Hurricane Energy Share Discussion Threads

[mhin2] 05/2/2021 21:57

what I do find interesting is how silent ngms is.....is his short not making so much money? After all he did not predict the rise in POO....thats scary POO has risen by 50% from the 40usd days, and 30% higher that the 44usd days...remind me...what was/is hur cost of production...and their first year profit was quite large, admittedly at a higher oil price...buy Poo could easily get there.. The issue is, of course, can 6z be sustained, Lincoln brought online and 7z make a contribution (after all Hur intimated that 7z could be re-activated)...touch and go...lets hope its go.

[mhin2] 05/2/2021 21:56

Surely the point is a rising oil price puts HUR in a better position. Nobody expected this, nor vaccine efficacy. It may be that the new BOD `kitchen sinked it'... they did. But they announced, a prospective future, and significant free cash flow (whatever that means), by increasing their available cash by over 20%. A new offload has occurred at a much higher oil price...and Hurs production costs are low. Have hur now got more cash? Are we to hear that

a. the worst case is not as bad as made out
b. Water cut is steady
c. CPR indicates better than worst case (which is likely)
d. Lincoln may move forward (after all it was intimated that discussion were active)

I dont know...does anybody...but all is far from lost....is that why some of the shorts are closing?

[fat frank] 05/2/2021 21:29

If my Mum lets me....

[fat frank] 05/2/2021 21:28

TGG

What a totally bizarre post.

To be honest my (sorry to hurt your ego) original question was for ngms27, not you.

Your opinion interests me not one jot.

Night TGG, you've obviously had a hard day and it's way past your bedtime.

Me? Well, I may stay up for the next few hours drinking heavily......

[thegreatgeraldo] 05/2/2021 21:18

Fat Frank
5 Feb '21 - 20:25 - 23375 of 23380

Can you explain to me(seriously I am genuinely interested) why you know better than one of the most respected experts within the sector?


....Now you may want to change that, but it's quite clear what you posted.

Why not deal with the substanc of what I posted, in response to a question from yourself, albeit perhaps not addressed to me? Instead, well...it's clear....


Night Frank

[fat frank] 05/2/2021 21:12

TGG

I referred to HAMMAN as the most respected experts, not an individual. I daresay there was a team involved in this important update - after all their reputation depends on it

Please read the posts properly.

I am really unsure about your fixation about how much I drink?

What on earth is that all about???

[whitedukejay] 05/2/2021 21:04

".& nobody can tell how that well will perform in 2021. Nobody."

Cough cough arent you forgetting about Ngm

[thegreatgeraldo] 05/2/2021 20:53

Fat Frank
5 Feb '21 - 20:49 - 23377 of 23377
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Why on earth do you need to know the report authors name!?!?

..Oh dear. You've been drinking again. You started it. You referred to him as " one of the most respected experts within the sector?". So, who is he? & Hamman do paid for rather than independent reports? Yes?

Fact is, HUR's future hangs on the performance of a single well.....& nobody can tell how that well will perform in 2021. Nobody.

[fat frank] 05/2/2021 20:49

thegreatgeraldo5 Feb '21 - 20:39 - 23376 of 23376

"Fat Frank, it's very simple..... your "expert", (don't know the report author's name) hang on one phrase..... " we expect production of 11kbbl/d, a moderate decline,"."

Why on earth do you need to know the report authors name!?!? Will you only believe the report if you know him/her personally?

At best this is pomposity in the extreme, at worst it is totally delusional.

And of course it is a punt, you will find most holders on this board hope to recover some of their losses, not make a fortune.

Not all of us bought at 60p.....

[thegreatgeraldo] 05/2/2021 20:39

Can you explain to me(seriously I am genuinely interested) why you know better than one of the most respected experts within the sector?

.......Fat Frank, it's very simple..... your "expert", (don't know the report author's name) & his view hang on one phrase..... " we expect production of 11kbbl/d, a moderate decline,".

IF well 6 behaves as he's assuming, IF the OP holds up, IF the CB holders agree to an extension & improvement in terms, with maybe a partial redemption, IF they can maybe re-negotiate a more flexible FPSO extension with Bluewater & IF they can execute successfully the well 7z ST......there's plenty of upside ....... IF well 6 doesn't behave & especially if it starts misbehaving in the next 3 months when HUR are juggling all I've just mentioned......


..It's a punt in my book, not an investment

[fat frank] 05/2/2021 20:25

From HAMMAN Report dated 14.01.2021

"Q4 production and water cut in line with guidance
Hurricane’s Q4’20 production averaged 12.7kbbl/d with a 25% water-cut. For the final 4 months of the year, production of 12.5kbbl/d was within the 12-14kbbl/d guidance range. The current production of 12.1kbbl/d and water cut of ~25% remains steady. The water production level is well within the handling capacity of the FPSO but the well production rate has been choked back to manage the reservoir and avoid water coning issues. In 2021, we expect production of 11kbbl/d, a moderate decline, which may be partially offset by a Q4 bump from the 205/21a-7z well re-entry.

Strong December cashflow generation demonstrates Lancaster’s potential
Hurricane’s 19th cargo of Lancaster oil was lifted at the end of the year. Given the higher oil prices in December (>US$50/bbl Brent) and a much-reduced discount to Brent (US$2/bbl in H2’20 versus US$10/bbl in H1’20), Hurricane was able to increase its free cash flow position by US$19mm over the course of December (>25% of Hurricane’s market capitalisation). This demonstrates Hurricane’s leverage to the oil price and the cash flow generation potential from the asset if it can maintain or grow production in a >US$50/bbl Brent price environment. At US$42/bbl Brent in 2020 (and with a realised price of just US$35/bbl), we estimate that Hurricane was able to generate US$74mm of EBITDA or post-tax cash flow (pre-financing costs) from 14kbbl/d of production.

Lancaster further development and funding options being considered
We continue to see considerable value remaining in the Lancaster asset if funding for further development of the field is forthcoming. Hurricane currently has ~US$105mm in available cash (versus a market capitalisation of US$70mm and outstanding convertible bonds of US$230mm) plus we estimate ~US$50mm in restricted cash. The company is also free cash flow positive at current oil prices and production levels. HUR remains very geared to oil prices: at current production rates of 12kbbl/d, we estimate US$40mm of incremental cash flow if oil prices move up $10/bbl (>50% of the current market cap for just one year’s production). Also, if it can boost production by 5kbbl/d, over the course of a year based on a US$50/bbl realisation, this would add ~US$90mm of revenue with little incremental opex.

Further development plans for Lancaster have been refined
The first development solution is to bring on a new production well through the re-entering and side-tracking of the 205/21a-7z well, to add a significant amount of incremental production starting in Q4’21 and at an estimated cost of US$60mm. This could potentially allow production to return to 20kbbl/d in 2022. The other project mooted is the implementation of a US$75mm water injection scheme in the NW of the field in 2022, which on our estimates could add 10mmbbl of 2P reserves (from 2C resource) and at US$60/bbl Brent would be worth US$231mm or 9p/sh unrisked (we carry 5p/sh risked in our NAV). A pilot well to derisk the feasibility of this could be drilled relatively cheaply (~US$10mm in 2021) if the side-track takes place.

Valuation: no change to our risked NAV of 10p/sh
Our risked NAV is 10p/sh (US$60/bbl Brent flat long term; 10% discount rate). Our core NAV only includes the value for the 2P reserves (worth 10p/sh risked) and including the liabilities gives a core NAV of 2p/sh. Even with the heavily downgraded contingent resources, we have a value of >40p/sh unrisked for the 2C resource, which on a risked basis is worth 8p/sh. The US$459mm net asset value held on the balance sheet for Lancaster implies a value of US$8/bbl for the remaining 2P reserves and 2C resources, totalling 57mmbbl. Assuming 11kbbl/d of production in 2021, we expect Hurricane to generate between $45-125mm of EBITDA (no tax payable on this) between US$40-60/bbl Brent. We expect non-discretionary capex of only US$6mm net in 2021, relating to the abandonment of the well on the Lincoln field."



Can you explain to me(seriously I am genuinely interested) why you know better than one of the most respected experts within the sector?

Again when you look at their calculations bear in mind that Brent is now heading to $65.

[ngms27] 05/2/2021 19:58

Agreed short term the oil price is massively helping at $60 break even is around 6.66k bopdHowever it all depends how long Well 6 can keep producing for without stability issues. Well 7z lost stability at 57% water cut.We know well 6 averaged 29% in November on natural flow.Pressure depletion is another issue, bubble point is getting closer.Enjoy the current day in the Sun, it won't last.

[fat frank] 05/2/2021 19:41

"hxxps://oilprice.com/

Friday, February 5th, 2021

Brent is closing in on $60 per barrel for the first time since January 2020. Crude inventories in both China and the U.S. declined this week, offering more evidence of a tightening market. “The physical market is also looking increasingly tight,” said Eugen Weinberg, head of commodities research at Commerzbank AG.

Shell profits drop, but boosts dividend. Royal Dutch Shell (NYSE: RDS.A) reported a $4.8 billion profit for 2020, down 71% from the year before. The oil major hiked its dividend for the first quarter, following a sharp cut last year. “We are coming out of 2020 with a stronger balance sheet,” Chief Executive Ben van Beurden said in a statement.

Shell sees oil demand back to “normal” in 2022. “I believe 2022 is going to be sort of back to normal” regarding global oil demand, CEO Ben van Beurden said. However, that depends on the aviation sector experiencing a full recovery.

Oil surges as OPEC+ keep cuts in place. Saudi Arabia kept oil shipments to Asia unchanged even as the market has tightened, sending oil prices higher this week. “It looks like, at every turn, Saudi seems to want to support the market,” Michael Hiley, energy trader with LPS Futures, told Bloomberg. “If demand really picks up, we could be short oil pretty quickly, because U.S. production isn’t going to come back fast.” At the same time, division may increase between OPEC+ members as prices continue to rise."

Probably the most positive weekly update in a long time.....

And a quick reminder to those who seem to insist on casting doubt on the recent offload;

During the very negative stream of updates it was commented that the current producing well would only remain economically viable as long as production remained over 10,000 bopd.

This has been quoted several times, by the usual culprits, but if you read the statement further this was based on oil at $40 bbl.

Anyone care to do the simple math to show what production is required to remain economically viable at $60bbl?

Or even $65bbl.......

[thegreatgeraldo] 05/2/2021 18:09

Leoneobull
5 Feb '21 - 17:28 - 23370 of 23371
0 0 0
I'm sure all the non-holders and ex-holders are delighted about today's rise.

...Great news for the newcomers......neither here nor there for long termers. Would be delighted if the rise was based on some fundamental news which I've missed

[bocase] 05/2/2021 17:51

Yes indeed. Oil up 1% today. HUR up 13%.

With mainly fixed costs it shows what a difference it makes.

[leoneobull] 05/2/2021 17:28

I'm sure all the non-holders and ex-holders are delighted about today's rise. I saw the two trades go through of around 6 million total within a couple of mins. Either serious buying or shorter closing. Either way, the most welcome news since the BOD last sunk the sp

[kooba] 05/2/2021 14:42

Brent looking at $60 does make this a much more interesting prospect ..if they can boost recoverables things really could take a tern for the better

[neilyb675] 05/2/2021 14:27

2.73 - 2.77 (GBX) at 14:27:20
on Market (LSE)

[kooba] 05/2/2021 14:10

Some decent volume building...maybe the engagement with stakeholders , sorry bondholders is creating some interest? These lumps don't look like private investors prints. Is there life in the old dog yet !?

[leoneobull] 05/2/2021 13:37

Another 2.4 m buy or was it a sell...probably Pro closing hia short?!

[neilyb675] 05/2/2021 13:36

look at those buys just thru...

MASSIVE

[kooba] 05/2/2021 12:17

Oh....and chunky seller reappears!

[kooba] 05/2/2021 12:16

There was a chunky offer in 2.6m overhanging the offer this morning seems to have cleared , there is indeed a bit of buying about.

[thegreatgeraldo] 05/2/2021 12:15

mrwaite
5 Feb '21 - 12:07 - 23358 of 23359
0 0 0


What I don't understand is why they would spend the money to P&A it now, when with extension already granted they don't need to until next year.

..The extension is for the Lincoln commitment well, not P&A'ing well 14