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Addendum to Kraken question - in fairness a lot of banks now just outright ban their traders and other front office staff trading in single stocks for themselves as the regulation and admin just not worth it
Hey Kraken - yes and yes (unless funds or non specific investments)
As to the bot/algo chat that goes on this forum - drives me nuts - i trade and use banks algos all day long - you could argue tht some of the high frequency guys do have bots to take advantage of stock buyers and sellers but they simply dont have any interest in specifically pushing ENQ one way or other. If there is a buyer they will simply pull their ‘offers’ momentarily so stock will go up a little more than expected or on sells they will remove their ‘bids’ so downside move on that sell is more than expected but this whole view of them pushing us down is simple nonsense.
Sometimes they are left with positions overnight but thats just when they get taken out by a broker or client to a level more than they expect but they HATE having overnight positions especially in stocks they cant hedge and are volatile like ENQ
I work on a trading desk (have worked for a decent spread of the banks in past) i understand that for retail investors like people on this forum this is a big deal (and to be clear i am heavily invested in ENQ) but no bank (and especially BAML) care about 15m of stock especially spread over a half year. They’ll have given a good deal to ENQ in expectation they this will serve them well in future biz investments if announced.
There’s simply no ‘edge’ in it for them and no reason to play any games - and the fall out from any silly games just dwarfs any gain they might make on a small fry trade like this
The suspicion i’ve always had is ENQ are buying the bonds back themselves as they yield 11.6% on par - this opinion is also held by my bond desk although with caveat that ENQs bond holdings are very ‘retail’ - with the biggest position in the 11.6%’s of 20m which is with Fido so clearly a grouping of investments (but the other debt holdings are pretty difficult to buy so this is the easy way to pay off 5-10m blocks
But until confirmed who knows?
As to partners - we’d clearly like one but fact is we are not desperate so it’ll be done if stars align
Stov, so if we have not recognised any revenue on sale to rockrose then we paid off 72m in NET debt in first 2 months from oil income? Thats AMAZING - and for record i wish it was true but as much as i love the idea of ENQ more than covering the early working capital positive then still booking in 72m paydown 2 months later i dont think you are right there
But you have your somewhat murkier view on Enq than I do - so lets see if that comes out in wash
Stevo, yeah as i said i’ll go with the companies with the actual oil people
Am somewhat perplexed how enquest have booked the money coming in from Rockrose if as you say its not real but we’re all experts on keyboards at home i suppose
It’ll come out in wash - i’m still very confident on my FCF bet btw!!!
Stevo - So while i agree Bressay and general future development does clearly get affected by gov policy - i am going to go out on limb and say Rockrose especially but also Enquest have clearly done some digging on this as its a hell of a punt for Rockrose especially to chuck in the money they have given the sensational headlines
I am aware on this chat there’s a lot of ‘experts’ (including myself obvs!!!!) but we clearly dont know as much as them, we really have no clue what conversations they’ve had and the fact is they are the professionals in the field
But hey ho lets see what the future holds
Hi - so i broadly agree that large bond issues are priced on market risk free rate and company default profile (enqs profile clearly is improving) - the difference with ENQ is that the bond issues are relatively tiny so demand and supply does come into equation which doesnt normally affect big issues.
Looking at debt schedule of ENQ i suspect the HYN’s are next on the companies radar to pay down (i dont know the term loan payback covenants) as the process itself of buying back bonds is quite simple - and given the 300m size of entire HYN its seems entirely logical that the minumum trade size of 1m that this would start to impact price - and the simple dynamics of the relative strength of ENQs cash flow in a market trading at 89 bucks a barrel market (would love to know if we are locking in some of this price level with swaps as well!!) means we’d have to be going in at decent multiples of this
Saying all of the above i simply dont know what the priorities of the company are on debt paydown now - they always seem to love the RB bond as its simple cash for them and lower rates but we’re in a great position as it stands to have to worry about this type of issue
I understand the frustration of some of the people on this board but the (sad) fact is we’re a small retail investor stock so while the news flow is excellent (debt down to 50% ebitda - and oil punching up) its the lack of buyers that is the issue. Now as a bull on the stock i am happy to keep buying (as i have done recently in fairness) but i suppose i understand the sellers just losing patience. The buybacks will help - but a bonza Q2 update will help as well to simply dispel the pessimism that is out there. I will happily keep plugging away as i expect an impressive fcf fig in the remaining H1 and with RBL gone thats a lot of buy backs or payment of expensive debt :)
Right so we saw the rockrose money flow - coming through basically to pay off last years funding and a lot bigger than we expected
We’re clearly raking it in at over 82-86bucks a barrel (simple cost per barrel vs revenue makes this irrefutable) but i struggle with the 140m rbl pay off as its still pretty much down as existing everywhere else - did we use the rockrose cash (plus another 30-40m) or has that not filtered through to net debt yet?
Am i reading this right? 77m epl? Thats way lower than some were expecting- of am i just misreading?
Right well lots to digest - rbl which was showing on debt page at 190m but in year end update was down to 140 and is now zero - so from perspective of debt costs that pays for buy back on its own (190m was going to have 17m interest)
Also notable that net debt down to 410 means we actually paid that 140 RBL by the 70 cash flow plus lowering positive balances which just helps for clarity and lowers that top line total debt fig
So 15m buyback super conservative but monthly fcf is chugging along nicely and we’ve hit the 50% debt to ebita by Feb!!!
Be interesting to see market response and roll on rest of H1 as thats historically also been net debt paydown period
So re the whole negative debate vs balanced vs too positive - i think steve does prob err to negative a little (hence the bet!) but thats as valid as some of the posters on here who err to being too positive so all in all different views are a good thing - i know in banking portfolio managers love the dr doom anaylsts as it provides a counterpoint to a market that gets far too herd like
Now saying that i have noted before that bloombrrgs weighted analyst opinion has now gone to 186m fcf for this year ( for record it was much lower when i did bet!!!) so i do think the even the 110m new forecast from Steve is a bit conservative but hey ho. Lets see what Thursday brings - the bressay paymrnt negates any cash flow effect but even that cash flow effect i dont think is as weighty as some seem to make it as we had nearly the exact same scenario last year with no bressay payment and the wheels didnt come off in H1
My point earlier on the RBL being at 140m at end of 2023 and even conservative estimates of 25m a month in h1 means we save over 8m in interest costs on that alone but i absolutely accept i do lean positive so roll on the data
Lets all face it - a lot of this is guesswork based on oil, tax, timing of payments and probably some butterfly flapping its wings in south america
My estimate is 430m or better (year end 2023 was 481)
I actually thinks thats super conservative - i note from year end update rbl was down to 140m (still shows 190m on the debt page) so that would take rbl to sub 100m if i am right (and again thats on the conservative end)
But we’ll see in 2 days
So regarding my post - i am not discounting there are fees such as debt interest and obvs EPL but debt interest is disproportionately weighted to later in year and epl is 100% later in year
Its why we always tend to print great numbers at start of year then slow down in H2 (as i made clear i thought)
Proof will be in pudding i suppose next week when we tend to get update including first couple of months
I would point out for Steve that bloombergs weighted analyst forwcast stats on 2024 fcf have just been massively revised upwards from 50ish to 186m - so lets hope analysts are actually on the money this time as bodes well for our 100m binary bet on fcf!!
155.29k shs at 13.579? I see them - but they dont print on exchange they just report them on BATS. Way of the markets - you have to look at composite flow not just main exchange
So 326k has gone through exchange but 647k had gone through composite today as example
right so thoughts please
we all know the works and payments at enquest are back loaded to second half of year so if this pattern holds we make big inroads into debt etc in first half before the h2 drag comes into play (works/epl etc)
now this is proper *** packet maths but given our budgeted costs of $685m and our production being around 43k a day i reckon the front ended gross profit per barrel is around $40 in present 86 buck market
thats an enormous monthy cash generation in h1 on a month by month basis
clearly we then get hammered in h2 but depending on oil price (obvs) even that is fairly do-able
I am on for that bet Stev - not so sure how confident you are now bearing in mind you just more than doubled your fcf from your last top down post :) doesnt exactly scream how positive you are!!!
For record as i said earlier any divi or buyback (dont completely exclude possibility given the front end fcf will take us below 50% debt to ebita ‘goal’) also excluded - roll on the full year data and specifically the half year update
Fyi if sofr interest is at same level at end of year i reckon we’re in trouble in more than ENQ which should also clearly improve enqs finances
Anyway - lets see how first 2 months go and debt when full figs come out