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People should know I’m a long term shareholder by now so would appreciate genuine challenge. I agree with the markets reaction. The level of forward guidance on financials and degree of current status update was simply insufficient. They mention COVID was a significant event and we all agree. By this very nature they ought to explain where they stand post lock down. Terrible disclosure
Romaran, finally this baby is starting to turn. Echos of 1999 tech bubble where value investors body slammed market returns from 2000-2004. The financial media call them "reopening stocks". I call them low multiple businesses that produce cash flows with predictable economics.....they dug their heels in today. Does that tell you the economy is about to start moving. Oil pared its losses too
This is just rant. You need'nt respond. The FTSE needs a backbone. It follows any downside in US markets and then flounders on any upside. Whilst i want a Brexit deal, i honestly think we have to draw a line in the sand very soon. What is holding FTSE back?
The public and the EU have to realise this tory government is not the same as the previous....they are perfectly willing to walk away. There is absolutely no chance of the UK agreeing to state aid rules...I have some experience in the area and its an absolute minefield. Just a thick sludge of red tape usually designed to benefit Germany and France at the right time. Barnier needs to just move on and await pressure for other capitals.
Looking at the chart and the FTSE hasnt moved since 1998. Is that right? Could this be our time
Squif and Chilts, the magnitude of the residual loan outstanding at maturity, in this case less than 50% of the RCF at Oct 2021 which is c. 15% of total net debt, has a huge bearing on whether an equity raise is required. I could wrong and appreciate your view but if there is $200m left on the RCF i would be surprised if they do a raise. It would be very unusual
I thought it was a very positive call. Conservatism and clarity over key discussion points. ENQ share price will be massively leveraged to the oil price now, quite rightly. The moves today are simply because oil is being slammed due to refiner maintenance. Everyone knows it on this board....we need a vaccine read out ASAP. Simple as that. The more effective a vaccine has been in a phase 3 trial the earlier the read out will come. If anywhere close to 80% effectiveness then expect read outs next month. Then boom goes the cyclical stocks.
Investors are incorrectly getting their knickers in a twist about this damn RCF. If i heard JS correctly...$60m payment next Spring no problem and to the extent there is residual when the bullet is due, he see's no problem in refinancing based on his discussions with lenders and the level of collateral the reserve base presents.
Whats the issue?
L3 when you say get the hedging right do you mean he should be able to predict macro events and the oil price? Another national lockdown was in October was a plausible event back in May/June and sub 20 oil prices again may finish his company.
I wanted to see more detailed guidance on the RCF as did the market. I do not expect ENQ to move until this further clarity is provided on how the $440m of RCF loan will be met under x, y and z scenarios. Solid performance but guidance on the elephant in the room somewhat frustrating
Solid, pleased, would have liked more on RCF paydown but well done AB for steadying the ship and staying calm.
L3, think you are obsessed with the hedging side. Whilst we dont have Soros on the hedging desk, 5.1m barrels still leaves a significant slug of barrels exposed to spot so think your comments are weighted too much to the negative.
This disconnect is not specific to ENQ. E&P equities are still being hammered notwithstanding NG prices moving upward significantly and oil tracking upwards. I try to avoid looking at the macro but as a citizen find it interesting. I liken the combination of zero rates, the circular impact of the increase in index / passive investing and focus on ESG ...a time bomb ready to explode. I do not think you require the brain of Alan Greenspan to ascribe a decent probability to this happening........Any unexpected rise in inflation, which is plausible given the scale of central bank QE, followed by subsequent rise interest rates would significantly reduce the price earnings ratios. That is mathematical and not up for debate. The crowded technology, software excess and speculative names like Tesla / sales force / zoom are the exact stocks the main indices (S&P 500, dow) have been pumping given the way these indices are weighted when constructed and check the ESG box. This would cause significant permanent capital loss. Meanwhile you could have oil prices rise (probably contributing to the inflation in the first place) and E&P equities will be looked at more favorably. One thing for sure......there is no excess in E&P equities atm thats for sure
Blackrock and passives have already reshuffled their index funds in anticipation of FTSE 100 dropout which has caused natural pressure on the share price. In my experience, this will already be largely complete. I expect major moves upward from here
Yes cash continues to roll in but reserves are also depreciating. SQZ needs to demonstrate we are a company that can replenish reserves at low finding cost per boe within a reasonable period of time. Unfair to ask for an acquisition this early though imo. A clearing process has yet to begin in the North Sea and energy as a whole. Once the dust settles and buyer -seller conversations become more rational, im hopeful. I would like to see detail on their capital allocation policy though in the interims given its 50% of the EV
Fair enough. I hadnt looked at the price in a while as been away. Thought i would have been pleasantly surprised though given NG prices. Ah well, look forward to the update next month. As the dust settles, hopefully a clearing process is beginning in terms of assets up for sale and passing our desk.
Cant find any news to justify this drop, especially given gas prices have surged. Seems very strange. Hope there is nothing up with production/operations and news has leaked. Very comfortable holding but we need the interims here asap
Loaded up as a new holder at 60p. Happy to hold this for 3 years. Fish in a barrel comes to mind. Let them cry Netflix. Let us cry unwavering demand for live shows, content production globally and Britbox for free. Dear me, we are taking 4-5x FCF here. I will go heavy into this the lower it goes
L3, i agree with most of what you mention, particularly around ENQ prospects being solely and firmly in the hands of the POO save for any unexpected operating/production clangers. One despises being drawn into macro forecasting given its an unprofitable way to invest however, taking further the key components that will determine the POO in the next 18 months..... We can say with confidence a vaccine will be announced between now and October 2021. Timing unclear. An approved vaccine sharpens the accuracy of the oil demand curve. A vaccine announcement is no longer simply scientific. Its psychological impact in terms of boosting confidence of humans across the globe and ability to plan will be enormous. This will impact economic activity and be a huge driver behind POO. The timing of the approved vaccine(s) and visibility over its rollout will be a huge event for ENQ.