Hurricane Energy Share Discussion Threads

[steve73] 16/12/2021 10:23

kooba ..94.
A lot will depend on the OPEX cost which will inevitably rise (on a per bbl basis) as the production rate continues to decline, but without knowing the individual OPEX components and whether they are fixed or rate dependent it's difficult to be accurate.

I'm guessing the bulk of the OPEX will be fixed (c. 70%..??). AM dayrate (probably be revised anyway), personnel costs, heli-ops, and support vessels will be largely fixed. Costs (to BP) associated with oil sales, shuttle tankers, and production chemicals (if any) will obviously be pro-rata.

Looking further ahead to the next 12 months to June 23 (just from well 6 as 7 is unlikely to be S/T'd by then??), and assuming it declines at a similar rate to the past 6 months.
End H1 23 - oil rate 6.3-7.3 kbopd, W/C 55-60%, FBHP 1450-1500psig... It's anybody's guess if the well could flow like this; unstable (flowline) but probably manageable at the AM, would be mine.

If so well 6 will produce c. 2.5-3 MMbbl (allowing for annual downtime). Generating perhaps $110-130 MM of free cash at todays O/P but also depends on how the new AM contract is priced.

Note also that the "reserves" are dependent of the O/P.. since CoP is when revenue doesn't cover OPEX... so higher O/P gives more (economic) reserves.. i.e. up from the May figure (but with allowance for oil produced)...

[oilretire] 16/12/2021 10:05

Hi Steve, long time..... Thought this was written off in my folio a long time ago, but is HUR really starting to see light at end of the tunnel.Lots of ifs and buts, and I'm still in an operational role so know they can and do come in lots of different shapes and forms ;-), but ignoring all the risks and assuming it goes smoothly and forgetting that anyone might be interested in taking out HUR for the tax breaks - could the company just sweat the asset and wind up in 18-24 months with a cash distribution to holders at multiples of today's share price?Figures suggested by your good self an others seem to suggest this is becoming more of a possibility. But of course, no where near being odds on yet.

[tradoil] 16/12/2021 09:58

Hahahahhahahhah go Walter hahahhahahahaha.

[wbodger] 16/12/2021 09:47

kooba, don't apologise to the numpties who tried to profit from a premature declaration of insolvency by a bunch of (American) chancers. Yes the oil price has helped us, but the prolonged slump had previously sandbagged Hurricane and others, so swings and roundabouts. Trice's geology has been proved right, and the Aoka Mizu has functioned as intended. No reason for this to be bankrupt.

[kooba] 16/12/2021 09:28

You don't half talk nonsense..if they commit to extension ( which i hope they will) then the company will still have nearly 4m recoverable to bring up ( see company produced production forecast produced May ..link attached yesterday) Even if one takes $35 production cost there is a lump of free cash to build on any post redemption balances.As i have said before do not underestimate the value of the tax losses..the company will be in a position to look at how best to effectively monetise these losses once the balance sheet is clear and positive.Thought i would unblock to see if you had managed to see the light...back on block not worth the engagement.

[kooba] 16/12/2021 09:10

Didn't say it didn't and am fully aware of the oil price and impact on free cash thanks ..was somewhat tongue in cheek after the shenanigans in the first half.Agree the offloads and cash position view...think it must be strong enough for the company to commit to extension. The forecast revenues must support keeping money in escrow to support such and extension Leaving company debt free with reasonable free cash balance and continued production for 12 -18 months. With the many 100's M of tax losses useable in corporate transaction starting to make these rather interesting.To think 6 months ago they were saying equity had no value !

[wbodger] 16/12/2021 09:04

Thanks, #31082

[ngms27] 16/12/2021 08:59

Remember it needs $90m plus in the coffers to support the current share price

However at present the signs are good if the ESP can hold out and bubble point turns out to be a damp squib.

Regarding an attic well / sidetrack P8 I believe that's now not going to be possible as it would be a 2023 drill now.

[tradoil] 16/12/2021 08:13

Broadsword calling Walter . Come in Walter ?

[steve73] 16/12/2021 08:08

kooba - LOL @ ..088. The O/P helps as well..!

Based on the latest data (14 Dec) I estimate that by June 30th 2022 the oil rate will be around 8.4-8.9 kbpd, with 45-48% water cut. FBHP around 1550-1575psig. Around 2MM bbl of oil export (4 more shipments)

So barring any pump failures or other unforeseen events, the well 6 should still be stable and producing, and more importantly allow for a worthwhile extension to the AM, for a while. If the O/P holds around where it is the rest of the bonds will be easily be repaid, and there should be over $70 MM in the coffers (not allowing for any changes of restricted cash).

[kooba] 16/12/2021 07:51

Amazing the free cash being thrown off now they are not paying all those lawyers and advisors!

[fandagle] 16/12/2021 07:51

This is really positive, they can start thinking about a drill into the sand on the edges now perhaps in late 2022/2023, 7Z is too risky, game on….

[kooba] 16/12/2021 07:41

On the company business model i linked to last night , forecast production was 8400 bopd for nov 2022 so we're not doing too badly with production still around 10000 bopd i reckon.

[molatovkid] 16/12/2021 07:19

I agree Kooba....looks like HUR should escape the debt stranglehold.

[kooba] 16/12/2021 07:16

Production as expected ..cash position better than i was expecting they have the offload proceeds in so $127m less $69m of bond purchases leaves $58m ..no offload Dec so will be slightly down by year end but this is now looking good.$79.8m bonds outstanding $58m cash and $18.7m in escrow released at end of current contract...$76.7m...boom.With 4/5 offloads before redemption depending on extension..time to start running this business for the future of the stakeholders after the bondholders are repaid.

[senseman] 15/12/2021 21:52

thanks fellas, forgot about that. and finances now making poss. AM deal def next step

[kooba] 15/12/2021 20:38

Was one of the key proposals to further improve productionDrilling a side-track of the existing P7z well in 2022 ("P8 2022")• Assumes a side-track of the existing P7z well (the "P8 well") is sanctioned by mid-2021 and drilled in 2022• The P8 well would be designed to accelerate production, achieve a higher operating margin and improve production resiliency• First oil assumed in July 2022• Estimated capital expenditure of $84 million, with a material proportion of this figurecommitted at project sanction• Economic limit: August 2023 (at the forward curve1), earlier than the NFA case due toaccelerated production of reserves, with potential future recovery from the Lancaster field of 11.6 MMbbls (at 1 Jan 2021)2https://www.hurricaneenergy.com/download_file/force/610/336

[laserdisc] 15/12/2021 20:35

Fact if we are to believe accounts for subsidiary hurricane gla.co ,signed off 17/11 .1st we need news on where we are at with AM extension once that is decided then Hur can move forward with a plan

[kooba] 15/12/2021 20:34

Info Company business plan from May first few pages show the monthly production expectation..this was a cornerstone to the restructuring plan.https://www.hurricaneenergy.com/download_file/force/625/336

[senseman] 15/12/2021 19:45

laser - sidetrack fact, or opinion?

[laserdisc] 15/12/2021 17:54

2m buy now showing @4.19 once they have decided on extending Bluewater contract then sidetrack to 7z is being considered