|Looks like OPEC is giving US frackers the green light, a few dollars/brl more and they'll be piling back in, then up goes production reversing any benefit from OPEC cuts and the price falls back shooting both OPEC and the frackers in the foot:) At least until demand increases, we don't know about that yet.
All I can say is get in there guys and get some equipment sold pronto.|
|Yes that's pretty much how I see it, Che7win.
But in capping the upside (price wise) they are shooting themselves in the foot because then need higher prices to make fracking sustainable. It's catch 22. So I can see possible near term more business for NTQ but medium-longer term not so clear. Just my opinion, Mr Trump could surprise either way.|
Trump it is thought is positive for US oil production, he has made some blunt statements about Saudi imports. That should be positive for NTQ, but would not help the wider oil price if it encourages US production.
Saudi are going to push through some kind of fudged OPEC deal, but you got to wonder for their long term plan - US fracking is going to cap the upside.
NTQ is well placed going forwards.|
|If US frackers storm back into production en masse, won't they risk recreating the same over-supply problem that OPEC is looking to cure? There must be a balance somewhere but I don't see the US volunteering to cap production, admittedly there could be higher demand if Trump's growth plans work out but there are lots of ifs imo.|
|Nice buying today, perhaps on the positive OPEC noises - and new recent highs.
The £10.9m m/cap is still well below cash however, let alone the other assets outlined in above posts - or with anything at all for the business itself.
che7win, perhaps they could rent part of the 30,000 sq.ft facility out, but presumably it would have to be relatively short-term in case of a return to sizeable production, which would be offputting to potential tenants. Perhaps best to email the company and ask them directly.|
could they not rent out part of the manufacturing facilities or is that just unfeasible for the short term? Even if it was just for storage facilities surely they could leverage that asset.
I guess the market is expecting no turnaround in prospects in the immediate future.
It does look undervalued at this price to me, and cash is being received as the working capital diminishes for now.
They also have opportunities to buy distressed assets if they so chose? Would they consider that?|
|In the annual report, the "land and buildings" is mainly buildings ($1.8m nbv at 31/3/16) rather than land ($0.5m), so question what manufacturing facilities would be worth in a prolonged downturn.
But all the same, I am still puzzled by the apparent disconnect between assets and market cap. As I read the accounts Enteq has:
$15.2m cash & equivalents
$ 0.7m working capital ($1.6m receivables, $0.9m payables)
$3.0m property plant and equipment
Again, as I read the accounts, in the half they reported $1.2m of "cash and shares" admin expenses (i.e. $1.46m less $0.03m forex less $0.23m D&A). They also spent $0.5m on inventory.
So even allowing for a lot of bad debt in the receivables it seems to me the basic cash +/- working capital gives them comfortably more than the c. $12.8m market cap (60.5m shares x 17p/share x 1.24 xrate). Then you have the inventories and property, plant & equipment (not to mention intangibles) for nothing.
Neil Warner stepped down in September so that will help a bit with admin expenses going forward.
So it all feels like a no-brainer - shares at this price appear to discount the business not recovering for a long time - which makes me feel I must be missing something. I suppose if they really had to shut everything down and pay off remaining staff there would be redundancy plus maybe some remediation works required on closure of manufacturing facilities? But that seems an extremely pessimistic scenario to me.|
|Interims out today - the cash pile is actually UP to around £12.2m (well ahead of the £10.3m m/cap).
New contract in Saudi Arabia sounds promising, and H2 will apparently be better than H1 was, though revenues will be lower than prior expectations.
Worth noting that NTQ also own $2.5m (at cost) of land and buildings as outlined in the narrative today:
Management have done a superb job in hunkering down. There are glimmers of light, but recovery is going to take a while - unless the global opportunites NTQ talk about start to come through.|
|Interims on Friday. Looking forward to seeing the commentary on US rig activity - how long do they think before business picks up there again, or are they already seeing signs?|
|Keeps nudging higher....|
|Nice very nice , great bargain here even if management just maintain the status quo, had another top up recently.|
|Allianz increasing ownership.|
|"This is what we've been anticipating. With prices at these levels and rising, rig count increases will likely be in the double digits hereon," said Tariq Zahir, crude trader at Tyche Capital Advisors in New York.|
|It seems a few large trades went through yesterday, one for as much as 500,000 volume.|
|45 rigs added to the Permian:hTtp://www.bloomberg.com/news/articles/2016-10-13/oil-rebound-s-dirty-little-secret-threatens-u-s-gas-bulls|
my mistake, I was looking at the net assets:
The net assets and non-current assets of the Group can be analysed by geographic location (post-consolidation adjustments) as follows:
|NTQ only held 2% of its cash in GBP - the other 98% is in US dollars. Look at note 17 in the last Annual Report.
I suspect that remains the case, but you could only confirm by contacting NTQ.
OT : sorry 1gw, my post crossed with yours. At least we agreed!|
|Where do you get the "half" from che7win? Don't you mean 2%?
Have a look at page 46 of the annual report:
At 31st March 2016:
$14,785 Denominated in USD
$336 Denominated in GBP
which is consistent with the statement on page 9:
"Enteq is subject to the foreign exchange rate fluctuations to the extent that it holds non-US Dollar cash deposits. These GBP denominated holdings are now approximately 2% of total cash holdings."|
|rivaldo or anyone who knows,
over half the cash here was held in Sterling rather than dollars from the year end accounts - do you know if they had any hedging or moved cash since Brexit?|
nice to see you here. This has been on my watchlist a while, I've bought some.
The chart also looks good for recovery.|
|Nice 30k buy at 16.49p caused the tick up, no doubt inspired by the rising oil price.
NTQ have around £12m cash at current exchange rates, plus a net $2m net receivables/payables, $4.2m inventories and $2.9m PPE - including $2.3m of land and buildings. That's almost £19m, against a £9.8m m/cap.
NTQ also recently highlighted this article on their web site about new drilling technologies, including their own:
|A little perk up? A very slight up tick by the look of the chart above|
The business here has been curtailed, what with employee numbers nearly halved.
However, assets underpin the share price.
|and tanked another 6% at one point last night :)|