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Enquest Plc (ENQ)

London
Currency in GBP
Disclaimer
16.04
-0.36(-2.19%)
Closed

ENQ Comments

After receiving comments/suggestions from the board, I made some adjustments to my financial model, and calculated the “break even” price for ENQ in 2019 (the Brent price at which free cash flow equals to cero (0)).I run the model under the following assumptions:ProductionCore business: 52.000 bopd75% of Magnus: 11.225 bopd (according to Magnus prospectus)Total: 63.225 bopd (close to the low end of the production range recently announced by management)OPEX: Core business: US$ 24/bMagnus: according to Magnus acquisition prospectusCAPEXCore business: US$ 180 millionMagnus: US$ 41 million (gross).RESULTSAt the lower end of the production range, and Brent: US$ 65/b, we have:EBITDA: US$ 855 million Free cash flow: US$ 244 millionNet debt at the end of 2019: US$ 1.628 millionThe Brent “break even” price (to get free cash flow=0) equals to US$ 49/b. Just for comparison, Premier Oil announced today that they break even at US$ 45/b.As a note, the hedging
Undoubtedly a strong buy for a much undervalued stock that has a chance to triple,maybe even quadruple, on short- to mid-term horizon.
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