut only on paper. It needs the US to cut as well and they cannot be trusted to keep to levels and cartels ain't democratic or even legal in the good old USA. What is Trump's threat. Blockade shipping lanes to KSA? I doubt there's much apart from sanctions that he could do to Russia. Remote warfare or asymmetric warfare plays into Russia's hands. MBS and Trump were born into privilege. The hard man is Putin. He understands sacrifice and the long game.
The calculation surely is will the KSA action eventually neuter the shale industry once and for all. Once shale is under lockdown KSA can reduce production meaningfully. Russia is a large shareholder in this enterprise and I imagine that KSA has mixed feelings over USA. Access to the best military in the world against a Country that many in the ME feel is anti-Islamic.
Throw in CV19 which we still don't really understand. Is it pushing forward many of those that were due to die within a year and will have a short life or is it an existential threat to all?

Did you know Trump is number one on Facebook. It isn't true but he announced it yesterday.

Trump answered a question about the 10mio barrels cut. Could be more, might not happen, wouldn't want to use the alternative (hint of a threat) the usual meandering suggesting that Russia and KSA could save the industry etc... so many caveats and room for back-tracking you wish he'd kept his mouth shut.

The airlines are priority. They are direct recipients. I read it as energy asked but less urgent.

No direct loans to energy companies. On CNN now.