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Hi Chilts - I understand your point however it appears that we are hurtling towards a significant energy supply deficit. As many have warned at that time the cafe late drinking iMac greenies will be angry. The fact is that these new technologies simply cannot meet the world's energy demands.

Love the creativity on the board. Lets just get that $10 differential. If AB could confirm the $27 BE for this year that would be a trigger for some leg up movement.

Hi Tom,
Just doing as best I can and there is of course things that I can have missed. I was simply trying to get the EV of Enquest and compare what the market is valuing the 2P reserves to Enquest after BE. I get the EV to be $3.5 BN and I "guestimated" the 2P reserves to be 180M - we will know more on the 25th March. You are right that the Capitalised Consideration for BP is included as a Liability in the accounts so that is included. I interpreted it differently to you - I assume that BP does not have a share of the 2P reserves but they have a contingent asset based on the contract to get monies from the Magnus Asset.

Point taken on the lease. That is indeed capitalised and included in the $33 so the BE would need to be reduced. My point was simply that I see a significant upside for Enquest when and if Brent moves $10 higher.

Hi Romaron and Queenie,
Point taken. For simplicity let's take Working Capital out of the equation. In short form, Non-Current and Current Liabilities (excluding Accounts Payable) were $3.14BN + 0.39BN at the end of June = $3.53BN. Enquest has reduced 3 line items in Current Liabilities by 50% - Borrowings, Lease Liability and Contingent Consideration (essentially monies to Bumi, SFA and Magnus). These totalled $276M so $138M. With the $70M reduction in net debt in Nov and Dec that I predict that gives $208M. Cash on Hand is $70M lower based on the OU in October so $114M. So $3.33BN - $114M = $3.22. The Market Cap of Enquest is $280M so that makes $3.5BN. If 2P Reserves are around 180M (the big unknown) that means the market is valuing Enquest at $19.4 a barrel which seems reasonable given BE at $33 at Brent at $55. My point was that if Brent pushes up to $65 this should be a disproportionate effect on the sp.

I have been playing around with the figures a little and looking at the last OU and half yearly. On the production side I assume during the last 2 months of the year that Kraken and Magnus averaged what they did during the first 6 months and that Other North Sea averaged what it had during the year. Malaysia is averaging 40% according to the last OU giving roughly 59k barrels a day. 700k barrels remain hedged at an average of $41 and the average Brent has been $48. With a BE of $33 I get $49M. If I add a premium of $3 for Kraken I get $54M. The remaining $17M payment from Petronas is to be received so I suspect that Enquest has been able to reduce net debt by approximately $70M assuming no decomm costs. There would have been no PiK during this time so I am aiming for net debt of $1318M. At 31st October, net debt was $1388M - Looking at what this is comprised of - the bonds should have stood at $1,011 BN (including PiK from August), SFA $410M (including PiK), Sculptor at $70M and SVT 11.2M. That means that cash stood at 114.2M. If net debt end of year is $1318M with Scultpor at $60M and SVT 11.2M and Bonds at $1011 BN SFA could be down to $350M.

For the first half of 2021 Malaysia will remain constrained so assume 50% capacity. In the best case we could do 60K Boepd. With Brent standing where it is and BE at $33 we could pay off $260M on the SFA. Where BE to go to $27 as AB mentioned this could add an additional $65M. I am comfortable with Enquest paying off the SFA or getting a deal to get this over the line. By mid year Sculptor should be close to $30M and SVT paid off.

I guess for me the interesting aspect is the EV of Enquest. For simplicity I will look at it from 31st December. Here I need some help on 2P reserves. During the year Enquest would have produced 22M barrels. At year end 2019 2P stood at 213M. That brings us to 191M. The question is how much has been written off and added to the balance sheet. I assume that we stand at 180M year end.

If I try to work out the net debt position of Enquest and looking at the balance sheet in mid 2020. Starting with Current Liabilities, I assume that Lease Liability and Contingent Consideration have been reduced by half (these are Kraken payments to Bumi and Magnus). Borrowings include what is paid to Sculptor and SFA. These will have been reduced by the 40M paid in october, the 30M to Sculptor plus the 70M above. This gives me a Current Liability of 495M. The Non-Current Liability I assume remains at $3.14 BN. The overall debt is therefore $3.63 BN. I assume that Current Assets are roughly the same however cash on hand is $114M roughly $70M less so $438M. Simply put the assets should be worth $3.2 BN. The shares are worth the market cap in dollars which is $290M. Therefore the overall EV I assume is $3.5 BN give or take. If we have 181M 2P that is valuing each barrel at $19. If we have a BE of $33 then that is roughly where we are at. If Brent pushes up to $65 then it is interesting.

Euphoric!

And to be sure it was as romaron written ab that i meant told porkies.

Touche Pelle! I Will give you that one :-)

Who knows Romaron - sounds like AB speak. I imagine we will get clarity fairly soon as to what is going to happen with the FCF, financing of Bressay and so forth fairly soon. Hopefully once this is clear a lot of the storm clouds should be removed. The Oil and Gas industry is a n dark space and Enquest is in a black hole but I imagine there is life soon and then Enquest will be valued differently.

Pelle - I am not a subscriber myself so can't get access. I will take you at your word but that was early in 2020. A lot has happened since then so I am sure AB would wriggle his way out of that statement saying that it was in early days of Covid.

That's a porky pelle. AB hasn't promised (or delivered for that matter) anything to shareholders so I would be careful with writing things like that. Nevertheless hopefully Farina and Richard Hall would not be tying themselves to a sinking ship.

Thanks mrc

Hi Jan. Good to connect again. I have a day job and can't contribute in the same volume as the rampers and de-rampers. I think things are looking good but I will let the sp do the talking :-). Brent looking very good

Looks like we have a little resistance around 15p but once through that we should move up to 18 - 20p level

I guess it comes down to ab putting forth a credible plan as some have written including romaron. The market simply does not believe enquest is worth more (at this stage) and with this leadership in place. Enquest is an investment in ab. As Pelle has written he should have had Hedges in place and he didnt and we the shareholders are paying the Price for his incompetence. He has Done good things as well and can hopefully pull something out of the hat. He has enough riding on this to make sure that our interests are aligned

Well I don't doubt that and in some way it may be the end of the road for Enquest as you suggest. What then is a fair value for Enquest? I don't think that given his track record and litany of fatal errors that it makes sense to reward him with a senior role though.

Hi Chilts - I agree that it makes sense for Cairn but does it make sense for the people who are actually shareholders? And now you bring in Magnus. Sounds like you have given up on AB?

Hi Chilts - Does it really make sense for Enquest to sell off its only real asset of value at these Brent levels?

Hi Romaron. What do you think is happening behind the scenes (if you were to speculate)

Had a check. 29th october last hook-up