Hurricane Energy Share Discussion Threads

[jacks13] 17/1/2021 10:59

That's the Jan 14 Update. What the Company do not state in that recent rns is that Well 7z appears to have contributed the lion's share of the water cut in Q3, with Well 6 producing just 12%wc. The current 25%wc is solely down to Well 6. Yes they are managing the wells to mitigate the water cut but the numbers suggest they may not be winning.

[cashisking76] 17/1/2021 10:45

Based on most recent HUR company update set out here in the ordered table below:

Q3 2020 - water cut 26%
Q4 2020 - water cut 25%
Currently - water cut 25%

It certainly does look like water cut has clearly somewhat stabilised.

[ngms27] 17/1/2021 09:55

Nearly spat my false teeth out with the comment that water is under control.The fact is water cuts increasing and oil production is reducing. This ain't going away, well 6 is in terminal decline.

[onlylongterm9] 16/1/2021 21:46

Proactive Investors:

"Hurricane Energy (LON:HUR): Water cut at Lancaster remains under control":

"Our take: Following an extremely challenging year for Hurricane, today’s update is much more positive on outlook. Production is in line with expectations, and a December lifting from Lancaster, and higher oil prices combined to deliver a US$19m million increase in net free cash at year-end compared to end November 2020. A continued recovery in oil prices would further enhance the value in the Company’s West of Shetland portfolio. It is also encouraging to note the continued control of the water cut at the Lancaster EPS which is now below Q3 levels through what appears to be strong reservoir management."

[bocase] 16/1/2021 21:10

A continued recovery in oil prices would further enhance the significant value we see in our West of Shetland portfolio



A well reasoned argument stating what we stated when oil was at $30

[back2basics1] 16/1/2021 19:16

@Pro_S2009, Additional USD $19 M for a company of currently only ~$50M Market Capitalisation is very significant indeed no matter how negatively you try to spin it as such, and certainly cannot be branded “jiggery-pokkery” as this substantial sum can in no way be hidden in the company P&L where the CEO has now predominantly labelled it as: "a December lifting from Lancaster, and higher oil prices combined to deliver a $19 million increase in net free cash at year-end compared to end November 2020.”

And same CEO then goes on stating in writing that: “A continued recovery in oil prices would further enhance the significant value we see in our West of Shetland portfolio. As previously reported, we are currently engaging with our stakeholders on a proposed development plan for Lancaster and its associated funding, in order to maximise the potential value of our assets."
DYOR

[ghhghh] 16/1/2021 11:44

Tournesol

Thanks and best wishes to you for 2021.

Re Aoka Mizu, the only issue is whether Bluewater have a decent alternative offer? I think this is unlikely given the macro picture. As we know from past experience, capital is normally prioritised for M&A (where the bargains are) rather than CAPEX.

And even if they have an alternative, this new party is still going to be trying to screw them down on price.

Perversely the CB’s strengthen HUR’s negotiating position since if Bluewater get too cute, CB’s will call their bluff and run for cash flow.

I accept this is a risk for equity but since it’s likely to be in everyone’s interest, a deal is odds on result IMO.

[laserdisc] 16/1/2021 09:55

Noel the cash operating costs are lower per the last presentation on hur website ,
page 18
$18.2 per barrel Cash production
Capex
• Decrease is primarily due to revenue-linked incentive tariff for Aoka Mizu

the latest rns says
Discount to Dated Brent of $2/bbl in H2 2020, compared to $10/bbl H1 2020, as oil price volatility reduced

rns states
"higher oil prices combined to deliver a $19 million increase in net free cash"

My view it has to be
higher oil price in the h2 that has delivered overall increase

i cannot see how they can be moving creditors to next 1/4 to do a bit of creative accounting with such large amounts involved , the rns does say unaudited There is no mention of any other material event to affect the accounting, we know they no longer pay fees for a decomission bond in this last 1/4

a December lifting from Lancaster, and higher oil prices combined to deliver a $19 million increase in net free cash at year-end compared to end November 2020.

a main objective is to strengthen balance sheet so we seem to be moving that way

[pro_s2009] 16/1/2021 04:05

Dont JOG (Jersey Oil and Gas) need an FPSO for their "Buchan" development.

Would be perfect timing for them to get the AM............

[professor_hodhasharon] 15/1/2021 22:10

Any1 seen Fat Frank

[ex bluewater] 15/1/2021 20:20

OK! Tell me where to sign up

[ngms27] 15/1/2021 20:02

Already in progress

[ex bluewater] 15/1/2021 18:17

Happy New Year Folks.
I have been following all your posts, polite and not so polite, with interest, for a year or so now. This is my first - as I see mention of the Aoka Mizu. I am ex Bluewater and helped them and HUR set up Lancaster. Stupidly, I and a few others bought shares - mostly at 50p: but then we are engineers, and poor misled suckers like lots of the rest of you. Bluewater (ie Hugo Heerema) are in quite a good position whatever happens. The AM had not long come off a long productive lease for Nexen. But for HUR she would have been laid up. But no, they paid for her to be substantially refurbished and then given a new life. I understand Bluewater have agreed to take some risk, but they have been on station long enough now that will not end up out of pocket much if at all. Also if they have to shut up shop in 2021 or 2022, the AM should still be in relatively good condition. Bluewater have another nice little earner with the Haewene Brim FPSO in Shell's Pierce Field - one of only two in the North Sea that Shell still believe are worth investing in. They also have the Bleo Holm which has been at the Ross/Blake/Parry fields since before 2004. The only people hurting here that I can see are HUR and their shareholders Pity we can't do a Class Action against Mr Trice

[tournesol] 15/1/2021 17:05

Hi GHH

Happy New Year to you - hope the rest of your portfolio is doing well.

The reason I see the AM owners as being in a stronger negotiating position than Hur is simply that Hur could not survive if they failed to secure a contract extension. It's a necessary but not sufficient condition of them continuing to produce at Lancaster. There is no possibility of them finding a timely replacement for AM and without it they just would not have a business.

I don't think the AM's contract at Lanc is the sole productive venture of its owners. So they would not automatically fold if the contract was not extended.

To my mind that means that a large share of the proceeds that arise from extending the EPS will, deservedly, accrue to the AM rather than to H. It's just basic commercial negotiating 1.0.1

I see it as a similar situation to the conflict of interests between equity and bond holders. In that situation it's the bond holders who hold the high cards. In negotiating an extension to AM, it seems to me that H will have lower cards to play with than the AM guys.

Of course I'm not privy to the details of the original contract or any limitations/constraints on extension, so I could be wrong. But I'd expect the AM side to have avoided the obvious trap of getting stuck in a contract that has been less remunerative than they (and H) expected). We are all ready to be paid by results when things look good. But when stuff hits the fan it's a less attractive proposition.

Hope for your sake I'm wrong.

T

[pro_s2009] 15/1/2021 14:20

noel.

End of year jiggery pokery.........

A supplier might have offered a discount to get a bill paid by HUR before year end - which then increases net free cash as the liability is less due to the discount.

All sorts of things can be done on the books to move things around.

[noelpbz1] 15/1/2021 14:13

HUR claim $19M increase in net free cash since 30th November 2020 - $106M compared to $87M.

The December offload (stated at 12,700 bopd) at best could have been 395K - which at near $52 per barrel totals $20.54M - how does this nett $19M ? Typical nett operational are running at near $35/barrel suggesting an increase of $6.7M.

For information the oil production figures are :
Quarter 1 - 1.4m (RNS 8th JULY2020)
Quarter 2 - 1.3m (RNS 8th October2020)
Quarter 3 - 1.25M (RNS dated 8th October2020)
Quarter 4 - 1.17M (RNS dated 14th January2020)

Total 5.12M barrels.

[tournesol] 15/1/2021 13:32

The Composer

Instead of asking people to ...imagine with Brent prices where they are today and potentially still rising, where HUR liquidity position and resulting company balance sheet will be by this year end….

Why don't you do the maths and make a forecast against which your analysis can be measured.

[steve73] 15/1/2021 13:26

3.8% of HUR stock out on loan is not much.. It was much higher thru most of last year, dropping from to over 8.5% that it rose to in Nov 2019. The BH's probably saw the writing on the wall back then.. with the share price well over 30p (IIRC), and have been unwinding at these lowly levels as there's not much more to be gained even if it does collapse completely.

[jotoha2] 15/1/2021 13:03

This will rise sharply at some point , its no longer a basket case , many will miss the first surge , no amount of negativity will alter the outcome .

[thecomposer] 15/1/2021 12:50

Apparently worth Repeating/Noting here that:

Oil prices are now clearly lot higher than what they were in December which for HUR, resulted in an incredible “$19 million increase in net free cash at year-end compared to end November 2020” all in just 1 months, so now imagine with Brent prices where they are today and potentially still rising, where HUR liquidity position and resulting company balance sheet will be by this year end, and bonds are not even due till 24 July 2022, DYOR!

[whitedukejay] 15/1/2021 12:04

I`m of the opinion that none of them have a short interest in the stock,if they had they would have been blown apart a few weeks ago on the spike,so the interest remains a mystery ,here at least.

[stuart14] 15/1/2021 12:03

The bond holders won't care at all for the equity. They'll do better taking the share price to 0.