Rockrose Energy Share Discussion Threads

[russiaguru] 20/3/2020 10:10

aside from cash, the bounce is oil is looking pretty much dead cat

[spawny100] 20/3/2020 09:59

Could be a Marathon AND a Spirit though perhaps SMTB? Happy to have bought back my shares I sold at 21.80 for 4.80 yesterday so now back in with same holding. Very lucky timing.

[tomg23] 20/3/2020 09:56

You got me all excited last night as thought I could pick up more on the cheap.

[simplemilltownboy] 20/3/2020 09:46

Still imagine the SPs going to be choppy for a few weeks yet. The whole market is up on central banks printing money which is generally good for equities, the whole market is up. Also looks like the US is going to try to broker a deal with SA and Russia and US shale is looking at some form of bail out which should include production reduction. All very speculative at the moment but given it's an election year in the US I expect Trump to pull out all the stops to prevent the the ongoing demand destruction. Anyway great day, happy to have got in yesterday, however it's a marathon not a sprint. GLA DYOR.

[danawinner] 20/3/2020 09:33

Eenweedy another bit of excellent share price prediction. Good luck with buying in at 4 pounds. Here's an alternative view share price should be north of £10 next week.Unless we are suspended of course pending a fantastic deal produced by AA.Watch and learn.

[bluearmy1] 20/3/2020 09:27

Got any more tips haha

[fuji99] 20/3/2020 09:22

Their cash pile which is £20.5 per share, a good management and a safe geographic location of assets make RRE a long term hold. This is without taking into account RRE share price already lost 70% of its value. So it is dead cheap and a long term value hold.

[hazl] 20/3/2020 08:19

...what a difference a day makes....as they say.

[5chipper] 19/3/2020 20:44

Saudis and Russians choosing perfect timing to exert political pressure on US to cut oil production.

Can't really blame them. Why should OPEC shoulder all the cuts in the face of pandemic demand shortage?

[hazl] 19/3/2020 17:03

Well interesting comments above.
Admit on this one I'm not as informed as some of you but as you say some of that will be clearer next week.

[dragon35] 19/3/2020 16:28

You also need to look at the production profile and split between gas and oil. If oil was $30 all year then RRE would still generate $10 a barrel as they get a premium on Brent and opex is circa $22. Then factor in current forex and profit increases again. Then factor in hedged gas and the current hedge on oil and I expect a blended sales price of circa $40 averaged over all of 2020. This is why they will maintain capex spend on 2p reserves and pay the divi imo

[fuji99] 19/3/2020 16:17

Cheers paleje - I was referring to total cash.

[dragon35] 19/3/2020 16:13

The $40 is the average price they need over the next 18 years. People need to understand that oil at $30 this year simply means free cash flow is reduced so likely that capex will be cut. The key is high oil prices late 2021 and into 2022 because that is where their production peaks on current modelling and where most money is made or lost.

[paleje] 19/3/2020 15:46

I thought some of that cash was restricted fuji99, and that $65/brl hedge was for 1st quarter only......but I hope YOU'RE right not me because that will make it even better and I've been adding from £9 down.

Anyway we'll all know next week then it's either egg or big smiles on faces:)

[fuji99] 19/3/2020 15:37

paleje - The cash balance is £262 million. For all 2020, RRE oil is hedged at around $65/barrel. RRE has about 35% gas too - also hedged for 2020.

[paleje] 19/3/2020 15:21

Citi analysts reckon worst case scenario $30/brl oil average through 2020.
If as per a few posts back we need $40 to cover all costs we'll be $10/brl short.
Estimated production for 2020 was 21k 77m brls/day so about 7.67m brls/annual.

That's $76.7m shortfall about GBP 60m. BUT we've got GBP 230m unrestricted cash.
And don't know if that worst case $30/brl will happen, it seems unlikely to me.

I'm probably over simplifying as I know there are hedges in place but it's roughly how I see it as a non-oiler non-acountant fwiw. Please anyone correct me with a more realistic figure.

[fuji99] 19/3/2020 13:47

They never mentioned any pension liability in their results. The good thing is they are DEBT FREE and have £262 million cash which is equivalent to £20.7 per share.

[russiaguru] 19/3/2020 13:37

so does BT but that survives, even with a crazy debt load.

I thought they were passing it to an insurance entity, hopefully we will find out next week.

[calmtrader] 19/3/2020 13:34

Don't they also have large pension liabilities?

[fuji99] 19/3/2020 12:29

Decommissioning costs are for 2021, 2023, then till 2025, 2027, 28, 29 and 2035. So within these periods there is income from production. In any case, ar the end of February they have a pile of £272.1 million, a rarity these days.

[robbiekeane] 19/3/2020 12:28

Thanks dragon35 for clarifying - Cheers

[dragon35] 19/3/2020 12:20

RRE operating costs are circa $22 but if you add in the whole life of the asset costs and capex commitments it rises to $40 area.

[fuji99] 19/3/2020 12:09

The US is pushing the saoudis to reduce production. China, for political and economic reasons is starting to push ahead with production. these are the two main factors in oil demand affecting its price. Saoudis stopping to flood the markets more than necessary and China starting to recover.