Member Info for romaron

You don't win the Champions League every year, that's for sure. Time to dump Warren Buffet? The silly old fool has dropped $3bn on Kraft.

Not convinced by motives's here but they certainly aren't bald men fighting over a comb.

Class!

Marshall Wace have a larger amount short in Cairn Energy - currently 1.49%

Now, is that a bet on the Indian tax case (probably imo) or had AK performance got a bearing on it. They've certainly made money in the past on these positions so might be worth watching.

MasterRSI - the only Bollinger I know comes in a bottle and will be enjoyed at the 60p party!

Hi RSI 22.27 - 3 months makes sense. It is also the period with most volume. You can see from here that volume falls off sharply after June.https://www.cmegroup.com/trading/energy/crude-oil/brent-crude-oil-last-day.html
I only give them a cursory glance because it is easy to misread a signal but if enough believe in them you can make projections. I don't.
I would like to see oil swaps but that isn't really for PI's so are ignored to an extent. Futures are open to all kinds of speculators but the swaps deal in much larger amounts (I'm guessing somewhat and will use dollar/sterling forwards to explain). There is a connection between them though [swaps and futures] and they cannot get too far out of kilter before they are arbitraged back into line.
In $/£ it is euro sterling which carries a premium to domestic sterling. They are largely controlled by bonds and gilts. These are the tectonic plates behind them. They move slowly but their influence is immense [Fed, Bk of England, base rates etc.] Trades are larger and in my day $10mio would be market size.
Banks have to report trades and penalties for breaching rules are draconian. Oil will be affected by these movements which reflect world trade to an extent and also have to contend with Trump, Saudi Arabia and Russia. I could go on but it is boooring!
I'm glad you're here and I hope that others who follow these things can make the odd post that the rest of us can understand. We already have a decent level of comment on accountancy here and they usually argue to a consensus.
For the rest of us its often mumbo jumbo but that doesn't mean it's wrong. If somebody stated that the EnQuest logo is actually an apotropaic symbol indicating we are protected from losses then some here would go along with it. I already have.
One last thing. Earlier you posted that a deal went through above the offered price for 220,000. That could have been just because it was larger than the normal market size. I looked here on LSE and market size appears totally arbitrary. Examples Enq 20,000 £4.2, PMO 20,000 £14.6, CNE 10,000 20.6, BP 3,000 £16.1

Warning: Too much attention to figures, like onanism can make you go blind!

typo - their importance

Hi Auson - I have enough things I watch and platforms already so I'm loathe to use another. I'm grateful that there are people following and accessing them. I'm happy to read from their input. I spent too long being a prisoner to screens so purposely avoid them when I can. I like sporadic news that carries some humpfh. Not every twitch or blow by blow account. Glad we have a cohort following these. Most of the time there importance is low but every so often.......boom!
Decent size tries to camouflage its intent but cannot be invisible for too long.

Hi MasterRSI - I don't put as much importance to theses numbers as you do but that's as much a personal view and others are possibly more aligned to you. I'll show my ignorance here. What are Brent Intraday futures, 15.13 post? Are they an average or for a set date?
In the past I dealt a lot with spot and forwards in FX along with Italian Govt auctions of BOTs. I attended the Rome fix for spot so have a lot of sharp end experience. Much was routine and there is a backbone of plain simple trade and debt raising. It can be dangerous or plain wrong to scry every movement. Having said that I'm glad to have you here. Volume to me is the key. Do you keep track of it?

Basically agree with gkb47. This was discussed back in November when DNO took over Faroe Petroleum (FPM). We have fresher EnQuest figures now but the most recent visible pricing (because of the takeover) makes FPM a less than perfect comparator but is possibly the best (only one) we've got. We are underpriced using the EV/EBITwhatever because of risk aversion and cya broker notes imo. If you were a fund with public scrutiny why would you invest in EnQuest when you could make an argument for choosing a 'safer' oil company? Job security does come into it. Better to perform alongside the herd.

MasterRSI - appreciate your attention but all that means is that somebody couldn't be bothered to faff about buying the amounts on offer. I would agree that it could indicate the buyer thinks that the price is going higher or he's in a hurry to get to the bar. The difference is quite tiny, £110. Still, it's better the activity is on that side of the price. It gets more interesting when larger amounts are dealt away from the quoted price which are handy if the buyer thinks they're artificially low. Sometimes it's the buyer showing the cheaper offer to hope others quote against it. That's how FX worked and if you have size to do it helps to be creative (bluff).

One swallow and all that, but I'm not complaining. It is not my intention to be the subject of posts but I do like to trigger debate. I make no apologies for being a supporter of EnQuest or its management. They have been tested and came through imo.
EnQuest are quite unique and others are copying. Early movers don't always get an advantage (forlorn hope) but when successful are formidable adversaries. It is unusual for a CEO to have such a large shareholding but then I don't think AB fits the typical mould. I am not a luddite in respect of accountants but they only tell part of a story. I remember faintly disagreeing with E121 over something and it was to do with numbers (I honestly cannot remember) but also saw him comment 'outside the box' on other angles which made me change my opinion of him. One trick ponies are fine as long as you are aware. I wouldn't back a company on that basis.
My approach to market commentary is to often be disrespectful. I worked in FX for 27 years dealing and broking. It may have been steam operated back then but little has fundamentally changed. The markets are so huge and specialised that nobody can really profess to be an expert. I would imagine an oil rig worker from the 70's would say something similar if he landed on Kraken Armada. Physics, metal, reservoirs, chemicals etc.. would be recognisable to them today.
I think all companies make a decision with fingers crossed. I mean, what is the point of wasting a bottle of champagne on the bow of a ship being launched.
Not for debate but I once tied up a partner of a large accountancy firm in knots because he couldn't explain NPV or DCF to me. He insisted on so many caveats that I realised the subject is so subjective and almost a waste of time. I do take note of the discussions here and how complicated some cash raising has been but one should take the conditions into consideration. We were facing an almost perfect storm and it lasted a few years.

Be Lucky.

Are we seeing the early shoots of a turnaround for EnQuest? Maybe like grief there are stages of recovery.
SHOCK & DENIAL- You will probably react to learning of the loss with numbed disbelief. ...
PAIN & GUILT- ...
ANGER & BARGAINING- ...
"DEPRESSION", REFLECTION, LONELINESS- ...
THE UPWARD TURN- ...
RECONSTRUCTION & WORKING THROUGH- ...
ACCEPTANCE & HOPE-
Ignoring the grief specific points I'd say we're along the recovery road. The obsession of some posters and brokers with the minutiae of detail and accountancy reporting misses the bleedin' obvious. What else could be done by the management? You have entered a storm so you batten down and prioritise survival. Pointless blaming the management for not anticipating the future but accept that innovation, head winds and cycles happen. Once it's over you survey the damage, do the necessary repairs and continue the journey. It is a kinda Darwinism and those who get through are stronger and battle-hardened. If you want an investment with little risk I'd suggest National Savings.
Still lousy volume after the early move up which was basically an adjustment to Brent. I expect a more substantial move as the market digests the changed landscape. Maybe as soon as later this week.

*Jim Ratcliffe made £42m a day last year according to news. Maybe some of that stardust landed on AB?

January - Fri 16.49: You asked the question what is rich? Another question is what is enough? Well Jim Ratcliffe doesn't think £21 bn is and he is emigrating to Monaco. Forgetting this egregious display of priorities there is little doubt of his commercial abilities. In reply to his business model of buying cheap and unloved assets from the likes of Shell, BP and ICI he had this to say "We'd look at absolutely everything." Plenty of people would call this asset-stripping. Ratcliffe, however, oozed disdain for the shareholders, which prompts executives in quoted companies to jettison what he sees as perfectly good assets after a few poor years. He also bemoaned politicians only too happy to lunch bankers while showing little appetite for meeting industrialists.

Not an easy person to like but he does have a point regarding shareholders imo. I quite like our business model too.

It gets worse. Article in Times stating that oil is an ethical investment and no scenario possible where the world can continue without investment in oil and gas by BP's chief economist Spencer Dale. He's an expert and former director of the Bank of England so I think we can safely ignore him. If present trends continue the total demand for energy is forecast to increase by a third by 2040 he says. Driven by rising living standards in India and China. Oil demand will be higher in 2040 at 102.5m bpd than it was in 2017 (95.1m bpd). If renewables grow 'off the chart' then demand would be 81.8m bpd. However, if the world stopped investing in new oilfields, then existing fields would decline and supplies would fall to only 34m bpd by 2040, a significant shortfall that would require 'trillions and trillions of dollars of investment in oil' to address.
He adds that the level of understanding about the arithmetic of oil and gas in general is not as high as he would like.
Dismissing debate over when global oil demand would peak, he said:"I don't really know and I don't really care", since in all the scenarios the likely decline was trivially small compared with the extra investment needed.
Surely another SELL signal! I'm beginning to understand this oil market!

It's started. This market is turning the world upside down. January becoming philosophical and searching for the meaning of life. Sounds to me like he's trying to wriggle out of buying a round at the 60p party. 100% is 40p.

A higher oil price is good for companies producing oil, isn't it?

Personally I welcomed Fernan's post regarding KUFPEC. I struggled to understand his other posts but continued as his forensic skills surpass any I might have in reading small print and balance sheets. Now I know he'll jump at the slightest hint of the real world entering his corporate utopia I can safely ignore his persistent torturing of numbers until they say what he wants to hear. I can only guess at his motives for hanging around.

His latest "find" was actually hidden in plain sight. They are a bloody devious bunch at EnQuest Towers.

An acquaintance has a pension maturing age 60. Value £110k - guaranteed pension £8,200 p.a. It is an old pension hence the raised annuity rate. I say no brainer because you'd hardly change it to an open market rate.
What happens when EnQuest has a similar compelling choice if the plan comes together?
I'm flummoxed along with many of you regarding the sp and we'd be kidding each other if we didn't allow for something we might be unaware of. However, RBC and Barclays didn't find a specific reason but followed their sums, threw in a pessimistic outlook, avoided risk and marked the price down. At the end of the day they are tipsters and pollsters who have their following. For sure the algos factor them in.
For some months now we have lagged when other oilies climb. We dipped along with oil and the RI and lost our mojo. Against us holders are enormous computers and people with Phds who know what we'll do before we get out of bed. It is futile to trade against them and some will suggest that they go along with them (pilot fish) but they are a minority.
I haven't the skill or the muscle but they have super computers and programmes trawling the market and post rights companies have their attractions. Holders will possibly have been sucked into buying more (RI) and have no appetite (or funds) to add. A high ratio of PI's will mean that sheep-like tendencies are probable. They are stocks that haven't a lot of vitality. It isn't even always a straight short and in fact reporting doesn't suggest that shorts and shares on loan are high for EnQuest. If you short the doldrum share and buy something with a little more zip you'd have done well recently (a kinda WTI v Brent deal). Volumes aren't high and there is still Brexit and FYR yet to be announced. For now it's still a relative safe deal and maybe no hurry to reverse.
I've forced myself to stress test this investment and I still don't really understand the wallflower status. Sheep move in herds because at times it's safer. Black swans can occur whilst trends reverse. One thing I do know is that super-computers and writers of algos are not perfect and losses are common in the same way that bookies lose on every race. They pay out on every race but take in more than they pay out. We don't have the interest, means or facility to try and match them. Just accept that for different periods they'll be right and we'll be wrong. When they make a ricket they lose big and baling out moves prices dramatically. This isn't an AIM share so don't expect flowery promises from the management. In their shoes I'd keep doing what I'm doing. Get it right and we cannot be ignored for much longer.

Build it and they will come.

I read with interest the debate regarding FCF and associated accountancy results. There seems to be a consensus that nirvana and the 60p party aren't just around the corner. I'd go further and say the consensus gets closer to the RBC and Barclays analysts notes. I am not surprised. Accountants and analysts deal with numbers and would argue that they don't lie. That is only partly true imo. A certain vagueness crept in regarding opex and capex during the debate. There is overlapping here but something has been missed. In the period of austerity that EnQuest, along with the whole industry, went through following a period of low oil prices meant that many plans were cratered and existential threats had to be faced. One of the first casualties are maintenance and prospecting. Needs must.
An increase in copex means that EnQuest are now addressing these areas and ending the backlog. I don't think it outrageous to suggest that BP weren't concentrating on Magnus or SVT whilst our existing fields were running on empty to an extent. We should be pleased that copex is increasing because this means that fields are being made efficient and natural declines slowed whilst we have money to drill. That's a good thing, isn't it? Without it where would the growth in reserves and increased production come from; thin air?

I read this as a sign of confidence and that AB and his team are prioritising getting the company back to full health rather than pandering to analysts and dare I say; certain short term shareholders.

*Couple of interesting items in ST. Perenco NS assets up for sale. Ineos is in the vanguard to buy them. They see further than next month. Also an interview with Richard Caring the restaurant tycoon. His approach to reviving restaurants and to survive is by spending more. He defiantly states that restaurants survive by spending more, not less. Other groups cut costs when things become difficult. He does it the other way round.

Be lucky

Risk can be avoided. But then very little happens. So we don't avoid risk, that is. But if you accept risk, you need a clear head and an appetite for rigour. Rigour is my favourite word in business. You need to understand risk, weigh up risk and take a view. Don't let the trees obscure the wood. Don't get paralysed with analysis. Get your head around the big picture, don't endlessly chase unimportant details. Be prepared to step up to the plate. Every deal or major capital project entails risk. It is unavoidable. And it is not for everyone.

Not my words but Jim Ratcliffe's. I came across them when double checking the Innovene purchase by Ineos from BP. At the eleventh hour BP threw two huge refineries, Grangemouth and Lavera, into the deal and Ineos knew FA about refineries. The rest as they say is history. In an earlier deal Ineos received a $100mio dowry from ICI to take Chlor off their hands and cover first year losses.

When large companies divest and restructure they 'tidy up' by selling (dumping) their no longer wanted assets. They are usually mature and not always maintained to the highest standard. It is possible that SVT was an add on too. It doesn't make it a good or bad decision, just part of a larger one. More information will be forthcoming in just over a month (FYR 21 March)

Build it and they will come.