Hurricane Energy Share Discussion Threads

[tournesol] 23/9/2017 23:34

TGG

I am still not sure whether you are taking a swipe at me or not.

If so why?

Say what you like about my assessment of HUR but it got me out before the precipitous collapse in the share price, so it served me well enough.

And likewise for SDX.

My thought processes might be unsophisticated by your standards but they have steered me clear of serious losses in both cases. That's good enough for me.

Did your different approach produce similar outcomes?

[tournesol] 23/9/2017 15:27

Sorry TGG still don't get it. Brain slowing down these days I'm afraid.

Were you criticising my post?

[thegreatgeraldo] 23/9/2017 15:18

Tournesol,

Very simple.... PW rather jumped the gun on the size of the discovery.... hence why he never got around to publishing any update on the extended well testing. The "decent discovery" swiftly morphed into a so-so discovery.

"Business as usual" for the E&P sector is to hype prospects (SD was slated at up to 600bcf), it's less usual to hype discoveries which subsequently turn out to be much smaller than claimed. Rather simple, obvious point I was making, imvh....

[fireplace22] 23/9/2017 10:47

The confidence that a FO was 'imminent' at one point could have been due to the rumour that the JV partner was Petrofac who was forced to back out for reasons known to most.
Risk is seen differently by different companies. What's a better bet, a wildcat in the Atlantic margins CoS 25% or a bet on HUR producing copious amounts of oil CoS 85%? If the majors wont bite I'm sure there are many other that would love to but can they satisfy Trice's entry price? We need further evaluation prior to the EPS to keep the momentum going.

[tournesol] 23/9/2017 07:54

TGG

Not sure what point you are making? Are you perhaps asking me why I ditched HUR but did not ditch SDX at same time? Ie why different levels of scepticism?

SDX had just made a decent discovery, their account of it was very positive and they did not need to raise any funding to develop it. On top of that they also had reasonable levels of production and cash flow. Given all that, the share price looked undervalued on a medium term outlook. I saw it as much lower risk than HUR albeit much lower return too. So much of the proceeds of my HUR sale went into SDX.

HUR needed a very big farm-in and some more fund raising. I decided there was too much risk attached to that in the short term so bailed out. Idea was to let things clarify but watch closely for re-entry at better risk/reward ratio.

Of course SDX subsequently dropped the ball - it became apparent that its communications had been lacking in clarity/transparency and it became difficult to penetrate the confusion - so again I bailed. Again I'm ready to re-enter when time is right.

Is any of that hilarious? Surely it's all business as usual for an investor in E&P?

[lfdkmp] 22/9/2017 21:30

geordy

yes, and many of them would not travel too far towards the horizon, as they'd be sure to fall over the edge of the flat earth.

[geordy2] 22/9/2017 20:03

Hi

I fear that most explorationists in the major oil companies are afraid to put their necks on the line and support the FB concept in the UKCS, for fear of looking stupid and possibly losing their position in the company. Most of them follow the tried and tested straightforward plays and have very little experience outside of stratigraphic or structural traps. I have talked to a few exploration people about HUR and they have all said the same thing , ie FB does not work, due to rapid production decline, I have asked all of them the same question , " on what do you base that assumption " and nobody has given me a satisfactory answer, I believe they are all victims of group think and commonly held opinions that are more based on we have not done it so it can't possibly work. So how can some piddly upstart oil company outhink us ?

I almost feel that there is a certain jealousy and emnity that Trice has taken a concept, developed it and proven it right under the majors noses. How come they decided to mop up all the acreage around Lancaster after Hur had led the way.

I would like to ask Trice why he left Shell in Norway, I would hazard a guess that he wanted to do something unconventional but was not allowed as it did not fit with the "in the box" thinking that is common in the Majors. My guess is the company that will eventually partner Hur will be Chevron, who have a more expansive view of exploration opportunities.

[thegreatgeraldo] 22/9/2017 17:17

Tournesol - Hilarious!! From memory you reported PW at the SDX AGM trumpeting that he'd discovered 10mmbbls of condensate at South Disouq. Sadly, he was lacking the "concrete evidence" you referenced in your post ;-#))

[haideralifool] 22/9/2017 17:08

tournesolf, I think I was at the same coffee that you are referring to, and party to the same expert opinion on HUR!

While I understand that pov, I hope I am not being naive in thinking that the sort of institutions that spend a few hundred million on a prospect such as this one are likely to have their ears very close to the ground when it comes to BigOil's strategies.

So although there is no farmout, the scale of the investment the company acquired is pretty close.

Wishful thinking?

p.s. at the AGM, I asked Trice directly, if there had been such problems raising a few million quid, what on earth was the likelihood of raising a vastly larger sum? He was emphatic that it was going to happen. Since it did, I'm happy to cut him some slack.

[nicebut] 22/9/2017 17:00

Good post tournesol....Spot on. The ramping by AS was disgraceful.....A real red flag- as seen it before in other over exuberant Co`s.... Add that to the warrants issue and his other arrogant comments and IMO he needs to go- Perhaps Trice could show some leadership and ditch AS? About the only thing I agree with Hiddendepths about.

Some good posts the last 2 days- At last!

[tournesol] 22/9/2017 16:51

For me the most significant error I made wrt HUR was to take at face value the claim that there were major oil companies chomping at the bit to do a JV. I don't remember the exact words and I am not motivated enough to seek out the actual written references but I remember the phrase about there being more people in the data room than the entire staff of HUR. Certainly the idea conveyed by management was that getting a farm in partner was a slam dunk.

On the day of the SDX AGM I had coffee with someone who was an ex-Exploration Director. He was up for investing in high risk/high reward E&P (hence his attendance at SDX) but he dismissed HUR as being little more than blue sky which would not be of real interest to a major until much more concrete evidence had been obtained - and that would take years. Having reflected on his comments I realised that I had over-ridden my normal scepticism setting too readily and I promptly sold out. From memory that was somewhere around 55-60p but I could be wrong. At that price I made a modest profit.

I still like the story at HUR but it does not feel as if the industry in the form of big E&P finds it compelling enough to put money into it. And there seems little support for the share price.

Consequently I am still watching from afar and waiting to see if it turns round solidly enough for me to buy back in.

[jacks13] 22/9/2017 16:45

Environment Statement, issued in March 2017 (Lancaster Field, Early Production System), says:

12.3.1 Production operator
Hurricane will act as Production Operator for the Lancaster EPS. As this is the first occasion on which Hurricane has been involved in a production development, having previous undertaken exploration and appraisal drilling operations, approval must be received from the OGA (though consultation with BEIS).

I'm with Steve73 on this. They probably need to make some staff appointments, publish operator procedures, undergo audit etc. in order to get OGA approval.

[davidblack] 22/9/2017 14:32

A digital stutter!

[davidblack] 22/9/2017 14:32

A Friday afternoon and a price uptick! Ok only 0.25p but that looks interesting on a day with very little volume.

[extrader] 22/9/2017 12:17

Hi Steve73,

An interesting assumption !

But surely :
- HUR would have been aware of this precondition, if it is such, and would have phrased the status of regulatory approvals accordingly ?
- if they're not going to start production for another 12-18 months (plenty of time, surtely, to find or buy in talent), would this be a CP now ? If there needs to be a recognised operator in place when we're actually nearing production, there's also plenty of time for an FO , no ?

Naive questions on my part, I concede.

ATB

[steve73] 22/9/2017 11:45

"Regulatory approval for EPS expected shortly "

I assume the delay is due to HUR not being a recognized "production operator", and with the failure to secure a Farm-Out to such an operator they are needing to add resources and go through more than a few hoops to attain the requisite status.

[davidblack] 22/9/2017 11:27

T indeed sadly you are I believe correct in Hurricanes case.

The assets here are potentially world classs but clearly subject to being developed without a view to shareholder value maximisation.

I suppose the opportunity is to sell on the next market exuberance and buy back post Stifel and friends have notched it back on their next success!

[tournesol] 22/9/2017 09:33

DavidBlack

Surely the single most useful lesson of this saga is that LTBH is NOT always the best investment strategy in order to maximise gains and minimise risks.

Sometimes it pays to take a short term profit when things start looking wobbly and then sit on the sidelines until the wobbles have stopped.

It's working for me.

T

[cashandcard] 22/9/2017 09:02

I think some perspective is required here. They have managed to raise approx. £560mln in new funding by way of placings, OO's, warrants, CB's. For a smallcap in an oil downturn - that is a phenomenal achievement. Of course, it has come at a price, but one cannot say it came as a complete surprise. Through 2016, RT and AS mentioned in countless interviews and in RNS updates, in the absence of an FO, they will need a big capital injection to get to first oil.

Relatively speaking, First oil in H1 2019 is not very far off, the action will start to pickup this time nextyear in anticipation, perhaps earlier as each milestone is achieved or a one-off value enhancing event takes place.


Cash

[haideralifool] 22/9/2017 08:47

DB the II's who coughed up a few hundred million are unlikely to be fazed by the current movement in the share price

Their payback is premised on the occurrence of some significant event that will not only propel the share price upwards but will do so with levels of trsding volume that will allow them to sell (if they wish to).

Until that happens they can't leave without crucifying the share price

They're effectively locked in for the next several months to a year or more and they knew that at the time they bought in.

I guess it demonstrates their faith...

[steve73] 22/9/2017 04:21

Some good discussion on the PMO board yesterday about short covering of convertibles..

Since our equity raise in June/Jul, we now have a couple of small disclosed shorts, although the stock-on-loan is showing much more.. It has more than doubled from Jul to Aug (3.6% to 7.66% monthly averages).

IIRC, there could be upto 575MM new shares if all of our recently issued CBs were to convert, which is around 30% of the current shareholding. We might expect the number of shorts to increase significantly if they are to be adequately covered, which could keep the share price depressed for a few months longer.

I realize that by paying interest of 7.5% pa, there may be less incentive to convert, but if the share price increases to the kinds of numbers being suggested, then conversion would give a better return than this over the life of the bond.

[davidblack] 22/9/2017 01:22

So the market was wrong at that point when the stock was in the 40s, 50s and 60s?

Or maybe we had an orchestrated collapse of the price curtesy of an exceptionally poorly executed warrant issue by Stifel which then gave way to the discounted offering.

Or maybe it was just the market and nothing to do with any of the parties involved?