Member Info for Stevo12

VOR

Just to correct one matter. Enq was not FCF positive in 2025 at $68 oil. Effectively 2025 FCF neutral at $68/ barrel.

Production in 2026 flat. Higher Opex and payments to overseas governments, EPL and Capex Lower, interest and lease payments the same.

VOR

There may be some operating leases included in OPEX but i am referring to finance leases which are excluded from OPEX. See company cash bridges. Management disclose in 2025 Financial statements the 2026 finance lease cash payments.

OPEX is guided at $450m, CAPEX 160m, ABEX $60m (£43/barrel at 43k BOEP). You then just need to add Lease, Interest, EPL and then payments to Malaysia and Vietnamese gov (PSC< Royalties and corp tax) and then divide by production guidance.

OILV

I will ask again for the Hundredth time, please provide a breakdown of how you arrive at your 2026 cash cost per barrel forecast.

Management have provided specific guidance on OPEX, CAPEX and ABEX ($670m). What have you estimated for 2026 cost of leases, interest and EPL. Also what cash cost have you estimated for 2026 PSC, Royalty and Corp tax in Malaysia and Vietnam.

Please provide and we can then debate your forecast. It is no help to anyone to pluck a number from the air.

Ok Hunbah. if you want to keep it simple and given you seem to have most umbrage with the PSC forecast. I will wager you £50 that total payments to Malaysian government in 2026 (royalties, PSC and corp tax) will exceed $100m.

The payments are detailed each year in an RNS so no debating.

Hunbah

You have to adjust for oil prices. I am forecasting what it costs Enq and Serica to produce a barrel of oil equivalent - not what the oil price may or not be which is totally outside the control of the company.

I will bet you that if realised oil price is $80/ barrel Enq will generate less than $10/barrel FCF and we will then adjust the $10/ barrel target up or down by $1 for each $1 variation from the $80/barrel oil price assumption. For example, if averaged realised price is $90/barrel then the target is $20/barrel FCF or at $70/barrel the target is zero/ barrel.

Profit taker

I have got enough bets running at the moment thanks! Unfortunately some of the posters on this board have failed to honour previous bets. I am sure you are more honourable.

Sorry VOM it has been a travel day. Certainly happy to have another bet. Let’s try something different, I will bet you that cash cost per barrel will be over $70 for 2026 excluding acquisitions or disposal proceeds. Accordingly if, as an example, average realised oil price in 2026 was $80/barrel and Enq generates below $10/barrel FCF. I win and above you win.

£50 to charity of winners choice

OilV is predicting cash cost per barrel of mid $50s. LOL

Hunbah

The PSC is a variable which is linked to oil price, OPEX and CAPEX. The later 2 are largely in the company’s control and are predictable, the oil price is not and this is the true variable -OPEX and CAPEX will be the same whether oil is $70 or $90/barrel.

I am not saying my PSC forecast is 100% accurate and will likely be plus or minus 10% at each oil price assumption. I have rerun my model against the 2024 and 2025 PSC payments and it was out by approx $5m in both years. The 2025 PSC payment will be reported by RNS in June 2026 but can be derived from 2025 financial statements recently published. I have calculated Royalty and PSC payment at $60.1m for 2025 and you can hold me to account when reported in June 2026.

As all forecasts, they will be refined as the year matures

Feels like another bet coming on!

Profitaker

You are on. To a charity of winners choice. Just to clear if 9% plus warrants then this is an effective rate over 9%

It isn’t assumption driven, it is oil price driven and knowing the FCF at different oil price levels provides a solid platform for valuation calculations.

Yes the future oil/gas prices is the great unknown, although both Enq and Serica could lock in 2026 revenue with full hedging to year end and we would then know + or minus 5% what both companies FCF would be for 2026.

Kraken

Not ready to pull trigger just yet.

VOR

While there has been a reduction in risk (I remember being paid in PICs for 2 years), risk free interest rates (10 year gilts) have risen over last few years and unlikely to fall this year. So while Enq premium to risk free rates may have fallen the risk free rate has increased since the last refinancing.

The recent RBL was issued at a premium to base of 4-5% if I recall correctly and has security over reserves. The bonds have no security and will require a premium over RBL rate - base plus 6% I would guess (about 11%).

If SEK moved at the same time as i posted I had moved in early April, he would have sold at 13.1p and bought Serica at £1,27 and Harbour at £1.53.

SEK

Yes i have run FCF model for Enq and Serica at $60,70,$80 and $90 oil.

I have been very clear i do not currently hold any Enq equity, but have a very significant holding in Enq bonds which have paid a very handsome 9% for last few years and I am expecting the UK bond rate to match the US high yield bonds at 11.25% when refinanced later this year. Would be very happy with a few warrants as well.

I am very happy to have moved my Enq equity into Serica in April last year and as i said at the time, it was purely a defensive move as we faced into a low oil price environment for 2025 and 2026. Well Trump has certainly changed all that. The political pressure is now mounting on NS licences and EPL and I am expecting a change this year which will start with Rosebank and Jackdaw being approved. A removal of EPL will benefit Enq share price more than other NS O&G companies and I estimate could add £200-300m to Enq’s market Cap. Serica will be higher in value but lower as a % of share price - possibly 40-50%.

I am seriously contemplating moving back into Enq equity if removal of EPL pressure gathers further and oil price increase looks sticky - I think we will know more by end of April and approval of Jackdaw and Rosebank may be my trigger.

Hunbah

I have run the model for Serica and Enq at $60, S70, $80 and $90 oil and happy to share all 4. I have also now update for EPL, UK, Malaysian and Vietnamese corp tax.

The model allows a FCF projection at any oil price adjusting for fixed and variable costs. However I recognise one of the current limitation is an understanding of how PSC % changes with oil price and profitability. I have assumed 40% at $60 oil increasing to 60% at $80 oil equivalent.

This is a significant assumption with 6k BOPD growth in Malaysian production and PSC and royalty payments that could range from $100m-$200m with an oil price range of $60-90/barrel.

Unfortunately for both Enq and Serica the Hedging (which I understand has to be used quarterly) is going to dilute the current elevated oil price benefit in 2026.

OilV

We had two bets. One on 2025 year end net debt which you lost and are refusing to honour. our second bet on cash cost per barrel for 2026 has yet to play out but I am 100% certain I will win. We will revisit with 1/2 year results. However I am sure you will welch on that bet as well.

I am still waiting for the details of your calculation of cash cost per barrel. You can’t keep quoting numbers without any backing.

You have not challenged a single number in my workings

That is the analysts forecast. Over $1b over next 3 years at $70 oil. 15m barrels per annum at $20 -25 per barrel FCF is very achievable

I fully understand how PSC work and still waiting for your workings and for you to pay up on your year end net debt bet

Hunbah

The comparison was done at a fix oil price of $70 oil to highlight the difference between Enq’s and Serica’s 2026 FCF breakeven.

The analysis can be run at any oil price and naturally the $20/barrel gap grows as oil prices increase. Knowing the fixed and variable cost per barrel enables a reasonably accurate prediction of FCF as oil prices develops

At $70 oil Serica is projected by analysts to generate over $1b of FCF whereas Enq will still be a debt prisoner. The reality is that Enq needs oil over $85 to start to eat into its debt and reduce interest costs and it looks like it will get for at least 2026.

Hunbah

PSC is calculated as a variable using the following assumptions, OPEX of $25/barrel, Oil price of $70/ Barrel and 2026 Malaysian CAPEX of $30m. The PSC ratio i have assumed at $70 oil is 50%. We do not know the actual PSC % relative to oil price but will be in the range of 40-60%. We know that Royalty and PSC payments were $62m in 2024 with production at 6K BOPD and oil in mid $80s (resulting in $19/barrel for PSC and $8 for royalties).

The 2026 forecast assumes 12k BOPD for Malaysia resulting in PSC cost of $12/barrel and Royalties of $7/barrel. The cost per barrel increases as oil prices rise and at $90 oil PSC and Royalty increases to $30/barrel.

Maul

I agree that Triton uptime is still a major concern and until Dana can operate the platform for at least 12 months without significant downtime, this doubt remains. Also there is a major task to integrate the 5 acquisitions in 2025 and exit the year at 65-70k/ BOPD.

However these risks are priced into the share price and, as and when they are dealt with, the share price will respond but not expecting this to happen until Q4 2026 at earliest and more likely 2027. Replacement of EPL and an increase in the 12m+ forward oil price are the key short term catalysts for all NS O&G companies.

OILV

I have provided a line by line breakdown of Enq’s and Serica’s 2026 pre tax cash cost per barrel on Serica BB. Please do the same to support your numbers or at least challenge any of the Serica or Enq numbers I have tabled. We can then discuss.