Member Info for Voiceofreason1

Also on last point of decreasing tax for enquest in particular - please take into account that enquest only have epl tax - we dont have the other 40% as thats got tax write offs to completely negate them

Mrc - ok let me try another way to show you re tax and allowables

Bacause all tax works on the same basic premise

Imagine i earn a million quid - and my tax rate is 45% - my tax would be 450,000

But if i invest in EIS schemes i can claim back 30% allowable as a deductable (draw some type of comparison on the 80% on the epl rebate as example)

Now you might think i can never write off the full 450k tax bill with just 30% on the EIS BUT you can - and a lot of rich people do

Basically if i have savings i can actually invest 1.5m in EIS then i can write off my entire tax (30% of 1.5m is 450k - this then mean i pay no tax in that year)

Its fundamentally same with the epl (which was why some people moaned about the high rebate terms at 80% which was so much higher than the epl itself) - so its actually easy to negate tax as long as you have enough work to do

80% does not apply as a roof on what you can rebate - it is simply how much you get back - the roof is the absolute tax that is levied

Mrc - i am as sure as i can be that in bastens case it would be zero epl and in my case also zero epl

Its just not that type of 80% - we dont work on a system of ‘you can only claim x% of an allowance’ its always on the actual amount you spend - tax authority simply is set up that way

I see your logical thought process and its understandable but in reality tax is actually much simpler than that - its a straight relief system

Please feel free to ask hmrc - i am happy to bet a beer on it for a future meeting at our ENQ party :)

Ok so on EPL - its a 25% tax - the other 40% tax is just ‘normal’ which previous losses mostly negate as most clmpanies are carrrying losses from low oil era

So then we go to 25% epl - lets say you have profit of 300m - so 25% is 75m - but you have drilling costs of 100m - just use 80% write off potential for simpicity - thats 80m you can use to completely negate your epl of 75m

Thats why enq’s calc on epl costs are quite low as drilling combined with fact epl was only part year this year mean our tax hit is minimal

But thats how you can still have profits and yet pay no epl - i think you both are misunderstanding the 80-91% rule thats all

Good work oinkston - i also rather boringly read the lassages regarding convenants and retrictions and seems actually pretty clear those apply to debt led buy backs or divis - which makes much more sense on a debt issuance level

Right as mentioned on the more recent thread (regarding clarification from ENQ IR) there is no restriction on normal buy backs nor divis

I have also read through in more detail (boring wednesday!) and the restrictions seem to actually be on debt led buybacks or divis paid through issuance of debt - which makes sense as you dont want to have your debt diluted

But it now seems 100% clear ENQ can do both divis and buy backs

Hi E121. I’ve just scoured the bond prospectus for dividend restrictions and cant find your investment grade nor payback restrictions mentioned anywhere

Can you please send a page number or specific quote? I admit my check was rudimentary simply searching for mentions of buy back or dividend so i am not saying you are wrong - i just find it weird that this covenant would be in there given AB’s desire of freedom of movement (we’re a long way off investment grade and the penalties for early payback are pretty bad early on on the bonds)

Right at risk of being very dull

Quest for oil you are clearly looking at jan contract (bberg ticker cof3) (oil basically trends down in future form the further in advance you are)

I am looking at live brent - ie current market brent deliverable today

But we’re splitting hairs here - the fundamental point should be that in sep oil was lower than Oct but ENQ actually had fcf over 60m in sep

Oil is simply down on negative china sentiment - simples - ENQ is down because market (and specifically retail holders) get a bit scared and sell on any old move

But oil (brent) bottomed out today at 91.22 and is up a little now and fcf given oil at 92.4 (on my bloomberg screen right now) with USD up approx 16% in last 6 months means with our debt in GBP that this oil price is basically more like 107 in debt terms - which is why we were able to have a fcf of over 60m last month even with oil much lower than now

Hold your nerve and watch debt tumble - last months fcf was equivalent to 12.5% divi yield in one month!!!

Its straight off my work bloomberg which is locked from external file transfer sadly - but is simply a bloomberg automated msg that came through exactly an hour ago

I assume will be elsewhere by market open tomorrow - sorry cant help directly

All placed and done - awesome

12.25 is just the quoted fig where market was murmering - might be less but who knows - its a function of debt market right now and interest rates generally i would assume

Perspective here is its around half a month’s fcf to service debt for whole year (seps fcf was 70m) - market (i believe) will be very positive thats funding ‘done’ till 2027

As to payback covenants - i think they seem decent at 0.5% fee level - so as per other posts this would seem that Enquest are swallowing the interest levels for the flexibility

Bookrunners bnp, bofa, dnb, db, and gs

Expected price around 12.25% but placing is tomorrow and pricing dependent on demand - is unsecured tho which is good

Right so i am more on Equities side but i can read bloomberg screens with the best of them!!

But new announcement today on Bberg stating again that its $300m - lead underwriter is BNP and they are conducting calls this week with investors to see what the interest levels are and therefore what coupon/interest they have to offer

So expect to see more details next week really

To be clear - its an announcement they are doing it - its not ‘done’ yet - otherwise moodys would have upgraded us (and s&p) as it removes last doubt on our funding

Hence lack of movement price really - but when it gets done (not easiest market) it’ll be very positive (imo worth over 5p)

Hence neither share price nor bonds moving as its ‘wait and see’ land - columbus day today so markets super quiet

So good points
1. Positive review notice from s&P
2. Moodys also on review
3. Only $300m - showing we’ve smashed the debt down
4. Next funding needed after this is 2027

Average points
1.both s&p and moodys waiting on successful placing in difficult markets to make that positive step ie upgrade us

If this gets placed it’s upgrade time as in multiple analyst notes we have out, we are always hung on the ‘wait for refinancing of 2023 bonds’ line

Opec so far more than a million barrels a day behind target so 2m means ‘real’ cut is less than million - hence market not going crazy - if Saudi and/or UAE announce other cuts thats what matters

Doe figs in 1 min!!

Market is watching not so much the reduction (as opec already underproduces hugely) it’s voluntary reductions that will drive market - so if saudi and uae agree to lower current production oil will spike

Other thing to watch is russia - historically massively against cutting production - but now potentially massively for it as they will be curtailed anyway

Interesting stat - the spr stands just above 400m by end of this month - but us has already presold newrly 100m barrels for future years (actually quite normal) butgiven the drawdown that puts real spr levels at 300m

So everyone talks about SPR restocking - but even if they dont - we are talking 6-8m barrels a week supply disappearing - and thats assuming no rebuild