ENQ is an oil production and development company. It has assets in the North Sea, Malaysia and other locations. It is greatly undervalued with strong upside potential in the next 12 months.
Debt is currently £1.7bn but with current FCF of £700m (based upon producing 70 boepd / ave $70 Brent oil price this should be reduced to £1.3bn by year end 2019.
ENQ will be operating on 1-2 EBITDA ratio by year end 2019 so would spend a further year reducing debt thereafter. But the CEO, who is personally invested and buying large tranches of shares with the share price at current levels, has stated that ENQ wants to spend the £700 FCF on CapeX, Acquisition AND Share holder returns.
Latest analyst presentation focuses on its growth in key fields.
The share price is currently circa £0.20 giving a market cap of around £400m whereas an asset was bought in December from BP that itself had a NEV of £500m alone. That asset (Magnus) accounts for around 22% total production of ENQ and is a 13-yr project so will keep delivering for years. Other assets have similar shelf lives.
The SP is due to increase on 23rd May when a financial update will be given. Suggest we include this stock on the list before then to derive full benefit.
Hope there is support from others in the Freetrade community in this regard.
