Hurricane Energy Share Discussion Threads

[kooba] 08/2/2021 17:02

Oh get over yourself.zzzz

[tournesol] 08/2/2021 16:57

Canetois

Shame on you.

How dare you criticise someone with genuine insight and expertise who takes the time and trouble to share it. How dare you suggest an underhanded motive. That says far more about you than it does about Steve.

Of all the people who have posted here, it seems to me that all - or nearly all - of those with technical expertise relevant to oil production and reservoir engineering/operations - are now in the pessimistic camp that regards Hur as more or less uninvestable. (eg Steve73, NGMS, DSPP)

Likewise those with professional experience of oil and gas investing and investment analysis (eg Hidden Depths)

Likewise those (like me) who have worked in O&G but not in the technical disciplines listed above. (I was in IT and cyber security and management consulting - mostly but not exclusively in O&G)

Likewise those seasoned amateur investors without direct industry experience but who have specialised in investing in O&G for 20 years or more (eg TGG)

Doesn't that give you pause for thought?

All of the above have taken an unusual degree of interest in Hur. Why? Is it because:-

1) They aspire to drive the price down so they can profit from shorting and/or trading?
Obviously not. They are all transparently honest and have all said they do not short and their posting history reveals no interest in short term trading. In any event they are intelligent enough to know that their efforts here can have no perceptible effect on the share price

2) They are indulging in schadenfreude and take pleasure in the pain felt by investors facing un-crystallised losses?
Again that is obviously untrue. They are not claiming to be infallible. They have themselves all suffered losses here. Many of them have owned up to failed investments elsewhere so are not pretending to be "better" than anybody else. They know how gut wrenching it is to lose 95% of an investment.

3) Hur is an unusual case. It seemed to be doing something genuinely innovative using genuinely innovative technology and led/managed by an apparent eccentric genius. It seemed to have unprecedented potential with billions of barrels claimed as resources. Pre-production work went like a dream. the modifications to the Aoks Mizu, its voyage across the world through dangerous waters, the heart in mouth hooking up of the bouoy, the triumph of the start up of the EPS - all this was such a resounding success that it gave shareholders confidence in the narrative that that stretchedc ahead to a successful EPS, a FFD and the extraction of billions of barrels of oil. Dr T was like Maximus in the Collosseum. He seemed an all conquering hero leading a small but indomitable band who vanquished all opposition. How could such a story not have a happy ending?

And yet it all went wrong. And some of us cheering from the sidelines started to see that and stop cheering. And as things went from bad to worse, we left our seats and exited.

Two things stopped those leaving early from simply going away.

First the story of Hur is possibly the most interesting situation we have ever encountered in 20 years of O&G investing.

Secondly many of the spectators have still not processed the fact that Maximus has left the building, the gladiators are dying one by one, the end is now inevitable. Those outside are aghast at the avoidable carnage that has been wreaked on those remaining within. They see people trumpeting unrealistic optimism and they do what they have been doing for 20 years or more. They share their honest opinions because they hate to see people suffer when there is no need. It's not altruism, exactly. It's instinct. And it's fascinating.

In my case I was 100% sold on the story. That doesn't mean I thought it was a 100% certain to succeed. It does mean that I thought the balance of risk/reward was very advantageous. I recognised that the R/R balance had swung against investment when the share price was in the teens and promptly exited. That was not because I thought success was impossible, but the balance of risk/reward were no longer favourable. I posted my assessment here at that time. Anybody who saw my comments then can have no grounds for complaining. Action at that time would have avoided a loss of 75-90% based on the share price at that time.

It seems to me absurd that those, like me, who have exited and whose exit decision has been vindicated by subsequent events should be criticised for maintaining an interest here.

[jotoha2] 08/2/2021 16:47

Exactly , if you were looking to close down an operation then a financial man would of been put in as a CEO , certainly an interesting appointment and CA still very much on board and look to be staying until the outcome is sorted .

[leoneobull] 08/2/2021 16:27

I have a lot of admiration for Steve and the quality of his postings and knowledge.The posts of Pro i treat with disdain. He congratulated Steve for selling out at a 95% loss.Pro is short...not a nice chap.

[kooba] 08/2/2021 16:04

Is that by proliferating misinformation and false perceptions on a negative angle ngms27 ..creating said balance ? Just asking. As things go we can but interpret the available information from reputable sources, but opinions are opinions and doesn't make them 'false' if you do not agree. Welcome genuine balance if intent is constructive but always slightly concerned that those who have jumped ship just want to see it fail and convince others they were right to jump.It's option money here..and before a CPR and plans from company we're all speculating on the future.

[ngms27] 08/2/2021 15:47

Steve73, please keep posting like I have. There's been a lot of misinformation and false perceptions on here that need balancing out.

As a matter of interest how long do you think they can likely keep producing above 10k bopd from well 6?

[drummondbulldog] 08/2/2021 15:17

The most recent data is 25% water for 12100bbld. Or 3075bbld water. It is an approximate figure. Hence the c. The previous approximate figure was 12300bbld and the water % was 23%. This is 2829bbld water. This is an approximate figure also. If they are taken as 100% accurate, it is a net overall increase of 2% or 258bbld per day maximum but it could be less as the figures are approximate or it could in fact be the same. In the light of the controversy over the water cut on the other hand, this increase could be bad news indeed or it could mean that the water rate has stabilised. Nor do the new %s really explain the impact of shutting down the 7 well so in short we possess supposedly factual information from which no reliable conclusions can be drawn. So don't draw any if you are being entirely logical.

[jotoha2] 08/2/2021 14:53

Buy high sell low , clearly the way forward.

[steve73] 08/2/2021 14:42

If the board would prefer, I'm happy to stop posting what I consider to be technical corrections to some of the misunderstanding posted here.

I've got no intention of getting back in, although I'm still very interested in how this pans out from a professional viewpoint rather than an investing one... much as Jacks has said.

FWIW, my last few meagre funds from here went into ARB (a mining share.... ok, Bitcoin mining) up 18% today... It was the easiest way into crypto with my "shares" portfolio, but pity I didn't bite the HUR bullet 6 months ago.

[whitedukejay] 08/2/2021 14:05

Longs are getting outnumbered here

[jacks13] 08/2/2021 14:03

Steve, probably now regards HUR as a bargepole share. As I do. His comments are rooted in his knowledge of the industry and of this particular company's operating history. His contributions have earned him my respect, along I suspect with many others.

I'm no longer invested in Hurricane but remain fascinated by the story and I still keep tabs on developments. I continue to follow events, read every RNS and track the OGA production data etc, and I can see that, given a fair wind, some intrepid souls may be able to make a few pennies. But it's no longer for me, although I will continue to follow events.

I have had the odd (mild) spat with ngms, but I believe he says what he says in good faith, and in no way do I think that he is talking his own book.

The following two RNS extracts for me illustrate the substance of ngms's arguments:

1) Trading, Operational & Licence Update Dec 13 2019

'The 6 Well is currently flowing individually at approximately 14,700 barrels of oil per day with minimal water cut. In a prior individual well test, the 7Z Well flowed at approximately 9,400 barrels of oil per day with a stable water cut within a range of between 25-30%. These rates were achieved on natural flow. In both cases, the bottom hole pressure showed minimal decline following an initial stabilisation period, giving management confidence in the long-term productivity of these wells and the Lancaster field.'

OGA production data for Dec 2019
oil 12,574 bbl/d
water 222 bbl/d
water cut 1.7%
natural flow

2) Trading and Operational Update Jan 14 2021

'The Lancaster field continues to produce from the 205/21a-6 well alone, with current production of c.12,100 bopd on artificial lift and a water cut of c.25%'

implied production data for Dec 2020
oil 12,100 bbl/d
water 4,033 bbl/d
water cut 25%
artificial flow

[whitedukejay] 08/2/2021 13:41

Nothing wrong in detaling your concerns and why you may have exited,i think Steve seems to have a bit more class than to put his concerns on an endless loop.we will see.GLA

[canetois] 08/2/2021 13:04

Isn't it strange how Steve seems to be reinforcing all those negative aspects of HUR that caused him to make the very wise decision, in his view, to bail out completely and is now back uninvested and in danger of persuading any ditherers to join him, intentionally, probably not, or otherwise. Surely he's not looking to get the price down in order to rejoin us now that oil has shot up. Based on all the respect and admiration we showed him whilst he was a fully paid up member this post will probably not convince many on here that it has any substance, including me, but when I see him being congratulated for his recent efforts, especially by those who have no shares here and who continually deramp the Company, I'd rather not read anymore about all things that will surely and most certainly cause HUR to fail.

[steve73] 08/2/2021 08:05

A new well (i.e. 7y) will have to hit a productive fracture to be of any use.. That's the big unknown (and based on the WW/LI drills their fracture modelling might not be as good as they thought). And if it's higher up in the structure it'll get to bubble point sooner. A new WI will have pressure support benefits since it will make its own fractures even if it completely misses existing ones - or are they planning to inject into the sandstone flanks?

They've not given us enough clues as to their plans, and the operating window is shrinking from all sides.. just the Oil price is in our favour, but as others have suggested this may simply encourage the CB holders to hang out for full repayment, rather than looking for more...

[leoneobull] 08/2/2021 07:27

Agreed Steve, but isn't that the plan? Sidetrack 7z gives them a new well and WI to follow in 2022...

[ngms27] 08/2/2021 07:23

Steve73, it's clear now that well 6 will have watered out before they could bring a water injector online anyway.Leoneobull, read what Steve73 said again: Without adequate pressure support Lancaster is currently trapped in a rapidly narrowing operating window.

[steve73] 08/2/2021 07:16

The trouble is Leo... that pressure support from WI will simply water out the 6 well faster, like what happened to the 7z. WI will only be of use if there's also a new or S/T producer higher up AS WELL as an injector.

I'm not sure if there will be enough cash in the kitty for this, or enough oil in likely targeted area to pay for it in time to suit the Bond repayment.

..and if they have to extend the bond maturity, then there'll be a BIG hit to equity holders

[leoneobull] 08/2/2021 06:21

Https://www.worldoil.com/news/2021/2/5/world-s-largest-crude-trader-sees-post-vaccine-euphoria-in-oil-pricesHttps://www.wsj.com/articles/tightening-oil-supplies-inject-new-momentum-into-price-rally-11612693802Tightening Oil Supplies Inject New Momentum Into Price RallySigns of strength under the surface of the energy market suggest further gains for crude prices, some investors and analysts sayWhat was sub economic again? 10000 at 40 usd or was it 5000 at 80 USD etc.?!

[leoneobull] 08/2/2021 06:16

If a single well can be so prolific for 3 years, surely at say 60 to 70 USD, this is going to be quite profitable, even with a relatively short lifespan per well? I'd be amazed if they cannot identify further reserves on this acreage.

[leoneobull] 08/2/2021 06:13

Need for pressure support

[leoneobull] 08/2/2021 06:12

Steve, good post on the news for pressure support. Brent over 60 this morning and lots of talk about a boom over time. HUR need to get drilling with remediation measures. They ought to pay for themselves , at least in case of 7z sidet, the value looks compelling.

[pro_s2009] 08/2/2021 04:54

Steve, excellent summary.

Its what the rampers cannot appreciate.........there is a very small amount of oil left..........and when its done, its done.


If you have 100 pounds in the bank, does not matter if you take out 50p a day or 10 pounds a day, you only have 100 pounds in total. This is HUR currently.......limited amount of oil regardless of the oil price, water cut or daily production rate.

[steve73] 08/2/2021 01:29

Production flows naturally due to the gas breakout in the well-bore. The gas has a much lower density than the liquids, and so the mixed fluid column is a lower overall density and wants to rise up....(Think of sucking water up a straw... when the glass is nearing empty, you start to draw in air, and it gets much easier to suck..) Typically, you need a Gas to Liquids Ratio (GLR) of around 200scf/bbl to provide a low enough density for the well to flow reasonably stable (although it also depends on the arrival/separator pressure, since a lower pressure gives more gas volume, and so will flow better at a lower GLR... I have no idea what the operating pressure of the separator on the AM is, so 200 scf/bbl may be a little conservative.) The 2km horizontal seabed flowline makes things a bit more difficult, so a higher GLR is needed to ensure stable flow.

Lancaster oil has a GOR of 360 scf/bbl, so is easily able to flow naturally when dry (i.e. GLR=GOR). But at 50% water cut the GLR drops to just 180 GLR since the gas is part of the oil phase. (Pedants might want to point out that there will be some gas dissolved in the water phase, but it is tiny compared to the fraction in the oil).

So Lancaster at 50% water cut would have a borderline gas flow to maintain stable production. In addition, to maintain 10kbopd now requires 20kblpd - i.e. twice as much total liquids, and this makes it harder to flow since there's higher pressure drop. Not to mention the reservoir is being emptied twice as fast so without adequate pressure support from any aquifer (or Injection) the reservoir is heading towards bubble point faster...

Flowing BELOW bubble point is not usually a problem since it makes little difference whether the gas starts to break out in the well bore or in the near well-bore region of the reservoir from a flowing viewpoint, but ESPs don't like any gas. So sub-BP is OK on natural flow, but not when using ESPs.

Without adequate pressure support Lancaster is currently trapped in a rapidly narrowing operating window.

[ngms27] 07/2/2021 22:48

I could be wrong, time will tell.I just think it's overly optimistic given the empirical evidence.