Hurricane Energy Share Discussion Threads

[hiddendepths] 18/12/2020 08:43

bocase - the good news for Tournesol is that he sold out some time before the share price hit single figures!

[leoneobull] 18/12/2020 08:40

Question for Gggghh. How far are major equity holders same people that hold the convertibles?

[bocase] 18/12/2020 08:38

Tournesol: or even 59p……sobs quietly…..

Yes indeed but the good news for you is that today's fall is only a 1% drop!!

Lies damn lies and statistics!!

[tournesol] 18/12/2020 08:32

Bocase


.. Assuming that you invested at 40-45p as many of us did….

or even 59p……sobs quietly…..

[tournesol] 18/12/2020 08:31

The composer

You (and others) criticise me for being negative.

With respect you are missing the point.

Investment is a game in which prizes are awarded for getting it right, not for being a cheer leader.

You should be asking yourself not, "is he negative?"

But rather, "is he right?"

[sbb1x] 18/12/2020 08:27

Bought a few

[bocase] 18/12/2020 08:24

Assuming that you invested at 40-45p as many of us did the 0.5p fall today has no more effect on your pocket than a fall from 45p to 44.5p. The real damage was done long ago so don't let it spoil your day. It is pretty immaterial.

Just hold and be happy. What will be will be.

[leoneobull] 18/12/2020 08:16

I'm a betting man and I reckon we will close around 4p. There are positives here, it doesn't have the same dynamics as the kitchen sink RNS. Brent is 51 usd.CASH is BETTER slightly than it was 3 months ago. That will continue for next quarter etc. With higher Brent

[bocase] 18/12/2020 08:14

More than ever, the future oil price is key. With fixed costs another $10 per barrel on the price makes one hell of a difference to the outlook both in terms of profits and likelihood of successful funding.

Some are predicting very substantially higher oil prices next year way above $10. That changes things completely.

[wildsheroo] 18/12/2020 08:12

Accepted the loss, sold and out. Deleting this company from my watchlist.

[leoneobull] 18/12/2020 08:06

From 1invest LSERNS Update potentialToday 07:58Positive news on side tracking 205/21a-7z. If successful this will give stimulas for backing of company. The water injection is dependent on above success or refinancing which could lead to dilution if shareholder value. This was always going to be a risk in view of finances and reduction in reserve estimates. Even so this has been fully been written into share price. Probably too much so and therefore should lead to correction as news sinks in. Especially as water injection would provide pressure support but also connecting sandstone oil which could lead to further upgrading in reserves! Looking at late 2022 which is to be expected in view of financing. Production currently in line with previous estimations taking into account increase in water cut which was to be expected. Higher than 1200 I was expecting :) There was always going to be risk of total loss of investment if above not successful and that's why the share price is where it is. Overall a positive RNS. Need a little luck on side track and then we are all laughing to the bank otherwise support of financiers. I expect it will be a combination of the two (fingers crossed) All in my honest opinion for what it's worth

[sji] 18/12/2020 08:04

Still some positives, although not much and still high risk.

Cash has improved between end of June and November 2020, meaning that, at least, operations during said period, despite very low oil prices, were still cash positive.

Net free cash on 30 June 2020 - $106.2 million (less $21.7 million removed on 8 October for Decommissioning liability) = $84.5 million.

Net free cash on 30 November 2020 - $87 million.

Also, Antony Maris, Chief Executive Officer of Hurricane, commented:

" ... While there can be no certainty as to the outcome of this engagement, we continue to believe there is significant value in Lancaster and our broader West of Shetland portfolio, and we remain focused on delivering that value for the benefit of our stakeholders."

Still work to do to determine the future.

[sbb1x] 18/12/2020 08:04

Get your money out and stick it in #GKP for 100 - 300% gain over next 12 months

[ghhghh] 18/12/2020 08:03

So looks like equity raise and CBs get partial D4E and haircut, say 25%, 25% and 50%.

CBs take haircut and term extension in exchange for equity (eg CA) coughing up some cash.

The two big questions remain

1. How much cash required? Possibly not that much if HUR generating reasonable cash flow at $50, decommissioning bond refinanced and the 50% D4E/Haircut. Plus CA may still be keen on some kind of an equity financed CB buy back. CB's currently c.40 cents

2. And the really big one, what's the potential prize? The usual resident bears will claim to know but the OBVIOUS reality is that none of us know. Hopefully might get a clue from broker notes.

[hiddendepths] 18/12/2020 07:50

Shudder! Certainly considerably worse than I was expecting, although the water cut increase is not terminal yet.

Might as well sidetrack 7z, I suppose, as it's essentially useless now. Although the costs and the uncertainty involved make it a difficult decision. Suppose it waters out quickly too?

And the very idea of waterflooding when the main problem is a rising water cut still strikes me as very odd. The pushing of oil towards the well when, as I understand it, the fractures are essentially vertical also seems counter-intuitive.

For equity holders it seems probable that the best outcome is for the company to be run as a cash cow from here, with no extra investment or dilution from the bond holders converting. That way, with cost minimisation, there could be several years of hefty dividend payments which may well total quite a bit more than the current share price.

But companies are loth to do such things, which amount to giving up on the proposition and shedding most of their staff. So they tend to shove more and more money into the business to try to recover the situation. But all too often it's good money after bad and the end is brutal.

[erric] 18/12/2020 07:48

I’ve placed an order for 4 plumed black horses and a carriage and will now work on choosing the hymns to mark the final passage of my once favourite best friend, Mr Hurricane.

[steve73] 18/12/2020 07:27

Current prod'n at 12.3kobpd with 12.5 average for the period suggests the rate is still declining even though it's just within the guided rate. IIRC it was previously naturally flowing, but now requires the ESP.. I assume to manage the increased water.

Some good indications of costs for 7z sidetrack (7y) and the new Water Injector of $60 MM and $75MM respectively.

7y would start generating cash as soon as its completed in late '21, whereas any impact from the WI will build up over many months once it's drilled & hooked up (and probably too late to make a material difference to repayment of the CB's).

I'd prefer them to concentrate on 7y - for which the have sufficient funds already... worry about funding the WI once the CB's are off our backs... also if 7y fails to generate sufficient production rate it'll be game over with or without WI.

Still too risky to add IMO, but I'm happy to retain my much reduced holding.. come what may.

[wildsheroo] 18/12/2020 07:27

What will be share price at opening?

[leoneobull] 18/12/2020 07:25

I'd be more interested in hearing Gggggg's opinion as a CB holder, than a non holding troll. Cheers

[datait] 18/12/2020 07:21

Not good at all.

[pro_s2009] 18/12/2020 07:21

So it will come down to, imo.

Bondholders..........do you want to spend no more money run the wells until they are no longer economic, generate as much cash as possible and then take it back after decomm costs to pay back as much of the debt as possible ?


Or

Bondholders.......Convert some of your debt to equity - make shareholders suffer massive dilution for more money.........use this money to see if we can strike some better oil bearing area and then maybe, maybe, maybe, you might get a bit more of the cash back than option 1 above of doing nothing.


Either way imo, as ngms has said..........Equity shareholders are screwed - but that was always to be expected.



Pro_S2009 18 Dec '20 - 07:05 - 22021 of 22025

So........

Water cut up from 19% to 23%


And.......possible big dilution coming, and if no funding agreement is made, the wells will be run until they become uneconomic and then the company shut down.

Pretty much as expected......... NFG.


...........It should be noted that there is a risk of dilution to existing shareholders from a possible restructuring and/or partial equitisation of the convertible bonds. Furthermore, if no agreement can be reached with the Company's stakeholders on additional investment, further development activity at Lancaster might not be possible. In such a scenario, Lancaster could continue to produce from existing wells before reaching the economic limit, the timing of which would depend on oil prices, actual production levels delivered and the level of cost savings achievable. The field may then be decommissioned, with potentially limited or no value returned to shareholders. Notwithstanding these risks, the Company will endeavour to secure the best possible outcome for all stakeholders. ..........

[leoneobull] 18/12/2020 07:20

As Ghhhh has articulated, under the decommissioning carry on until lights out scenario, the CBs would lose money considerably post decommissioning costs, as the majority bought at par when Bond first issued, it comes down to whether they will sanction further investment and accept equity partially or fully in return...a higher oil price in 2021 .....esp if Goldman's 60 to 65 USD comes to fruition may persuade them investment rather than closure is the best way forward. High risk, for sure...but CBs are trapped and aligned with equity in favouring survival over closure IMOv

[leoneobull] 18/12/2020 07:12

Antony Maris, Chief Executive Officer of Hurricane, commented:"Options to enhance both Lancaster field performance and recovery have progressed considerably in recent months, utilising the revised geological model of the Lancaster field and a rebuilt simulation model incorporating additional reservoir data gathered since September 2020.While several development options continue to be evaluated, a side-track of the existing 205/21a-7z well to an up-dip oil producer location could increase oil production from late 2021. This could be followed by a water injection well in the northwest of the Lancaster field, which, with related FPSO and subsea work, could provide pressure support and sweep oil within the onlapping sandstone reservoirs towards the producing wells from late 2022.We will now commence a period of stakeholder engagement to seek alignment on the merits of this further Lancaster activity and the support and/or approvals which may be required to execute this programme. While there can be no certainty as to the outcome of this engagement, we continue to believe there is significant value in Lancaster and our broader West of Shetland portfolio, and we remain focused on delivering that value for the benefit of our stakeholders."

[leoneobull] 18/12/2020 07:10

So Sept to Dec WC has increased 4% or just over 1% per month....Good to see some decent proposed remediation measures.All depends on whether CBs will fund it in exchange for equity, but that has long been the case.