Enquest Live Discussion

hitman1 25 Sep 2018

SP ex rights I’d look to seeing Enquest moving from a £500m market cap company to say £750m, in light of the Magnus NPV and additional funds going into the company. Also OPEC and friends are quite content with $80 plus for the foreseeable future… which bodes well for Enquest cashflow over the next 3 years… 45p as per Barclays looks like the £750m market cap target once the new shares are added. Accordingly the current price might head towards 55p (currently 42p) in the run up to ex rights date and then fall back to 45p… or you could argue we are almost just about there already.

Diesel 19 Sep 2018

SP ex rights Any estimates out there was new shares hit the market?

gk10 18 Sep 2018

Cnbc interview An overly complicated business? I don’t think anyone could disagree with that statement. They are still projecting returns of over 22% from todays close. I’m sitting it out until after the RI.

hitman1 14 Sep 2018

Cnbc interview Funny that, because when I was at the AGM, I also spoke about the balance sheet being quite difficult to comprehend. Not surprised Barclays feels the disclosure hasn’t been quite right. Indeed no mention of voidage at AGM. We were at 40k in Nov 17, so back to where we where last year, when second train was started. At least Cairn said the voidage issue had been fixed. 2019 looks like a better year that should enable free cash flow to reduce debt. I think Barclays are tired of Enquest and still aren’t quite sure what other cash flow issues they haven’t disclosed fully.

hitman1 14 Sep 2018

Cnbc interview ENQUEST PLC (LON:ENQ) has been downgraded by analysts at Barclays, which no longer takes a positive view of what is described as an ‘overly complicated’ business. Barclays described the North Sea oil firm’s recent £107mln rights issue as a “necessary step” in addressing near-term debt repayments and the Magnus acquisition payment. READ: EnQuest buys rest of Magnus fields from BP “However, the fact that it was necessary despite our prior estimates indicating otherwise highlights the sub-optimal nature of EnQuest’s disclosures around what has become a complex operating and financial structure,” Barclays analysts said. “Simplistically, EnQuest is a debt-levered North Sea oil producer that should be quickly paying down debt in the current macro environment. “In reality, we forecast end-18E net debt being flat year-on-year at c$2.0bn as annual EBITDAX growth of c160% fails to translate into free cash flow.” Barclays set a new price target of 45p, down from 60p, which compares to a market price of 36.85p. “With other oil-levered producers appearing more attractive in our view, we downgrade the stock to ‘equal weight’ from ‘overweight’,” Barclays added.

hitman1 14 Sep 2018

PRESS Release on STS / (not an RNS) This hasn’t been issued as an RNS… so looks like Enquest are now releasing positive news on the website… etc. perhaps a good sign going forward that we will get more information… On Enquest website 14 Sep

hitman1 14 Sep 2018

Cnbc interview Well if the Kraken extra production gearup from 33k to 40k plus in Q4 2018 onwards goes to OZ Mgt(15%) until repaid and the extra from Alma goes to the Kuwait partner who gets 20% extra revenue from 1 Jan 2017 until their capital is repaid etc… plus cost of capital calculated at Brent $90… then I can see why Jefferies are thinking the net production(earnings) to Enquest is about the same for 2019 as it is for 2018. Seems like Cairn have said getting more from Kraken is trial and error until they work out how much water to send where and when in the right combination/ time frame. I guess they must be using software similar to Formula 1 , in working out when best to pitstop compared to other cars and traffic… AB said the target still remains the same ie 50k/day. Well that’s like Mercedes saying the target is still to win every race and the Constructors championship, when you know your vehicle isn’t performing as expected. Magnus helps out, as you get the NPV $500m and capital back ($300m less $100m), so in effect, $700m back. Call it over 5 years… so $140m/annum. net . Interesting calcs are based on Brent trending lower to $70 over 3 years, so perhaps some more $ upside. I would think trend towards $80, But the important aspect of net earnings is that’s what’s left after all costs… in Enquest case, after depreciation. and costs of sale, including depletion. The depletion aspects is all important as this expense is the basically in my view how the debt gets repaid and it’s a huge expense… it would be more useful to see Analysts provide EBITDA. In any event, all positive from Jefferies and Barclays issuing a 45p target today is quite optimistic imv … I only had 40p post RI. Given Jefferies have had access to better data over the year, Barclays was always going to comment later on. And of course there is the hedging aspect… perhaps we can get a higher blended average price going forward nearer $70. (Brent $78) I can see how the debt will be paid off over the years, but I agree with Jefferies, everything has to work for several years. , without major issue… what are the chances of that? . At least J has said they will focus on debt reduction in 2019… and I suggest a refinance of the remainder at lower costs of capital thereafter to add more value to equity via interest saved… The same point was mentioned at the AGM, but I get the feeling it would be a lot easier and better at the end of 2019. If we remain on course, and give it another 6 to 12 mths… we should exceed the Barclays target price, but we are behind from where I thought we would be…

hitman1 13 Sep 2018

Rights Issue Info via HL EnQuest plc - Proposed Rights Issue Dear X EnQuest plc has announced its intention to raise approximately £107 million by way of a Rights Issue. The Rights Issue is subject to Shareholder Approval at a Shareholder Meeting to be held on 01 October 2018. If you wish to vote in respect of the proposals you will need to give us your instruction before noon on Wednesday 26 September 2018. You can give a voting instruction online by selecting the dark blue Corporate Actions Icon alongside your EnQuest plc Shares and following the instructions provided. The Rights Issue is expected to open on 02 October 2018 and will be available to all Shareholders as at close of business on 01 October 2018. If you hold Shares at this time you will be entitled to purchase 3 new Shares for every 7 Shares held, at a price of 21p per Share. Unless you wish to vote on the proposals you need take no action at present. We will write to Qualifying Shareholders confirming full terms of the Rights Issue shortly after 02 October 2018. Our deadline for the Rights Issue is expected to be noon on Wednesday 17 October 2018. Please note that all details in this email are provisional at this stage. There can be no guarantee that the Rights Issue will proceed until it has been approved at the General Meeting. If the Rights Issue does proceed correspondence will be sent to you that outlines full details of the event. Any instruction you give in respect of the Rights Issue must be based on the full details provided in the correspondence and not on the summary information outlined in this email. Please also note a vote in favour of this Rights Issue is not also an instruction to take up your Rights. You will be required to provide a separate instruction to take up your Rights once the final details have been confirmed. CORPORATE ACTIONS DEPARTMENT Hargreaves Lansdown Stockbrokers

hitman1 12 Sep 2018

Cnbc interview Enquest Plc (OTCMKTS:ENQUF) – Jefferies Financial Group issued their FY2018 earnings estimates for Enquest in a report released on Monday, September 10th. Jefferies Financial Group analyst M. Wilson expects that the company will earn $0.15 per share for the year. Jefferies Financial Group also issued estimates for Enquest’s FY2019 earnings at $0.17 EPS, FY2020 earnings at $0.19 EPS, FY2021 earnings at $0.14 EPS and FY2022 earnings at $0.14 EPS.

gk10 10 Sep 2018

Cnbc interview Hitman, Good call on the 35p, it is following the same pattern as the open offer so far but to exaggerated degrees. A completely different beast being a RI which appears to be confusing some of the regular posters on the LSE chat. TERP, the “T” should give it away? Good luck tomorrow.

hitman1 10 Sep 2018

Cnbc interview Pretty much near 35p … as expected… perhaps a little help from historic shorts closing, helping us out over the next 6 to 8 weeks … etc. they won’t get these prices for much longer given the current production profile. And it’s hard to ignore the ever improving EBITDA. I did ask JS at the AGM about the time frame of offloading Kraken and actually getting the money. Never did quite hear/understand the answer, but a few people sitting nearer to him, heard him better and nodded… I’ll assume it’s 30 days from delivery at East Coast refiner. No one wants to ask the same question again. I guess from the questions last Friday, all the analysts were confused about the Magnus deal… Towards the end , it got a bit clearer… . but some were left with the “it’s too good to be true” as they left. Maybe trend 35p/37p over 2 weeks… but by the time we hit end of October… I’d expect 40p plus. The cashflow coming in when your producing 75k/day is impressive… ok you might get the benefit next year, once we have cleared a few outstanding supplier invoices… but it bodes well with Magnus backdated to 1/1/17. Alma/Galia is quite small ie working interest is about 26mb. so only about 10% of reserves including the new Magnus… Yes it cost too much… but it might produce 7kbopd and trend down to 5k by Nov Ops Update. Might be one of those buy to lets that washes itself until oil prices are higher. Overall, give time for the wider market to gain confidence in Enquest business decisions . Irrespective of the Brent price, we lost a lot of investors over the last 2 years as the variance between what was said and delivered has been too large… it’s been more than just a snag list.

hitman1 09 Sep 2018

Cnbc interview I’m not worried about Kraken not hitting 50k, as the original diagrams and estimates a few years ago only anticipated this level for a few months. I actually prefer the 40k and extra capacity DC4 brings, because this lasts for several years. The train crash happened a couple of years ago and Enquest survived. I think the rights issue was misunderstood on Friday as the other board have mentioned also. some sold and acted as if it was an open offer, others think it will drift down to the rights offer price of 21p as if this is a placing. EBITDA is strengthening, every day. Excellent tanker tracking on LSE which would indicate a hook up tomorrow ie Kraken at 40k/Day. I see an up day tomorrow., to 35p. People now widely know the nil paid rights have value. They didn’t most of Friday am. Like me they were worried about dilution and where to get the extra money from.

gk10 09 Sep 2018

Cnbc interview Hitman, This is a train crash waiting to happen. The company couldn’t afford the repayments on its mortgage so went to a payday loan company to cover the impending due sums. That revenue is now gone until the payday loan is paid off. Kraken is not producing what it should be for the capex invested and now shareholders are being asked to stump up close to 50% of what they already hold to invest in Magnus. A poster on the PMO board suggested a cash call there a week or so ago, I said if it was underwritten it would be at a heavy discount. This one is. I expect a small rise tomorrow followed by a steady decrease to circa 23p over the coming weeks. Good luck all. Good analysis of the results on the other thread, unfortunately it will be immaterial until the 21p shares have cleared.

hitman1 09 Sep 2018

Cnbc interview Energy Voice – 8 Sep 18 Magnus acquisition my 'cup of tea', EnQuest boss says - News for the Oil and Gas... EnQuest bosses said yesterday its acquisition of 75% of the Magnus field, giving it 100%, would deliver a huge “step change” for the oil firm. Chief executive Amjad Bseisu described the £230 million deal with BP as his “cup of tea”, saying it would... Jonathon on Sat stressed the Magnus deal add £385m to the group. Amjad thinks it’s his cup of tea. I think the SP should have gone up on Friday GIVEN the extra £385m. Where did we go wrong?

hitman1 09 Sep 2018

Cnbc interview Very short CNBC EnQuest CEO: There will be some issues with supply chain post-Brexit Depending on outcome of Brexit that could affect some costs, says Amjad Bseisu, EnQuest CEO.