Member Info for Tommo1985

I wonder if this is “leaky”…

Between Liebor and the fake tories the UK really is trying to reach net zero energy.

https://www.gov.uk/government/news/uk-departs-energy-charter-treaty

Our hedges have changed.

For 2023, EnQuest has hedged c.7.9 MMbbls of oil, predominantly through the combination of puts and costless collars. The average floor price is $58/bbl and the ceiling associated with the 3.3 MMbbls of costless collars is $75/bbl. For 2024, EnQuest has hedged c.3.2 MMbbls of oil with an average floor price of c.$60/bbl in the form of puts, with the call element of the existing costless collars having been bought back during the first quarter of 2023.

Ps I see the Telegraph has published the Traitors article in full.

https://www.telegraph.co.uk/business/2024/02/15/labours-net-zero-obsession-is-betraying-the-scottish-people/

today's update was a very lovely surprise. i am though slightly surprised that at 31 october net debt stood at $585m and has come in at $481m just 2 months later... even without the bressay/fpso deal coming through. $104m to the good in 2 months... as an aside i was expecting / back of a *** packet the numbers to be circa $500m even including the sale.

i know we got some $88/barrel hedges in at one point, and equally the move from collared/capped hedges to $60 minimums & uncapped could be a factor but does that make enough difference? anyone with the technical skill to have a look?

I'll go from -£10,000 to probably +£30,000. It's ridiculous government interference cause such damage to companies and shareholders. But that's what happens when you rinse some companies for 75%+ of their profits versus others for 25%...

Saudi Arabia of wind turning the lights off.

A rather depressing post however it is darkest before dawn. How many times has a windfall tax been levied on the North Sea and how many times has one been removed?

I am very glad Labour are cancelling most of their green investments. Because if they aren’t getting energy from windmills, they are going to need oil and gas. In theory they could get it from the Middle East or the US. But there is always the risk the Middle East stops selling them enough for a reasonable price and US shale is looking a bit long in the tooth so could see production turn down if R&G are correct.

This feels an asymmetric bet as the downsides are pretty much in and upsides entirely discounted.

My price target was 103p, getting close now.

Hope they got a good discount off that mining equipment as its cost shareholders £5m off their market cap.

All very nice in theory. However in practice production has fallen 30% since the EPL arrived and 90% of firms have cut investment. What are the chances Labour rug it too?

Also all the firms that have spent loads developing in the past have been utterly rugged so can’t fund them anyway, especially with current interest rates and anti oil Energy Stops Growing rhetoric.

I hope we do not hedge. Last time there were windfalls, our hedges cost us $203m in 2022 (and another $67m the year before).

Currently we have a counter cyclical draw in oil, and a middle eastern war that is just getting fired up.

No thanks.

We keep paying off our debt and despite lower oil prices and a robbing government are kicking out a LOT of free cash flow.

If a few missiles hit iranian oil fields or the houthi's succeed in blocking in Saudi oil or US production rolls over as G&R suggest we are all on for a lot higher oil prices. My aim here is to hold until the debt is paid and then shift them out when oil roofs it. Until then we wait.

If development is not permitted by the UK, after all the costs so far, I can only imagine the size of the damages award for Sea Lion. Rockhopper has the lawyer contacts after all after taking Italy for £200m. I doubt the government will fancy a $20bn award against them.

Https://www.telegraph.co.uk/world-news/2024/01/19/ursula-van-der-leyens-eu-engine-ban-opposed-own-party/

EU increasingly likely to roll back on its ICE car ban in 2035.

The real issue - if I'm adopting a Stevo perspective - is that Enquest is currently return free risk.

It doesn't pay a dividend, there are no buy-backs and it is still mired in debt.

If there is a global crash and oil goes down, returns are still further away and you are accepting further declines in share price.

Then there is a stupid government risk - and it is also probably too small for much institutional investment.

I hold a lot here. But I've been holding them a while and am well down on the current share price. We have to hold them for another year at least before returns arrive. Not everyone will be game for that when you can get 5% in the bank or other shares that are offering big dividends NOW.

However I do like that this is probably on a FCF/EV of 3. And the windfall tax does eventually end in 2028 unless we get still more thieving government.

The main Q I have about ENQ is this. We have 12 years of reserves but how much will it cost to get them out of the ground (and what will be the decline rate of producing wells).

$10 a barrel is less than our profits producing even post epl so doesn’t worry me.

Slightly surprising to see ENQ up 2.35% when oil is up 3.5%. Really Enquest should lead oil prices not lag them.

As a Rockhopper investor, I know their partner is Navitas Petroleum, who are Israeli HQ and Listed. I was worried war may lessen their ability to develop - equally it may drive it.

Looking at this given they can buy notes under par value and save 11.625% interest as well we are basically running the debt down by 1.1625 for every pound we pay?

EPL does allow new production capex to be set off / paid immediately against EPL IIRC.