Enq 23 �pik Tog Discussion Threads

[p@] 16/1/2015 10:39

When does this go xd? TIA

[envirovision] 15/1/2015 16:22

If it makes you feel any better bt i've just taken a few again

[silkywhite] 14/1/2015 19:41

No he's always wrong. I make a lot of money off monty. Just do the opposite of what he says and you'll be quids in.

[montyhedge] 14/1/2015 17:04

badtime
He just looks at his investments through rose timted specs. Of course I'm not right all the time only 95%, lol.

[badtime] 14/1/2015 16:57

Silky..we are all grown ups ..make our own decisions..I'm sure Monty would be the first to admit he isent right all the time.

[eastwind] 14/1/2015 15:56

If there is nonpay of interest, it is classified as default. The issuer (ENQ) has to repay the debt (ENQ1) and accrued interest immediately according to the prospectus.

The main issue with ENQ is the covenant of the banking facility and bonds. Both says net debt/EBITDA >3. Even if the oil price = $70 pb, with the cost of $46 pb (without DDA), the EBITDA is only $24 pb. If we assume the average production is 27.5k per day, or 9.1 Mb or year, the total EBITDA = $218M per year. With net debt of $800M, the debt/EBITDA = 3.6>3.

The banks can refuse to lend and ask their money back in this circumstance. So ENQ could be in default.

The net debt in June 2014 is $716M.

[silkywhite] 14/1/2015 15:02

Beware. Id take what montyhedge says with a massive pinch of salt. He's been posting complete nonsense on the supermarket threads recently. Some of his calls have been 100% wrong. Like claiming MRW would cancel their dividend when in fact it was increased. Claiming the Qataris are bidding for Sainsburys etc. He revels in scaremongering but Ive never seen anyone get things so hopelessly wrong as Monty. I'm surprised he is still solvent.

[badtime] 14/1/2015 14:34

Forgive me ..also you posted the same on BRCI ...did I miss any? :)

[envirovision] 14/1/2015 14:34

I suspect the freezing would be classified as default leaving holders here with the option of asking the courts for a winding up petition. That would be a terrible mess!

[badtime] 14/1/2015 14:32

Yes I saw u posted that on the ords thread

[montyhedge] 14/1/2015 14:28

Like I said oil debt default will be like the dot com bubble, Dow and FTSE watch out, crash coming.
Opec cannot cut pruduction because US shale and others would make up production.
Oil going to $32, game of poker for arabs to finish the others, North Sea companies are stuffed bigtime.

[badtime] 14/1/2015 14:21

I hold a few ..lol

[simon gordon] 14/1/2015 14:20

And the bonds are not cumulative, could they just freeze payments, or would they default and liquidate by doing this?

[montyhedge] 14/1/2015 14:14

Would not touch with a 50ft bargepole and I like risk.

[envirovision] 14/1/2015 14:12

I wonder what their options is in withholding the coupon here, holders are not senior in the pecking order so would need to do as they are told to a certain extent.

[simon gordon] 14/1/2015 14:05

Maybe in the 30s, like the LLPE days.

[envirovision] 14/1/2015 14:01

Are you tempted ?

[simon gordon] 14/1/2015 13:54

Any views on at what price this might be worth buying?

[envirovision] 24/12/2014 12:16

some confidence

Dr Philip Nolan notified the Company on 23 December 2014 that he had purchased 100,000 of the Retail Notes at 71 pence per Retail Note, totaling 0.065% of the total Retail Notes.

Prior to this transaction, Dr Philip Nolan held 150,000 Ordinary Shares of GBP0.05 each in the Company ("Shares") and no Retail Notes. The total holding of Dr Philip Nolan following the transaction is 100,000 Retail Notes and 150,000 Shares

[envirovision] 18/12/2014 11:32

Good buy bad im still holding yep no intentions to be trading them at all!

[badtime] 18/12/2014 10:22

Bought a few at 65

[badtime] 16/12/2014 23:40

Holding onto yur nibble? :)

[envirovision] 16/12/2014 19:55

Rating Action: Moody's affirms EnQuest's B1 rating; oulook changed to negative
Global Credit Research - 09 Dec 2014

London, 09 December 2014 -- Moody's Investors Service has today affirmed B1 corporate family rating and B1-PD probability of default rating of EnQuest plc and converted to definitive B3/LGD 5 rating on its senior notes. The outlook on the ratings is changed to negative from stable.


"The negative outlook reflects our expectation that lower oil prices will translate in lower earnings and weaker leverage metrics in 2015, even as EnQuest is set to deliver strong growth in production volumes on the back of its Alma/Galia field development scheduled to come on stream in mid 2015", said Elena Nadtotchi, Vice President and Senior Credit Officer and the lead analyst on EnQuest plc at Moody's. "The B1 corporate family rating is materially supported by the expectation that EnQuest will strongly execute on its large development project at Kraken and deliver sustained high level of growth in production in 2016, that will drive the recovery in the leverage profile in the next 12-18 months".

RATINGS RATIONALE


The negative outlook on the ratings reflects the expectation of weaker financial metrics in 2015, including debt/EBITDA closer to 3x, as the projected growth in production in the next 12 months will not fully offset the decline in the average realised oil price on our current assumptions. Consequently, we expect that EnQuest will operate at a lower level of financial flexibility in 2015, including reduced headroom under its financial covenants. The affirmation of B1 corporate family rating and the assignment of definitive B3 rating on the senior notes reflects the assumption that EnQuest will proactively manage its requirements to fund negative FCF generation in 2015, as it continues to invest, and that the sustained growth in volumes from its new project at Kraken will deliver a recovery in the financial profile in 2016, even if oil prices do not recover. Proactive cost management and hedging of commodity risks will also help to reduce the pricing pressures during the transition period in 2015.


EnQuest's B1 CFR reflects the relatively small scale of its proved reserves and cash flow producing assets as well as a certain degree of portfolio concentration in a limited number of fields in the UKCS. The solid positioning of the rating within the B-category is supported by the strong, albeit relatively short, operating track record, high level of technical and management ability and cost efficiency the group has delivered during the growth of its operations since its inception in 2010, as well as the strong growth expected in production in 2015-2016. With most of its reserves and production in the UK, EnQuest benefits from the stable fiscal regime and low political risk associated with operating in the UKCS. The tax incentives from the UK government in recent years to operate on the UKCS also mean that EnQuest does not expect to pay any cash tax in the medium term.


EnQuest is a high-growth business and its B1 rating is materially underpinned by the expectation of sustained high level of growth in production. We assess positively EnQuest's strategy of developing licences that already have producing or near-production fields, through a focus on field life extensions and marginal field solutions, which reduces the group's operating risk profile relative to similarly sized US peers with larger focus on exploration. In addition, the almost entirely Brent oil production enables the group to achieve a high realised price for its production. EnQuest is also the operator on the majority of its licences, enabling it to benefit from an increased level of oversight on its expenditure and operational strategy on these fields. EnQuest also has a track-record of successful acquisitions and current lower price environment may bring opportunities to add to its portfolio.


In 2015/2016, EnQuest faces a high level of investment and material execution risk as it looks to double the group's production levels through bringing on-stream two key projects, Kraken (2017) and Alma & Galia (2015). These risks are mitigated by solid economics of the two projects and strong execution by EnQuest, with the close completion on Alma/Galia project in the next 6 months, as well as the fact that c.60% of the capital expenditure on Kraken, has been tendered and awarded. In 2015, EnQuest will generate negative FCF and will rely on its committed bank facilities to fund the development of its key Kraken project.


Liquidity


EnQuest's liquidity is underpinned by a USD1.2 billion revolving credit facility (RCF), of which USD153 million was utilised for letters of credit as of the end of June 2014. The facility has several financial covenants and while EnQuest is managing commodity price risk proactively, a sustained weakness in the Brent oil price will reduce headroom under the financial covenants at the time when the company will need to utilise the facility to fund its FCF deficit in 2015 (driven by investment in Kraken).


EnQuest also has access to additional liquidity, as it continues to add to its reserves and raises efficiency of the operating assets.


The group does not have any debt maturing before the expiration of the RCF (October 2019), but it has recognised a USD122.6 million financial liability related to a firm development carry (as part of the consideration for the stake it acquired in the Kraken field in 2012), that we expect will expire in early 2015.


Drivers of Rating Change


While we do not see any near-term upgrade pressures, the continuing expansion the company's reserve base and production profile, together with a growing level of diversification of its asset base, that would deliver further operating cash flow growth and enable the sustainability of its moderate financial profile, could lead to an upgrade on the B1 rating.


The B1 rating could however come under pressure should (i) there be material delays and/or cost overruns in the development key oil fields, such as Kraken; (ii) any significant deterioration in production levels and/or oil price realisations, which would lead to more material balance sheet re-leveraging than currently expected, with debt to EBITDA rising above 2 times for a sustained period.


The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies