Member Info for Voiceofreason1

Tommo re Enq price drop - its a function of debt and short term hysteria - whenever oil drops ENQ is the kicking target - hence why AB and board are making that priority to get down

Then people would have to look at your other points - but its all knee jerk reaction territory right now - which gives us all great opportunities to buy!!

RS aint changing windfall tax - we have to accept that a u turn just isnt on cards.

Outside of oil investors its a popular tax

Plus rishi would take a huge ego hit - and politically would look awful gor tories

Even if it would be common sense (much rarer than unicorns in politics right now)

We are (imo) just not even in right ballpark to really believe in stock buy backs - the board could not be clearer that they are prioritizing debt paydown as this is the key pathway to stopping the volatility we see in ENQ. Its the debt that freaks the market out about us - get that down to the stated target of 0.5 and changes in oil from 120 (ENQ super profitable) to 110 (Enq still super profitable) just wont have same effect

I personally would be fine with oil between 100-110 - we still make huge profits but we potentially dont see lidicrous hyperbole headlines everyday as this would definitely dampen inflation

Btw people hoping for a rishi/boris common sense approach to windfall tax change are right up there with people who said ‘nah russia wont invade ukraine’ - commen sense just isnt in high supply

The key thing happening in germany is just preperation - phase 2 means no real change - BUT germany starts to set itself up NOT to export energy (they are biggest net electricity exporter intra-eu)

The knock on effects of this are a bit hairy - ie France and Netherlands import loads from Germany and export loads to UK as an example

As to ENQ being in good place - absolutely no question

Kraken - the pressure is on you now - i bought more ENQ today (always feel markets overreact) on the last push down - all on basis of your chirpy attitude post AGM!!

Modestus, i dont know if i ascribe a negative force trying to short us - i think fundamentaly the market generally knows UK e&ps are relatively endebted, prone to whimish laws bt Boris trying to misdirect peoples attention and relatively small scale - and the analysts downgrading us just knocked confidence that wasnt really deep rooted

Now i disagree with this overly bearish sentiment but i see it as a glass half full moment - allows me to buy more on dips and wait out the short term negative periods

Seems from outside that AB has same opinion - ie calmly keep doing job and buy more shares

The question to ask is exactly where is net debt as we stand today - as i read it we were down to 1090 (from 1.22bn end of year) as at Feb 28th - we then paid another 85m into the Rbl facility - so since then we have March to mid June - if we’ve paid at same rate it will be an amazing progress report

Without reaching 90% he’s basically increasing his exposure to company fortunes but not have conplete control - so 50% etc just means he’s 5 times more exposed - so the figure is 90

And also to clarify the 90% is excluding his 10% he already owns - so imagine he goes to 30% - he’d need 90% of remaining 70% (that he’s offering for) - so he’d actually have to reach 93% in reality

So basically nearly any bigger shareholder could block him or demand better price (that he then has to pay everyone)

Martinen and Elitesky - yes 30% is the ownership MAX you can have before you are obligated to make a formal bid - which then means everyone has to be treated equally in terms of price etc (its to protect people like us)

To be clear - he’s still miles away from this - BBerg has him just over 10% - now might be higher with options but its still nowhere near 30%

To be crystal clear - AB could try a takeover but barring an exceptional price it has zero chance of passing 90% threshold - institutional ownership has no incentive to sell - especially the Aberforths and Baillie’s of the world that dont do short term investments

They know valuation metric of ENQ and unlike some retail investors (not all clearly) would simply know they had no logic to sell

I also think its fantasy land as an idea - he has enough of an investment in company to make over 3 figure millions without have to take risk buying the 80/90% of firm he doesnt own

Elitesky - uk takeover rules are 90% to force minority shareholders to sell- its called a ‘squeeze out’

Google that and you’ll have endless articles

Issue with this rating downgrade (but still way above present price) is JP dont publish upgrade/donwngrade notifications. So on bloomberg you dont get notified of this change in same way Barclays downgrade got notified in news feeds

Means it will come out but not in a blaze of publicity like barclays - so less impactful (sadly)

Also please bear in mind that assets in north sea right now will be much cheaper, so bearing in mind the FCF gush we have right now this might (counterintuitively) make more investment in North Sea interesting - ie producing fields trading cheaply by our more taxed competitors as opposed to fields like bentley and bressay that are not ‘sure things’

Fellow Enquesters
Honestly while most of us massively disagree with Barclays draconian rating change - we should never forget that if you have strength in your convictions this has provided an excellent opportunity to top up our holdings

Honestly on a personal level this has been great for me - glass half full thoughts here

As to windfall tax - this is more nuanced - its a badly designed levy but its a done deal in reality, and while ultimately paying 25% isnt great for us (Labours one off 10% levy that got voted down by conservatives saying it would kill investment in North Sea just re-iterates my thoughts on the present shower in charge) but its not end of world - especially with oil price flying

Keep the faith

Stupmy - not a specific go at you - seen it mentioned a couple of times tho thats all - for record i think Barclays ENQ analysis is lazy and borderline ludicrous and simply chasing market down instead of being purely financially driven (saying that i simply dont believe some people who think Hosie is trying to push stock down as thats simply not feasible in todays compliance era)

Kraken - as mentioned above i 100% agree the downgrade is a little hysterical (imo) it simply takes worse case in every scenario. But even then seemingly adds a further haircut. I just think we need to be factual - it isnt 65% - he never claimed that and given their oil price forecast and the 450m fig for 4 years it is crystal clear that its not 65%

Lets be clear Hosie has the worst tracking stats of any analyst on ENQ - its a minus fig. % - showing when he’s a buyer ENQ goes down and when he is underweight ENQ goes up - lets hope this amazing record continues after this brutal couple of days

Can we put this idiotic chat about Barclays using 65% tax rate to bed - i dont know who started it but its just blatently rubbish and made up

Barclays have simply assumed very conservative valuation to ENQ but this 65% nonsense has simply no factual backing - i mean look at the stats people - 450m in tax due over 23-26 - thats 4 years - look at the oil price assumptions - over $100 - thats clearly 25% (with deductions for investment) not 65% otherwise the fig would be ludicrously high

As to ENQ making announcement - i mean granted would be nice - but as long as they are not changing targets or having a meaningful change to goals then they dont need to - and as most of us are not day trading the stock it doesnt really matter to us

As to takeover - simply not the climate for it and AB would want a decent premium - as would Baillie Gifford and Aberforth - 23% between them

All my opinion clearly

So while i think this specific version of windfall tax is pretty badly built - we have to face facts - its politically popular across the spectrum (granted its hitting wrong targets)

Plus - while its hit market sentiment short term its not a killer blow - we all know that without it ENQ was going to COIN it in - but paying some type of solidarity tax with a large part of country struggling is actually affordable for us (if still a bit unfair)

As i have said previously the analyst ratings on us have taken a short term hit due to this but lets look at facts

1. Oil production globally simply isnt there to change pricing dynamic - the opec+ prod raise yesterday was a sticking plaster on a gushing wound - the 3 countries that can raise production have been alotted 100k of the 200k raise and even they have struggled to hit their targets - let alone rest of them and avoiding russian degradation - Oil draw in yesterdays figs was 10m+ in the week (5m spr release and over 5m in actual crude stockpile drop privately)

2. Our analyst coverage still have their conservative oil price forecast for year of $90-92 a barrel oil price - its at 117 now - now to put in context that differential just massively changes our Net Asset Value calculation (upwards by a multiple as its free 100% profit - well 75% :) )

For context NAV at one big broker for us quadruples our NAV if oil is at 100 and not 90

In short i am still a buyer and will continue to add when money in account

Home market (Uk) closed - like when US markets are closed and even european stocks trade less - let alone European listings (GDRs) of US stocks

So in fairness - opec+ not turning taps on at all really (200k more a day but that includes russia pumping those 200k more - so somewhat laughable as direction of travel is clearly negative for the russian production stats)

So add to that SPR release of 5m barrels last week and then EIA draw of 5.1m on top of that - thats a net draw for week of over 10m barrels

Given analysts rating ENQ as a ‘buy’ even now (post windfall tax announcement) have oil priced in for year at low 90’s market price - then the medium/long term pic does make a dream of 60 seem not as unreasonable as some sledgers like to admit

IMO

EIA report draw of 5.1m compared to 1m expected….