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“BP and it’s partners “ could Enquest be 1 of them? A dal where we provide the fpso and manage it with contingent payments along the lines of the Magnus deal might make sense for both parties and avoid a share placement.

BP has filed its decommissioning plans for the fpso. Production ceased in April last year due to structural integrity problems with the fpso. When production ceased it was producing at 12,500 boepd and reserves were estimated at 200m barrels. Could this be a home for the EP?

L3Trader, thanks for your knowledgeable post. So The Magnus contingent payment is at about (40m at year end 2020 and I guess is down at about $910m at year end 2021. With appropriate capex in 22/23 surely some of the 250m barrels of movable oil or likely to be extractable? I guessed at 80%. What are your views or is AB's mention of this a red herring?

Romaron, Thanks for the invite and, prematurely, I had already nailed my colours to the mast at 32.8p. I take the glass half empty approach in view of past disappointments, but we should do much better than this. Tigar talks of 2 proximity wells on Kracken for 2023. AB has talked about developing the western flank at Kraken. I took AB to mean in 2022 rather than 23. Kraken, despite the recent 10 day hiccup is performing well and I believe still has 20 years of production. Why wait to develop the western flank? I have hazarded that the EP is at Nigg earmarked for the western flank. Why leave it mothballed incuring modest unrecoverable opex costs when it could be put to work? AB must have something in mind and if the 2 proximity wells are commercially viable I think that is where it will go.
Many here have poor predictions for Magnus but provided the 3 or is it just 2? wells drilled in the late spring summer are not dusters I would hope that each single well will produce in the 7.5-13.5 thousand boepd. Provided there are no capex overruns than Aloj's estimate might be on the low side and as an outlier I hope he wins. As a pessimist I stick at 32.8p

Romaron, thanks for the invitation. If the well drilled at Magnus and Kraken all turn up trumps each of the 5? wells drilled could be producing between 10 and 15m boepd doubling our production. Blue sky thinking but possible. The 60p party would be in the rear view mirror. With my 700k plus stake held since April 2019 I have an average sp of 19.2p. I am mindful the sp reached 29p in late January 2020 and am in the blue for the first time in many weeks.
With my glass half empty I think dividends are still over 2 years away. AB is 60 in November 2023 I do not think he will want to retire then. I bought in because I appreciated what a miserable time he must have had in having to beg for funding to the tune of $2bn. I am sure he said to himself" never again". I guess he wants Enquest to have net debt at below $500m and possibly even to have no debt at all. The US market accepts share capital appreciation without dividends, the UK market is not so forgiving and to my mind is immature. At close of business on the last trading day of 2022 my view is a conservative one and I estimate a share price of 32.8p. Not much of a gain on late January 2020, I hope we do better

In September work started on the 16 month project to update Magnus and we all know that the project to reduce flaring has been completed. 3 wells are to be drilled, I guess sometime between April and September this year and tied back to available slots on the Magnus platform. There are 250m barrels of movable oil left at Magnus. If 80% is recoverable this is 200m barrels. This is bigger than Cambo at 180m.
AB is going to develop the wester flank of Kraken this year and my gut tells me that the wells drilled will be tied back to the EP. What else would AB be retaining this asset worth £100m+ for?
The issues in Malaysia will be resolve in the 2nd quarter at the latest and the likelihood is that production will be very much higher by Q3.
On Magnus is anyone able to estimate the amount of the profit share with BP that has been paid and capped at $1bn? Could it now be down to about $850?

The main item in the business section confirms that days after Cop26 the energy secretary Kwasi Kwarteng had a charm offensive dinner with the bosses of BP, Shell, Equinor, Neptune Energy and Amjad Bseisu of Enquest to reassure them of the future of North Sea oil. The times also confirms that one Greta Thunberg turns 19 today. I am not sure I can bring myself to wish her a happy one but on the other it would be churlish not to

On Tuesday we will be 40 days into Q4, in H1 we were all a bit disappointed at the daily debt reduction at $530k rather than $1m . GE must generate net debt reduction at $300k a day. Surely even on a bad day debt reduction should be at $830k in Q4 or by Tuesday $33.2m. Surely this has to begin to reflect in the SP?

Will our capex over the next 12 months make net debt of $800m a realistic possibility?

Congratulations to AB for getting GE over the line and now is an appropriate time to look at the whole picture and I raise some questions which I hope those with a better finger on the pulse than I may be able to answer.

GE
A low production asset has replace the high cost end of life assets closed down because of Covid last April. The adjustments to the price paid will be interesting but will we get the actual figures in short order or will we hato wait for the year end results in April next year? I guess that Suncor has had the first 3 quarters of annual production to 30th September and we have the 4th quarter production for ourselves. Is any one able to estimate the adjustment to the initial consideration of $325m to reflect the ist 3 quarters to Suncor?
I think some posting here have been a little unfair to AB. Between 1st October and 3.00pm on the 2nd the lawyers and accountants have been busy working out the final figures and dealing with regulatory compliance and all the ducks were in a row by Friday morning, the consideration was paid over to Suncor's lawyers by 2.00pm and AB issued the RNS at the earliest opportunity. Nothing turns on the fact this was towards the end of the day's trading SP up between 1.5 and 3.00p tomorrow?

Magnus
I have been a shareholder since April 2019- I am halfway through a5 year plan to hold Enquest and it has proved, so far, to be disappointing. I hope this is all about to change. The 16 month program on Magnus should have commenced in September. Does anyone know if it has actually started? The work on the existing wells and the drilling of the 3 new wells and tie back to the Magnus platform will be presumably on going from April next year. Will the additional production from each well be about 7k boed a day or possibly more? Could production from the existing wells and the new wells reach in aggregate 35k boed? After all AB has spoken of 250m barrels of "movable oil" remaining at Magnus.
We know the BP loan to purchase Magnus was fully repaid in H1. How much of the profit share capped at $1bn has been paid to BP to date? What is the estimated capex cost for this 16 month program?

Kraken
This has been our savior over the last 2 years surely production must start to decline soon at say 7% per year?
AB has talked about development of the "western flank" with 3 or 4 wells. My gut feeling is that the EP waiting patiently at Nigg is earmarked for being utilised as the fpso for this project. Am I off beam on this or is it a possibility? What are the capex costs earmarked for this project? Is another 30k barrels a day feasible or fanciful?

Malaysia
Presumably steady as she goes or are there any capex developments here?

These are exciting times for Enquest, with debt now where it is at about $1.3bn with the production we have surely we have lost once and for all the epitaph "heavily indebted" and with current production need to show net debt at $800m by this time next year, will our capex over the

It will complete on Thursday, we will have the Q4 output and an adjustment on the Q1-Q3 production. The question is will the RNS be 7am Thursday, probably or 7am Friday confirming completion and hopefully provide some figures on the adjustments.

An excellent post Squif, it does make me wonder, as others do, that at some stage, I guess, when net debt is down by between £400.00m and $400.00m that AB will make a move and take Enquest private with a premium of 10% on the previous close and fear the day traders might take it.
Interesting to see that share tradings are at about twice previous levels over the last couple of months. I think this is a good thing for the medium term.

I would like to thank all those who have responded today, it has gone some way to lift my Enquest induced depression!
i optimistically, take the view that Magnus is a, small, sleeping giant with an additional 250m barrels of "movable" oil. I guess nobody can hazard a guess as to how much is recoverable at economic cost over the next 10 years and at what capex cost.
Why is the view taken that the $1bn contingent payment will not have to be made? There must be a contingent condition that presumably can never be satisfied and if that is the case what is it?

I took the view that net debt reduction was running at $1m a day. In the event, for the half year, it was only running at $530k. An extra 5k boed in H1 would have reached the figure I had in mind. Ignoring GE for H2 is 47-48 boed a reasonable estimate? With GE 58 boed?
Bearing in mind there is a set-off against the GE acquisition payment of the production yield between the conditional purchase agreement, can anyone hazard a guess as to what sum Enquest will have to pay to Suncor at the end of this month on completion.
Where will our net debt be at the end of H2?

Mine are a bit crushed. Friday's close was 38.2% above the placement price of 19p. The volumes daily are up 200% on what I have been used to daily over the last 2+ years. The price was down today because day traders with little or no knowledge of Enquest are happy with their 3%-6% trades and move on. We are stable at 25-27p for a little time, perhaps 31p by Christmas and then subject to day traders ups and downs. My, repaired but fallible balls give me £1.40-£1.80 but not till mid 2024, about 32 months from now when Pelle, at long last, receives his 1st dividend.

During 2020 and Q1 2021 Magnus has not performed well and I guess low poo prices last year and lack of capex have both played their part.
The accounts for 2020 when referring to Magnus state that there a$138.2m cost correction against the additional contingent consideration.Now poo has recovered is this added back?
There was mention of $61.8m payment. As at year end 2020 how much of the $1Bn contingent consideration been paid?
With judicious capex in 2022 plus steady oil above $70 and exploiting the addition 250m barrels of movable oil the ultimate value of Magnus to shareholder value should become very significant.

There is also the position of the unknown party who has leased the shares. They might be wanting to devalue their holding short term for a tax gain. You may have guessed I am a property lawyer and my knowledge of oil is learnt from the likes of Romaron and others. It is not unknown, for example, for tax purposes for a party to lease a commercial property for a commercial term starting in say 2027 for 50 years. This means that the freehold value is reduced significantly and provided it is in an arm’s length transaction, if the freehold belongs to granny who likely will die by 2025, the value of the freehold reduces and the inheritance tax on death reduces, two generations later the family get this high value property back. This is just an example. We will probably never know the actual reason for this unusual deal. Tax avoidance for one. Or both parties is high on my list of possibilities.

Effectively Helikon has effectively leased the shares until March 2023 I guess the lease contains an option to in effect buy rather than hold the shares for a period of time. The advantage is it allows them to wait and see at minimal cost. If they conclude the shares are now a one way certainty upwards then they buy on the terms of their lease at a discount and if disaster strikes they take the modest loss. I guess the cost of the 20 month lease would be discounted.
Just my guess. It’s certainly not a conventional short. Might they be some of AB’s shares.

Romaron, I was surprised by today’s volume. I have been here since April 2019 and I am pretty sure that this was the highest volume by some margin since I have been investing here.There have been 4 or 5 days trading where the volume has been around 1/2 million shares traded. Is something going on?

Chilting, it could happen, but it is more likely that future North Sea development will have to be more carbon neutral in production. No diesel powered FPSOs, no flaring, floating wind generators etc. This will increase Capex but AB and all others will factor this in to the price they pay for a new field initially.