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Hi romaron. Hope i did not mislead on the hyns and rb but i simply looked at their current price. If we can just get through next year with no incidents and a brent around 60 then the picture Will look very different this time next year

It is a very good analysis. Interestingly they had EV/EBITDA at 3.8 in 2018 so they are not counting one of the debt items as debt. They suspected that EBITDA would come in at 760M but in reality it came in at 716M. 3.8 x 760 = 2.88 BN. This was calculated during H2 2018 when they only had access to the H1 report. Back then net debt was 1.97 and they were adding 418 which was the NPV value. This leads me to suspect that they were including the decomissioning provisions which were 670M rather than the leasing which was 748M (current + non-current). Regardless, even including leasing I get EV/EBITDA coming in around 3.8 year end 2019 with SP of 18.3p. Next year if SP remains flat the ratio will come in under 3 at 2.9 assuming production of 72k and Brent average of 64. These are approximations however they reveal that the leverage is coming down and are historically low. The real challenge is the market view of oil stocks. Once this changes all oilies will rerate including Enquest.

Pelle is that ev using ABs net debt figures or TGFs? What Do you have fcf at?

Will Do. Thanks theraoist

Stumbled across this interview when looking at the Mark Gordon interview https://www.youtube.com/watch?v=0-BxxbDmKd4. Kate Prichard says that EoG companies used to be valued at 8 - 10 EBITDA and now are at 4 - 6. If we assume the higher debt level that TGF advances then we are currently at 3.8 times EBITDA. She also talks about small caps debt being at 17% yield which is roughly where we are at. I think that Enquest like most oil stocks are a victim of the market view. Nevertheless Kate advances that this is going to change and will have to.

So again about 50k a day. 525/10.5 days

The ratios are bloody awful however one looks at it

Interestingly if we maps this ratio - it started at 8.1 when the annual report for 2017 was released and EBITDA was 303m and net debt 1.99 BN. Then when 2018 was released and EBITDA was 716.3 and net debt 1.77BN the ratio was 2.93. When the H1 report was released the trailing 12 month EBITDA was 930M and net debt 1.64 the ratio was 2.11. Now if EBITDA hits 1.027 BN and net debt 1.485 as I estimate the ratio will be 1.74 if we keep this sp. That is to say half of the ratio that Mark thought was ridiculously cheap. Why is AB not able to convince the analysts at these analyst meetings???? It feels like Emery.

At the very least they should take the opportunity to speak with the analysts and correct the false assumptions that their price targets are based on (if enquest REALLY cares about shareholders). How else can shareholders other than AB generate value out of this investment?

Thankyou whoever drew our attention to the point at 47:30 in the mark Gordon interview. He claims that his portfolio has an ev/ebitda of 3.5 in 2020 and that is low. Enquest as it stands has an ev of 1.9 bn. It Will have an ebitda with 72k boepd and brent ave of 64 of about 1.05 bn. That gives an ev/ebitda of 1.8 roughly. Omg

I agree with you rom. The sp will move when the dark forces are ready. i think most of us agree that this could be some time H2 or even Q4 2020. I watched the interview that was shared yesterday and gs seems to indicate as well that that is approximately the timing for the tight oil story to end. I can understand why production is going up in the US and why they are pumping more than ever if they need to pay debts but if drilling has stopped and Tier 1 assets are drying up then the vapours will soon run out. When is anyone's guess but that they will run out seems a given. Enquest can survive and prosper at 60 oil particulalry if they are earning 3-5 buck premium on 50% of their production.

I have revised my figures and are starting to come closer to HMHs figures. I believe if Enquest can produce 72k a day and get 64 bucks a barrell then fcf should hit 700m next year. We could well be below 800m net debt and the Magnus loan outstanding of around 80m. If that doesnt get the sp moving then I don't know what will. I agree with you Krakenoil that the Enquest CEO should put some bold statements forward in march 2020.

Agreed krakenoil but i dont think that ab is that type of Leader who Will give à clear direction

Krakenoil - if you asked ab if he was open with enquests finances he would say yes of course but i agree with you. We have a pe of 2.5 and pmo over 7 and i dont see a major difference. As i wrote previously there are institutions that simply dont trust an owner led company and steer clear. Eventually hopefully the fundamentals Will impact.

He might also say that in the past i have bought assets totaling 6bn which have an ev of 1.9bn so i have an excellent track record!

Where is the money coming for that hitman? PIs who have been bled dry theough two RIs or an off balance sheet loan which analists have punished enquest for?

Reminds me a lot of the film big short. It is like the emperors new clothes!

Not only are the markets corrupt but the US president is as well.

I have no clue What is going on with brent, shale and enquest now. It is like we have left the real world and entered trumps fantasy world

Almost as many as double A!!!

Haha - kraken - luv your sense of humour :-)