Member Info for romaron

It has taken 16 years so far but it looks like the vision of our glorious leader will soon bring rewards. We have had the shake-up and now we need to see how the dice have landed.

"Norway approves the re-development of three North Sea oil-and-gas fields that were closed ~30 years ago.

After redeveloping, the fields will pump gas and light oil. The gas will be sent to Germany and the light oil to (irony of the ironies) the UK."

6 May https://x.com/JavierBlas

and this:

"The physical North Sea oil market has weakened further, with Dated Brent down to $104 (down ~10% in one day). More importantly, physical differentials have narrowed further, with premia at $0-$2 a barrel range, lowest since the early days of the war. The message? Plenty of oil."

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Hopefully some stability comes back and we can get on with the day job and finding a way to speed up using the tax credits. Maybe a jolt from the local elections might even encourage some MPs from Labour to challenge the message from Miliband that importing O&G is somehow better than using our own.

Well worth a watch https://x.com/KathrynPorter26

Kathryn Porter talking to Spiked. She explains a complicated subject in simple terms. Probably why she'll never be seen in a debate with anybody senior in Labour.

OK Stupmy I'll simplify. Nobody is going to put money into a cyclical industry that punishes you in both high and low price oil scenarios. The moribundity is UK based. Just cross over the NS to Norway to see how it's done. If the forecasters are right for the 7 May elections then Labour cannot continue - "business as usual". Does anybody think Trump or Iran will come to their rescue?

This is relatively up-to-date http://www.stockchallenge.co.uk/ftse.php and so simple to read even I can understand it and seems pretty accurate. I expect VoR and Profitaker to correct me if this is wrong. It is a useful aide-memoire if nothing else.

As I understand it we are about 5p away from getting into the FTSE 250 (365 > 325) and if we merged with Serica (219) we'd be worth about the same as Greggs (184).

It could also happen that the overall FTSE falls with O&G holding its own and we rise by default. I cannot understand why Serica are worth so much more than we are. Having low debt and high cash can also indicate a moribund management and I think there is too much emphasis on debt. If you've got wind-in-your-sails you can make more money providing the O&G price holds than by sitting on your hands using debt. I think we are pretty comfortable where we are but the market doesn't. I'm sure there are better investments in O&G than EnQuest but also a lot worse. I understand EnQuest and it is complicated. I wouldn't invest in them necessarily if I wasn't a LTH because I'd see that they've already doubled since the beginning of the year. Some will say O&G is falling and that Iran will collapse soon. Why? The leaders of the IRGC aren't suffering and Kim Jong Un has shown them the template.

We need a catalyst and I think there is plenty going on behind the scenes. Personally I am not a fan of Serica but concede that in these types of situations they often "try again". AB with his contacts is (imo) a wily fox and Gareth Penny is no mug either but events will likely intervene to get things moving - even if it is only majors jettisoning NS assets.

If things move at the snail's pace of the last 2 years I'd say we'll have a boost when we enter the FTSE 250 which looks nailed-on imo. I think we are on all the radars because of our tax warehousing capabilities.

My biggest mistake with this stock was not reducing when EPL was brought in. I expect the opposite to happen when the OGPM is adopted. I cannot see the backbenchers of Labour happy to go down with the Captain of SS Ideology and his first mate Reeves by ignoring the life-belts labelled O&G.

Ineos Energy’s executive chairman Brian Gilvary announced that his firm would favour investment across the pond, as the US had “proper energy security and a proper fiscal regime”.

In September, Gilvary took aim at the UK’s tax policy, labelling it “one of the most unstable fiscal regimes in the world”.

This came after Ineos shut down its oil refinery in Grangemouth, a move which left 400 people out of work.

Late last year, Shell also successfully derisked its UK portfolio as it lumped its British assets into a joint venture with Equinor.

Today -

Ineos has partnered with Shell on new tiebacks to the supermajor’s US oil platform after the firm called time on UK investment.

Drinks tonight round at Ed's.

I record the HYN rates 144a and Reg S. On the Luxembourg Stock Exchange https://www.luxse.com/ the old ones ended at 102.25 and 103.05 on the 22 April 2026. The new 9.875 to 30 April 2031 were entered @ 99.038 on 30 April 2026.

Today they fixed @ 103.404 and 103.374.

Unless someone can tell me differently our bonds have improved massively. Can we expect an RNS tomorrow?

That would mean Meg O'Neill being followed by the rest of industry to avoid being punished for the crime of being "profitable".

I think Miliband is a secret Chelsea supporter. I was watching Chelsea supporters being asked to choose between (a) winning the FA Cup or (b) the team that sealed Spurs being relegated. They all chose (b).

They'd rather miss out on success to happily enjoy heaping misery on other supporters. Ed is a natural fit for this mentality.

If the rumour is true then this is tantamount to open war being declared on industry. Ed and his followers make the IRGC look reasonable and sensible.

From an article in The Times:

"These drone waves alone could end almost all Russian overseas oil exports tomorrow if Ukraine and its allies had the political will to do so, Shtilerman said. “Ukraine can cut off all Russian oil exports in one day — from the Baltic Sea and from the Black Sea. Our drones come close to the tanker, switch to the 16th channel for international radio and say, ‘You are in the naval blockade zone. You must change your course immediately,’” he added. “If the tanker doesn’t change course, we can aim for the engine part of this tanker.”

Fifty drones per day would be enough to blockade Russia, but Kyiv’s allies would need to authorise the move, Shtilerman said: “It’s a question of political will. Because our weapons receive financing from European allies and maybe even some American money from before Trump.”

Exactly Stevo, so if you compare us to Harbour we have the biggest tax advantage in the NS relative to our size which is (I suppose) measured by our market cap. The stars have to be aligned for the benefit to realise and none of us know when that might happen. EnQuest has been out of the limelight for so many years and at one time was close to collapse. I have the same stubbornness that AB has shown and few could have got us through it. That will have value in the eyes of the Majors. Some of our luck is serendipity because who could have forecast 16 years ago that an investment in a heavy oil field and lessons learned would take this long to come to fruition.

A £1 profit or dividend is largely irrelevant on the size of the company providing it. People don't ask where the money came from when you settle the bill. Thank you for the correction about Serica. They now have to prove they can manage a larger diverse company. EnQuest have already shown they can.

Our handling of Magnus makes us an ideal candidate. We have shown what a good partner we can be. Is there anyone else out there with our advantages? Harbour have around $3.5bn and we have $3bn with the remainder as also rans. EnQuest is absolutely in this first camp. The key thing is not just “tax credits” in the casual sense, but accumulated ring-fence losses, supplementary charge losses, EPL attributes, capital allowances, and decommissioning relief capacity that can shield future UKCS cash flows.

When it comes to this fiscal advantage there are only two large "tax warehouses" on the Continental Shelf. We have the scale to assist the majors. I'm surprised Stevo missed this and relied solely on Harbour?

Amjad Bseisu - the Baron Palumbo of the North Sea.

*I still have a suspicion that Equinor still have 'first refusal' on a Bressay development.

The Times today:

BP is reported to be weighing a sale of some or all of its UK North Sea operations as part of a broader effort to cut debt and refocus on higher-return oil and gas projects.

The FTSE 100 oil giant is conducting an internal review of its UK upstream operations, which could be worth around £2 billion if sold fully, according to a Bloomberg report which also said the plans were not final and may not materialise.

BP said last night: “We have a strong North Sea portfolio with significant untapped potential, supported by a highly skilled workforce. We don’t comment on market speculation. Our focus is safe and reliable operations.”

BP shares were down 2 per cent at 572p yesterday amid broader market weakness from Iran war negotiations.

Meg O’Neill took the charge as BP chief executive last month as the group pivots towards shrinking its debt and targeting investment in oil and gas projects after an ill-fated foray into renewables. In February the company said it would suspend buybacks.

BP operates five key production hubs in the North Sea region, including the Clair oilfield, which is the largest on the UK continental shelf, according to its website. Last year, the company sold its stake in some of the North Sea assets to project partners in a $232 million deal.

Other energy companies such as Chevron, Shell and Total Energies have either sold their assets in the North Sea or restructured their positions.

BP was a pioneer of UK oil and gas operations in the North Sea, having obtained its first offshore licence in 1964. This week it came under attack from Ed Miliband, the energy secretary, after announcing a surge in profits for the first three months of the year to £2.4 billion amid an oil price spike due to the Gulf conflict.

In a post on social media, Miliband said that “profiting from a crisis is morally and economically wrong” and that was why the government was “taxing these windfall profits to help fund support with the cost of living”.

Downing Street distanced itself from Miliband, refusing to comment on his intervention, and he withdrew his claim that BP was “morally wrong”.

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Whoa! The free pass that "Downing Street" has given to Miliband is the same as the criminal answering 'no comment' when being questioned. When BP say they don't comment on 'market speculation' they have no compulsion to answer and a commercial history to support this. Surely the same doesn't apply to a 'Downing Street' that has Energy Security as its responsibility cannot have the same moral compass as a petty criminal and refuse to comment - especially with two wars presently impacting on both Energy and Security?

Excellent summary Hunbah - I think we have been talking with BP. The Magnus profit sharing deal was within the period of Meg O'Neill leaving her old job and starting at BP. The seemingly favourable deal to us may be because it is part of a larger deal yet to be announced. There are echoes of Linda Cook here and perhaps Meg didn't want to go through the pantomime with the Environmental Audit Committee that Linda suffered in 2022. I think AB has a lot of US experience and would work easily with these two women. The EnQuest board has always been well represented with female NED's and in my experience business wise women are much less flighty than men.

Harbour are well aware of the accountancy benefits of tax credits and the driver for the 29.50% of Kraken is to free up £350mio of escrow monies using the strength of the Harbour balance sheet.

I agree. There are a lot of plates spinning.

BP has a lot of muscle with the UK Government because their trading is directed and managed from London although the markets are global. For Labour to attack these profits would impact every financial market and jeopardise London's standing.

Of course all this is in abeyance until we get next Thursday's results and the fall-out gets analysed.

It would be nice to get some announcements before the AGM but it will be tight.

And this Frac but more people read The Sun https://climatechangedispatch.com/rcp85-dead-ipcc-climate-scenarios/

The hostility from Labour and their lack of experience and understanding of business (profits are morally wrong) make Ed Miliband's Gosplan still an option but I believe the opposition now has the upper hand and it gets stronger every day. I was wondering if we couldn't have a buy in from an investor other than the traditional route and we turn aggressor and buy up other UK O&G interests using our tax credits as the springboard. It would of course need OGPM to be brought in early to kickstart the industry. We live in remarkable times and why not a revolutionary approach that fits in with the situation previous Political mismanagement has landed us in.

I looked at Harbour's progress with the purchase of the 29.50% of Kraken that was held by Waldorf and not surprised to read - "HMRC is currently the sole dissenting creditor in the restructuring case." This government spaffs billions on spurious welfare giveaways but fight like tigers over small change if it might help O&G. I think there is a log jam of deals that present ministers are purposefully blocking with the tacit support of a weak and ineffectual PM.

When this breaks it could be very sudden. The forecast collapse of support for Labour at the Local level next Thursday must surely hasten an end to the ideological experiments that this country cannot afford. We're stuck with Labour for the foreseeable but how much longer can they continue to ignore their responsibilities to their subjects?

Actually M it is before PMQ's. From 14:45. The SNP guy, Dave Doogan, was excoriating about Ed Miliband. I'm sure the SNP hate Labour as much as we do but also hate fossil fuels and LOVE renewables, whatever the cost. I loved his language and description of Ed Miliband.

"financially illiterate, ideologically obsessed, profound ignorance, tweeted from the hip, all jam tomorrow" - loved it.

The tweet was on Miliband's feed so he "owns" it although he is savvy enough to recognise how damaging it was and quickly had it removed. I doubt he OK'd it and the running of his media would be delegated. He has effectively has done a 'U' turn in this case and drawn attention to the fact that he hates Big Oil and profits from wherever they come. It has certainly damaged him.

Good spot - thanks.

Thanks M - watched it on catchup from 21:30. "Uncoordinated deindustrialisation" Russell Borthwick CEO of AGCC. Only problem is that the likely Scottish winners are SNP who hate the O&G industry as much as Labour and put ideology ahead of reality.

I've been lazy. I wanted to know how much EnQuest traded swaps rather than futures because I understand them better and there are similarities with FX swaps. I got this from AI:

Total vs. "Protected" Production

Total Production: EnQuest typically produces roughly 15–16 million barrels of oil equivalent annually. For 2026, their guidance is 41,000–45,000 Boepd (barrels of oil equivalent per day). Multiplying that daily average by 365 days gives you ~15.7 million barrels.

"Protected" Production: This refers strictly to the portion they have hedged to lock in a price. In their latest update, they reported having 5.1 million barrels hedged for the 12 months starting April 2026.

The Gap: The remaining ~10 million+ barrels are "unprotected," meaning EnQuest sells them at the prevailing market (spot) price at the time of delivery.

And also this - "For 2026, EnQuest is hedging the vast majority of its protected oil production—approximately 4.0 million to 4.2 million barrels—using swaps"

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On the face of it this looks good but it lacks granularity. I doubt EnQuest have the physical production to take advantage of this as crystal balls remain in short supply and it could be that we have sold all our near end cheaply and are taking a punt on the remaining 12 million barrels. It is highly unlikely we have done this but it remains a faint possibility. I think it more likely that we have spread it over the year and we are left with 75% unhedged. That is very good news if it is the case and according to AI we started doing it in April.

The major threat is a sudden opening of the Strait and a collapse of forward/future Brent for most of the next year. I'm going for AB and team sticking to this formula and doing minimal fine-tuning - that can be a mug's game. The longer it goes on the richer we become. As I think it will last a lot longer than most I am very happy with EnQuest's position and my own. Then there is the market post Straits. Is the damage to wells and refineries more serious than we have been fed?

Hi VoR - we risk going into the expert's realm. So many moving parts and different grades, refinery demands etc.. and we still don't know how much we managed to get a higher price for but it would likely be only a small percentage imo. That area I leave to the experts and you're probably closer to them than I am. Some questions will be answered at the AGM I'm sure but much goes over my head. However, I'm enjoying the higher prices for now. I don't know how they work but it wouldn't surprise me if they further hedged within the DB periods when tying in the loads and deliveries. Sometimes just having the capacity for a few days might give you an advantage with price-making. It'll make even the professionals giddy with the swings and roundabouts. You've gotta be in it to win it and we're certainly in it.

I'm wondering if they are tidying up the RB before some larger deal. Because of the danger to widows and orphans there are some problematic legal hurdles that scare the horses and the lawyers. Easier to just remove them and sacrifice the slightly cheaper money for less legal hurdles that could get in the way of a deal. The RB have restrictions that although unlikely to happen are enough to crater a deal. They are a bit of a UK oddity anyway and we are a lot stronger than when he had to resort to them. Just my opinion. June is looking very interesting.