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Hi all
Apologies if this has been discussed before but am relatively new to the SQZ board (although has been on the radar for a while) and trying to decipher the companies break-even cost? Has this been disclosed previously? Thanks
Chilting - I must admit at times I do also agree with you that a lower price for longer will fend off more of the producers. However the sentence "assuming Enquest can ride the bad times" is more important than worrying about other producers, who ultimately have very little impact on overall production (particularly the US). The key thing is that Enquest has cut its high-cost production units which ultimately must help going forward...
Interesting article Pelle. It shows that production had gone up from 850k to 5m in recent years and that is despite the fact that OPEC were making cuts to try to alleviate world oversupply during the period, so why shouldn’t they suffer Now when they ignored the rest of the world. They have been overreaching for far too long and are one of the main contributors to the downturn in oil price.
The RBC target of 1p... has analyst who gave this target been put to question? Despite the fall in oil (and I feel like we could feel it a little more in Q2/Q3) I could not foresee the SP being anywhere near that level.
Let's hope they are present at the AGM for grilling
Given the recent decision made to have the 2020 AGM done virtually then am I right in saying the way to gain access to this is via the website?
https://www.enquest.com/investors/shareholder-information/annual-general-meetings
Or is there another way?
Appreciate there is still a few weeks to go until this but it does say on there that questions need to be sent in by 19 May, so would be interested to know the kind of Q's that others will be putting forward...
Hi all
Had Serica on the radar for a while now. After reading today's results (which look very positive!) what are peoples thoughts on a possible takeover? We would look a very appealing prospect to a larger player. Reminds me of Ithaca when they got snapped up by Delek a few years ago before they had a chance to explode!
GLA
BTFATH - I think we're going to see volatility like this quite regularly in the short-term whilst the market tries to fully understand what is going on. The uncertainties with OPEC and agreements only add to that.
No harm in trying to trade the swings, you just need to be careful you time it correctly.
My thoughts after a quick skim is that this a now a much "leaner" company - we're taking the higher producing fields off our books and concentrating on the low-cost producers. This is reassuring given the current oil price environment.
Seeing BE of $33 in 2020 and then $27 in 2021 - the fact they have stated the figure is a start but who would have thought that a few years ago... you have to commend them for this!
No sign of any additional hedging, from what we already knew, which is disappointing but it is what it is, and the market has already priced this in - I was just hoping they would throw a curve ball and tell is that they had some more in the 50s/low 60s.
As Squif says, who knows how the market will react... today is a big day for ENQ given this and potential OPEC cuts. Will go one of two ways, either batten down the hatches and get ready for the storm or sell a kidney and load up! Anybody's guess which one it will be
GLA
I agree Pelle. If the Company knew the break-even would be around $38 (appreciate it would have been higher when the other higher producing wells were still running) and that the aim was to reduce debt, then it would have made absolute sense for them to have hedged more - even barrel produced would have led to profit. That isn't to say they should have hedged all, because no-one could have predicted the oil would fall as much as it has, but they missed ANOTHER chance.
AB really has done a decent job at ensuring that ENQ has survived through troubling times, but he never has helped himself when it comes to hedging.
I agree, all very good points made this morning. I also don't see it as deramping, just a statement of fact that the current price of oil is less than our break-even so we cannot continue to work like this. Yes hedges are in place but they will run out - this HAS to be the biggest and most talked about subject at the next AGM because they cannot keep missing the boat on this!!
Ultimately if you think that price of oil will go higher than $38 in the future then buy now, because the prices will be significantly higher. If you don't think they will then you're better off investing in another sector.
It's all down to a person's own risk appetite and whether you're happy to take the volatility now or wait until there is greater certainty around the oil market / coronavirus / global demand / global economy recovering before investing/topping up. I am still long on this one and cannot afford to sell. I'm happy to miss out on some of the gains in exchange for greater certainty down the line.
This certainly isn't going to be fixed overnight but hopefully those that remain patient could see significant returns in the future.
GLA
NH - No we don't have as good of hedges in place as PMO. It's always been something that we've fallen behind on compared to them. However we don't have any debt commitments in the next 12 months. And for that reason I can sleep a little easier.
The knock-on effects to the global economy of oil price at these levels is huge, which is why I don't believe it can last IMO. I'm in no mood to top up at present as there is still too much risk but I will look to fill my boots at some point, when that is nobody really knows
GLA
Although the decision by SA has hit the fund hard this morning, it may be a blessing in disguise in the longer run by killing off many of the shale producers once and for all.
We have to remember that one of SA's main goals is the Aramco IPO, so as far as they're concerned they won't want to hold the current prices for too long. Plus they needed $85 oil in order for them to break even on their annual budgets so they will still have long-term targets in mind still.
Just another manic Monday!
I recognise that CoV should be treated with absolute caution but the market has certainly oversold it. Either way I see this as being a significant buying opportunity when the dust settles. When that is I don't know but I'll certainly be waiting in the wings to grab some more below 20p... even at $60 oil anything below 20p is an absolute steal - appreciate we're currently $10 below this but that will not last IMO