The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Good work NH. Looking forward to seeing confirmation of this at the next RNS (in March I believe).
Will be interested to know when the company expected the operation to be complete based on their projected production figures for 2020 - I'd like to think that given the operation is done already then we can move towards to higher end of the projections.
Pros
- Overall debt now below $1.5b - that's a decent landmark to hit. Next stop $1b
- Paying off the remainder of the 2020 debt now is a real sign that there is cash available
- OPEX now at $21 boe which is impressive
- Q1 hedging - $65 floor is favorable compared to current prices
Cons
- Would like to have seen more news on hedging for the remainder of the year
- Would have liked further information on the status of Thistle and Heather. Some indication of progress would have been good
- Disappointing in the production targets for 2020, but I would not be surprised if AB was looking for another acquisition later in the year
Overall a 8 out of 10 for me
Pelle
It would be good to see some restructuring on those bonds - although not sure what scope is available? 2023 seems a long time to be having those hanging over the head, particularly if FCF is available and the RCF is finally paid off (maybe by the end of 2020?)
E121 - apologies, perhaps I was being too general by comparing those companies together. In general I was just thinking of those with North Sea O&G commitments.
I know you mentioned HUR, keeping it brief (as this is ENQ BB) what are your thoughts? I've followed for some time and see value there in the current SP
Volcano - I believe the recent rise is the market finally waking up to accept the true value of ENQ. Appreciate past projects have gone badly wrong and have put a black marker over our heads, however this should not be the case going forward and I still the potential for significant upside here, particularly if we look at how we currently rank against PMO and particularly TLW. no slight against those companies but there is still much to be had at ENQ to bridge that gap.
Out of curiosity, has anyone yet done analysis comparing the key metrics (debt, production, average BoE etc.) of ENQ compared to its "similar" peers in the market, so the likes of Hurricane, IOG, Rockrose, GENL etc. Would be interested to know how we stack up?
Ammu123 - it depends on your assessment of "fair". If by fair you mean in comparison to it's peers, PMO, TLW and the like then I would still consider 35p to be highly undervalued.
The Company still carries considerable risk but the steps it has taken over the last 18 months has put it in very good stead going forward. Debt reduction has to be the main aim for 2020. I am not too keen on acquisitions in 2020, although something similar to the previous Magnus could prove beneficial.
I would be intrigued to hear other views on what they believe a fair price is?
This sure has brightened up my Friday! GLA
Agreed, PMO have proven (on paper) to be better operationally. That may change once full year 2019 and 2020 results come to the fore.
Both look like very attractive buys at present. I did ponder whether ENQ would benefit from further acquisition this year but I feel the market would react poorly to this and the main aim should be debt reduction this year. The only way I think it would work for ENQ is if we acquire assets at no cost now but pay out future production - but I'm not too wedded to that idea at present.
GLA
Jan
I'd like to think of us more of a "hibernating bear"... although it looks like we've slept through 2 winters rather than 1.
The situation with TLW is really grinding my gears. Anybody know who the analyst is at Cannacord that covers us and them? Their current target for us is 15p and for TLW is 60p. You'd argue that it's a good "guess" given that both are trading around those ranges but I'd like to understand why such the disparity in the SP... I'm just not seeing it??!!!! Thoughts?
Itsaponzi - I agree with you (as unfortunate it is for TLW on a day like today), you'd argue they are still grossly overvalued. If you were valuing them relative to us then surely the SP would be hovering near to us... similar production guidance for 2020 and twice the level of debt
PROPERLY is definitely the right answer. On 30 September 2019 oil was trading under $58 and the SP was 19.13p. Today oil is up almost 10% and we're down around 4%.
So we're not tracking POO (in fact doing the opposite) and we're not tracking the fall in debt (again a slight inverse). Market sentiment is horrid and we must have a big red X across our name among all II's.
Not really much we can do than sit and wait, and hope that you have enough free cash to top up at these ludicrously low rates.
Thanks for asking KO. I assume no indication of how much additional hedged in Q4 2019? Let's hope it was something in the mid to high 60s, although we haven't been great at this in the past so we will see.
To what extent are we able to put this Q forward to them on CMD? Or is that no an option?
Ufufuo - it's good to hear that there are opportunities in Tanzania that are presenting themselves. All we need now is to get this license agreed so that we can take advantage.
Long overdue but hopefully worth the wait.