Good Morning,
A brief one from me today with the luxury of time not being
afforded this morning. People should organise meetings well in advance, instead
of at 10pm the night before!
Asia and China is seeing higher
volumes of copper, the perception is this is likely to be shorts, however it
may actually be hedging for the larger boys, the three (Red
Kite, GLEN and Trafigura), and the consumers of the commodity.
Trading $2.55/lbs or $5621.78/t so just a smidge lower but
volumes are up...panic stations for those over-exposed with quite a few bets
going on for $2.11/lbs or $4673.79/t. Why $2.11 is confusing but perhaps time
will tell.
Having been short on WANdisco (WAND) from
some higher ground, there's perhaps a reason to review this and jump on the
bandwagon again. WANdisco's proposed
placing really says the cashflow is not there. Its worth some analysis
as WAND may not have the size to be viable on their own.
Perhaps, if rumours are correct WAND should have accepted the
offer earlier last year.
Wolf(WLFE) Wolfe Minerals building activities update shows things are
going along swimmingly. With commissioning for March 2015 and production due in
August/September 2015, the appetite for this stock should progress. The Chinese
market in tungsten down to circa $291/289 APT (Ammonium
Para-tungstate) will give Europe an indicator of next month’s
prices.
Enquest (ENQ) today have update the market of
their 'resilience' with trading
and operations update showing the covenants have been reset. With
rumours of a fundraiser being around for a month now, with little appetite
previously, will ENQ be pressing that button now? I doubt
it...the market may just reprice ENQ by Monday. Over to ENQ: Additional
Information
Funding. In 2013, EnQuest entered into
a revolving credit facility ('RCF') of up to $1.2 billion committed, plus a
$500 million accordion feature. In light of recent low oil prices and in order
to provide flexibility for EnQuest's capital investment programme, the RCF
lending banks have agreed to relax the existing credit facility covenants. The
net debt / EBITDA covenant has been increased to 5 times and the ratio of
financial charges to EBITDA is reduced to 3 times, both until mid-2017. As at
31 December 2014, EnQuest's net debt was approximately $1.0 billion.
2014 production, revenue and EBITDA. EnQuest
achieved provisional production for 2014 at the top end of its guidance range,
28,267 Boepd, up 17% on 2013. Revenue is expected to exceed $950 million and
EBITDA is expected to be in the range of $530 million to $580 million.
ENQ with the appreciation of oil (as should be
considered) was creating greater downside risk than upside. The disappointment
being I was unable to get out of one position. So the Atlas Iron holders can
cheers as all the profit disappeared saved only from a loss by the tighter
spread from a loss. Will reappraise...a very good coup for ENQ.
Food deflation is being seen by Premier Foods (PFD) trading
update, worth a read whether you have a position or not.
Atb Fraser
