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Hi mo. Do you have correponding Data for Alma?

Agreed. I believe that the Magnus deal is a good deal. Ideally there will be more such deals to be done but AB and JS need to explain this properly to the market at the next investor call. Most of us are not fully clear and Jeffries also seems to be confused or pissed off. I am assuming a 5 year payment of the 100m until proven otherwise. That gives Enquest a good cash flow the next 5 years.

Hi Pelle,
Capex - 180. Have you read that anywhere? Yes I agree that 0 fcf could be at 43 (need to check) however Enquest needs to pay off 275 musd next year so when I wrote be was 51 that was the level so that Enquest would have that money in the bank. Does that align with your thoughts?

Pelle, testing different figures then 2019 (prod 74k realised price 51), 2020 (prod 72k then 50) and 2021 (prod 65,5k then 70). So sure we could live with a realised price above 51 the next two years and meet our rcf payments but then we need a much higher price in 2021 of 70. I have assumed that the Bonds do not need to be paid back until 2022. I have also assumed that Alma workover will help Cns climb to 7000 h2 2018, and then 10k 2019 through 2021.

Hi pelle Same production figures as i wrote yesterday morning. 2019 and 2020 would be cash generating but 2021 when enquest has to amortise 455m is where all excess cash is eaten up. Be is as you say lower 2019 and 2020 but higher 2021. However IF i use same price all 3 years then 58.

Hi pelle. Just updated my calcs with your share of 62,5% of Magnus and outstandibg debt of 100m and steady Annual repayments of 20m and i get a break even of 58 per barrel. It is still very inportant that poo stays comfortably above 70.

Agreed kraks. The Magnus deal was necessary to diversify but i agree with L3. Execution must improve. I understand that things are difficult but so is getting up in the morning for some. Kraken needs to show considerable improvement.

Thanks for your help pelle. Will update my spreadsheet.

Magnus around 16 and rising to 18 and then falling back. I will check on your figures for the loan and defer to your analysis IF correct. Only wish that AB had Done sensible deals like Magnus before he blew over 2 bn on kraken, Alma, scolty and galia :-). I think that the Details need to be better explained to the market. It is shocking how complicated everything is. That would probably push break even closer to 55 realised price. Thanks for your help.

Hi pelle. I see your take on Magnus. Remember that the Magnus debt is not currently part of the 1,97 net debt. That puts our quoted net debt at 2,17 then. I dont know that enquest gets 25% + 50% of 75%. I think that it is 50% of everything up to 1 bn. The other 50% goes to pay down a debt that is not part of the 1,97.

Hi pelle. I see what i wrote below. It is as i say that after all these deals 45k remains to generate cash flow but the Oz deal which is the difference is going to pay down that Debt. So 74k less 16k for bp, less 3k for Malaysia and 6k to Oz so 49k.

Hi pelle, i havent got the offering in front of me but i think that Magnus was 16k. 8k goes to bp and 8k goes to paying down that debt which is not part of the 1,97 bn. Dont know IF it is off balance but that 200m is not quoted currently as part of the net debt. 3k of the malaysian production goes to the government as part of that deal. Why they keep reporting 9k from Malaysia when 30% disappears is a mystery. Then Oz gets 22% of kraken which is about 6k next year. That does go to paying down that debt so i was a bit flippant so say that it is 55k. What is the challenge is all these intricacies and that is why jeffries raised the flag.

IF enquest can show a meaningful impact on net debt by year end given the current set-up i think that will go a long way to restoring the company’s credibility. That they only managed to being down net debt by 20m in h1 was a huge disappointment. Nevertheless when i plugged in a realised price of 59 that was the outcome. I think that AB has Said that they can survive below 60 but that is simply not the case. In fact that is probably not the case for all the companies with significant debts such as pmo and tullow. Anyway, the Iran deal will be crucial and i hope that poo can stay above 80. Then enquest can generate significant money and that would mean 1bn over commitments by end of 2021.

Haha epic - I got my finger out and started doing the modelling. I don't believe in blindly saying that the CEO knows what he is doing and everything will be fine. It isn't and the sp is evidence of that. AB will be fine because he is sitting on all the information but what about us ordinary shareholders. Hope is not a strategy.

L3 and Twallby - I modelled 74k (2019), 72k (2020) and 65,5k (2021). I have used the production figures for Magnus in the offering document so they should be solid. I have assumed 28K to Enq for Kraken (2019), 24K (2020) and 21K (2021). What is interesting is when you model in that 22% of Enquest's 70% goes to Oz and that Enquests 50% of Magnus goes to paying down the loan to BP. In effect therefore there is approx 45k of the 74k barrels in 2019 that is going to generate cash flow to pay down the debts. I have modelled capex of 250m for each of the 3 years. I have modelled opex at 24 dollars a barrell and depletion at 24. I have modelled 7% of the overall debt going to financing, 10 dollars a barrel for Kraken to Bumi. From what I see Oz and BP should be paid down early 2021 with realised price at 70 dollars a barrel.

I have followed the payment structure for the rcf as stated in the offering. 2019 - 275m (2019), 155m (2020) and 425 (2021). As I wrote earlier if I assume 70 realised price over the 3 years we have a buffer of 463m at the end of 2021. If I put in 60 dollars we have 11m. I am assuming that this H2 we will have a realised price of 70 and a H2 production (including 100% of magnus) of 67,4k leaving us with a cash flow after financing and capex (125m) of 170m (including the 35m for thistle and from bumi). I think we will have a net debt (excluding Magnus loan) of 1,78 bn.

Yeah - have to wait until it is Done and dusted. Anyway, enquests sp hangs more on the price of oil than anything else. By association enquest hangs by trumps twitter account :-). IF poo stays above 75 then we are in the money

Enquest is very sensitive to poo. I have spent this week trying to model enquests finances up until 2021 when the rcf is to be repaid. A realised price of 70 during this period would provide a comfortable buffer of 500m usd. A realised price of 60 and we are scraping by the skin of our Teeth and just able to pay the bills. No wonder h1 looked the way it did with poo at 59. So i can understand with us getting 4 dollars or so less than brent that the market reacts the way it does.

Weny - very interesting parallel. I hope you are not right but it rings true on certain points. Certainly AB has pumped enquest full of debt but thankfully he has invested an insane amount of money in the shares albeit in a trust. It is difficult to get a real handle on the state of the oil market but i guess there are a lot of smoke and mirrors in play

Didnt see his name so assuming he didnt take up his allotment. Poor IF that is the case. Everyone in a leading position should show solidarity. Last time he sold out early on all the rights he acquired. I guess it is better that he doesnt buy anything IF that is the case but then he should quit the company.

Thanks epic. I missed that. Nothing for faysal then?

Jan - they have a small amount of personal holdings like 10000 shares but as you know it shows a commitment IF they personally invest. Sure swinney is Investing his time and reputation but that is not enough. I like the fact that AB has invested an insane amount of money in enquest but i simply question whether he is the right Guy to Lead the company. Anyway i want it stated as i am often regarded as being negative that i am impressed by his level of financial commitment