Hurricane Energy Share Discussion Threads

[officerdigby] 16/11/2021 09:17

Ayato, OGA have not agree to flaring they agreed to production below bubble point. As long as no extra gas produced than now.Disappointing RNS. Adds to risk apparently. No real developments in last months.But maybe as said this the necessary medicine to shake the BHs out. But how many SHs get shaken out too!

[ayatollahhighrollah] 16/11/2021 08:46

Strategy?

1) Bondholders can prevent further CAPEX spend on any well performance improvements / well decline mitigation strategies.
2) Flaring permissible post-bubble point but with OGA permission - annual license or, more likely, quarterly. Permission, even for a quarter, de-risks. Permission will require extra setaside cash
3) Bluewater are not going anywhere fast, are kept close and a flexible win-win quarterly renewable extension very doable. Announcement derisks bonds - formal deal not needed right now.
4) Net free cash early December likely $130 million (ish)- possible earliest bubble point couple of weeks later. Given 2) = risk to bonds.
5) 2nd Bond buyback scheme early December - nukes $50 million at 85p/90p? every little helps etc in terms of discount and interest payments to maturity saved.

2022

1st Quarter

Year begins - bonds outstanding $ 100 million - free cash $ 65 million
Bubblepoint reached - OGA approves flaring - requires + £ 10 million set-aside - renewable quarterly
Production chugs on at min 9,000 a day - increasing water cut is manageable by AK.
Late Jan/early Feb lifting at circa USD 95 per barrel (winter spike etc) - nets $ 40 million - allows/clears Bonds early.

End of quarter - bond restrictions cleared - unlocks new financing initiatives/deals to action capex to improve performance/mitigate existing wells in 2023 - which continue to produce throughout 2022, albeit declining but at same time is chugging in all net free cash and Bluewater happy on flexi win-win deal.

New CPR + lancaster case study unlocks deals on wider assets.

Perched water in back-pocket - still not truly bottomed out.

[marmar80] 16/11/2021 08:37

Reduced today. Price should be trading in a range approx 4-4.50 till next news imo. Will be around Hur of course, but the risk has increased and couldn't keep that much of capital locked in.

[nigwit] 16/11/2021 08:35

Material doubt over whether they can repay the bonds on time even at current PoO is a potentially insolvent situation. The directors may be in jeopardy and equity is possibly vulnerable to a fresh attack from bond holders. Even in the event there is any surplus cash Bluewater, who obviously don't trust the well, want it in escrow as a condition of contract extension.

Hard to imagine a way out.

[steve73] 16/11/2021 08:01

My take on this...

The oil rate has declined a little faster from oct-nov than the previous update jul-oct indicated. Water cut has increased a little faster, and total liquid is a little higher (but could simply be rounding error due to the W/C given in whole %).

But it does allow us to make some better forecasts though.. At end Jun-22, I forecast the oil rate will be between 8.3 to 9.3 kbopd (using oct-nov or jul-oct actual figures). W/C will hit 50% (which may give production problems) during Q1, which is when they suggest bubble point may be exceeded).

Last offload netted $49.1/bbl. Assuming this is maintained (in reality it may drop a little as oil rate drops, since some of the OPEX is fixed rather than pro-rata), I estimate we would generate an additional $110-120MM of cash (2.3 to 2.4 MM bbl) to end jun, providing production can be maintained as forecast.

Added to the free cash currently available, there would be sufficient to repay the bonds in full, and assuming the current free-cash includes all decommissioning and wind-up costs (which today's statement suggests not), there would be up to $60 million available for distribution..

Compared to todays m-cap of 96M_GBP we do appear to be well overpriced, given the risk that production may not continue until end jun-22.. Obviously does not include any residual value for our licenses.

DYOR..

[sji] 16/11/2021 07:55

From the tone of the RNS, I sense that another Bondholders' offer is on the way! The RNS creates a degree of uncertainty for the Bondholders to induce some of them to accept HUR's offer IMO.

[cyrilsneer1] 16/11/2021 07:32

I don't think the market is going to like this, I could be wrong. I rather prefer reading the CRystal amber RNS relating to HUR.

[kooba] 16/11/2021 07:31

https://glossary.oilfield.slb.com/en/terms/b/bubblepoint

[kooba] 16/11/2021 07:29

So production and price ahead of expectation meaning strong cash generation over the period..significantly ahead of projection at $99m.The water cut is rising and pressure falling ..this was anticipated but needs watching as they have now brought the bubble point closer ..which in itself might not be a big issue but will need careful adjustment to mitigate gas release which could impact production levels.$26m cash inflow from last off load ..with another coming up end of the month / beginning Dec so should be looking at $125m at year end. With $154m outstanding to the bond holders another offload end of Jan should get us close.

[jonc] 16/11/2021 07:24

What is the meaning of "bubble point"

[dave999dave999] 15/11/2021 15:28

buys and sells are designated by comparison with previous transactions.
price changes and volatility can cause issues with the simple mechansim used for labelling

Dave

[ottoman1453] 12/11/2021 16:13

Unclear what is happening here, but a purchase of mine at 15.57 this afternoon, of 25,000 units at 4.83p, was put down as a sale.Stock appears to be consolidating in the upper quartile of its 4.00-5.00p range.

[marmar80] 12/11/2021 11:43

Do we know if Saba has a short here? If yes, any link?

[solo4yous] 12/11/2021 08:28

Minor drop still in a huge HUR uptrend!

Meanwhile people are accumulating

81% been held at June reporting data/date... remarkably more popular than the share price is saying:

[lawsy24] 11/11/2021 20:27

Is that another 2mill sale

[marmar80] 11/11/2021 10:19

I topped up a few times in the recent days. It wasn't easy. Had to wait hours. Hope this will pay out soon.

[prof_pwhite] 10/11/2021 22:41

I'm afraid so the countdown to de-lising has official started.Clock stops here on 31st Dec 21.

[prof_pwhite] 10/11/2021 21:42

I am taking this back to 2p by order of Fat Frank

[marmar80] 10/11/2021 16:43

"U.S. Oil Stockpiles Rose 1 Million Barrels Last Week: EIA"https://uk.investing.com/news/stock-market-news/us-oil-stockpiles-rose-1-million-barrels-last-week-eia-2508494

[marmar80] 10/11/2021 11:36

I have that date in mind too, but any result will not cause HUR to stop selling oil or ceasing the existence. The worst case is CA selling all stake to Saba imo.

[wbodger] 10/11/2021 11:23

Next important date is November 22. That is when CA's continuation vote is scheduled.

If CA have that under control they should then be free to apply pressure on Maris and Chaffe over the Bonds, assuming an extension to Aoka has been informally agreed with Bluewater.

I'm still bothered by Stifel being the Nomad. What are they doing? We need to amend the term of the Bonds if necessary and lock in the AM extension to match that. (If the BHs won't amend the terms that will send an unmistakable signal that the AHC "hasn't gone way, you know". But it should be routine, other financiers should be willing to bridge any gap.

Then it is just technical and I defer to others more knowledgeable about the performance of the well. Looking good so far.

[marmar80] 10/11/2021 07:37

"Oil Up as Supply Remains Constrained and Travel Demand Picks Up"https://uk.investing.com/news/commodities-news/oil-up-as-supply-remains-constrained-and-travel-demand-picks-up-2507834

[marmar80] 09/11/2021 17:59

WTI almost $84!!