Member Info for Sipp10

For all of you lucky, or stupid enough, to have a swimming pool, an air source heat pump is the best way to heat it. I have had one for 4 seasons and is way better and cheaper than anything else.
For home heating I am not so sure.

If Chilts is right even more buying opportunities at lower prices for Enquest

At January 2020 just before Covid I thought the consensus was AB'S shareholding at about 27.5p a share. some speculated at about 38p. He bought quite a few at 9p in about last April. I guess his average now in the range 22-24p. Gut calculation only can anyone hazard an accurate estimate?

gkb47 I disagree with your last post. Enquest in the 27 months I have been here has been well managed by AB. He was very fleet of foot in April last year with the covid crash and took a 20% pay cut. I have 720k shares at 19.2p a poor return but BP would have been much worse. To my mind the journey is just beginning and if Brent behaves and a dividend in 2 instalments at 10p a share gives a theoretical share price in under 3 years of circa £1.80. I may well be wrong but I could be right. I accept like everyone else I should have been a day trader in Jan 2020 and sold at 29p. Hindsight is a wonderful thing.

Spot on gkb47 at 18:48 my view exactly. That said what will make the difference is over the next few years after repayment of the pik bonds in October 2023 is dividends. I guess AB will for his charitable trust will be wanting dividends from mid 2024. He will be over 60 then. Provided net debt is in the range $600- $750m and dividends are paid the 40% discount will be gone and this share should fly.

Tiger,
About 3 weeks ago I made a fag packet calculation of divi May 2024 and share price of £1.80 a share. This is close on 1000days or 700 trading days. As we know the sock market is a smooth transition with never a jagged saw tooth wave form on that basis our share price should rise evenly at 0.23P a trading day until May 24.
Real life will never be quite like that!

Pelle,
No I guess a sloppy/honest mistake based on historic data.

Kracken I can understand your frustration. I have been here just over 2 years, you have been here nearly three times as long as this. Fortunately, for me, the placement price and my average purchase price match and I guess that all who average above the placement price wil take up their placement shares. Markets do not like uncertainty and after 22nd July and the market sees that existing shareholders have confidence in Enquest the sp wil improve. That is the 1st blame.
The second blame which will begin to fall away after the half year results is that Moody and the rest will only rerate once reported. Our net debt of circa 1.1 by is still being misreported at 1.9bn.
The third blame is dealt with very well in the previous post from Chilting what happens to poo if any 1 of the following occurs?
1 US production increase significantly
2 Venezuela returns to the fold with the US and production gets underway.
3 Libya and or Iran return to the western fold
4 OPEC and or OPEC plus increase production or more likely individual members cheat.
Any one of these could cause poo to fall and investors avoid the sector for this reason
5The woke agenda concerning CO2 emissions

The person who is not to blame is AB with Covid he has steered the then heavily indebted ship Enquest with consummate skill. The market has yet to react to the superb refinancing at half the interest rate of Tullow.
We all know that Enquest is far more investable than either Tullow or Harbour the market has yet to discern and respond.
Finally if you look at Enquest’s sp performance over the last 6 years we have been a dog of a share. This is all about to change to mix metaphors we are the ugly duckling about to transform into a beautiful swan.

I've really put a dampener on today's discussions. My share valuation for May 2024 is based on assumptions I consider credible but could be way off beam.
I put net debt at about £500m, production at 70k barrels a day, opex costs at $35 a barrel , p00 at $75 giving a gross oil yield for the year at 25.55m barrels, at $75 this total revenues of $1.7885bn dollars. Deduct opex costs profit $894.25m.
Convert to £ at 1.3 $. £688m.
If split 3 ways 1/3 capex on existing wells, 1/3 for future development expansion 1/3 dividend the divi for the year is £233m.
IF 2BN shares following placement this is 11.65p a share. If shareholders happy with a 6.5% return this gives a May 2024 share price of£1.79 a share.
Possible surely. Our journey over the next 34 months is from 21p to £1.80. imo any thoughts please pull apart.

Since I have been here some 28 months now, I stick with my view held over 2 years ago. Pay off the pik bonds October 2023, first divi 6 months later May 2024. I hope I am very pessimistic

The construction company Kier undertook a share placement towards the end of last week. The placement shares were placed with a discount of 17% of the previous day’s closing price. Enquest’s closing price that day was 16.9p which would give a placement price, on the Kier basis, of 14.01p.
For myself, I own about 1/2500th of the company and to take up the placement shares in approximately 4 months time would need to purchase about £21k in shares at the placement price.
My stockbroker advised that share placement shares were often only offered to institutional investors and not ordinary shareholders such as me.
Is there any information on the share placement terms due late in quarter 3?
Should we buy in the dips to avoid as far as possible dilution?

With the proposed issue of shares to bondholders existing shareholders are blown away, the dilution is effectively total. The shares, on current prices, will be worth 0.012p.
Hurricane’s case to The Court will be simple. It will be unable to meet its obligations to Bond holders in 14 months time and is technically insolvent. Deferring the bond repayment date and the issue of shares to bondholders is the only option on the table unless the judge so orders Hurricane will be insolvent, the company wound up shareholders and bondholders loose everything. The proposal before the Judge salvages something. The Judge makes the order Hurricane seeks.
The only alternative is for CA and all shareholders to put up the £50m themselves.This would be at 2.5p per share and would cost a holder of 1m shares £25k. Technically this would have to be by way of a share placement. It would need to be underwritten by CA to take up the share placement shares of shareholders who decline their placement shares. The bond holders would have to agree the repayment extension terms offered and the board replaced to take Hurricane forward.
Can all the shareholders stomach the cost of a share placement

Krakenoil, I agree that AB does not have to offer a discount to shareholders on the £50m share placement. This misses the point. He will offer a discount of 5% or more. Theoretically if no shareholders take up the placement he will acquire all the shares himself or for his charity and the greater the discount the more shares that will issue and to him. I have thought for some time and understand his position which is that his average share price is higher than many of us here and acquiring shares at say 14p or possibly less will bring his average down to below 20p.
The good news is that after the share placement in early quarter 3 all the bad news will be out of the way and then it will be in AB’s and all our interests for the share price, at last, to take off.

MRC has hydrogen energy production at SVT as for the birds, I would prefer to think that AB might fly a kite. As Chilting has pointed out BP now regards itself as an energy company rather than an oil one. We took over SVT from BP, I see an initial future for hydrogen fuel cells in PSVs, very attractive to London Mayors and the present incumbent in No 10. Surely BP should take a lease back from us. The EP is moored at Nigg and it is recently announced that very large wind turbines are to be manufactured there, Hydrogen production initially very expensive but surely not for the birds, politicians would all love it.
On a different note today we are exactly 1/4 the way through 2021. Ignoring acquisition costs of GE my back of a fag packet/ finger in the air pencils in net debt reduction of $360.00m this year or $90.00m a quarter. If right net debt now is down to $1.189Bn from $1.279Bn surely this should help cheer the market up for Tuesday.

I find the present posts from Romaron unfair to Chilting. He has over the last 2 years posted pertinent observations and his ship watch for Kraken greatly appreciated by me. Romaron's post usually find a resonance with me and are appreciated.
Like Romaron I have held without selling but my wife urged me to sell at 29p last January and at 24p a month or so ago. Chilting's approach to be a day trader has much to commend it.
Environmental issues will be with us for the remainder of all our lifetimes and I appreciate both their views on this.
I am against the BP approach on this. They are an oil company and should leave alternative energy sources to others. For us we have redundant oil wells and the SVT. To my mind to lease wells that are to be decommissioned to third parties initially at a peppercorn and then at a commercial rent after say 10 years with a Government indemnity for issues arising from carbon capture is part of the way forward for us. So far as SVT is concerned a wind farm off the terminal with plant ashore for hydrogen production with commercial leases for 3rd parties is also a possibility for us, the hydrogen generated for initially hydrogen powered PSVs. Electricity generation off the Shetlands is fine the high distribution power lines to the mainland and on into England are too expensive .
I am with Romaron these capital intensive projects are not for us but we can gain our green credentials as a facilitator.

Romaron, I think the article refers to Kraken Oil & Gas who operate in Montana and North Dakota.
Teir strap line is Kraken Oil & Gas have exstensive experience in the Brakken

I have been with Enquest for two years and coincidently the share closing price yesterday is exactly at my break even point.
The share placement in quarter three Wilco’s me £20.1k. If the share price stays where it is and assuming a 2p discount I will acquire 115650 shares. Selfishly, I am happy for the share price to remain low. Are we not all in this position.
I feel for longer term holders Romaron, whose posts I enjoy, has admitted to purchases at 58p and surely all longer term holders will want to average down and, unless needing to sell, will want the share price as low as possible and to take off immediately thereafter.
This brings me to AB historically, and before his 7p purchases nearly a year ago I read on this site estimates of his average in the range of 37-58p a share. In view of his historic holding and more recent canny purchases I speculate at about 30p. What are others views?
AB will be mopping up all the shares not taken up by other shareholders and I suspect will be wanting to average down to as near as 20p as possible. AB has the greatest interest in keeping the share price as low as possible until completion of the share placement. The report issued on Thursday deliberately under states and this time next year AB will be able to report that he has over delivered. By this time next year the sp will have rocketed.

I agree with Romaron, operational updates and the accounts for 2020 will underwhelm the market. What the uninitiated will see is the April 2020 write downs and the inevitable year end loss. We know that what matters is the reduced cost base and the consequential reduction in debt in the most difficult of years

Unless asleep I have not seen any posts on the $ currency fluctuations. Over the last few months sterling has appreciated 18% against the dollar and on Friday the dollar strengthened a tad and Brent declined a tad. It must be mostly about supply and demand and demand will increase as will Opex+ production. Saudi would like $68 or more but my guess they will not quite achieve it due to additional rogue supply. My guess is an average for Brent at $67.72. Are the rules to be to 1 or 2 decimal places?

Romaron,
Your post at 20 39 today re the bonds invited responses. I am a medium term holder of Enquest shares and hold nearly 700k. I started purchasing just under 2 years ago. Like you I only hold Enquest shares, the rest of my portfolio is in real property or cash.
To hedge my bets I asked my stock broker to look at the bonds.
When he reported back he advised:
1. That the bond market in Enquest was small with very few trades.
2. That at that time it was only possible to purchase if you paid significantly over the quoted offer price
3.That they were not straight forward in the way that dividends (7.5% payable biannually) but that rather than cash could be converted to shares
4. I think he also said that on redemption the company could redeem in shares

For all these reasons I decided not to pursue the bonds. My personal opinion (which could be wrong) is that the potential for conversion to shares has a depressing effect on the bond price.
To my mind I suspect that the algobots that set the share price factor in the bond price which has a corresponding negative impact on the share price.
I think that this together with the terms of the bonds that preclude payment of a dividend until the bonds are paid off also depresses the share price. If the bonds run to term and redeemed this October 2023. To my mind this leads to a first interim dividend in about May 2024. A 8.5p dividend, ignoring the coming placement, would cost £150m approx. AB will be 61 then and dividends will begin to look attractive.
I have always thought Pelle is premature when he floats dividend payments but, of course, if POO is kind to us now and into the first half of 2022, then AB may well refinance Enquest next year and then anything becomes possible dividend wise with nearly $700m repaid since I joined the party this share has to shine it ought easily to out perform TLW and PMO