Hurricane Energy Share Discussion Threads

[wbodger] 21/3/2023 14:15

Why keep them? Because they have value. Why would you sell them at a deep discount is more the question. Because that gives certainty, and because this has been dragging on. Ultimately under the Prax option the maximum is 12.5 pence per share, and a lot has to go right for that outcome (and a lot of waiting).

I don't think Prax intends to close Lancaster early, but the outlook for oil prices will come into it: if Prax can do better in the spot market they will be happy to source their oil there and the DCUs will carry the burden - presumably the liability to DCUs ends with Lancaster, even if Prax is very profitable? That is a big negative for me, the temptation to close Lancaster increases a lot if oil price slumps.

[kooba] 21/3/2023 13:36

Eerrm ...if you want to give them away I'll have them.If there is a secondary market then there would be the opportunity to sell but initially there might not be that much value...as with hurricane the value builds as they keep pumping profitably. According to the company you do slightly better and get a lot more cash up front from the scheme.If W6 pumps to expected economic cessation (august 2025) they will pay you 2.96p in 6 monthly increments assuming $80 Brent just from that..obviously higher if the oil price goes up. And if they make producing acquisitions we get the same revenue share which could boost that to a total 6.48p. So the DCUs could be worth more than the upfront 6.02p that is being paid in dividends and cash.

[soilderboy] 21/3/2023 12:54

Why would you want to keep them.

[kooba] 21/3/2023 10:14

There is a load of information accessible on the site nowhttps://www.hurricaneenergy.com/investors/formal-sale-processThe revised CPR is up there in full.There is also the deed to the DCU's the legally binding agreement. It also states there will be certificates and a registrar. Whether these can be held in nominees probably depends on your own arrangements but it certain indicates that they will be transferable ..ie there can be a secondary market where you could buy and sell. They are basically royalty units.

[kooba] 21/3/2023 10:09

I think RB's point on communicating the deal and engagement is a good one...hopefully Hurricane and Prax make a concerted effort , they have convinced the two largest shareholders that this represents the best option..they would appear to need to do a fair bit more to convince pi's whose expectation was largely far too high. I have had a look on LSE. Quite a bit of negative comment before today mostly just emotions running high and little substance save for a few interestpoints around the revised CPR..i don't think this extends production beyond the mis 2025 mark but if it does the DCUs share to end 2026 unless the 12.5p already met. I am interested how they think they can vote this down...and if they do..then what? Same management , same draining the well same outcome according to the company of payout 8.19p with cessation of production august 2025 ( or less if production issue or BW takes the AM away) and final payouts to shareholders 2026 once the decommissioning done and company wound up but during that period there are still overheads. The funds held in escrow are important , if the well carries on to natural economic exhaustion its possible Hurricane gets the escrow back from BW..its unclear what might be owed at that point. Obviously if there is an early cessation then those funds are forfeit.The decommissioning monies themselves were probably reasonably provided for but with cost increases in Nth Sea , seasonal weather conditions and potential shortage of rigs to do the work they probably do need to make further contingency..some on the other board just seem to think you can move money out of restricted..nope not the case it is legally binding with NSTA and BW as far as i am aware.The other figure that RB points out is that if for any reason there is an early cessation of production on an operational issue ( this being the main reason nobody wants to pay upfront) then we could end up with less than the current cash as we would have overheads again until the decommissioning done and company wound up. That is why the company would have to retain a large chunk of cash on balance sheet on a standalone basis for this contingency and not pay more out.

[sue999] 21/3/2023 09:57

Prax is also taking all the risks.

[marmar80] 21/3/2023 09:06

I will be voting NO if upfront payment from Prax is not increased and Hurricane will not return all cash from the unrestricted account. Prax only offers 0.87p. All the other money are from Hurricane's accounts paid by Hurricane ans are part of the sweet deal advertised in the media. This 0.87p will let Prax use up to GBP300m tax losses, will give them full ownership, licence, operational well and access to the restricted GBP 50m cash to cover furture technical issues.Prax must pay us more lads.

[brinks_matt] 21/3/2023 08:54

RB is much more articulate than Maris and Co. have ever been. I was on the fence yesterday. The risk is the clarity around the DCUs and calculation of values until 2026. Given that Prax look to have the intention to use the tax wrapper for further acquisition, I am persuaded that the risk/reward, on balance, favours this acquisition, if, as RB states, all other avenues are exhausted. I think I’ll be voting yes.

[billynotsilly] 21/3/2023 08:26

Well things finally coming to a head.

[senseman] 21/3/2023 04:01

Look at the The Annual Report and you will see that although published 28.11.22 it was signed by Chairman & a Director on 29.09.22. The Chairman's statement contained therein was also signed on 29.09.22, & is identical to that contained within the 30.09.22 Final Results RNS, ie:

"The revised policy commits the Company to maximising capital returns through the timely disposal of its holdings. This was initially envisaged to be largely completed by the end of 2023, with the exception of GI Dynamics, which was highlighted in the February circular as being a longer-term project. However, after consultation with Shareholders, it was clear that setting December 2023 as a fixed deadline could be counterproductive and consequently the Board reiterated its focus on the best outcomes for all Shareholders"

Your point fails. Mine succeeds. You need to learn to read documents fully and look at signing dates, not publication dates.

[porrohmahnn] 21/3/2023 01:18

Senseman, as I said, the Annual Report was published on 28/11/2022 and therefore post dates the statement you quote which was dated two months earlier.

[senseman] 20/3/2023 22:18

porro
there was no CA RNS issued on date you cite
From 30.09.22 Final Results RNS under Chairmans Statement

"The revised policy commits the Company to maximising capital returns through the timely disposal of its holdings. This was initially envisaged to be largely completed by the end of 2023, with the exception of GI Dynamics, which was highlighted in the February circular as being a longer-term project. However, after consultation with Shareholders, it was clear that setting December 2023 as a fixed deadline could be counterproductive and consequently the Board reiterated its focus on the best outcomes for all Shareholders"

what was the name of your planet?

[jacquibic] 20/3/2023 22:17

Good night chosen one!

[kooba] 20/3/2023 22:07

Oh do bore off your opinions on what i post are as worthless as your opinions on the company.

[rja63] 20/3/2023 20:59

What happened to the 14p bid that was being talked about??

[jacquibic] 20/3/2023 20:54

I don’t know what you are on about…..Hmmm!
Maybe I should make numbers up….no you use historic or forward guidance to give credibility to your posts.
I’ve been far too generous in my responses..how condescending (that your best!)
Just do some research yourself…I have and come to the conclusion your words are not to be trusted

[kooba] 20/3/2023 20:19

I don't know what you are on about and I'm sure you don't either. Maybe I should just make numbers up and not use any company historic or forward guidance..idiot.As it goes it was the company's forward guidance that lost them the restructuring as it was used against them. Don't bother addressing me again..I've been far too generous in my responses. Just do some research yourself...you might actually learn something and gain a view.

[rodneytt] 20/3/2023 19:11

The Half Yearly Report published by Hurricane Energy on 11 September 2020 included preliminary findings of the Technical Review announced on 8 June 2020. A ‘strengthened Hurricane sub-surface team’ performed a comprehensive reassessment of the Lancaster field.
The Technical Review was led by Beverley Smith who, according to her LinkedIn page, was a Non-Executive Director of Hurricane Energy between December 2019 and June 2020 followed by Interim CEO between June 2020 and September 2020 then Non-Executive Director(part-time) between September 2020 and 2021. It is not clear who the other members of the ‘strengthened Hurricane sub-surface team’ were.
The figures referred to below are derived from the CPR dated 14 April 2022, the CPR dated 7 April 2021, the Acquisition document issued on 16 March 2023 the ERCE CPR published in April 2021 (available on the Hurricane Energy website) and the Half Yearly report referred to above.
Definitions (contained within the above documents)
2P – Denotes the best estimate of reserves. The sum of Proved and Probable Reserves. (Defined further on page 61 of Acquisition Document referred to above.)
2C – Denotes best estimate of Contingent Resources. Page 61 defines Contingent Resources as ‘those quantities of petroleum estimated as of a given date to be potentially recoverable from known accumulations by application of development projects but which are not currently considered to be commercially recoverable owing to one or more contingencies.’;
The covering letter accompanying the ERCE CPR dated 23 April 2021 states, inter alia, ‘In accordance with your instructions, ERC Equipoise Ltd (ERCE) has prepared an independent assessment of the hydrocarbon Reserves, Contingent Resources and certain Prospective Resources attributable to Hurricane Energy plc (Hurricane) within licences held by Hurricane in the West of Shetland area, offshore United Kingdom. The effective date (Effective Date) of this report is 31 December 2020. For the preparation of this report ERCE was provided with data and information by Hurricane up to 31 December 2020.’
2P and 2C figures declared by Hurricane Energy:
31 December 2020 2P 7.1 million barrels 2C 34.7 million barrels
31 December 2021 2P 5.8 million barrels 2C 35.4 million barrels
31 December 2022 2P 6.6 million barrels 2C 31.6 million barrels
Actual production in 2021 was 3.7 million barrels. 2022 production was 3.1 million barrels. Put another way, based on data and information provided by Hurricane Energy, 2P was 7.1 million barrels as at 31 December 2020. From 31 December 2020 to 31 December 2022 6.8 million barrels were produced. Based on this, we would expect 2P to be approximately 0.3 million barrels. The figure provided by Hurricane Energy as at 31 December 2022 was 6.6 million barrels. Why is the figure circa 20 times higher? The 2C figure as at 31 December 2020 was 34.7 million barrels. With 6.8 million barrels actually produced, we would expect 2C to be approximately 27.9 million barrels as at 31 December 2022. The 2C figure provided by Hurricane Energy as at 31 December 2022 was 31.6 million barrels. |At USD70 per barrel, 6.8 million barrels of oil has an estimated value of USD 476 million. Why is performance almost always so much better than estimated at Hurricane Energy and why might this be relevant now? Might those 2C Resources be much more accessible (and valuable) in future?

[jacquibic] 20/3/2023 18:51

Evening Kooba having digested your posts today what stands out to me is conformational bias you choose data that fits neatly into your very entrenched position.
All estimates/projections issued by hurricane have historically been proven to be woefully conservative (dead wrong) yet all your conclusions are based on?
Kooba as you stated earlier today the industry folk understand and know what they are doing this is the best deal for all…why is the share price now 6.53p? The industry specialist on the other side don’t get it??

[porrohmahnn] 20/3/2023 18:06

Senseman, the latest regulatory announcement from CA that I can find is in the Annual Report published on 28/11/2022 which states CA remain committed to a target of winding down the fund by 31/12/2023. Whilst they acknowledge that it might not be in the Company’s interests to stick rigidly to this exact date, it remains their target. They are therefore under an obligation to their shareholders to use reasonable endeavours to achieve this date and will have to justify any delay.

[senseman] 20/3/2023 17:50

read CA RNSs - it's in there - they state end 2023 is no longer strict deadline but via agreement with SHs is now variable to enable best value to be secured

[porrohmahnn] 20/3/2023 17:45

Senseman, I based my 31/12/2023 date on a search of Google News which produced numerous articles quoting this date. I haven't found any announcements slipping that date to the end of 2024. I don't doubt that winding down the fund might take longer in the real world. Indeed, CA stated the following in their 2022 Annual Report which was published on 28/11/2022;

"As stated in the Company’s circular to Shareholders dated 15 February 2022 to convene an EGM, the Company, following consultation with several Shareholders, determined it was no longer in the interests of the Company to impose a fixed deadline for the return of capital, but would retain 31 December 2023 as a target."

Is your later date based on a subsequent announcement from CA? If so, I haven't found it but am happy to be corrected. If not, I stand by my post. CA's target is to try to wind down the fund by 31/12/2023.