The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Tomorrow will be interesting. The digital story is by Jonathan Leake the Energy Editor at The Telegraph and is timed @ 7:57pm. What will be interesting is if Labour react or just ignore it giving tacit approval. EnQuest will have been advised about the best approach and who is to say whether it has been giving approval (or at least no objections) from various regulatory and government departments. It isn't a late Friday announcement and should attract the fury of Tessa Khan and her valkyries along with the usual subjects tomorrow when it hits the inky press. Is it testing the water or a Millwall statement? EnQuest aren't breaking any law and have the necessary licenses in place to move the projects forward. It mentions TWO fields. Jonathan Leake would have got this information from both OEUK and EnQuest where I'm sure he has excellent contacts. AB knew about the release of this release on 28 March. I'd say he's tidied up a few loose ends in the past few days. I'm expecting more news. Good news.
Summer is coming.
You're probably right Mansardman but they are an extreme version of what can become embedded and accepted as true or civilised behaviour for a just cause. For them it is either black or white. Amnesty International were yesterday attacking Israel for not releasing on humanitarian grounds Walid Daqqah a Palestinian 'writer' died of cancer whilst being in custody for 38 years.
They didn't mention that his crime was being the leader of a group that held a 19 year old Israeli youth hostage and before executing him gouged out his eyes and castrated him. I have no 'dog in the fight' regarding Israel and in reality neither do they imo. ECHR and Greenpeace etc. don't represent mainstream opinion and never have but they managed to get 'climate change' into law. It was called weather when I was growing up and the arrogance to believe that we can alter the planet's destiny has replaced religion for those that need to believe in something.
"No amount of beief makes something a fact" - James Randi, magician and skeptic
Ooops - this is the December one https://twitter.com/JustStop_Oil/status/1737409504155721853
The Tories and juststopoil are history. Youth Demand has risen phoenix like from jso perhaps hoping we wouldn't notice or maybe they justdon'tcare.
Spot the difference - today: https://twitter.com/youth_demand/status/1777691848783319194
December https://twitter.com/youth_demand/status/1777691848783319194
Support ordinary people in civil resistance. What's normal about this mob?
They should be locked up in a safe place. Incoherent ranting suggests they may be as much a danger to themselves as the public. Why do you think they have swung to attacking Labour so early?
Https://twitter.com/youth_demand/status/1777345177293627770
Increased pocket money
Louder music
Removal of 'parental lock' on home computer
We refuse to inherit suffering but a flat in Pimlico doesn't count
Counselling for hostage-takers in Gaza
No more smelly things that make our life so comfortable
Vegan meals for dogs and cats
Cheaper drugs and booze
... it goes on.
At their age my dad was getting shot at (and hit) helping free Europe (he was also a coalman for a while).
That's a terrible indictment. An industry that survived without subsidies (investment allowances are de rigeur for all industries in the UK) and kept the lights on when the country went through massive transitions in the past is now being closed down on the spurious claims of agenda driven eco-zealots who are in the main privileged and protected from the lack of energy felt throughout Africa and other poorer regions of the third world.
An interesting article in the ST by Oliver Shah writing about water and electricity. The bail out of undercapitalised energy providers cost £22.7bn which is £94 per household. The O&G industry probably paid for all of that with its heavier taxation even before EPL. The amounts are irrelevant. The difference is more imortant; we survive and pay into the exchequer and EPL is the thanks we get for it.
Water has indeed been a money spinner for foreign owners. Monopolies are like that. With no market forces, regulators are all we have to keep behaviour in check. No doubt we'll soon be importing water from abroad. The demands on water companies is making them unprofitable too. Nationalisation invariably is more expensive than privatisation but I can't see much alternative. If the next government use O&G as a template there is no future for water companies and it'll only be a matter of time before they tax wind and sun.
I am that confident that we are through the worst that I have tentatively started looking at diversifying a little from EnQuest out of profits but still within the industry. BP or Shell is not for me but I do like the look of Harbour. I avoided Premier and have followed them for some time. One of the biggest attractions is that it suffers in many ways like EnQuest but the PI holders there are not as clued up as on here. In fact they are making a glaring error that I’m not prepared to share publicly at present. They can do their own research and if I am going to buy it hardly helps me to promote them. Presently EnQuest make more sense and the rewards will be much higher imo. It also depends on what EnQuest do in the next months.
Both EnQuest and Harbour lack popularity and the market valuation reflects this. I was looking at the price of Brent and as long ago as 27 March 2024 the price was $80.35 If the present trend continues we should crack $100 on 18 April 2024. I’m being flippant but is it really that outrageous that oil will remain higher? Investment in the industry has been abysmal for years and little EnQuest was the biggest driller in the NS in the past 5 years. The cult of climate activism is worse than religious fanaticism and we can see where that got us. Carbon credits are the modern “indulgencies” and no society in the world wants to become poorer in the future. The shrillness and embarrassing childishness of the supporters of “renewables only” reached a new low imo over Easter. Did any of you see this - https://twitter.com/JustinHeIsJesus/status/1774162724294980065
There are clues scattered all over the place and we now have some intriguing management and board appointments. The caravan politically seems to have moved on and it remains to be seen if Ed holds on to his position of clown ringmaster. We have no way of predicting the future but I reckon they’ll still be having trouble with Iran, Putin and Israel after the election. Energy Security is important and it is rising up the charts.
*Another EnQuest investor rather rudely described me as Ramper Ron from Romford. That is inaccurate. I don’t come from Romford.
Build it and they will come.
There is a good chance that EnQuest will move higher in the near future with either an asset purchase or M&A and it is time to speculate on the outcomes. Recent posts by Papegoja and AoK respectively about share-holdings and analysts are important.
Papegoja’s (29 Mar) numbers are guesswork but we have a much larger direct PI holding than most. The remaining funds are not the classic pension types. Even though Baillie Gifford and Schroders are big names you’d struggle to find their EnQuest holdings and as a percentage of their investments is a fraction of a tiddler. Take away AB’s family interest and I’d say it’s closer to a 30% share of large holders. Of course there are other large holders who are below the surface around 1%. We are ignored for a variety of reasons. The main ones are the ESG cult of Net Zero with its COP festivals and government hostility. The Majors saw this early and moved production out of the UKCS. The WFT was purely political but I doubt it will be rescinded before the election and after Labour will be desperate for revenue. I doubt they’ll risk making investment in the sector impossible. This means that if you want guarantees with dividend and a quiet life the closest you’ll go with O&G is with BP or Shell. Most investing is done by the big funds for you and the chat boards reflect this. It is the sheer weight of money that propels them into the FTSE 100 and attracts analysts because hardly any pension fund in the UK doesn’t have a Shell or BP holdings.
Because of that we are in a backwater, lowly valued and not even of interest to trackers https://www.stockchallenge.co.uk/ftse.php the reduction in sell side analysts has been of the magnitude of 30% within the EU and even more pronounced for small-cap companies. You could argue that with the reduced coverage we at least don’t have sell recommendations but the serious side of it is that there is no publicity or encouragement to buy. The likes of Malcy or David Lenigas are not a good advert for the industry. However, we are where we are but the future is looking far brighter imo.
I have a perspective on ESG as my daughter’s partner works as an Account Director for a PR company that represents many. I asked him how they were doing and he just said “they’re going bust”. The wheel has fallen off the ESG charabanc because there has been a mountain of promises that have failed to deliver. Compliance officers don’t bring profits or revenue to a company and that is what most of them are. They are being found out daily and it is accelerating. This brings us to the next few months ahead.
(more)
Hi AoK – I think sell side analysts are a thing of the past to some extent. We aren’t really big enough to warrant coverage either; added to the fact that the whole industry has been ignored by many companies since they started attending ESG indoctrination classes.
Of course, it means that many companies fly under the radar. If we can get some political and fiscal stability to replace the current uncertainty then we should really fly imo.
I'm more interested in the jobs she held at BNP (2006-2018). They are one of the few remaining banks active in O&G. They seem to be like a rash whenever RBL gets mentioned. They're involved in more O&G deals than any other European bank that I see. It's not what you know but ..........
Hi M - our water quality is about the same as yours but better than Germany and The Netherlands. Most of mainland Europe is no better than the UK (see 16 UK Waters Megathread https://twitter.com/LoftusSteve/status/1659637753158545414) our beaches are as good as Europe's too.
Nothing is perfect but reading our press you'd imagine we have rivers of sewage running past our front doors and we queue to collect fresh water in buckets. UK waters are actually better than they have ever been. I love the blame on CSO's. They're only 150-200 years in use and are ubiquitous throughout Europe. In actual fact the present government has done more than any past government and I don't have shares in Thames or vote Tory. It suits media to have outrageous attention seeking headlines. Another cause of overflows is blockage (wet wipes and fatbergs?). Activists seldom have anything good to say about this country. I wonder why they want to live here? Under their terms when nobody voted them in. I'm not defending Thames Water but it is more a financial problem than nasty foreigners owning our assets. The publicly owned ones in the UK are in an even worse state.
Latest from McDan are out: https://mcdan.com/price-forecasts/
These guys are pretty respected but they can't tell the future either - along with us and the politicians. They are a best guess and make a mockery of using today as a projection of the future. Even algos don't do that and play the day to day.
Just 3 months ago they had Brent at 77.00 for all of 2024 and 78.03 for 2025. This month they know the first 3 months of 2024 (83.00) and the next 9 months are forecast as 84.50 making the year 2024 average 84.13 and 2025 80.58.
For us $7.00 a barrel is over a $100mio to the published revenue before it gets divvied up; not inconsequential.
Interestingly they have 2027 onwards the same as the forecast 3 months ago. I suggest that is more a case that nobody really trades that far out so you can probably ignore them.
I recommend you all listen to it again. I picked up on topics from the first listen and discussions on here.
A future headline. They'll be demanning Thistle next year. Unions already asking about future work. Labour will have a choice. A good headline or unrest. It ties in neatly with Bressay development.
We have long term contracts with contractors. We are a reliable employer.
On Bressay AB mentions 'some small production' on Bressay next year or so. The main aim is to reduce the emissions by getting gas to Kraken FPSO. The emphasis will still be on Kraken and Magnus but confirms (for me) that we will be going for a cheaper EDP and build up to multiple wells at Bressay over coming years.
It has been mentioned here a few times that BP got a good deal with Magnus. I think it is irrelevant. Win some, lose some. It built our reputation and means majors will always consider us; as will NSTA. It augurs well for future asset deals. We are tried and tested. With out tax situation we are in a strong position versus our peers.
I also liked that AB isn't publicly making threats at Labour. He'll let the facts do the talking. I think he'll get through to Rachel Reeves.
Jonathan Copus came over almost evangelical when he said the industry needs a Champion. It is a big step but why can't it be us.
I also liked AB's new enthusiasm when he said at the end that it is like the first 4 years of EnQuest. I think that is confirmation that deals are being negotiated NOW.
EOR for Kraken is a definite.
We have $ 2bn of tax credits and next year $1.4bn from Bentley. Have I got that right that it is $3.4 bn or was AB breaking down the $2bn?
Listen again. You'll enjoy it.
Build it and they will come.
Hi Jeffrey - not necessarily. VoR recently mentioned that we are presently considered a small retail stock with many LTHs who are up to their gills fighting the apathy that comes from activism and populist politicians. There's always the 3 D's to keep the selling going - Death, Divorce and Debt (unfortunately algos begin with an A) whilst some just give up out of Despair - Maybe Day traders are another D but even they are ignoring us too it seeems. There is a lack of buyers.
Bonds are debt and exactly how Thames Water and the British Government work. Long term revenue against the issue of debt (called Gilts by Govt). We use debt too but our future is less assured. Activists protest against Thames Water (cleaner than Welsh and Scottish water) but aren't (yet) trying to ban it. Governments parrot what they think the voters want to hear not helping at all really. The protestors are as clueless with water as they are with O&G.
We have the $ HYNs (Junk Bonds) and the £ Retail Bond (RB). The RB is for retail as well whilst only professionals get involved in the HYN and the amounts are too large for retail. The HYN trading is pretty opaque and all I do is take a note of the price from here https://www.luxse.com/ when I rememember. It may be that one large trade has moved the price and it is a reflection of the thinness of the HYN rather than a significant move but I suggest it has to be a decent amount. Overall $ interest rates didn't go lower and if anything are hardening so the HYN is going against the trend too. Yesterday the RB moved .13 (an 1/8th) upwards. That is a reflection of decent figures and to be expected. A normal movement. The HYN move wasn't normal.
As for movement I'm not surprised. Lets see next week as there is plenty to digest. I'm currently musing over why the ENI - Ithaca deal has been extended. Israel is becoming a pariah and that's where Delek are from. An eleventh hour intervention. Who knows?
These are my thoughts and opinions. I don't get inside info but I did when I worked in the City. Not much but you often only needed a whiff of a rumour. I remember when BCCI went bust in 1991. People got burned but in FX even the Bank of England wouldhn't deal with them in the market.
They hear things first. Debt is almost always involved in a deal and lenders have to be informed or approached. Leaks eventually do what they say, they leak. Another investor who knows this side better than me is convinced there is a deal on the cards with the recent personnel movements and I have never seen AB more relaxed. 175 points is large.
On the other side it may be rarely traded and small trades could exaggerate movements.
One thing for sure they ain't day traders and they normally require some rumour or signal to invest. Bonds often lead the way. They run for cover at uncertainty. This is GOOD news imo.
We are dwarfed by the bond market. It hears and sees everything. We have been dismissed as a minor retail stock so why is the bond market not doing the same? 22/03/2024 $ Retail bond, both 98.75
Today: Enquest 11.625% 01/11/2027 Reg S 100.5 03/04/2024
Enquest 11.625% 01/11/2027 Rule 144A 100.5 03/04/2024
Deal on the way?
Much appreciated L7 and Stevo. I think I now have a level of knowledge where I feel comfortable. What I wanted to hear (and it is only an opinion) is that there is enough obfuscation available for Labour (likely next government) to score points with political promises on headline numbers once in power but be able to shuffle them around in esoteric tax adjustments that 97% (possibly higher) don't understand. Definitely the Green party and the various activist groups will never understand or even try. As for Davos and the CBI you can make your own mind up. Labour will need investment from the private sector. They'll need olive branches after their haranguing of various industries essential when in opposition.
Thanks again. Your input clears up a lot of misinformation that is around.
Something in return. I am repeating myself but notes from a chat with Neil McCulloch at the 2015 AGM.
"When I said break-even at $35 he didn’t scoff but thought that possibly it was using an Early Development Plan (EDP) which is a short term (cheap) plan and not suitable for the lifetime (kinda throws a spanner in the works of the “do it like a major” quote by Xcite for Bentley."
Xcite couldn't raise the funds for an EDP, we can. A cheap start up of Bressay (providing Labour doesn't make it financially impossible) could be to station the EP at Bressay and feed both the EP and Kraken FPSO with gas possibly getting us over the starting line with efficiency and emission requirements solved with a kinda EDP that could be upgraded if and when the politics allow.
I omitted to say that if they are penalising us again and again using the excuse to make it kinda "fairer" or more like Norway then shouldn't depreciation be treated similarly to other companies in the UK or am I being ingenuous or just
plain wrong in my understanding?
Thanks Stevo. Treat me like a 12 year old and it'll eventually sink in. So we're still facing an uphill battle with Labour. They'll remove the allowance and increase the EPL. I'd suggest that presently it makes development of fields in the UKCS uneconomic. We'll still get some relief but as you say -its complicated by our own tax position.
I'm still confused by the statement that we would fund the whole cost of development. We always have and just get back tax relief I thought. I thought also the convoluted decomm system was partly created by past governments (both) wanting to get their hands on revenue earlier and pushing depreciation further into the future.
Governmentds for sure have protection from the public ever understanding the intracacies of O&G accounting. I'm thinking that most MP's are in the same boat as me. I think it was exemplified by nobody in Labour disputing the quotes of Keir Starmer - “You can never say it enough – Clean British power is cheaper than imported fossil fuels. Nine times cheaper.” Nov 22 2022 Keir Starmer to the CBI conference and repeated again at Davos in January. So you could even say that the CBI and Davos audience are either complicit or ignorant.
The Tories kept shtum too. They couldn't attack the blatant lie as they were trying to ride two horses at the same time - pretend we could be the Saudi Arabia of wind and rob the O&G industry of its future.
Still doesn't explain why AB was so chirpy.