Eneraqua Technologies Share Discussion Threads

[365] 17/3/2002 23:06

From Sunday Times:

Justin Urquhart-Stewart tips Enerprise Oil.

[bionicdog] 17/3/2002 16:19

another little snippet to increase M&A speculation.

"LONDON (AFX) - A spokeswoman for Statoil ASA in Norway declined to comment
on a report in The Business that the group is studying a possible bid for
Enterprise Oil PLC.
"We do not, on principle, comment on such reports," she said, when asked
about the report which claims that the oil and gas company has identified major
benefits from merging its North Sea production assets and Central Asian
exploration projects with those owned by Enterprise.
acb/jlw
NNN

For more information and to contact AFX: www.afxnews.com and www.afxpress.com"

btw , would anyone object to me starting a new thread , as the title of this one is a little outdated? if nobody objects , i'll do one with updating charts and links etc.

[365] 17/3/2002 14:06

Already at $24 a barrel if sustainable at these levels then I see a valuation in excess of 700p, I remain long.

[bionicdog] 17/3/2002 00:21

from the FT. the last two paragraphs will be of most interest to ETP holders.


"Onlooker: War makes oil a 'win-win' buy
By Vince Heaney
Published: March 15 2002 17:20 | Last Updated: March 15 2002 17:47



The possibility of US military action against Iraq cannot be ignored by investors. A second Gulf War could snuff out signs of stock market resurgence and threaten to derail the cyclical economic recovery. Investors need to look for stocks that offer the prospect of solid performance if the economic recovery continues to develop, but which also offer a degree of protection in the event of war in the Gulf. The oil sector appears to fit the bill.

I remain cautiously optimistic about the prospects for UK stocks based on improvements in the macroeconomic backdrop and the technical condition of the market, topics covered in last week's column. But experience suggests war against Iraq would produce a sharply higher oil price. The consequent transfer of income from oil consumers to producers would reduce global economic growth at a time when the scope for policy response is limited by the extent of changes already enacted in the wake of September 11.

Some insurance is needed. But the problem with assessing political risk is that it is difficult to assign a probability to the worst-case war scenario. Paying too high a price for protection can leave you high and dry if the worst outcome is avoided. The FTSE oil sector has performed strongly in 2002, rising by more than 13 per cent in the year to date. The pace of increase has picked up in March as the perceived threat of military action has grown, driving the crude oil price higher. Investors need to ask if there is still value in the sector.

Strategists at Merrill Lynch see scope for further upside, describing the European energy sector as a "win-win" proposition. A recovery in global manufacturing will increase demand for oil. If the economic recovery disappoints, Merrill suggests that an attractive mix of characteristics including sound balance sheets and solid earnings growth rates would cushion the sector.

Valuations are not excessive. Energy is the cheapest European sector on the Merrill Lynch valuation matrix. According to Credit Suisse First Boston, current share prices for the UK oil and gas sector imply a 10-year earnings growth rate of 7 per cent. By historic standards expectations do not look high - the actual 10-year earnings per share growth rate for the sector is almost 15 per cent.

But recent share price increases have introduced a note of caution. "After a reasonable run-up the absolute valuations are starting to look a bit stretched," says Mark Iannotti of Schroder Salomon Smith Barney. However, Iannotti believes the risks are not great - with crude prices above $18-$19 a barrel there will be support from earnings growth.

The crude price outlook is brighter than at the start of the year, even excluding the potential for war. In January there were doubts about compliance with the December 28 Opec agreement, and whether it would be sufficient to avert a price war between Opec and Russia. However, "threats of a price war failed to materialise, and ultimately price levels revealed the market's backing of the agreement, offsetting lower-than-expected demand due to the mild winter in the northern hemisphere," said Edward Ennis of SG Securities. The success of the agreement led the cartel to extend the quota cuts through the second quarter at yesterday's Opec meeting.

Restriction of supply will help support prices during seasonally weak demand in the second quarter, while resurgent economic growth is expected to increase oil demand as the year progresses.

Valuations look reasonable and the crude price outlook is brighter, but it is not all good news. Refining margins remain very weak, suffering from a reduction in demand after the September 11 attacks and the mild winter. Analysts see little improvement in margins in the second quarter. However, the weakness in refining margins encourages producers to reduce production runs and works to reduce stocks of refined products. Lower inventories combined with increased demand later in the year may produce a recovery in margins over the medium-term.

There is a strong positive correlation between oil prices and oil stocks. Profit at oil majors BP and Shell increases by around 5 per cent for every $1 a barrel increase in the oil price. Enterprise Oil suffers from being stuck between the higher returns offered by the majors and the growth potential of the smaller exploration companies, but it offers a more highly geared play on the oil price.

Mark Redway of Teather & Greenwood suggests Enterprise is fair value at 670p with oil prices at $20 a barrel, but if there were a sustainable rise to $24, not merely a spike higher, a valuation in excess of 700p would be more appropriate. Enterprise Oil is also a potential takeover target having already rejected an unsolicited bid in December, reportedly from Italy's ENI. The possibility exists for a premium in the event of a fresh approach.

If the recovery takes off, the oil sector will not be the year's star performer, but it has solid prospects and defensive appeal in the event of war in the Gulf.

Contact Vince Heaney"

[nackaerl] 16/3/2002 00:31

If you assume that the average trading range is 615 with an oil price of 21-22 at the time of the rumoured bid. Will i be wrong if you say (615/22*24) = 670
as a new fair value ?

[diydan] 16/3/2002 00:04

Still waiting for news of bid! However that run of other oil stocks has continued yet etp not moved even with large rise in oil price. I would have thought it would at least have moved up with that. I am not sure how much of etp price is now based on possible bid and how much is based on current oil price. Anyone have any views?

[diydan] 15/3/2002 13:39

nachaerl
BP. has risen by £ with the rise in oil price in the last month I would not have expected etp to do the same as it is always lower than BP however I would have thought a rise to £6-40 could have been expected?. Maybe it will do that from now but I do not think it will.

[365] 01/3/2002 13:48

I would have thought that as the price is holding up in a narrow trading range a bid is expected, otherwise it would surely have drifted much lower?

Waiting game

[t.ainscough] 26/2/2002 08:38

So this was the reason for the rise yesterday (From Sharecast)

There was a late flurry of interest in Enterprise Oil as dealers heard that the oil exploration company had suddenly cancelled a management visit to the US, The Guardian reported. Enterprise refused to comment on rumours that the trip, to update US investors on its recent results, had been postponed because it had received a firm offer from Eni. Enterprise ended 24p higher at 625p, its biggest one-day gain in six weeks.

[upside] 25/2/2002 18:33

Here's the link:

[t.ainscough] 25/2/2002 16:53

Sorry meant to say "no announcement" in the above post.
Saw that news- but don't understand why that would cause a leap in the share price- Must admit I expected a fall!

[nackaerl] 25/2/2002 16:43

Please see on bloomberg the uk edition read under news for etp and see what the italian press la republica wrote today

[t.ainscough] 25/2/2002 16:34

Big rise in last few minutes of trading today on no news.
Someone obviously has got wind of something!!
Is the bid imminent?

[nackaerl] 20/2/2002 10:18

TOTALFINAELF ceo T.Desmarets today denied in the belgian newspaper l'echo considering a takeover in the US ( conoco ) or acquiring ETP

[diydan] 18/2/2002 11:41

Anyone out there have any views on when there will be a comment or bid from ENI. Other oil stocks seem to have had a good run in recent past and its all gone very quiet with this one. My own view was that they would have made some comment or bid last week They must be talking to the big shareholders.

[josephmsmith] 10/2/2002 11:35

For those who took an interest here is an update on previous post of 20th Jan on this thread.
Notible improvements since then have been the bid for EXD, and the price increases of HVE, ART, CRST and KIE.

Market rating LSE Price change p as of today.
0.0290 EXD – Express Dairies +10 (+70%)
0.0869 ETP – Enterprise Oil +164 (+36%)
0.1065 JKX - J K X oil -1 (-6%)
0.1079 ART – Artisan +2 (28%)
0.1103 HVE – Havelock +13 (45%)
0.1356 UKC – UK Coal -6 (-7%)
0.1545 AG. – Arcadia +39 (+15%)
0.1962 RWD – Robert Wiseman -9 (-7%)
0.1992 GTG – The Get Group +3 (+2%)
0.2007 DVO - Devro -2 (-3.5%)
0.2366 CDB – CD Brammell +16 (+6.5%)
0.2693 PCH - Pochins +13 (+10%)
0.2899 NICL – Nicholls -4 (-4%)
0.2922 TTG – TT Electronics -14 (-8.5%)
0.3552 PAG – Paragon +23 (+9%)
0.3727 CRST – Crest Nicholson +40 (+20%)
0.4008 CC. – Clinton Cards -10 (-6%)
0.4107 ARI – Arriva +11 (+3.67%)
0.4130 HVY – Harvey Nichols +22 (+12%)
0.4592 KIE – Kier Group +110 (+22.5%)

Will be publishing a re-valuation using the above strategy on the 1st of March highlighting new stocks to be considered
Those interested can contact me on [e-mail]

[pparkin405] 06/2/2002 09:12

Enterprise still vulnerable to bid
By Saeed Shah
06 February 2002
Enterprise Oil remained firmly in bid target territory yesterday after its strategy presentation failed to convince the City that it must remain independent.

The exploration and production company said it had had no contact with Eni, the acquisitive Italian energy group, since it received an approach in December. Enterprise revealed the takeover interest last month, which was rebuffed, and it brought forward a strategy announcement by the new chief executive Sam Laidlaw.

Although Mr Laidlaw impressed investors and analysts with a polished performance yesterday, they complained the message lacked anything new of substance. Eni has already bought two UK oil and gas independents and they said it had every chance of a hat-trick.

The message yesterday from Enterprise, in what amounted to a defence document, was that it will take fewer risks and improve returns.

"We need to focus on value, not volume, and establish a really strong performance culture," Mr Laidlaw said. "It is not going to take years to transform this business, you will see the change in weeks and months."

Mr Laidlaw, who replaced Pierre Jungels, emphasised action had already been taken in the three months he has been at the helm. Enterprise yesterday revealed a series of deals that remodelled parts of its portfolio. It will also reduce the number of staff in its London headquarters from 300 to 200, to save £20m a year, and it entered into a joint venture with Innogy to supply gas to western Europe. Additionally, earlier this month, Enterprise ditched its exploration director, Andrew Armour, after the company failed to meet production targets in 2000 and 2001.

Jon Wright, an analyst at HSBC, said: "There was not enough to change investors' perceptions. It remains a bid target. You could say that the push for value over volume is because they don't have volume growth coming through this year."

Enterprise set a target return on capital employed of 13 per cent, assuming an oil price of $18 a barrel, but Mr Laidlaw admitted this was below the aims of the large integrated players.

Analysts believe that Eni will now lie in wait for Enterprise's shareholders to lose patience or for the company to fail to deliver what was promised yesterday.

[bionicdog] 05/2/2002 21:53

LONDON (SHARECAST) - Besieged explorer Enterprise Oil today paved the way for a renewed £3bn takeover approach from Italian giant ENI after admitting that it would consider any offer that reflects the value of its assets.ETP - Enterprise Oil

The thaw in relations came as Enterprise reported a sharp drop in net profits from £407m to £274m for 2001, reflected falling production and lower oil prices compared with the previous year.

However, the profits decline has been overshadowed by growing expectations that Enterprise is on the verge of receiving a formal takeover offer from ENI. An initial approach by the Italians before Christmas was rejected by Enterprise, leading to widepread criticism from City shareholders.

However, the two sides are likely to meet again soon after Enterprise's new chief executive Sam Laidlaw conceded that its would seriously consider a "full" offer.

"If an offer was made at a level that reflected the current value of our assets and its future prospects we will discuss it," he said.

Analysts and City investors believe ENI would have to offer at least 650p a share in cash to stand a high chance of winning control.

[monty burns] 04/2/2002 14:42

Don't like the rumblings on this over the weekend, and seems likely there will be no bid update - feel they could get targetted tomorrow by the shorters. With holders having some gains that they can realise, I chickened out and just sold. Difficult, could go either way.

Will watch with interest.

[pparkin405] 04/2/2002 08:00

MONDAY FEBRUARY 04 2002

Tough task for chief to defend Enterprise

COMPANIES REPORTING BY NICK HASELL

ENTERPRISE OIL: Sam Laidlaw, chief executive of Britain’s last sizeable independent oil explorer, has a formidable task ahead of him when he stands up to deliver full-year results tomorrow.
Not only must he put the best gloss on what are expected to be a grim set of figures, but he needs to outline a strategy that is suitably impressive to warrant Enterprise Oil retaining its independent status.

Early last month, a run in its shares forced Enterprise to admit that it had received an unsolicited bid approach, with Italy’s ENI — the owner of Lasmo, Enterprise’s old sparring partner — emerging shortly afterwards as the predator. The UK group had swiftly rebuffed the approach, made in December, but with its shares having since rallied 35 per cent — and with ENI tipped to pay 650p a share and more — institutional shareholders may press it to cave in if they do not like its plans.

These are expected to include cost reductions, a programme of disposing of non-core assets, and details of new geographic regions on which it intends to focus after its recent lack of exploration success. Other possible avenues are thought to include a big asset disposal, a defensive tie-up with a large North American rival, or even a rights issue.

However, analysts suggest that any sign of poison-pill alliances with strategic investors are likely to be received badly by the market.

The figures themselves are set to show the impact of the company’s 15 per cent downgrade to initial production expectations and a doubling of exploration expenses.

Deutsche Bank forecasts a 45 per cent fall in full-year net income to £290 million (£528 million), earnings per share of 61p (107p) and a dividend of 8.4p (8.0p).

[monty burns] 31/1/2002 17:32

Update to previous post:

Presumably the exploration bloke's departure was part of the 100 HO jobs cut announcement. Given their lack of success at exploration, seems logical.....





ENTERPRISE Oil has slashed
100 jobs at its London office in
the first step of a cost-cutting
campaign aimed at defending
itself against a potential £3.4bn
takeover bid from Italian group
ENI. The cull represents one
third of Enterprise's London staff
and will go some way to meeting
the company's goal of cutting
total costs by 25%.

The job losses, foreshadowed by
the London Evening Standard Business Day section a
fortnight ago, are expected to be confirmed when
Enterprise unveils its strategic review and full-year results
on 5 February.

[monty burns] 31/1/2002 16:48

Still hanging on to these - a bit dull over the last few weeks, but a lot better than losing it on the likes of the telco's. I guess patience is a virtue. Boring though.

Just seen the RNS about the exploration director leaving 'to pursue other interests.' Interesting. Was he pushed? Why would he leave voluntarily when he could very well be in line for a pay-off in a few weeks (days?) if ENI take them over? The timing of the announcement seems odd given next week's make-or-break (for the management) strategy presentations.

Can't imagine they will be actively seeking to replace him until the current dust settles - but this departure won't do much for their strategy. Far better to give in gracefully to ENI, wouldn't you think? 700p (and a bit more) and it's theirs.....

[venomousviper] 31/1/2002 14:25

Thanks I think there will be a bid too decided to hold until the bitter end as every time I sell a stock it rockets made a costly error selling MTN so I dont intend making the same mistake again here,rather hold and see it crash to 450p rather than sell and see it at 700p+