Member Info for romaron

hitman 15.35 - Remember the Bonds aren't at PAR either. In some respects bonds are simpler in that they have a strict hierarchy and rules. The rating agencies indirectly control the stock market price of any company that has broken covenants or come close to breaking them. We have had a few 'restructuring' deals together with a RI. What's not to like?

The likes of Barclays pay attention to the debt because that is what kills companies so until we get some tangible improvement on debt I'm afraid we are stuck.

To amplify what Londoner7 posted. For some reason people expect individuals do something that is impossible and that is to predict the future. A hedge is a bet on the future but more importantly an insurance (for EnQuest) against a drop in price. The analysts aren't interested unless it is a huge amount which would suggest that the company has been speculating and trading in oil rather than producing and selling it. Hedge profit and losses will occur but the main purpose is to protect the companies production. A hedge is insurance. For speculators it is something different.

Article in today’s Times says that about $50bn of projects approved by oil companies, including BP and Shell, within the past year will fail to deliver economic returns. This is of course based on the Paris climate goals whilst every oil major is betting heavily against a 1.5C world. What it does throw into the mill is fear around projects becoming “stranded assets”. Only lowest cost projects will deliver an economic return blah blah.
If Shell and BP are facing headwinds and a price stasis (little capital appreciation and held for dividend) then smaller oil companies are treated even worse. The good news is that EnQuest missed a bullet with Kraken and after nearly killing us is likely to be one of the engines for growth due to lack of competition from large new fields. All this whilst the majors grab all the attention by telling the world that they are evolving from oil and gas focused to broader energy companies.
*BP spent half a billion dollars last year on renewables. Its total capex was $25.1bn. Tokenism comes to mind.
Eddie Davies CBE was a British businessman and philanthropist who put endless millions of his own money into Bolton Wanderers. He made his money out of the elements in kettles. Not glamorous but essential and economically rewarding.
The world keeps turning and it’ll be a long time before we are weaned of oil. EnQuest are niche to an extent with a top team. I doubt we’ll ever be trendy but the ching ching from oil sales will make this a very rewarding investment over the next decade at least. Nobody controls or can forecast the macro and scaremongering is rife. China buying Iranian oil; Warren wants to ban shale on federal land; nuking hurricanes or steering them etc….
In a world where oil has the mark of Cain it isn’t surprising that good figures are ignored. Lower debt and dividends will end that.

Build it and they will come.

In the Future upside column it states:
Magnus: c.270MMbbls of movable oil
Kraken: Maureen sands under evaluation (c.20-40MMbbls STOIIP)

I'm guessing that movable oil is kinda STOIIP with better understanding and an increased prospect of lifting. I suppose my question is does movable oil equate to 2P or is it somewhere between STOIIP and 2P?

In QA there was a much more relaxed board and the questions were far less hostile or probing than in the past. The fact that AB is prepared to now say (c.43.40) "a rocky road to get here" when discussing Kraken means that the worst is past imo. Very impressed by his admission that they underestimated the complexity of the Kraken project but are justifiably proud of several industry firsts. Imagine what we have learnt and the prestige the company has gained from peers. We are in a target rich environment in our own back yard (North Sea) with existing assets so the future is pretty secure.

I look forward in a few years to when AB admits in his book that the company was near administration as we near the FTSE100 and to helping Pelle load his Volvo estate with dividends.

Hi Beerbull - we are in agreement.

They like it. First trades since 21st August https://www.londonstockexchange.com/exchange/prices-and-markets/retail-bonds/company-summary/XS0880578728IEGBPUKCP.html
and the amounts suggest (to me) it's not a day trader. The fluffers (small day traders) were busy here yesterday and it's just noise. When they're not clogging this board they're probably regaling associates with their daily bowel movements. They do talk a lot of sh*t.
The credit agencies and analysts will be digesting today's news and it will be interesting to see how we perform over the month following their reporting. Today's trading has an element of knee-jerk. Structural changes and performance take a while to feed through and that includes the new Chairman's input. I think we are firmly moving higher.

Hi hitman - reminds me of a story my father told me. During the Blitz the East Enders were very fatalistic and most accepted that if your name was on it there was very little you could do about it and went about their day with commendable sangfroid.
Unfortunately their next door neighbours, a Mr and Mrs Doodlebug weren't so relaxed.

The new Chairman is a busy man. Unlike his predecessor he is steeped in the energy business and on a positive note he didn't need the job so what encouraged him to take it (unless he's a compulsive hoarder)? He's a geologist which means he's an optimist (aren't all geologists?) and appears to be pragmatic. The Oman connection (CC Energy) may link connections whilst the Tellurian business could suggest a new direction or even include SVT. The man is a thinker and this appointment is in my view not for the immediate 6 months. I believe he was interested by the vision of EnQuest and he is an Englishman who maybe wants to end his career in the UK. His own due diligence means that EnQuest passed with flying colours as he holds positions with an investment bank (Moelis) as a consultant on energy matters and has a role with Hakluyt which was started by ex British Secret Secret Service official (MI6) and is famous for its discretion.
A very intriguing appointment.

4m shares went through today on NSF around 9.18 @ 40p so the brokers are still working the order (I suppose?). Interestingly there are off-book trades which mean a human being is likely involved and they are hardly likely to go public unless required by regulations. They can also delay reporting so the deal may have been done yesterday, or Friday at a stretch.
The media hasn't really picked up on it which is understandable as the amounts are small compared to a company like PFG and there is plenty to keep the pundits occupied with something called Brexit.
I was hoping the Woodford sale might have smoked out something interesting or impacted PFG but it appears that PFG is getting on with the knitting. That's normal and we might have little to keep us interested until the next update on November 7th. However, with Woodford involved I expect we'll hear stuff before then.
No news is good news imo. We've slipped back to boring and we should be grateful. There is a potential Woodford overhang which will be a brake on a rise but good figures will take the spotlight away.

Well now we know. Woodford has gone from 23.9% to less than 5% in NSF whilst Alchemy Special opportunities now owns 19.25%. Woodford still holds a rump amount and I'd expect an arrangement with Alchemy might be an agreement for him not to sell the balance for a period of time. The market will be left confused. Does it mean that for now he doesn't need to sell PFG? Does Woodford consider PFG the better bet of the two? Is he actively trying to place some PFG stock? Is he struggling to get the price he wants for PFG etc............?

It reinforces my position. Alchemy are not fools and if they can pay good money for NSF then the intrinsic value of PFG is higher following their interest in the sector. NSF is also small enough and badly run (imo) so that Alchemy can live up to their name. I doubt they have the leverage to attack PFG. Personally, I think their task will be more like polishing a t*rd.

I enjoyed that exchange. You could both do Mastermind on EnQuest. I'm far simpler. Reserves in end of life fields (EOL) decline at close to 10 per cent. Without routine maintenance and TLC that can increase to almost 20 per cent (as it did a few years back). The economics and scale of EOL fields make them a burden to majors. There is a "second hand" market in EOL fields that seems fairly perky at the moment with smart money interest because they are cheap. The best place to find oil is in an oil field. AB and team know what they are doing and the coffers are filling slower than they and investors would like but filling they are. Magnus and Kraken are under appreciated assets in the mix and we know there is potential exploration possibilities. The investment returns will change opinion before long.
Hurry up Thursday because you two are doing my brain in. It will be nice to reboot the calculators and refresh the excel sheets.

*something posted recently talked about treatment of short date and longer term debt. We seem to be piling up at the front end and current rates to renegotiate (bonds) aren't pleasant. The best way forward is to aggressively pay down debt and get the bonds to par before we try. Problem here is the way creditors assess companies and they don't like near term capital repayments which may coincide with a problem.

It's minor but could possibly imply that NSF are sloppy when it comes to keeping investors up to date. On the NSF website they have Woodford with 25.3 and the FT had the percentage at 23.90.
Something to think about. In 2016 I helped a distant relative sort out the estate of her father. Although he died in 2016 he had a debt relief order dated 2014. He also had 3 outstanding debts with: Vanquis, Aqua and CapitalOne all taken out after the DRO which included utilities, HMRC, 2 debt recovery agencies and even a Provident Personal Credit. The fact that he still got loans from Vanquis and other sub-prime lenders shows that the system needed a complete overhaul.
I would imagine (hope) that the recent investigations by the FCA makes it much harder for those in debt to get multiple loans. PFG was hit early and hard so lessons will have been learned. Action was long overdue so perhaps the next phase of sub-prime will be built on a more sustainable and honest business.

Thanks mk for spotting my typo.

....and lets not forget that most companies with such a huge tax credit often go bust because it was created by high borrowing during a period of austerity (low oil price) and the tax credits die with them. EnQuest narrowly avoided administration imo. The plus side though is that if you survive you have a beneficial position regarding profits for a good few years. Recovery will be swift because the tax position helps the compounding effect.

Possibly the Sunday papers might pick up something as even if this isn't Woodford related (unlikely imo) anything close to him attracts speculation. These are (were) the 4 major shareholders:
1. Invesco 89.32m 28.2%
2. Woodford 23.90m 25.3%
3. Aberforth 40.98m 13.13%
4. Marathon 39.55m 12.10%
So either a combination of the last two or more likely the first two with imo Woodford being the favourite. There was talk (NSF leaked?) at the time of the proposed NSF bid that parts of PFG could be sold off to New Day. Karma that it might well have been the precursor to the demise of NSF. Chunky amounts like this don't get traded every day and the small premium for NSF is still a lot cheaper than its price in February. The field of sub-prime is winnowing down and those left have had the resilience to withstand regulatory assault. Monday will be interesting.

https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB00BRJ6JV17GBGBXSSMU.html?lang=en

See after close trade 16.58.31. Either a misprint or a large amount changed hands. The sub-prime world is getting interesting.

Good spot Pelle.

Thanks Theborn. I could be wasting my time but wasn't sure if the two previous UT's were an aberration. (1m and 2m plus shares). What I do kinda like is that it shows that decent amounts are being traded at the fix/auction. Large amounts are regular with the likes of Lloyds, BP & Diageo at UT time which I am supposing helps the professionals get a decent price that few of their clients could argue with (open and to an extent public). It is human nature to think you are being ripped off with funds applying tops and bottoms rates. It is seen by some as a fairer way of dealing and it does accommodate size.
It could mean new money moving in and there are plenty of shares that can be picked up before hitting reporting thresholds. I see it as a positive sign. Lets see if it continues.
Regards the question of the moat. In the past some of the clearers got burnt with sub-prime and the field is left to the specialists of which PMO is the biggest in the UK. There is some US competition. NSF's attempt was doomed to failure with reliance on expensive, old fashioned methods with a huge amount of hubris from van Kuffeler. They have been picking up halfpenny's in front of a steam roller. I have no idea what serious funds were doing backing NSF but it did coincide with their own problems. Others come and go. Amigo may well be a flash in the pan as was Wonga. The business seems easy but failures are common. Remember Albemarle and Bond, Cattles? As long as PFG has learned its lesson, and I really believe that the business has cleaned itself up with regulators, then there is a very decent business here. PFG knows this business inside out. Technologies change; people basically don't. There will always be a demand for PFG products. It is a lot harder than it seems and they have the DNA and experience to retain the number one spot.

Hi galiniwilbury - ditto. They have a moat.

*lot of late trades so I missed the UT amount of today. Does anybody have it?