Member Info for romaron

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.

I just realised the 38% is raising the EPL by 3%. To clarify what I meant to ask was that removing the headline rate of 91% allowance and replacing it with something more in line with the 'Norway Solution' (as I understand it) would be a neat sleight of hand that gets Labour the required headline but encourages further investment in the NS.

Hi L7. Another investor alerted me to the drop in Ithaca's price so I read the chat on LSE as I'm not invested or actively follow them. I should follow them as their proposed development of Cambo is highly important to us because if it doesn't go ahead then it is unlikely that Bressay will either. The drop seems unwarranted to me and a combination of a TP cut, ex-divi and ENI deal delays but it was a couple of points you mentioned that interest me.

Your post on ITH yesterday at 13:52 whilst impenetrable to those of us in the shallow end did kinda alert me to something that may be important for us to try and understand better. It revolves around this comment of yours:

"Incidentally, this highlights the ambiguity of the political debate on removal of EPL allowances and the increase in the EPL rate to 38%. There can be little doubt that the complete removal of the EPL allowance would make any new investment in the North Sea difficult to justify, but there is room for Labour to claim political capital out of removing the ‘addition’ EPL allowance – sometimes referred to as the super deduction – while still providing a case for North Sea investment."

I remember the disgraced Labour MP Barry Gardiner (takes money from CCP agent) using the term "super deduction" when attacking the O&G industry. Are you saying that what Labour are suggesting is removing the headline investment expenditure allowance of 91% but replacing it with something similar but spread over a longer time? The political capital of course being that for Labour it will be a"headline" that will only say the gift/subsidy to the O&G profit-gouging giants is reduced to 38%.

If many of us here struggle with the complexity of the NS tax regime what chance does Brenda from Bristol have?

38% is lower than 91%. That's good enough for the majority of voters.

Juan - people are just getting back. Give them a chance to digest the presentation. You have to admit it was one of the better ones even with EPL. With our tax credits we have an advantage when bidding for assets and any corporate deals that may pop up. It is as always dependent on the politicians. Tesla aren't doing well. Maybe we'll replace them as a growth stock. Why not? Stranger things have happened (VoR 12:23)

A couple of things that matter. Where heat pumps are (apparently) a success does not bear close examination. They conflate air conditioning which is for hotter countries than ours. The Scandinavian countries do not have an extensive gas grid and few can compete on the raw material (electricity) price that Norway produces because of hydroelectric (pretty difficult in Belgium Modestus).

"We do NOT have corporate sponsors, including Gorilla Glue. However, X won't let us change our profile picture back."

Ah, diddums - juststopoil used the Gorilla glue logo without permission. Not sure if they chose Gorilla Glue because that is what they usually sniff or they thought the glue was a threatened species. It was swiftly removed and who knows, maybe there'll be some legal action.

They don't have corporate sponsors. Well not since Vince Dale stopped supporting them and clearly they've become an embarrassment to the philanthopist Aileen Getty (yes, that Getty).

"Although great progress has been made both with domestic GHG emissions (now the lowest since Victorian times in the UK), per capita emissions and carbon intensity of the economy, pushing ahead with the remaining plan will show the rest of the world only how to achieve Net Zero while severely damaging the economy and most likely causing a degree of social breakdown. In the meantime, the main beneficiary is China, now building much of the equipment used for renewable energy infrastructure in Europe and in the process of becoming pre-eminent in the manufacture of lithium batteries and electric vehicles."

"As Napoleon said, “never interrupt your enemy when he is making a mistake.”

Both from here: https://mailchi.mp/1697386b5510/picking-winners-open-peer-review-201556?e=35cf3821be

Q: Hi Craig, excellent presentation last week. I have a question revolving around the gas from Bressay. AB said there was a positive indication from the NSTA regarding the gas line. I don't know enough about gas but is it possible to access the gas faster than developing the field to extract the oil? I know there is such a thing as an Early Development Plan and could this be a precursor to developing the whole field?

A: The NSTA has issued a ‘no objection’ letter regarding our proposal to develop a gas well tie-back from the Bressay field to Kraken and our focus is on progressing that activity, primarily in order to displace the diesel currently being used to power the Kraken FPSO.

The Bressay oil development project is expected to follow and I’m told by our technical experts that utilisation of the Bressay gas cap on the tie-back to Kraken could also precipitate better results in terms of oil production. Any oil development would likely be on a phased basis and could certainly involve the EnQuest Producer as an early production system.

-----------------------

All fields are 'phased' so a very interesting response. It is possible to read into the email that the EP may not be the final FPSO for Bressay and we later move the Kraken FPSO to extract Bressay oil. What that does mean to me is that we can access the gas quickly. That will be transformational for the company. It also has a narrative that should please the objectors.

London: 2 April 2024

Campaign group Net Zero Watch warned Claire Coutinho against removing renewables subsidies from electricity bills. It was revealed yesterday that the Energy Secretary is looking at plans to move the levies onto gas bills or general taxation.

But Net Zero Watch director Andrew Montford has warned that she can only temporarily hide the true cost of renewable energy:

"It’s a sleight of hand. She is simply trying to hide the subsidies while simultaneously insisting that wind power is the cheapest. It’s yet more socialist market-rigging of a kind that the Callaghan government would have recognised."

And Mr Montford called for the government to make good on its promise to come clean about the cost of decarbonising the country:

Mr Sunak has said the Government needs to come clean on the cost of Net Zero, but we are still waiting for him and his Energy Secretary to tell us the truth about renewables. If they don’t come clean soon, their place in the history books will be as a pair of confidence tricksters.

Thursday’s results day is available as a webcast on enquest.com. AB seems very confident but wasn’t challenged on the plans that incorporate gas from Bressay. It was as though there was a decision not to acknowledge the elephant in the room, development of new fields. Rosebank is moving ahead but what about Cambo? Shell ducked out of Cambo but the Ukraine war has probably affected that decision and there are probably ongoing discussions including the government at a high level.

AB did say that we had received positive indications from NSTA over the gas line which I assumed means Bressay to Kraken. He was talking as though it is a done deal. I don't think you can start exporting gas until you have a FDP that gets NTSA blessing. I think we've been given the nod from Labour.

In fact the damage that EPL is doing to the industry wasn’t mentioned much at all. I think that is a good sign believe it or not because the only people acting sensibly and holding the strongest cards are the remaining O&G producers on the UKCS.

This only relates to the Dumbly post on 30 Mar 8:27

You should have numbered them to make it easier. You did ask for thoughts and I could easily get all 9 wrong. Here are mine.

1. No chance of EPL being tampered with until after the election.

2. We haven’t seen a ‘Labour Manifesto’ and at times the electorate have shorter memories than goldfish.

3. I think Labour will have an absolute majority but it won’t wipe away problems.

4. I think EnQuest are only looking at deals that work with high tax and a hostile government.

5. A fiscal event always possible as common sense and realism returns plus 'events' - Russia could escalate.

6. Tricky one about Bressay. If they announce it won’t proceed then it won’t because governments don’t pay ransoms (they usually act before via back channels). This is a massive game changer for the company and the UK if it happens. The activists really are a spent force because their threats of global collapse haven’t materialised and renewable prices are unaffordable and going higher. Occam’s razor says it will go ahead because of the chains of parsimony that Labour will creatively invent. I do believe Ed is on borrowed time.

7. No idea who the others are and would need government diktat.

8. Tax credits are ‘sanctified’ and would drive business away from the UK if removed.

9. M&A – no idea. We have plenty of wiggle room and possibly more of a before/after election decision. Before means likely to get a Labour blessing; after something to negotiate with as there is a chance Labour are creating a new narrative due to professional industry and economic analysis or more likely due to simple expediency.

From same article:

"RWE, a German energy firm, wants to erect nine turbines each standing 660 feet tall – five times the height of the tallest local church.

RWE’s project newsletter admits that 77pc of local people are opposed to the project but said it still planned to go ahead."

later

"“Last year RenewableUK Cymru commissioned a Welsh poll which showed that people living closest to wind farms are the greatest supporters of wind power. While the majority of Welsh respondents (65pc) said they support onshore wind, with only 9pc opposed, approval ratings rose to 72pc for those who live within five miles of a windfarm.”

My reading is that support is high for (maybe) a potential handout/sweetener to those most affected/closest. There is also the point that it might not be visible to many. I live in the suburbs and can't really see more than 300 yards. I wouldn't accept one that could adversely affect my property value or was viewable from my back garden.

From The Telegraph:

But councillor Gill Davies, 84, who sits as an independent on Nelson council, said the proposed wind farm would be a disaster.

She said: “Renewable energy is a good idea but destroying our landscape to produce it is too high a price.

But councillor Gill Davies, 84, who sits as an independent on Nelson council, said the proposed wind farm would be a disaster.

She said: “Renewable energy is a good idea but destroying our landscape to produce it is too high a price.

“Wales has enough low-carbon energy already. The power from this wind farm will all be going to England, the money will go to the company and we will get nothing. And then the English wonder why we Welsh get stroppy.”

The Welsh were stroppy before renewables (and the Jocks were too).

*Welsh Labour override local Councils in turbine planning. Sign of what's to come in England.

"EnQuest's owners are quick to point out that they have made no money since they invested. Moreover, they say, they have an obligation to make returns for their investors; if they can't do so after seven years, and with no prospect of returns in future, it is entirely rational to pull the plug."

The above was actually a slightly different story. I have cheated slightly by typing in 'EnQuest' when the actual name was 'Thame's".

But does it make the paragraph wrong? The Boat Race (30 March) is a traditional event but the back story was about pollution of the Thames and they did not have the traditional dumping of the cox in the the Thames due to fears of E.coli.

Water really is an existential threat and we run the risk of going backwards. In South Africa they have water rationing. Not because of a shortage of water but the electricity to deliver it. A new tiny band of activists (6 supoporters on funding page) were there conflating energy, water and Gaza https://twitter.com/youth_demand/status/1773758539871277246/photo/1. They actually have as much impact as juvenile graffiti scribblers but casually deface and damage our environment. That won't garner them support. The activist movement is crumbling before our eyes. Thames Water will survive in the same way that bankrupt Councils will. We the public will pay for the political failure to protect oiur infrastructure because the shelf life of expediency has gone. Let's face it. EPL wasn't about the environment. It was about an urgent need for cash to plug a gaping hole in the country's finance.

We are inching ahead.