Member Info for Voiceofreason1

Hi Kraken, totally agree on patience and overhang from delisting - we’re a retail stock with pretty low turnover so a relatively small amount affects us

Underlying tho is oil at 83 and swaps for 800k at 88

I do differ on AB tho - i mean put yourself in his shoes - enq is cheap agreed but he owns so much its almost pointless to buy more from a risk reward side (i own considerably less but have same issue to be honest!!!)

Profitaker - being a pedant i asked about this question to my corporate department (i work in investment bank) and their opinion is the losses definitely would be tranferrable as the conditions relate to ongoing business (which enq have) and also being of decent scale (which enq have) - so it would pass the HMRC conditions.

For record generally although this deal makes great sense i dont see it happening in short term - so much more important is the next half year (and this one) and continuing to pay down debt as ENQ are generating more FCF rhan marlet cap so eventually it begins to simply burst with money and returns - which i think, is why AB doesnt seem overly concerned but retail owners are just a little rabbit in headlights on it - we need a longer viewpoint

Stevo,

I am more optimistic at 75-100m lower debt at year end compared to end h1 mainly due to all works now completed so magnus and kraken shoulc be 100% - the swaps for 800k barrels at $88 is awesome as well

Opex down due to kraken downtime and related payments we got to partially pay for that and production always seems to crater at start of h2 due to kraken and magnus works

Epl lower - who knows - suppose depends on what we could offset against it (possibly also havd somd relation to kraken? I dunno)

I never expected anything on shareholder returns in an update but who knows with ENQ

For sake of balance we pay max 35% tax (less due to capital allowances) as we dont pay any of the 40% due to booked tax losses

Most companies and especially most oil companies would kill for that

We just have to see where debt ends up

I was asking more for operational update to be fair but re the autumn announcements i think this probably more about raising epl floor - if they raise to high 70’s it would give a fill up to oil co’s by providing backstop. It would also not cost anything in real money

Apologies if i missed this but does anyone know if an update is due? Cant find any planned thats all

I know there are no shortage of bulls on this chat but am i the only one thinking we may hit the 50% debt to ebita this year and potentially unlocking returns? Oil up strongly - which allows us to pay debt and also (very key) pushes up ebita as well i really think we may be closer than a lot of people think

Also this endless debate on $100 oil and damage it does - why is oil the only thing in the world that shouldnt be affected by inflation? (The costs certainly are rising!!) - i read recently that given the rise in inflation the damage of $100 oil is massively over hyped as since that benchmark threat was introduced inflation is up circa 30+% so basically the inflation adjusted price of oil NOW at $100 is actually a REAL inflation adjusted price in mid $60’s - just drives me nuts

I dont know if anyone else has mentioned this but has everyone noticed the change in hedging logic? We have gone now from costless collars to straight put options which is incredibly positive in todays pricing market

Costless collars are free which is great but limit upside (been awful in last year and half) - put options at 60 mean our upside is unlimited - if oil stays up here in any shape for next 6 months we are looking at a MUCH more positive H2

Kokomo - aussie strike threat on their gas and oil shipping - seems a bit of an over-reaction given reserves are around 90% full in the middle of summer but hey ho the market is skittish just now (plus the strike date hasnt even been agreed!!)

At least this is somewhat positive - i dont expect UK to follow but some positive news on windfall taxes always preferred!

Stumpy you could be right - markets are not exactly normal. But should note HBR is at 288 now on clearly massively improved oil sentiment and an oil price above that level when HBR reported in absolute terms

Suppose we’ll see tomorrow - API tonight will be a decent factor as a read to the DOE figs tomorrow

For medium to long term investors the oil price this year will be key factor - if we see 100+ again then ENQ will have a ball even with EPL - if it falls to low 70’s it will be a slog (but EPL would be factor and might even get a floor by gov)

The sad fact is to the ‘man on the street’ the EPL is a good thing as they read the headlines and dont really understand the detail. As i said to Kraken - politicians dont care about long term good they care about short term spin - its sad but true

Sadly totally agree Kraken as the simple fact is politicians dont stick around long enough to see a business cycle through - so the short term positive of epl works and they dont care about the long term screw up. Hunt is just being a politician

https://oilprice.com/Energy/Energy-General/The-US-Will-Be-Dependent-On-Oil-For-Far-More-Than-A-Decade.html

Interesting take

Sorry where does 50 days come from even on the 380m ? - EIA stats are the US consumes on average 20m a day

Or am i missing something?

Market reaction to this is just like market generally in equities reacting to a story that matches their anxiety levels

This release was preplanned a while ago - in oil markets themselves it was known about (forbes did article about true state of SPR and its actually really more like high 200’s not 380 due to mandated sales like this over course of next 2 years)

It should also be noted they are for april to may - thats a while away - its also a decent time frame so much less weekly than before and its potentially going to be swamped by russian cuts (voluntary or basically they cant sell what they want) and china re-opening

Dont get me wrong its been pushed big time as a headline but its not a surprise nor is it earth shattering even if it was

To paraphrase an article in oilprice website

Oilers have to deal with 4 big issues

1. Incessant calls to drill for more oil to lower prices
2. Revenue source for cash strapped govs
3. Energy security
4. Green energy transition

I would have them in that priority in the publics mindset (due to massive blame shifting from govs for high oil prices)

So the main push right now is to produce more oil while making it less profitable and less popular (mps trying to say ‘not our fault’)

Then further down road we’ll get back into green transition (but with current world outlook thats 5 years down road)

So basically all we can do is pay lip service to greens ( see shell and bp actually turn back to fossil) , keep head down on abuse from mps and just not drop ball on production

And all of this plus the actual main premise of a company to look after shareholders first

AB has it easy!!!!

I really hope you are right Kamrat - i am a little less positve on EBITDA for second half of year but i stress - i want you to be right!!!!!!

Chilts i just dont know if i agree on the ‘gas is cause of high energy prices’ storyline being pushed - i’ll admit i am not an avid watcher of news (proven stats on it just being stress inducing) but dont think i have ever heard it framed that way when i have been hooked in

I think its fairly accepted by public and anything i have seen on news (when i have seen it) that fossil is still cheaper than renewables (and more dependable) - i actually think the attack angle is the FIRMS are the one at fault not the product

Just like banks get smashed all the time for either paying too much, making too much or losing too much money - ie its not the money itself getting attacked

The issue (as you say) is that oil wont come down and actually gov policy and the short termism of it makes this MORE likely - THEN they blame the firms for not doing what they actively discouraged by their bashing of the firms

But as i stated earlier its just oils turn - banks got it for years (Boris as london mayor ‘i love banks’ but as MP and brexit pusher ‘i hate banks but they better jot move jobs away from UK’)

As long as firms make profits they’ll get ****ged off by govs for cheap votes and headlines - cynical but as old as time

The big issue we have is governments work on 5 year popularity contests - and the EPL is popular. Media is even shorter basis

Oil and other huge infrastructure industry work on 10-20-30 year timeframes - most mps will be long gone before they public realise that EPL means more expensive energy

I get fact we want a balanced argument but thats a pipe dream - AB just has to roll with the punches - he’ll lose any media war as the boring facts never sell