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"I'll take 45p for now". I agree Romaron. Plus we have to remember that 45p equates to a more than 100% return on the RI shares being offered at 21p.
Once the debt gets whittled down further then we can expect a forecast higher than 45p. For now 45p is a figure that we shouldn't scoff at too much.
MO, do you happen to know (or can provide a link) the current supply/demand ratio for global oil? I think I remember it being 2.3:1 around 2 year or so years ago, which prompted the POO fall to $30.
Thanks
From the H1 update, the two most significant parts to the c.$2 billion debt are the RCF and bonds. The H1 update says that $25 million was paid in August 2018, with further payments of $195 million and $175 million due October 2018 and April 2019. This should put the RCF at around $700 million after April 2019.
Before I do further digging, do we know when any other significant amortisation payments are due on the RCF?
And when are the bonds expected to mature?
With POO seemingly playing ball for the time being the main thing holding this share back is debt figure so am trying to get a better picture of when we can expect this to whittle away.
GLA
I agree completely Jan. From 2015 to 2017 my biggest concern was whether the company had enough cash available to pay outstanding debts and avoid declaring insolvency.
That's definitely not the case anymore! It would be good to have an interview with AB where someone asks him the question "is he able to sleep a lot easier now than back in 2016" as I'm sure was having restless nights back then.
Fingers crossed for a more fruitful future!
GLA
DD
Did you say that you had seen a copy of the prospectus already? I am unable to find it on the website. Please could you provide a link (unless of course this was provided by your broker and so unable to send).
Thanks
Thanks MO. So by acquiring the additional 75% we would be getting an extra 13-15k boepd, is that correct?
Very crudely, even if if produces for only 300 days a year then 13k x 300 x $60 is an additional $234m of revenue per year. Would need to do something more accurate to get projected payback period for the project. Happy for one of the more astute to share any initial calculations they may have done?
GLA
Do we have a feel of what the additional 75% of Magnus will mean in terms of additional boepd? And what is the break-even for the field? Somewhere in line with Kraken would be nice.
Just trying to get a feel for the total production and costs post-acquisition.
I agree with your reasoning Jan.
HeresHopin - your method would have been optimal. However you run the risk of selling and then rising. Albeit I could not see that happening.
Unfortunately I missed the boat of being able to sell as am in a meeting all morning. However I also intend on buying the shares at 21p and seeing what I can do with the difference whether it be immediate sell or hold until we get back to the levels we were at at the start of the week.
My only Q for anyone, what is the latest date at which I can purchase more shares to be eligible for the rights issue on any new shares that I buy? Potential to gain funds from elsewhere, I just need to figure out what date I have to do so.
GLA
HeresHopin - I agree. The rights issue feels like a 1 step back 2 forward kind of deal.. although it could be a 1 step back 3 steps forward deal (i.e. SP falls back to around 30p post rights issue but with significant potential of 3x increase over following 12-24 months).
All guess work at the moment and will need to wait to see how the market responds.
Squif, you have to remember that AB agreed to the Kraken project when POO was well in excess of $100 a barrel and there wasn't a bear in sight across the oil market. No-one, not least AB, would have seen POO drop as low as it has done over the last few years. Therefore I think that AB has done a fairly good job at keeping this companies head above water during very troubling times.
Has he delivered shareholder value like some other oil companies? No. But none of them were not committed to as big a project as Kraken at the time.
I imagine that if you were to ask AB would he have agree to Kraken knowing that POO would turn and the bears would come out then he would have said 100% NO!!! However the company has very much been in a state of survival and now moving into a consolidation phase and hopefully growth phase in the next 18-24 months.
Do I believe we will hit 60 in the short term.. unlikely. However I do believe that this share is a very solid long termer. There will be others which I believe you can make more money from across the oil market in the next 12 months but that is the whole point of diversifying the portfolio.
All my opinions, based solely on latest RNS's and current trends in the oil market.
GLA and fingers crossed for Friday!
Jan, E121 - thanks both.
I am under the same belief as you both. However I was seeking confirmation at the risk of missing something. Once the $280m is paid (and the $50m already paid) then we're down to around $800m aren't we? Apologies I am unable to check previous RNS's on my phone at the moment.
Thanks E121, Chilts.
Do either of you have your own views on how the overall debt figure will look at end of 2018 and 2019?
I'm trying to get a feel for how the $1.9B debt previously reported will be working its way down.
I do agree on the Magnus front and exercising that option.
I think the messages being given by PMO are relatively positive and should in some way mirror what I expect ENQ to say in its half year update, mainly:
- Production in line with guidance
- Debt reducing (and expected to reduce in the future)
Both offer good long term potential, provided POO remains over $60
I guess my main thought for ENQ is, assuming POO plays ball and the debt reduces over the next 24 months then what is the next opportunity? Any guesses?