Member Info for Soder

8.2 v 8.1 is not great but not a disaster at all. And after you sold everything rallied given how bearish current positioning is across pretty much every asset class. At some point I would think we could have a full puke/wash out like we did in 2008 but still feels like death by a thousand cuts at the moment.

Fwiw I think valuations in energy limit any downside as companies are trading at 1x ebitda and even lost have cash balances which cover most of their enterprise value. As such 70%+ of everything I own was s now in oil and gas.

Really not going to even discuss of harbour is a safer investment than enquest. It’s clearly the case. that’s not saying enquest is bad. It’s just different.

Nail on the head. This business continues to be run for creditors. The equity story is not about growth. It’s simply a hope that oil price remains high so you can repay debt and hold a constant ev multiple so essentially debt is replaced with equity value.

No news is good news? Nope. No news is no news!!!! They are drilling a hole in the ground which will take 25 days and then they will log it. There may be some logging while drilling but would be very very very unlikely they would release anything to the market until they have logged the hole in full post drill IMO.

You can buy the gbp retail bond. But..enquest bonds are priced where they are for a reason. If your friends are risk averse they would be better off buying equity in a bigger company.
Only or at least one with a better balance sheet. Serica are net cash and pay a divi. Harbour will be net cash v shortly and pay a divi etc etc.

Enquest will have to replace declining reserves with more M&A and also no matter what the reported debt figure is, they have lease liabilities on FPSO (for example) and huge decom liabilities…..which is debt. They will HAVE to make these payments as can’t avoid leases and decommissioning is mandatory. Which is why the mkt is saying that even though they optically look 1x levered they are actually much much higher when adjusted for leases and decom liabilities.

Ukbbbbb I followed oil markets and enquest long enough to know these cashflows are not an annuity and that eventually production declines and oil prices fall.

Btw the price talk out on the new bond at 12.25% yield. May be some element of that yield priced in at discount to par but coupon is still going to be big.

Check the production declines on kraken. Enquest have to make acquisitions. Or their production falls off a cliff going forward. It’s not an annuity.

The roadshows on the bond and investor calls only started today and it won’t price until later in the week. When it’s a 12 handle coupon don’t worry, I will be sure to come back and say “told you so”.

They have changed the outlook at enquest are in the market with a new $300m bond and reserve based lending facility to refinance their existing debt.

They will probably have to pay 12-13% coupon on that debt replacing a 7% coupon.

These are CREDIT rating agencies and nothing to do with equity and attractiveness for growth or future prospects. Enquests business model relies on them being able to pick up cheap assets and they will always have to do this as they do no exploration. It’s essentially a business in run off unless they can buy cheap new assets.

I stand by my comment. Enquest is a piece of **** and there is no equity story there. They fact a 1x levered business will need to pay 12% on its debt should tell you that the credit market also thinks this.

The market isn’t irrational. The people that operate on it may be. But that’s how you make money. You take money out of the pocket of people that would sell a duster result for a well that will cost zero to drill given the tax offset and which the share price factors in zero value anyway.

That’s not a risk. That’s an opportunity.

What’s the definition of trashed?

How can it get trashed when by year end you will prob have 55-60 per cent of enterprise value cash covered.

If it was down 20% or more it’s literally free money and I would sell everything to buy it. Gas prices still at records and Serica will be making significant cashflows. North eigg is s not a game changer for us. We have production. We have revenues and more importantly we have cashflows. North eigg is a nice to have. It’s a nice to have and will increase reserve life and production in the future. I’m not sure it’ll a duster would have any lasting impact to n the share price and none owns this for north eigg. They own it for 300p gas.

Good news but not a done deal15 Oct 2021 02:58
The chat from Aces is of a very good first innings. The coke is flowing. The original plan remains to go down, down, deeper and down.

I would not expect any official news for a while but the word from Aces is to empty the bottom drawer and buy a few golden tickets.

Let’s see how she swings !

Ace’s a rocking21 Oct 2021 00:25
It would seem that several arrivals have occurred.

Nothing’s a done deal until it’s done, but things are looking very positive.

No official news this week.

Top tip….

This poster has history of picking a local bar where he pretends he knows rig workers would hang out and leak info ahead of a drill result.

Like Aces in Guyana for example. Note on to )I assume) mavericks in Cape Town which is a strip joint.

He will claim over the next few weeks that he is getting l Alex info from mavericks re the drill. I measn (and I quote) “ As ever, news will leak, especially in a country like South Africa. Best sources of news are in Mavericks !”

He will pump the stock which is fine. Hell I’m
Balls long. But…. Don’t get caught holding the baby. He is here for a quick run and will be ping gone pre any official news.

In summary….
Brightspot knows nothing inside
Brightspot has never been to mavericks
Brightspot has no contacts in mavericks or South Africa or eco or on the rig
Brightspot is a pump and dump specialist on this stock

Check out his post history on ECO and WTE from last year and how he was “calling it from ACES”. Aces is a bar in Georgetown Guyana.

Calling it …. From Aces23 Oct 2021 03:37
Strike. 3 zones. Commercial and probably over 500 M bels recoverable.

News late next week.

Enquest is a piece of **** that relies on being able to buy assets cheaply to just maintain production. Without that it’s just a business in run off and can’t see an equity story at all. It also has too much debt that it needs to refinance within the next 2-3 months and the market is going to absolutely clobber them to refi their bond. It’s current a 7% coupon which can be paid in PIK if oil price less than 65 during the interest period. They will have to pay well through double digits to refi it. Probably like 12-15%. All the cashflow will be gone on interest payments. They will also get hit hard by the windfall tax.

Not sure mkt was expecting that severe

I can only assume that the username Olderandwiser is a form of twisted irony?!

Company reports saying sales up 10%, ebitda (which is a cashflow proxy) is up 10%, cash balance grew 30m and leverage dropped half a turn since year end. Whilst at the same time saying they working on new hydrocarbon and green deals and looking to close a transformation deal. Yes timing has slipped but totally out of their hands …..and the best you can do….

“Yeh but they still reported a pre tax loss”

Who gives a **** what a pnl statement with a load of non cash charges says when the cashflow statement says they are generating a ton of cash? Cashflow is REALITY!!!

Yes. Just frustration hearing people witter in about the refi. If he could have done it at a lower rate then he would!!! Answer me this…..would is the current 10 year rate on Nigerian and US government debt? Then go look how that has moved the last 6 months. Then go check new issuance bond volumes in any single market you want versus last year (I bet you they are off 60-80%). Then come back and tell me how you think Andrew could have got a refi done.

The result are absolutely fantastic. Like truly amazing. They are running the assets they control hard whilst adding contract and managing costs well. But we seem to focus on the fa t some most likely corrupt schmuck in ****ing Chad is holding up exons exit from the region. Totally out of our control. And also that we can’t raise cheaper debt cos global rates have blown up like nothing we have seen since in history. Totally out of our control.

Let’s focus on what we can control. And the team and doing a spectacular job.

Honestly people need to wind their necks in and out their toys back in the pram with regards the Nigeria refi. The credit markets have been shut this year the WHOLE world over!!!! They remain that way. Pick up a ****ing newspaper!!! And that’s in a developed market like the U.K. never mind nigeria!!! What do you want Andrew to do? It’s completely out of their control that GLOBAL inflation is running at double digits, yield curves are inverted, and the area has fallen out of every single equity and bond market the world over.

These are planted questions. No one would be asking these given the elephant in the room.

We’re a balanced business. Half in U.K, 20% US and same for Europe. Wow. That’s a whole 400k a quarter of sales in each of Europe and US.

I’m so happy they have right sized this business for us.