Highlands Natural Resour... Share Discussion Threads

[toolsmoker] 12/7/2017 10:12

This is the most blatant long I've seen in a while plenty de ramping. Just had broker on the phone bidding me 13p for 60 brands worth of stock prob be 15p trading today

[barnetpeter] 12/7/2017 09:51

I agree with a lot of comments here even though I bought in the placing. As the shorts close though we may see a rally up to 20..,,I note the author of this thread has closed. So much money lost here by many investors.....

[englishlongbow] 12/7/2017 09:15

It's the Montana helium and methane were the real value is and the market has not yet woken up to this but the tide will turn as it always does with these things and there is ample upside from these levels plus multiple strings to their bow to spread the risk.

[money maker1] 12/7/2017 09:06

Further Colorado permits due the week after next. Their DT Ultravert process alone is worth many times the current market capitalisation. Bargain.

[money maker1] 12/7/2017 08:07

Helios and DTU will provide big upside. This is a bargain.

[money maker1] 12/7/2017 08:03

Back to 50p soon. Helium, DTU and oil all coming together nicely as per their 80:20 strategy.

[superg1] 12/7/2017 07:30

The oil wells already drilled in the area don't stack up on performance to recycle cadh into the next drill.

I see one guy used the best well from 2015 making it look like it was a well recently drilled and completed.

That well was 2015 and was shut in early this year.

They can see up 20k to 30k barrels in the first month and a few months then it plummets.

As it stands due to the way deals have been done HNR get about 45% of tge returns for over 70% of the costs.

So when doing figures you have to think in the $20-$25 barrel range and deduct over 70% of costs to produce.

But then for many it's absolutely nothing to do with facts just pump and dump.

Ask PM if there are any personal issues or contracts that affect his position.

I doubt he ever told those he works with.

[eazymoney] 12/7/2017 06:57

Yes he does draw a salary

I would laugh if this is share issue is not approved by shareholders it would be like NWOG all over again with all the forward selling going on. I see it has stopped temporarily so Highlands can get the open offer away. Once they have the cash in the bag it will continue.

[money maker1] 11/7/2017 23:12

Definitely not a lifestyle co as Rob Price does not yet draw a salary and won't until they make revenues.

[barnetpeter] 11/7/2017 22:59

great call this...but I think shorts will close now and we may see a modest rally. Pointless shorts chasing the last few pennies from 10p....the big falls are already done. The company may hit oil from these wells and they have raised new cash. Maybe....

I fully agree this is a lifestyle company mind you..... bought in the placing and will be pleased to get out flat.

[eazymoney] 11/7/2017 21:08

MM1 how the hell do you work out £8M market cap!

Try $11.5M-$12.5M or $15.5M-$16.5M fully diluted.

Overpriced.

[superg1] 11/7/2017 20:12

I think the team are bit like the punters Bi polar, now there is thought to play with isn't there HNR.

[superg1] 11/7/2017 16:10

Surface Location Data for API # 05-005-07224 Status: SI 3/1/2017

[superg1] 11/7/2017 16:07

Longbow

Are you trying to mislead PIs. Are you trying to suggest that well has just been drilled?

I checked the API number that is the very well I'm on about that was drilled in 2015 and is now shut in.

05-005-07224 Location: NENE 10 4S 65W 6
Field: DJ HORIZONTAL NIOBRARA Field Code: 16950
Facility Name: Sky Ranch 4-65 9-10 Facility #: 1H
Operator Name: BURLINGTON RESOURCES OIL & GAS LP Operator #: 26580

[superg1] 11/7/2017 15:56

Longbow

Yes that is typical for an optimised well by Burlington. Their best of the 2015 ones did 34k in the first month and is now shut in. It was fading 6k per month after 12 months then recently down to 500 per month.

That's not typical of the good wells re shut in.

The range was about 24k to 34k in the first month then after 12 months 5k to 7k now 3k to 4k.

That's fraccing for you the decline is sharp.

HNR are 5s that well is shown as 10 so in the top half of the township, so a range of approx 6 to 10 miles North of HNR permits.

The Conoco wells were in the 4S range and not as good as Burlington wells. That indicates results are not as good the further south you go from Burlington wells

Minor details of course that the same distance south of HNR and you head into an area of virtually no wells.

It's the minor details that matters for the long game but obviously not for pumping to unsuspecting folk that don't understand the area and how it works.

[money maker1] 11/7/2017 13:58

Company capitalised at £8m which is one sixth the value of their DT Ulravert process - which they can also use on their own wells. Looking like seriously good value.

[letmepass] 11/7/2017 13:42

Already done that a few times and will here

[money4me] 11/7/2017 13:25

big institutions are always losing money, it's not there money anyway to lose. Crikey look at GKP and many other with placings at many many multiples of todays sp, do you think everyone is a winner. Directors keep getting paid regardless of being useless and running a business into the ground, then they move onto another company or change the name and pursue 'new sectors'. Mostly its all a scam, just try not to get caught out too many times and hope you pick the odd winner

[letmepass] 11/7/2017 12:33

Big institutions won't lose money and they bought at 12p.. Hold on for the ride

[letmepass] 11/7/2017 10:24

Looks like a bottom added a few for now, expect big bounce once all weak sellers go a

[lodgeview] 11/7/2017 08:35

Just sell after sell here down to 0p?

[superg1] 11/7/2017 06:47

Did I say they would be able to raise finance or did I say it would be difficult to raise backing with the oil market as it is.

Here are the well facts.

HNR permits are South of Conoco wells, Burlington wells are in the main further North of Conoco and up to 10 miles further north.

HNR will be at the southern most point of nay DJ Horizontal wells. 10 miles south of HNR and you go into a bit of an oil well desert.

So based on that it seems HNR are right on the edge of the DJ play.

Ignoring that look at the Burl/Con data. As said top to bottom Con are at about a max 10 miles from Burl wells.

Burl v Con on 12k-12.5 feet wells with 20-22 fracs.

First month production.

Burl 12k-18k barrels in the first month.

Con 3k-5k

That is a big difference.

Cash year end £1.9 mill.

Lender covers 28.75% of the well costs for a 25% working interest (1st 10 wells).

Optimised wells expected to cost $5 mill or higher.

Renegade farm in

The transaction entails a US$500,000 total payment from Highlands to Renegade, comprising an initial payment of US$250,000 for the right to drill the first two wells and a second payment, on commencement of drilling of the third well, of US$250,000 for the following four wells. In all wells drilled by Highlands on the farm-in acreage, Highlands will retain a 100% working interest (full responsibility for drilling and operating costs) and will receive 80% of revenue generated by these wells.

Highlands entitled to an 80% revenue share

So as it stands Highlands at that point pay for everything and Renegade collect 20% of the revenue.

Oil about $45 pb at the moment.

Royalties are typically 1/8th in the US but I'll use 10%.

So $4.50 to the landowner and $9 to Renegade.

So you have start point of $31.50 pb before considering the 25% to the lender.

On the fund raise they said.

"Highlands has so far raised a total of GBP2.74 million net of expenses, which is sufficient to drill the first well at its East Denver Project."

The cost of a full optimised well which were indicate to be $5 mill each (exchange rate £3.875 mill)

Using the $5 mill figure $1.437 mill comes from the lender.

So £2.74 mill = about $3.5 mill.

Add on the $1.47 mill and you get to the $5 mill needed.

Time to drill the next well is 60 days from the relays of the rig at 1 well to he spud of the next well.

Using Conoco well data for their best wells (there were only 4)For the first 2 months on 3 of them 40k to 50k barrels of oil.

Using the top end figure of 50k barrels. 20% to Renegade 10% royalty 25% to the lender.

Using 50% HNR get $22.50 pb before any costs to produce which is $1.125 mill.

So they will have way under $1 mill revenue in the 2 months before they have to drill the next well. Take the $1.5 mill from the backer for each well and they are at least $2.5 mill short to get the next week done.

If they hit a duffer like Conoco did on one then the returns are a lot less.

They talk of further backer potential but would that mean another 25% etc when their share is already below 50%.
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So it looks very high risk and the well data difference from Burlington to Conoco and the North to South apparent reason for that enhances the risk imo.

As it stands it looks like they are out of cash once they drill the first well then can't cover the costs of the next well without further funding.

The £800k open offer looks unlikely to be completed at this time. They obviously need the cash so will that come back again on a lower price.

[nobullplease] 11/7/2017 02:07

Hi Superg1, was that when you claimed HNR would be unable to raise finance, as the investment case for ED wouldn't pass a financial institutions due diligence? Whilst I'm here, can you explain your post on LSE from 18/10/16, was it just a mistake or something else?
"All I was trying to do on one thread was point out the number of wells in the area and claims that didn't really match what HNR claim".

[superg1] 10/7/2017 17:53

Well the Renegade farm in was that HNR get 80% and about $250k to pay to Renegade for each of the early wells (right to drill etc).

Then you now have the funding for 28% plus for each well and a 25% return for the investor.

So on that basis HNR fund about 71% of each well plus $250k on top.

If they are $5 mill each (or more) then the cost to cover 70% is $3.5 mill plus the $250k.

So around $3.75 mill per well to fund for HNR or more.

For that they get 55% of the revenue BUT royalties are normally around 10-11% to land owners.

So the end interest for HNR will be around 40-45% then take off production costs etc.

So a lot to consider and as we now know the name Darwin is involved.