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Pelle - so doing some combat maths. We are getting a tanker about every 10 days so that is 3 x 550k x 70,5% = 1.16m boe per month. Oz gets 15% to pay off the loan leaving us with 988k. Enquest pays 10 bucks a barrel to Bumi in leasing which is 11.6m and Enquest gets about 65 usd (a 3 - 5 buck premium over brent). You are bang on - I got 52.6 m.

So the question is then during november and december we should get 105m from Kraken alone. Removing kraken share of interest and capex (50% of total enquest production) for nov and dec of 18m and 46m = 32m then just alone from Kraken net debt should decrease by 73m. Very interesting. Then also forgeting the chunk that we bite out of the Oz loan with the 15%. I read that those hedges are at 56 bucks so in the worst case that is 170k boe x 2 months x (56-10) = 15.6m. So net debt should decrease by roughly 90m just from Kraken alone!!! Interesting to see if that is indeed the case or if someone has their fingers in the till....

Trying to look back through the pages. I think that NO arrived on the 18th or maybe the 19th so that is bang on 9 or 10 days. Chilts - do you have the exact timing? This should give Cairn's and Bumi's sp a nice push up.

Yippee!!!

Look - I am not going to go down my favourite topic but this has got to stop. I think for whatever reason there is broad distrust against a company where the CEO is the majority shareholder and doesn't seem to be advancing the broader shareholder needs. Again this is my interpretation of the situation but if you are not putting shareholder needs first then something is wrong. For godness sake most of us here have poured money into Enquest to save it from going belly up and this is the returns. If the majority shareholder is the CEO there is an even greater onus on that person to be transparent with what is going on inside the four walls of the company.

I mean if you read Premier Oil's latest presentation from november - Page 2 "79.4 kboepd to end of October; 94% operating efficiency Forecast FY production at upper end of 75-80 kboepd guidance" and "$300m FCF to end of October, already delivered upper half of $250m-$350m full year net debt reduction guidance". They are very clear what is happening and what quartile they are targeting. They have a portfolio including Tolmount that they show guidance on. What the heck is happening with Seapulse? Or was that just some lotto ticket that they found somewhere.

This is a publicly traded company not the CEO's private company. That I think is keeping investors at bay. People want a CEO who is driven by the broader shareholders returns and not just their own.

Not only that - our assets are valued on the books at 5.54 BN!!! There is that element as well. The equity is valued in the books at 1.04 BN so we are 40% of book. Something has to give. This is not a vote of confidence in AB.

Another thing I cant work out is why Jock the Sock with his shiny red nose is still showing up on the front page. I know it is christmas soon but we don't need "Rudolf" to get into the christmas cheer. He was rubbish and was rightly tossed out but he is no Page 3 that we want to announce that we had anything to do with. Get Martin in there. Houston - we have a problem!!

Hi beerbull. I agree. I think the fact of the matter is that even of js thinks that our debt structure is straight forward it isnt as stated by the analysts (has come up several Times during the investor calls) and a big offender is the magnus deal that i admit to struggling to understand but think i Do now. It is off balance and We Do not want more off balance items. Essentially i think not until debt is under 1 bn and or brent jumps to over 80 Will our sp move upwards. The result after the cMd has been nothing short of disappointing....again

Agree although i am resigned to the fact that the so Will be tightly controlled Below the Ri price

Hopefully ab has not caused irreparable damage to the sp. Personally i think the cMd was overall good but personally i believe he has dig himself a credibility hole. I think that two RIs was just too much for most IIs to stomach. We lag greatly when compared with our peers that it is an open question which peer we should be compared with now - failed shalers? Even they have a much superior pe ratio.

Hopefully not another downtime at kraken. When did it leave last week? Tuesday?

It is frustrating no doubt about that. I had a look again at the profit after tax number from H1 and at 44m usd it is not great. Nevertheless, the fundamentals seem to be improving. But let's be honest - tying money up in Enquest is a cost - if the money was invested elsewhere the returns could be very compelling and here they are negative so the board needs to step up.

Hitman - what do you estimate production will land 2020. My guesstimate is 72k boepd. It is always a challenge with Enquest but I expect some improvement over 2019 which should land around 68k.

During 2018 and the beginning of 2019 Enquest was plagued by operational, financial and market risk. In my opinion now that debt is on its way under 1.5 bn and heading towards 1bn and Kraken is firing that it is only the market risk remaining and even that looks like being solved with the shale meltdown. Time will tell. It looks like the stars are aligning for 2020 - 2021.

Hi pelle. What to Do? It has been and gone. Either we plod on or implode. It has to change. Hopefully some analysts Will pick up the message.

Thanks for clarifying on the 150 base capex. I thought I heard 100 but 150 sounds reasonable. I guess with that and what they outline for Magnus, Kraken etc we are probably looking at capex of 200m next year. I too am also looking for some 2P upgrades. Hopefully as that analyst report evidences the tide is slowly starting to turn. I think the figures for next year look really good even with brent in the low 60s and that we are getting a premium for Kraken oil. Then the big If if is the american shale industry has peaked. That would really set a cat amongst the pigeons and as analysts write there are few big projects coming online after 2020.

Hi E121 - agree on your points re next years debt repayments and indeed I would add that I don't see any issues with 2021 debt repayments. I think Enquest will take a sizeable chunk out of 2021 payments next year. As I have written I think that towards end of next year the economics will look compelling and hopefully in march 2020 the market will start to get the message - even I did eventually :-).

I sadly agree pelle. Therein lies the complexity. There are a lot of ins and puts that are simply put complicated

Hi Pelle,
That makes sense - thanks. Did Enquest then get 100m back from BP as I understood? Anyway, I think that JS simply did not get it when the analyst said that it is complicated because it is when you compare with other companies and it is off balance sheet! I believe that Kraken has about 5 - 7 year left. You can see it when you look at the long term provisions. There is about 600m remaining and on average they pay 100m per year. Nevertheless, it appears to be the case that enquest has put a line under their financial troubles and by this time next year all things being equal it should be a thing of the past when net debt is on or around 1 bn. The real story is what will happend with the oil market h2 20202 - it appears that growth in us production is decelerating and not too many international projects are coming on stream. Enquest appears still to be highly leveraged to the oil market so should brent inch up that should be reflected in the sp and then IMO2020 should have an impact. We still are clueless as to the premium. I do think that we would be better served by having Bob step up - he seems to have done a very good job and we would not want to lose him.

Hi Romaron. Accept your explanation. I admit I took a very quick glance at their report and may well have mixed up 2P and 2C as you write. Apologies.

Nevertheless, I admit that I am struggling with the set-up of the Magnus deal. Londoner/L3/anyone can you try and explain simply how it works. We initially had a vendor loan for 100 or 83 m gbp and then we paid 100 m last year and had a loan of 200 and we have paid off the first loan and now we got back 100. This is so confusing and this is what the analysts are talking about. Never mind the cash flow - that I think I understand. We own the original 25% and now have a 50/50 split on the remaining 75% up to the point we have paid bp 1bn in fcf? Thanks in advance!

Everyone - have I misinterpreted that now that we have entered into the 50/50 split with BP as of last half year reports does this mean that all debts are paid down or are we still working paying off the 100m vendor loan?

I think to the point of one of the analysts that Enquest has a complicated financial structure this is one of such an example. In my opinion JS saying that he didnt think so missed the point. It doesnt matter what he thinks but rather the market and if the market thinks it is complicated they value it on that basis. The sooner the vendor loan is paid off the better

I would really like to understand what is a fair value for enquest. In my model if I compare the enterprise value at year end last year when sp was 16p (2.26 BN) and where we will end up with a net debt year end of 1.49 bn we should have an sp of 36p (assuming EV remains stable). Back then I might add brent was considerably lower than it is now. However I understand 2P reserves are important when valuing oilies and 2P reserves have been consumed during the year which reduce the EV somewhat. At year end 2018 2P was 245 and 2c was 198. They talk about 263 2p reserves being added on slide 7 which is the same amount as at year end 2018 so I assume at this stage no new 2P have been added during the year and assuming we end up producing 68500k per day that is 25M consumed. So we have 2P of 220M left at year end. Using a same barrel valuation as at year end 2018 (9.2 USD per 2p barrell) I get an enterprise value of 2.03 BN which after reducing net debt should leave a mcap of 503 m usd which is 30c per share or 0.235 p. This is simple bandit maths but maybe provides some clue - regardless we are undervalued. So hopefully they will promote some of these 2c to 2p at year end. Similarly, if we roll the year forward to end 2020 and we consume 26m barrels (72k a day) then we have 2P of 194M which would give an EV of 1.78 bn and if net debt is 1bn then mcap should be 780M or 36p.

Premier Oil has an EV of 2.93 BN and 2P reserves of 673m. I think lifting 2P reserves will be key as well as a re-evaluation of the oil sector in general.