EnQuest Background
EnQuest PLC (www.enquest.com) is an independent oil and gas production and development company focused on the UK Continental Shelf . Its assets include the Thistle, Deveron, Heather, Broom, West Don and Don Southwest fields. Gaffney, Cline & Associates (GCA) certified that as at 1 January 2010, EnQuests assets had total net proved plus probably oil and NGL reserves of 80.5MMBbl. As at 1 January 2010, GCA has also net certified oil and gas best estimate (2C) contingent resources for individual assets. The aggregate of the oil 2C contingent resources on an unrisked basis is 67.5MMBbl, and of the gas contingent resources is 30.6Bcf .

On 6 April 2010, EnQuest was formed from the demerged UK North Sea assets of Petrofac Limited and Lundin Petroleum AB. EnQuest was admitted to trading on both the London Stock Exchange and the NASDAQ OMX Stockholm. On listing, EnQuest PLC went into the FTSE 250 index and OMX Nordix Index. Its assets include the Thistle, Deveron, Heather, Broom, West Don and Don Southwest fields. It has interests in 16 production licences covering 26 blocks or part blocks in the UKCS, of which 15 licenses are operated by EnQuest.

EnQuest believes that the UKCS represents a significant hydrocarbon basin in a low-risk region, which continues to benefit from an extensive installed infrastructure base and skilled labour. EnQuest believes that its assets offer material organic growth opportunities, driven by exploitation of current infrastructure on the UKCS and the development of low-risk near field opportunities, rather than exploitation of high-risk exploration opportunities.

EnQuest intends to deliver sustainable growth in shareholder value by focusing on exploiting its existing reserves, commercialising and developing discoveries, converting its significant contingent resources into reserves and pursuing selective acquisitions. EnQuest is focused on increasing production from its existing assets in its core hub areas. It believes that it has excellent operational, execution, subsurface and integration skills and it seeks to become the development partner of choice in the UKCS.

EnQuest believes that it has the technical skills, the operational scale and the financial strength to achieve its objectives and to take advantage of the production and development opportunities in the UKCS.

http://www.nasdaqomxnordic.com/aktier/shareinformation?Instrument=SSE75073

North Sea set to roll out the barrels again as UK oil industry is thrown an unlikely lifeline
TELEGRAPH - 11 FEBRUARY 2017 • 1:17PM
In the North Sea, there are fears that the oil basin might not survive a late-life market shock

After a vicious two-year oil collapse that brought the Granite City to its knees, Britain’s oil and gas industry is daring to hope again.

“In Aberdeen people are being embarrassingly nice to me,” says Philip Kirk, weeks after steering oil minnow Chrysoar through an audacious multi-billion pound deal to become one of the largest independent operators in the North Sea at a stroke.

“We’ve had a massively positive reaction to the deal. People want to hear someone talk up what might be achievable. What we need now as an industry is to show what the future could look like and give people something to focus on and look forward to – some sense of optimism after a particularly difficult year for the workforce,” he says.

Global oil prices have dragged through a price rout longer and deeper than the North Sea workforce can remember.

Since the historic lows early last year, the oil and gas industry has lost a quarter of its staff and its capital city of Aberdeen has shrunk by almost a fifth, leaving a trail of insolvencies and mortgage arrears in its wake.

Major oil-producing regions across the globe have been battered as project plans were were left in tatters and booming profits turned to loss.

In the North Sea, fears that the oil basin might not survive a late-life market shock have added extra weight to the gloom.

These fears have been grossly overplayed, says Kirk.

The $100-a-barrel boom years may have left producers bloated with unnecessary costs and rising debt, but the need for leaner operations in the “super-mature” North Sea was becoming clear even before the market crash.

Oil production costs have slipped from $35 a barrel to the low $20s and are expected to fall further still. Government has slashed taxes and smoothed the tax rules for dismantling projects in the coming years. A new regulator is stepping in to streamline a new vision for the industry.

It has been an unprecedented collaboration that has protected the North Sea from collapse and lay the foundation for a new chapter.

http://www.telegraph.co.uk/business/2017/02/11/north-sea-set-roll-barrels-region-thrown-unlikely-lifeline/

50 v 50.50p +1.50 (+3.08%)

The strength of the order book has been reflected on the spike not long go, and managing to keep most of the gains so far.

DEPTH
62 v 43

volume at spread price 33K v 83K

Kraken FPSO Arrives At Hook-Up Location
Published in Oil Industry News on Monday, 13 February 2017

EnQuest’s Kraken development off the UK remains on track as the Armada Kraken arrives on-site at it's hook up location, keeping the project on track for first oil in the coming weeks.

The FPSO which set sail from Singapore towards the end of last year is designed to handle 460,000 barrels per day of fluids with 275,000 barrels per day of water-injection capacity, and storage capacity of 600,000 barrels.

EnQuest has forecast 2017 output to range between 45,000 and 51,000 boepd, with the final figure being dependant on the time of the Kraken start-up.

EnQuest chief executive Amjad Bseisu said: "EnQuest is delivering reductions in operating and capital expenditure and we continue to streamline our operations,”

“Our low cost operating structure and our low cost approach to operatorship are integral parts of our way of doing business ­ whilst always retaining safe operations as our number one priority.”

Https://www.oilandgaspeople.com/news/13399/kraken-fpso-arrives-at-hook-up-location/

49.25p +1.25p

The much awaited already known news on the BB's are finally released....

ENQUEST PLC, 17 February 2017
Development update: Kraken FPSO in the field and hooked up

The Kraken development

The Kraken Floating Production Storage and Offloading ('FPSO') vessel arrived at the field on Monday 13 February, anticipating good weather conditions. The hook up of the Submerged Turret Production ('STP') buoy mooring system, to the FPSO was completed on 15th February and a full rotation test performed so that the vessel is now on station and securely moored. Commissioning work will continue on the topsides. Reconstruction of the turret area pipework and connection of the risers and umbilicals to the swivel stack is being undertaken followed by commissioning of the subsea infrastructure. Delivery of first oil in Q2 2017 is on track.

The Oil Man: Jersey Oil & Gas, EnQuest, Ithaca, Bowleven -Malcolm Graham-Wood | Fri, 17th February 2017 - 12:37

EnQuest

Good news from EnQuest (ENQ) this morning as news from Kraken is that the FPSO has arrived and has been hooked up successfully. With delivery of first oil on track for Q2 this year things are beginning to look up for ENQ and it probably deserves a better reception than that given by the market this morning.

Good article in The Times yesterday.
Author thinks Ithaca has been undervalued with recent bid. Stating Enquests field a long with Ithacas are amongst the largest in the north sea to have passed significant milestones. The tone suggests further rises to come with noting negative stated

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The Times - February 18 2017, 12:01am,

First oil from Stella field lifts Ithaca
Greig Cameron, Scottish Business Editor

The Stella field is forecast to more than double Ithaca’s daily production to between 19,000 and 22,000 barrels this year

ITHACA ENERGY
Two of the largest North Sea fields have passed significant milestones with Ithaca Energy’s Stella site producing its first oil while a floating production vessel has been moored on Enquest’s Kraken acreage off Shetland.

Stella has had a troubled gestation with the date for first oil originally pencilled in for the end of 2014.

The timetable was pushed back several times, mainly because work to build a floating production facility at a shipyard in Poland fell behind schedule. Since the vessel arrived in November last year, the weather has caused further delays.

Yesterday Ithaca, which is subject to a £517 million takeover proposal by Delek, the Israeli group, said: “Production has been started from the field and oil export to the adjacent shuttle tanker has…........

Http://www.thetimes.co.uk/edition/business/first-oil-from-stella-field-lifts-ithaca-fq8cwd5rf

50.25p +0.75p (+1.52%)

What a change today from opening lower ( all depends of orders being place on the order book ) and there were not many and more on the offer side, to slowly the bid side getting some orders and almost being equal.

But now the amount are well reverse and the DEPTH has gone to 77 v 38

Bought some @ 42.975p

Looks like an intraday double bottom at this price seem like a good support after the shark spike down, with a Fibonacci retracement of over the maximum 78.6%

Charting Brent oil

It's from Soc Gen via Alphaville. The comment from Bryce Elder at Alphaville sums it up neatly.

Brent gave a break below the triangle pattern within which it was constricted since early January at $54.74 and this level also coincides with the weekly Moving Average. The correction has deepened and almost fetched the earlier highlighted support at $52.00/51.70, the lower band of a short-term down channel and the 61.8% retracement of the up move that occurred form last November to last December.

Weekly RSI indicator is now closing in on a 1-year channel floor (horizontal blue line) and emphasizes the proximity of crucial supports, such as $51.70 and more importantly $50.60/50.00. Indeed, $50.60/50.00 appears pivotal as it represents the uptrend in force since January 2016 cyclical lows ($27.29) and the 38.2% retracement of the following uptrend. Thus, the current correction appears to be transitory and embedded within the overall uptrend, so long $50.60/50.00 holds. In an alternative scenario, a break below $50.60/50.00 would prompt accrued negative signals and mean a prolonged correction to last November low and also March 2016 high at $46.82, and to $45.14, last August low and the 61.8% of the whole uptrend.

Thus, near term levels are standing out at $51.70 and $54.74, and it will take a break above the latter i.e. the reintegration within the previous range for Brent to stage a rebound initially towards $55.75 and then to the short-term channel upper band at $56.75/57.00.
$53.86 is an immediate resistance.

I top up just under 41.50p

Why?

The share price performance of this morning is much the same as yesterday, with another Intraday double bottom at around 41.25p.

Then he order book is hardly changing for the last 20 minutes and much the same for the trades but if any are now buys, what gives me the idea that the selling must be over.

Order book is still weak on the bid side but is well supported by 3 MMs @ 41p, if it was the other way round it would be well up by now, But I am expecting that to happen soon.

1 - What is the free cash flow POO number for ENQ after which it can pay down debt or pursue growth given substantial hedging of $68 has disappeared from 2016?

2 - Also given Candian heavy oil is trading at $35 pb, what is the benchmark Kraken oil gonna be selling at?

3 - And one last question, is debt gonna keep on increasing from $1.8bn if interest is not being paid on it i.e. compounding debt ?

1. $32

2. $18 over Canadian heavy oil

3. Debt starts reducing, slowly, in late 2018.

ENQ
chart and comment by various sources.........

Https://90efcf5696fb6d91896e-62c980cafddf9881bf167fdfb702406c.ssl.cf1.rackcdn.com/data/tvc_99329fb8b4690f0f94df5a1f79ab513b.png

Next support could be 100% fib from swing low 22nd Dec at 37.75, the 76.4% fib at 42 only just failed to support the sp, but only just - intraday low was 41, so may have a second go at holding the sp. The support for poo is more likely to dictate the price movement for ENQ, crude has support at 47.4 about 3% below its current price, that would put ENQ at about 40.25.

TBH who knows, TA can be a self fulfilling prophecy but then again pick a number, any number, this will be driven by poo and poo is driven by a multitude of factors - Baker Hughes count this evening, possible noise from OPEC the weekend, a bidding war for BP, Bentley, Delek, etc,

ENQUEST PLC, 21 March 2017. Results for the year ended 31 December 2016*.
Kraken on track and 2017 guidance reiterated
Magnus/SVT acquisition progressing to plan

2016 results highlights
· Production averaged 39,751 Boepd in 2016, up 8.7% on 2015
· 2016 unit operating costs of $24.6/bbl compared to $29.7/bbl in 2015
· 2016 cash capex of $609.2 million compared to $751.1 million in 2015
· Revenue of $849.6 million and EBITDA** of $477.1 million, reflecting EnQuest's strong operational performance and hedging activities
· Cash generated from operations of $408.3 million, up from $221.7 million in 2015
· Net 2P reserves of 215 MMboe at the end of 2016, 5.9% up on the 203 MMboe at the end of 2015
· Comprehensive financial restructuring significantly improved EnQuest's liquidity position
· Net debt at the year end, was $1,796.5 million, compared to $1,548.0 million at the end of 2015

2017 update and outlook

· The Kraken development continues under budget and on track for first oil in Q2 2017
· EnQuest's confirms 2017 average production guidance, in the range of 45,000 Boepd to 51,000 Boepd for the full year - dependent on the timing of Kraken first oil
· EnQuest also remains on course to reduce average unit opex further in 2017 to be within the range of $21/bbl to 25/bbl including Kraken production, driven by further cost reductions across the supply chain. Cash capex is set to be in the range $375 million to $425 million in 2017, the majority of which is being invested in the Kraken development
· Hedging of c.6 million barrels for 2017, at an average of c.$51/bbl
· Total debt facilities of c.$2.1 billion remain in place
· The proposed EnQuest acquisition of interests in the Magnus oil field and the Sullom Voe terminal was announced on 24 January. Transition activities have begun and are ongoing; the process is expected to take 6-12 months, with no cash outlay for EnQuest

The company, which targets production of 45,000-51,000 barrels per day (bpd) this year, said the North Sea would benefit from further deals like one it concluded in January with BP when it bought a 25 percent stake in BP's Magnus oil field and surrounding assets.

Swinney said the UK government's review of its decommissioning tax and transfer of asset losses was positive for dealmaking in the mature basin.

EnQuest's strategy has been to buy up interests in mature fields for bargain prices and to apply new technologies and stricter spending programmes to squeeze more out of ageing infrastructure.

"Pushing out decommissioning and getting more out of mature fields is absolutely what we do extremely well. Anything that the government does to help that I think we are very keen to be part of," Swinney said.

Kraken a bright spot in an otherwise disappointing performance. Also, strong links with PFC seem to be recognised by the market, fairly IMO.

I did think that links with PFC was a positive, not now though for obvious reasons.

ENQ and PFC are falling in unison.

Certainly... is 6 & 4%!

EnQuest looks to cut debt with $700m a year from new field - 10 JUNE 2017 • 7:34PM

One of the North Sea’s largest new oil fields will begin pumping its first oil within weeks, giving its small-cap operator a $700m (£549m) a year boon.

Production at the Kraken field in the East Shetland basin could begin within days to bring a significant reversal of fortunes for EnQuest, which survived a major debt refinancing late last year.

Kraken could generate free cash flow of $700m a year for EnQuest, according to analysts, even at oil prices of $55 a barrel, by bolstering its production rate by as much as almost 50pc.

EnQuest’s production fell to 37,000 barrels of oil a day earlier this year but with Kraken its full-year average production for 2017 is expected to climb to between 45,000 and 51,000 barrels, depending on how fast the project takes to reach its full potential.

Amjad Bseisu, EnQuest’s chief executive, has said the start of Kraken “will mark a turning point in EnQuest’s progress”, from a period of heavy investment to one focused on generating cash and cutting debt.

The £4bn Kraken field was the largest industrial investment in 2013 and remains one of the UK’s largest heavy oil projects of recent years.

Since then EnQuest has cut project costs by almost half and will deliver the field ahead of schedule after a major debt restructuring, without which the downturn-hit producer would have faced a £2bn debt crunch this summer.

Mark Wilson, an analyst at Jefferies, said that within the small-cap oil space US investors have a “specific interest” in EnQuest ahead of Kraken’s first oil because it is expected to cut the group’s debt, even at low oil prices.

The project will drive down its breakeven cost for producing oil in the UK to between $21 and $25 a barrel, meaning even at $50-a-barrel market prices the group will be able to start chipping away at its debt pile.

The company ran up the debt by continuing to spend heavily through the downturn to develop Kraken. The project also lost a developer after First Oil Expro fell into administration in the wake of the oil price crash, requiring the already stretched company, and minority partner Cairn Energy, to take on a greater stake in the project.

EnQuest ended last year with net debt of $1.8bn, slightly lower than expected but still towards the upper limit of its $2.1bn facility.

Taken some @ 32.75p

Wanted to get in from early this morning at a better price but has been moving higher all the time.

All looks set for better things from this point

1 - The lows of last week at around 30p were just like the oil price holding at lows for some time.
2 - Kraken production is approaching and could begin within days
3 - Oil price rising today
4 - Order book very strong all morning