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Agree. My base case is a positive or not a negative report tomorrow - we already know the headline figures from the ops report. What is interesting is kraken, kraken production, overall production and any comment on seapulse and debt. Typically they dont comment debt reduction apart from the fact that it is important

Tomorrow will be an eventful day. Hoping for glory but fearing it will not be the case

Assuming that the report will remove uncertainties that have plagued enquest sp for the last 6 months but tbh nothing is certain with this company. Kraken is the big problem and it is just sympomatic of the company that when we see a vessel on its way that it changes destination. It just aint working for us

Hope that heather is heading to kraken. This has been a nightmare for long timers since the last results. Ri, sp down to 15,3, talk of writeoffs... you name it. Not holding breath but a little hopeful that can afford food again...

We will have to wait for the explanation on thursday. Naturally npv is already impacted at the front end due to lower production figures during 2017 through 2019 but i assume that production will last for longer and perhaps less aggressive drop off rates. I think the way that cairn did their impairment calculation was a but rough and ready. 20% lower rates than peak of 50 so we impair with 19%.

Sorry - other way around. Poo of 62 and average production of 66k.

Itsaponzi - good summary. I thought that the Kraken finance lease might be a little lower but lets go with 115. If I use an average price of 62 USD for poo (I don't think that the differential will be as high as you quote given the situation in Venezuela) and average production of 66k per day.

I get fcf of 540M USD. Capex of 275M gives 265M for debt reduction. I have PiK or interest on bonds at 75M annually (used 2018 report), and Net Interest and Finance costs of 110 (double of costs for half year 2018 when rcf was 1083 and debt repayments were made).

Naturally, the key assumptions are ave production of 62k (mid-point of estimates) and poo of 66. The average realised price H1 last year was 59.1 and price movements were fairly similar to this year however I think the discount is lower and Kraken mix lower.

Paying down 265 brings net debt to 1509M which is around where I expect we will end up say 1.5 BN to make it round.

Hi hitman - but they write cash capex 220 which means cash paid out. For me this is all about cash generating ability and not so much whether 100m invoices were Carrier forward. I will study the accounts again later.

Agreed pelle and that is probably why Salman mayak got the boot from the hedging desk

Hitman - it doesnt need to be 100m from 2018 as it says prior periods. From that i take that 275 less 60 for kraken less 100 gives 115 to keep the lights on. They do write cash capex in 2018 of 220 so the assumption is that 220 was cash paid out. I can accept that they may do this to smooth cash payments over years and an outlay of 320’or even 350 in 2018 would have been over representative particuarly of we are going down to a run rate of 115m. Whatever, i hate the fact that the rns need to be read 100 Times to understand as AB is playing with items and the continual use of the words approximately and expected. On feb 2019 they know what dec 31 2019 was so approximately and expected are not correct

For us with AB is to be exactly sure what he is saying and what the facts are. I dont like that. Is net debt 1774m - great. IF not then why not.

Hi hitman. Understand that and the accounts will reflect that but IF 100m cash had been paid out in 2018 rather than 2019 then cash on hand would be 100m less and then net debt which is debt less cash on hand would be 100m more. Then my question is was cash capex outlay 220m 2018 or 120m. For accounting purposes it was 220 but it is relevant to understand how fcf after cash capex is. We have assumed that fcf was 220 which while ok is not great. IF it was 120m as creditors will get paid this year then that is a different story. Obviously production was lower but the hope is that fcf after capex will land around 250m. Moodys predicted 450 and less 275 that gives 175m. So net debt at the end of this year could be anywhere between 1500 and 1600m usd.

Hitman - i see your point on the 100m postponed to 2019. One question i have - was the cash outlay 2018 then 220 as reported or 120. IF 120 then we should be with net debt of 1877.

Hi fern - 25 of the 215 was payments delayed from 2018 but i agree that we should be modellinformation at least 200m capex per year going forward. I guess it all comes down to market confidence. The advfn site was highlighting carillion and interserve that went into administration with lower debt levels and higher turnover however i did notice that interserve had shareholder equity of 1m against liabilities of 1,7 bn. That is obviously not sustainable but it is important to keep the lenders happy and pay interest as and when required. That does not appear to be in question here and IF poo remains at or around these levels the fact that premier hedged and enquest didnt will be moot as pmo hedged for 68. Sustaining production around 67k a day and a poo of 68 will enable 1,2 bn to be paid down and capex of 250m a year. By all accounts kraken will be able to sustain production of 35k a day for the next 3 years. Magnus will be around 18k meaning that as long as the remaining assets including Malaysia, Alma, galia etc can sustain 25k or above we will hit 67k. There is upside around scolty and Malaysia. I think the market has not factored in Magnus and this will be the first time they will be able to do so. Enquest has a complex finance structure but net debt is 1,77 bn usd and IF the above hold it will reduce to around 1,52 bn this year. The debt payments to rcf are 200m after the payment made in q4 of 75m.

Indeed - Howard is probably already advising AB and could have been involved inbyte above. I am certain AB is not waiting until the agm to pick his brains

Pelle - you calculating on enquest earning roughly 35 bucks a barrell on Magnus? Sounds reasonable and could be higher. IF we remove the 1 bn that bp will get thats 1,2 bn to enquest. Makes sense that they say a npv of 500m and provision of 491m to bp over 11 years. Essentially enquest is valued negatively IF we remove Magnus from the equation. Approximately -200 musd. That is illogical and must be driven by other forces. Maybe AB needs a White knight. Could bp be interested to buy up a swathe of shares? The new non-exec director looks to be exactly what we need. Someone with experience of creating shareholder wealth. That is currently lacking. No rational investor could be at all happy with the current state. Building up a company with assets with a book value of 6bn, shareholder equity of 1bn and the shares valued at 267m gbp. Least of all AB. I think there is someone who is using ABs predicament to get at him. They are squeezing the value of his shares and know that he is emotionally attached. That is hurting us shareholders.

Does it matter that TL is still there IF dc4 is hooked up and producing?

Good post modestus. I have been stress testing the numbers. IF we do 67k flat the next three years at a poo of 67 then we pay down 1,2 bn usd.

I now understand why faysal didnt take up his Ri shares. We have generated fcf during 2018 that was more or less equal to market cap now.

Romaron - the big difference between AB and us is he knows whats going on. We have no clue