Enquest Live Discussion

Elena_Saratov 13 Dec 2018

Back in Enquest is pinned down by the Bots and a massive overhang from the placing. Once the overhang is cleared this will sprout wings. Oil Price is down over $1 over the week, if improvement this evening continues into tomorrow we could see lots of buying sub 23p. Good luck to all holders here.

gk10 13 Dec 2018

Back in Nice little tick up on Brent tonight, let’s hope today’s 5% loss is re-gained in the morning.

gk10 13 Dec 2018

Back in I honestly didn’t think I would get some for 22.15p, time will tell if they were a bargain or not!

hitman1 13 Dec 2018

Back in addict. but at least your making money.

hitman1 13 Dec 2018

Out again Thanks for that… certainly looks somber for 1H 2019… for both shale and Brent. Brent $61 isn’t enough… US Producers seem ok with devaluing the whole business just to produce a few extra barrels. Investors can’t seem to keep them in check… so large US funds are doing it for them by not going long… It’s here at this level until things calm down, rigs decrease and the price will only go up if there is genuine extra demand. But i still believe Opec + efforts with drag Brent to $65, showing a $15 spread in Q1 2019. mainly due to demand for the difference in grades… There are however some Shale producers which are cashflow positive at WTI $40 so some of them won’t slow down. 2, Thankfully all our projects are now done… I can’t see any small/medium ones starting many more at this level… which leaves only the ones like BP to take on mega projects. Our capex in 2020 and 2021 will be almost nothing apart from 2 drills at Magnus and 1 at Dons East, so that releases alot of cash to further develeraging. At these rates, AB is probably asking BP what else can i have, on a Magnus type deal to complete in mid/late 2020. Most news articles never discuss natural declines … oil is too easy to produce… so this is omitted from most equations… but it still costs $ to stay as you are… which hits the cashflow hard.

gk10 13 Dec 2018

Back in Couldn’t resist. Good luck

gk10 12 Dec 2018

Out again Hitman, This is worth a read if you get five minutes, It’s not as optimistic as your numbers. I’m still sitting it out for the time being. [link] Good luck.

hitman1 11 Dec 2018

Out again I believe every member of OPEC wants prices higher than Brent $65 . Perhaps Saudi wants more than $70… and has now accepted $80 is too high for other economies like India…etc If we say most oil wholesalers have enough stock for 1 month… then we won’t see any improvement in demand until the cuts start to begin… so really looking at sometime in Feb 19 when analysts see some concrete data and revise forecasts. In any event we have our hedge for $70 on say half so our average today is about $65 until end of Q1 2019… all in accordance with Moody’s analysis… We should see $65 plus from Q2 2019, although I am expecting it much earlier in early Jan 19. What we need to see from Enquest is monthly RNS re debt repayments in the $40m/range range… Brent $70 combined with production nearer 70K rather than 65k gets our FCF nearer the $700m/annum mark. Not that hard to do. 2020 nearer $950m if you cut most capex and save something on interest… 2019 and 2020 use up 50Mb , leaving about 180Mb for equity etc… and balance 250m debt. peanuts really. Q for 2091 AGM : how much capex for 2020… imv has to be less than $50m… Non-execs should discipline the company to not exceed imv…

gk10 06 Dec 2018

Out again Hitman, It’s a tough market to trade, I’ve made 9%, less stamp duty in the three trades. I could have made that in my last trade had I of sold yesterday but I never have regrets. Managed to call the bottom or thereabouts on each trade but not the top. All indices got hammered today, oil got hammered, we had the arrest of the Chinese mobile phone CFO potentially re-igniting the trade wars, Brexit and indecision at the OPEC meeting. Let’s hope the Russians play ball tomorrow or it could be another day of carnage. Another chance at 22.5p would be nice. Good luck tomorrow.

hitman1 06 Dec 2018

Out again Looks like 1m cut for OPEC based on Sep or Oct, which has more meaning than based on Nov. Plus Russia cut 150k to 250K… will know tomorrow. Main thing is that Opec has capped 2019 production… perhaps 6 mths. Plus Canada cut… Libya production issues, Iran decreasing a little… All bodes well for $65 to $70 in Jan 19. A little higher when Shale finds it more difficult to offset natural declines… And of course… this price range doesn’t exactly leave much left over for massive capex investment… The only thing about the Enquest Rights issue is I still can’t understand why we needed it… The Magnus drill money won’t be needed until next year, and we have plenty of cash as confirmed by the last ops update as of Oct 18. Perhaps our solicitors didn’t want to work in Dec… gave us a cut off point and somehow the risk of not completing in time was mitigated by the RI… ?

hitman1 06 Dec 2018

Out again Don’t blame you… plenty of washed out longs won’t re-enter Oil unless they see OPEC cuts over and above that required to balance… Also think Russia anticipates Shale production has peaked and shale natural declines will become much more noticeable in Q2 next year, hence the reluctance to agree to larger cuts than it thinks necessary. We can relax a little with our current hedging in place, but if we get another RNS in Jan, with more early repayments, say another $40m, then the market can extrapolate forward to give better value to our future cashflow… which at the moment, isn’t in the SP. RE Times article , no point criticising delay of TL… it broke down earlier… , …we managed to get a better lease rate due to the delay… $$$. worked out well.

hitman1 06 Dec 2018

OPs Update Hi GK10… I know what you mean re Kraken… we ordered a Large Deep Pan Pizza and got our delivery late… It looked correct, so we signed for it. When we opened up the large box… we found a medium Pizza inside. The thing is some components aren’t accessible, so although Enquest has admitted some smaller parts have been identified as troublemakers… I guess there are other components inside larger pieces of equipment that need investigation… problem is you can only do that when the plant is shut down… I anticipate a 2 week shut down in March/April 19 for more detailed works… Can’t really always blame Bumi because all those pieces were subcontracted out to others. There’s a reason why they have made reference to “conservative numbers”… because I think they now have some clues… nothing to do with well capacity… just that on current set up… 30k/35k is max on continuous. Anyway, for me now it’s about deleveraging… excellent because the process has started. Interest savings and lower capex mean more cash in the bank every year in addition to 2019 estimates… EPS next year and beyond look very strong compared to last few years which the SP is based upon…

gk10 06 Dec 2018

Out again Good luck.

gk10 05 Dec 2018

OPs Update Hitman, I think excellent might be pushing it a bit. Net debt remains a concern as it appears to have only reduced, in real terms based on sales, by $50m when you add back in the net $127m from the rights issue and the $20m Thistle payment to increase the company’s decommissioning liability. I’m also assuming all the $175m OZ facility has been drawn down to arrive at that figure. A positive, some might not view it as a positive, is the company has now admitted to the market that the golden goose, Kraken, is unlikely to produce more than 35k, a far cry from the 50k anticipated. As always this is a play on the oil price, unfortunately due to the additional shares now in issue long-term holders may have a longer wait but if OPEC agree a policy to stabilise the oil price tomorrow new investors may do well. I was tempted to cash in earlier but since I’ve got a bit of a buffer I took a gamble on OPEC. Good luck in the morning.

hitman1 05 Dec 2018

OPs Update Excellent Ops update… on hedging… 2019 production forecast and admission of issues on Kraken re some equipment that will have to be sorted in time, … but no time soon. RE DC4, It does feel like we are building well capacity to be used in the future , so well pressure might be good, but will have to be shared… so till a chance of better than 30K/35k gross on Kraken in 2019. Strengths are the company’s ability to deleverage over 2019 as we are… all sort of in accordance with Moody’s analysis… perhaps actual will be 5% better … so time will tell. aim for 67K at $67. It’s no longer about each project… but the overall production and cash the business generates. So long as reserves are accurate… Enquest should moved away from the going concern issues that have plagued the sector and be re-rated in the New Year . More deleveraging instalments by next April, perhaps some a little earlier like the $65m Nov 18 to save interest charges and we should see a more positive SP. At some point we have to be valued on Earnings x number of years… … because you can’t hide the significant volumes of cash now coming in… GL