Member Info for Voiceofreason1

Oil breakeven at 62.5? You’ve said over 70 in other posts :) Thats $45+ profit in todays world

As to both north sea and SEA split - i am happy with where we are - magnus outage in jan/feb was unforseeable so i am relaxed about that - infill work should add/delay deterioration and kraken with harbour as partner seems more hopeful

I think the key problem for enq has been is debt - and as long as this pricing environment holds its a quickly dininishing one - lets see how far that goes - as i understand it from an analyst we have in my shop the timeline is 1-3 months to get out of ‘debt prison’ stage and into debt repairer - so i do wonder why they dont hedge out at above 100 for next 4 months but hey ho (suppose they have enough hedged and want to see where upside goes)

Stevo - you are much more the accounting animal than me (i did accounting at uni but went into equity trading - much easier)

Whats your full year fcf prediction as we stand now? - i lost to you a couple of years ago and want a rematch!

Stevo - so a few points

1. The massive advantage of malaysia tho is even at low prices it generates income due to the sliding nature of the costs (and a little more although not fully at higher prices)

2. All great talking about 70 dollar oil but the elephant in the room is oil is above 105 right now and not even the most bearish banks are looking at 70 for a long time (sprs going to need restocked and probably added to going forward)

3. NS generates 24 at 70? Blimey then we have to start thinking no debt pretty sharish even if conflict in ME resolved sharpish :) (lets remember guidance can be beaten especially with malaysia going full throttle and north sea currently generating at full whack while oil is above 105…..)

So i agree with lions share of that - but why did SNP vote against a positive oil bill during week?

so i have not completely trawled through the details but few points

1. i see epl payment in h2 of 104m and guidance flagged that 2026 is guided substantially lower - now that logically should be the case given oil price was 68 last year and the 104 came from a 80+ oil price market - what that is i dont know but i would assume enq wouldnt go out of way to guide specifically much lower without reason

2. while full year production may be affected massively i think timing is king - we lost magnus for just under 10% of year but at low prices - so while i wish we hadnt i do look positively on the 50k+ plus we are achieving in march (and expect that to continue into at least may when infills start happening in magnus - back of *** packet thats 30k in north sea and 6k in vietnam and 14k in malaysia. now in todays market thats (even with your conservative $70 breakeven steve!) making 30 bucks a barrel right now so over a million a day in north sea and vietnam - and then you add malaysia to add enough to take it to 1.5m a day - hence looking at $10m a week (not saying long term but thats this week alone).

3. hedging is interesting - as we’ve mentioned before it would be foolish to use them now unless you needed to but i suppose that will come out in wash.

4. the issue with enquest has always been debt and epl, now the literally million/billion dollar question is how long the present oil prices stay this high? - if you wanted to hedge out to to end july you can still average out at above 95 so market clearly troubled by how quickly everything could return to normal (but thats for fate to decide). epl is a thorn in enqs side but fundamentally enq is rated as a debt prisoner stock and $10m weeks can potentially make a big dent in that quite quickly. i am not expecting a rerate to debt free cash cow (unless this crisis goes on much longer than expected) but i think an improver rerate and god forbid a cheeky entry into 250 could change the world!

My spelling is terrible with my big fat fingers on phone…..

Yeah magnus not included in those net debt figs as i think paid in feb(ish) 2026 - the increse due to oil price, super high epl (but as its year in arrears this year will be substantianlly lower) - and the key pushers are the payment for the rbl and the field purchase in asia

If someone said you have increase debt but uou have bought new production and got a much better rbl facility in a terrible ool price environment of 2025 the. I’d have been happy i think

Only really disappointing (in hindsight) is expanding hedge at relatively low but in fairness profitable 80’s

Why do you say wrong way? It has already been reported in feb no? And thats basically just due to the purchase of new production and the rbl facility refinance which is massively positive

I think the key stat is production in march is abpve 50k so north sea production in todays prices are above 30k which is awesome as a debt paydown

My last point on the oft used miliband ‘being anti oil and gas production doesnt lead to higher prices’ misses point that we have super high energy costs not only due to gas prices but also the taxes and levies we add on top’ - proven by the 7% lowering when they moved some of the green levies from energy bills to general taxation. So if we could produce more and earn more revenue from that production then clearly we could use this revenue to lower bills - i struggle to see why no one ever picks him up on this. This positive revenue effect is then multiplied by the jobs we keep in the uk and the subsequent money these people spend on other things like, well, everything!! (economists might recognise this by the term ‘money multiplier’ and anyone not blind would see the effect of this in aberdeen which used to be rolling in cash and thus generated loads of tax revenue…..(hint it doesnt now)

The issue really seems that the uk through ed miliband but to be fair last tory lot were the ones that started it (and continued it post 2022) are basically anti investment but have no problem importing carbon based fuels

Look at germny as an example - installing 5 times more renewables in 2025 and on target for 4 times more than uk in 2026. They had a windfall tax in 2022 but it was temporary and only lasted as long as windfall did - ie 2023. So they incentivise business to invest and dont hammer them for it. We could learn something…..

On enq divis i think that target of getting net debt to 0.5 of ebitda is the key. Eminently possible given present prices but speed of reaching it will be key. Basically needs $150-200m debt paydown as i see it - but with oil at 100 and magnus on full tilt (please let that be true) its what i am looking for in the guidance in a perfect world

I am a bit more positive on that - depending on how late they update the numbers into this crisis

Fcf above $50m

Debt is an interesting one - i am actually hoping for reduction there

Ebitda lets see :)

Agree with hedging going forward - and great point trying to understand if we used much of the 68 swaps already

Thoughts?

For me i’d like a latest production amount post the outages in jan/feb - renewed guidance for year - update on hedging - would love a forecast fcf - but really a detailed breakdown of costs/margings in 2025 so we can project into 2026

So they want to meet speaker of parliment on Sat (the man calling bs on earlier trump claims) - Iranians have yet to even agree! So we have highly probable nothing changed scenario on hormuz (with 5% capacity transit) till sat!! Thats another massive chunk of oil not getting to market as well as possible increases in shut downs of production as oil storage is critical level in gulf

This whole thing is nuts - trump first claims 2 days of talks then when confronted with iran denying talks says envoys talked last night…..

Sorry mizan are also the other news channel denying talks

Tasnim and fars are the iranian news agencies - both known and signed off by regime - now if they are lying they are gonna get killed so to be honest who do you think is more likely to be telling truth?

Couple of important points

1. He’s just postponed strikes to power grid - i see nothing apart from this - does that stop iran bombing? Does it stop us bombing? And does it stop Israel?

2. Hormuz seemingly still functionally closed and iranians have literally zero reason to relax this until they get what they want

So in short its positive for world but a long way from a solution to oil spike!

To a degree its just rearranging distribution - ie china buys all of iranian oil. This allows it to go to rest of asia (ie friends of usa) no net effect on supply demand