Hurricane Energy Share Discussion Threads

[tournesol] 06/2/2021 08:35

Frank

Refer to your long post about HANNAM

(I assume that's who you were referring to? For some reason you insist on calling them HAMMAN.)

You quoted H as saying ...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/share…..

That says the core NAV is 2p. Core value means proven and reliable. Risked means speculative and based on an assessment of probabilities.

1) For a co with a solid track record of getting things right it makes sense to place some credibility in their future programme of activities. H has a track record of getting things wrong and having to backtrack. Their future programme would have little or no credibility even if we knew what it was - which we don't.

2) For a co with a portfolio of multiple assets/projects, it makes sense to aggregate the chances of success of the portfolio and expect some kind of averaging out across the piece. Some bits will succeed, some will fail but you can expect a % to deliver. H really only one asset - it's a binary thing.

So a co with little credibility and a binary asset is only going to be considered on the basis of its CORE NAV. Which Hannam tell us is worth 2p.

Seems clear enough to me.

[steve73] 06/2/2021 07:26

Although no longer a holder here, I do maintain an interest, and also keep tabs on the oil price (and global usage).

Globally, oil production rate, without any intervention, would typically decline at 15-20% per year (large fields often less, shale wells much more).

Minor interventions, workovers, side-tracks, development wells, etc. most of which are still ongoing, reduces this decline to 5-10%.

Until Covid global demand was increasing around 2% per year, so the resultant 7-12% shortfall required new major developments (typically 5-10years in the planning), nearly all of which has been put on hold.

Covid reduced global demand by around 5% in 2020, with a major supply cut agreed by OPEC+others needed to prevent excessive storage build (which had resulted in the brief negative oil-price in mid '20). Global demand will be unlikely to fully recover for a few years, much less get back on to the previous 2% demand growth track.

At the present time much of this supply remains closed in, and most could be brought back into production relatively easily, and it is the threat of this that is preventing major new development activity resuming. Meanwhile, demand is recovering, storage inventories are slowly reducing, and the oil price is recovering strongly, which will come as a relief to most oil co's who have suffered major losses during 2020.

With the vaccine roll-out now fully underway, there is an expectation that demand will get back to before. This makes two assumptions; 1. that the vaccine program will be total success (and that further mutations will also be controlled), and 2. that the "new normal" will, from an energy usage standpoint, be much the same as before.

If these assumption are valid, I would foresee a supply crunch in a few years due to the ongoing lack of investment, and we could easily see an oil spike like we saw in 2007 (and perhaps higher due to the ongoing QE). If these assumptions are not met, and the demand forecast too bullish then the oil price will continue to be "controlled" as the shut-in supply is only slowly returned to the market... And IF demand does not eventually recover, then there may never be a significant oil price rise.

The question of what will be the "new normal" will unfortunately be a political decision..

And what the implications are for HUR I will leave to others to debate...

[kooba] 06/2/2021 06:57

Rename the corporate entity Hurricoin and this time next year Rodney....

[leoneobull] 06/2/2021 06:21

OK sod it, let's put some BTC mining machines in a data warehouse on the AOKA MIZU and pay off the CBs by end March...

[leoneobull] 06/2/2021 06:15

We were told by HUR that sub economic meant sub 10000 at 40 USD. So BE is 400ks a day. At say 12ks a day, we are generating 720ks ...a day. That's more profitable than the majors as a % inFCF terms.....look at the BP results!

[leoneobull] 06/2/2021 06:11

Ps let's also not forget that sovereign or national oil companies , the NOCS are suffering massively....the private sector isn't the only one. The Middle East may be able to produce at a few USD a barrel to the low teens, esp. SA but if they need 60 to 80 USD for fiscal BE.....The cure for low oil prices IS low oil prices and vice versa. I can see shorts across a no. Of oil stocks reconsidering their position. Better to be a producer than at exploration stage in this scenario.......

[leoneobull] 06/2/2021 06:06

Partly oil is high as mkt is looking 6 months ahead to vaccines becoming efficacious, partly SA unexpectedly cutting production, drawdowns in the US, strong demand in China, huge under investment since 2014, expected huge stimulus packages impact on demand .Various economic commentators have predicted the 7.5% decline in GDP in Europe in 2020 to swing to a 5.5% growth trajectory in 2021. POO recovery must be 4 months ahead of expectations.....allowing HUR to reduce Armageddon. Who knows, they can at least fund the. Sidetrack on 7z more easily. Imagine if they got back to 20ks production at 65 USD say.....

[mhin2] 05/2/2021 23:45

frank...really...please justify in the context that the comment was made. You must think people are stupid...do you?

"All shares are Binary - they either go up or go down.

You pays your money and you takes your chance."

I happen to think hur are onto something...albeit the changing zeitgeist is against them.

In the meantime, I will look at the oil price and hur current oil production, cash, prospects....could somebody see value?

[mhin2] 05/2/2021 23:17

Frank, you did not address what I was inviting people, like yourself, to address. Thats a shame


Hur have been given a `window of opportunity'. Lets see how they take it

[fat frank] 05/2/2021 23:12

mnhin2, we all (holders) need HUR to stabilise.

Good Luck

[mhin2] 05/2/2021 23:06

Frank, I don't disagree...I just need Hur to stabilize. The reality is that HUR have been far from stable. The new BOD need to construct the stability. Past and future careers and reputation are involved-how will that play. Of course there are others that see, but not contributed to, sunk costs....there is a lot of research and development.....but have times changed?

[mhin2] 05/2/2021 23:04

Leon. Why is oil at its price? I think that is important....For Hur its good, assuming they get the price. I am at a loss to understand what is happening

[fat frank] 05/2/2021 23:03

For at least the next 20 years

[fat frank] 05/2/2021 23:03

The world still needs oil... and in massive volumes.

[fat frank] 05/2/2021 23:01

mnhin2: "I work on the assumption that oil is a depleting resource"

Agreed.

But not yet......

[leoneobull] 05/2/2021 22:55

I pointed out HUR achieved huge turnover in first few months pre CV19 from 2 wells.170m usd in 7 months. Were it not for CV they could have bought their way out of this mess, even by buying up production on the cheap. Great news Brent is back at close to 60 usd.

[mhin2] 05/2/2021 22:41

Hur is a binary play in so far as you lose all or make money....I dont think BP/shell is a binary play..Let me know if you want more clarity.

[mhin2] 05/2/2021 22:38

Frank, I dont have a target price. I work on the assumption that oil is a depleting resource. It is being supplanted in energy but I do not see that it is sufficiently advanced to supplant petrochemicals (although that is coming). I think companies like BP will look to the future (thats good). There will be a supply constraint, and thus some hydrocarbons may gain (and personally I think hydrocarbons have a long time to run, unfortunately its a middle class thing-the majority are surviving not struggling-electric cars are an aspiration ). If storage can be resolved then hydrocarbon energy is on the way out, but the issue of storage is exactly where the interesting things are. I am not convinced that there is sufficient knowhow and capacity on non fossil energy to supplant hydrocarbons at the moment, hence why I look at companies with prospects to store energy .

transition is tacking place...take your pick Look at the share price of EQT and PHE, and make up your own mind....in the meantime can HUR progress in a, ultimately, dead industry....shell did well today...BP did not.

[fat frank] 05/2/2021 22:31

mhin2; 'As people have said Hur is a binary play'

This has always made me laugh. The 'people' who say this are trying to look smart.

All shares are Binary - they either go up or go down.

You pays your money and you takes your chance.

[fat frank] 05/2/2021 22:26

3p would see me retaining my 1977 Austin Allegro

[fat frank] 05/2/2021 22:22

mhin2: What is your realistic target price?

12p would see me ordering a new AMG

[churchill2] 05/2/2021 22:21

Tournesol
Ngms27
Thegreatgeraldo

I would love to get your views on JOG if that is not too impertinent where there is a similar strong difference of opinion on the potential outcome for the Company.

[mhin2] 05/2/2021 22:14

I assume the poster that is `thumbs down' is Ngms.

NGMS how much have you betted on your short (which you have always denied, but has been quite clear...I prefer honesty....are you capable).

Anyway I hold long, and may add....news dependent...POO is a positive as you know...its significantly higher- Something your predictions did nor account for ( I did not expect the Vaccine efficacy nor the Saudi action- what a turnaround)