Member Info for Voiceofreason1

Low sulpher specifically mentioned so no problems making it bunker fuel

So in previous discussions we’ve had breakdowns of yearly and in my case daily production and resulting cash made in these troubled high price times. So a positive thought to have is given our guidance wasnt changed after the outage so i think that explains a lot of thinking behind north sea production being 23k-ish in hunbahs and stevos calcs but right now with full production (and to keep average production up - including maintenance time planned for later in year) is going to be more like 32k+ right now in these 105 dollar market - so on a pure daily basis (or weekly) we are coining it in right now - adding in asian production we’re fairly obviously making above $1.5m a day clear so thats clearly meaningful even in short term.

Another positive i think is bressay is clearly going to get a more positive review than previously given hard lessons learned lately.

Brent futures right now

April 102

May 102

June 98

July is still 95!!!

I dont disagree with any of the follow ups but my point is more ‘here and now and take it to the bank’ type thing ie even if it did miraculously resolve now (which is incredibly rose tinted clearly) the risk premium being shown so obviously means oil and gas users will feel desperate need to insure themselves with more reserves which clearly drive demand short and medium term.

As an aside a us president who basically did the attacking but in his entire 2nd term of 14 months has only refilled 19m barrels into a heavily depeleted spr when oil price was low seems just nuts

Simple thesis - after Iran, will the worlds energy using countries feel they have to stock up more oil in reserves? I realise we just released 400m reserve barrels which needs to be replaced but with US being way below historical levels even before this and other countries feeling pinch does that show them more reserves are needed? Iran situation continues to sap reserves all on its own but when eventually resolved (unless weirdly 100% positive) will future worries make demand jump from countries building (and even just replenishing) reserves for next crisis

Stevo,

I suppose time will tell but i just dont see north sea production being that low - i mean magnus back to 90% efficiency so matching last year broadly so thats 15k - kraken is double figs, and thats ignoring gka, golden eagle and the odds and sods elsewhere but lets see - i hope i am right clearly :)

I do get annual effect of losing magnus for 5 weeks but thank the stars that happened in jan/feb not now as thats clearly lowered net effect. And ultimately i only really care going forward to see the incremental effect and the pass through to what that should mean on share price.

The dream is that we can pay down a meaningful percentage of debt and that should have effect on ev/ebita ratio discount we trade on (due mostly to debt). As to when the market sees that and prices it in? Thats the buffet call!

One thing i think we all agree on is the march full year figs and commentary are key to all this discourse

As to final point - agreed on ME and lives being lost - sadly oils history is pretty intertwined with horrible events unplaying

Stevo questions

Why only 8.5m barrels? Thats circa 23k a day - if i combine magnus, kraken, gka, heather/broom and golden eagle i get north of that or am i missing something?

What is gas effect on fcf?

And do you agree the present stats we realise right l now will be higher on daily/weekly basis due to no outages in magnus and as stated before on incrementals we wont be using hedging facility as that seems bananas (clearly would weight to later in year)

Hey Hunbah, i am fine with it being a little less :) - i do think the important point tho is epl is going to be significantly lower this year as this years epl payment is actually for the year 2025 as its year in arrears and i cant fathom why they would use the insurance of the hedges at moment when oil is above 100 (clearly logic dictates you use them later in year when oil is almost certainly going to be lower)

I definitely agree on the point of this (so far) being short term but trumps rhetoric at weekend of threatening nato allies to provide ships which will take weeks (best case scenario) to get into place for escorting (which us navy even says isnt going to work) means its likely to play out longer and crucially shut down more production in gulf with subsequent start up protocol delays hence markedly lengthening this pricing increase

One thing is for certain - the end march full year full figs and guidance to 2026 (with an update on 2026 so far) will be fascinating!!!!

Hi Hunbah - i appreciate the broad figures but i actually think this materially underplays what is happening - for example given enq guidance not being changed north sea/uk production is well above 24k (guidance is 6-10k higher bpd) and we have the non trivial 5k a day in vietnam which is pipeline sold not tanker - so is realised every day

Add to that epl is actually going to be less this year (as stated by enq) as its year in arrears - and opex is not affected at all by price increase as its the same amount of barrels just higher price

So really your top figure is more like the baseline very conservative figure if you go by those figures(bear in mind they certainly aint using the hedges right now with oil above 100) - now i accept fact that oil is probaly going to revert lower for later year production but at the moment ENQ are almost certainly banking circa 7-10m a week extra imo as we also have the gas upside as the price of gas is massvely up as well!!!!

If they hedge now for entire year using the futures curves up to dec 2026 they can guarantee 90.3 bucks average - which would be circa 88 realised if we take into account the 4m already hedged lower down…..

Hint thats a LOT of fcf guaranteed

Also key is very scarce floating storage left as all empty tankers are now basically full - news that kuwait started shutting off wells today (source WSJ) which is WAY earlier than estimated for them has definitely pushed market today for example

I see on the brent futures live time i could easily hedge out to june now with little or no premium at 85 (if so tiny in June) and point is each day hormuz stays closed thats a lot of oil kept out of supply chain - with trumps rhetoric you can now see qatar freaking out so this impacts quickly. So thats now an entire quarter you could hedge which is getting meaningful imo and every day is upping the panic level.

As to pricing in epl - i just dont know - no serious investor i know that has been in ENQ (and i covered a few in my time) would base a hard investment decision on what reeves might or might not do - i think thats a bit of a red herring (again imo).

I do agree a lot of the upswing recently has been on ENQs newsflow in SEA which derisks us to a degree from NS total dependence and some gas exposure to boot.

One thing i defintely do know is there has been a broker selling ENQ over last couple of days and inside of market they are well known to impact as opposed to trading more considerately (well with client orders anyway). As to reason underlying cliet was selling? Well 80% in last 3 months is enticing as a profit taking point

I know we have roughy 25% hedged at 68 but maybe i am just a boring worrier - i would definitely hedge another 4-5m barrels here just to lock in roughly extra $70m profit.

Thoughts?

So i know this board loves to chat about EPL and how bad it is (spoiler it is) and how it will or should be cancelled - my point is somewhat more basic - FCF this year should be a massive improvement on 2025 (and therefore debt reducing)

A quick play with AI and adding in assumptions on production and using guidance from the last update that EPL payments will be ‘substantially’ down in 2026 as they are in arrears and that will reflect oil price drop in 2025 and also decreased % produced in North Sea - added to fact that production figures are very resiliant overall (not forgetting magnus buyout) means ENQ could be in for a bumper year. If they hedge some oil today as well that would just be icing on the cake!

2026 should be a good year for ENQ!!!

Not to belabour the point but ENQ has specifically been very open in previous releases about deprioritising investment into North Sea while the legislation backdrop has been so poor and therefore a pivot in production percentage to SEA was there and expected for all to see for a while now. The other advantage of doing this is to keep powder dry for a deal while also not being seen as a forced buyer which i kinda feel the Magnus deal shows is definitely a productive strategy. Now if we go big on a transformational deal which i feel is still the clever move thats great but low risk SEA deals that fund divis and diversify our earlier complete dependence on UK politics is obviously an intelligent policy

All IMO clearly…

Kraken - another thing (which you are guilty of) is assuming algos are all clever when actually in the midcap/small cap market its actually clients using the wrong algo strategy and intelligent actors (ie the specialist midcap brokers) seeing this a mile off and just pulling all their buy orders as they know there’a an idiot selling

Kraken - because (generally speaking) they buy much more cleverly than the people selling. They’ll look for blocks/placements/ or simply be more dynamic. But drip feeding orders in (like a lot of the sellers I saw) is just the worst trading approach - i used to try to educate them to this but market is full of people not as bright as they think they are. I suppose its just the thought process of people just scared to make a decision (ie ‘spread it out as i am scared of looking an idiot’) when it actually proves the opposite. If you are being kind, you think well they dont care about a movement on a small nominal as its an even smaller nominal percentage move - take example of someone selling 50k - if they spread over day they wont get the lows but the average so they’ll get maybe 3.5% down - thats only 1750 quid and weirdly they think they are clever as they ‘beat’ the lows

Jeff - all it takes is a semi decent sell order - i worked in trading in a large brokerage (when i was an ENQ holder) and when we received a sell of over 50k GBP in ENQ we knew it would be a down day. When clients came on board they would just say ‘spread it over day’ thinking that was best way to trade a small position (nominally) which was just so destructive to price in a smallcap name like ENQ (as its an awful way to trade small illiquid names)

Just wondering as plan to recycle coupon into ENQ shares

100% agree a combination of both divi and buyback makes common sense to me