United Oil & Gas Share Discussion Threads

[theuninvitedguest] 21/11/2020 00:16

What news is due here before year end? Jamaica CPR?Egypt has rates?Anything else?

[swanvesta] 19/11/2020 15:06

Here's a bit more detail from Hibiscus:



"However if FDP Approval is not achieved, or if the Marigold FDP submitted does not include the development of the Crown discovery, AHUK may, at its discretion, proceed with the USD3 million payment or transfer License P2366 back to the Sellers at nominal consideration without any further payment obligation."

So actually no deadline I can see, just the FDP.

[swanvesta] 19/11/2020 14:53

Well, impairments can be reversed if conditions improve. It doesn't necessarily mean Hibiscus won't proceed. Check out their presentation for the end of June (4Q) results:



At 3:38 they have Crown at 4.0mbbl 2C resource, so presumably still economic to produce.

At 17:09 they say they are not sure when they will be able to develop the asset, thus they are being prudent in writing off their investment so far. Still, it suggests the FDP milestone will not be triggered, as I believe there is a deadline for end of 2020. Can't find the full agreement at the moment.

[bettyswollox] 19/11/2020 13:58

Thanks Swan, didn't know about the Hibiscus write off. You'd have though UOG would have RNS'd that information? The interim accounts RNS at the end of September still has the $2.85m included in the trade and other receivables as well. Anyone fancy emailing our revered board and asking for their thoughts?

[swanvesta] 19/11/2020 13:44

Watched a couple of Proactive interviews with Larkin.

In June he sounded very positive on Egypt (which I agree has had a great start in the circumstances) and rather sanguine about the implications of covid for delays in Italy etc.

In October he promised a further CPR from Jamaica this year, and another spud in Egypt by early Jan 21.

[swanvesta] 19/11/2020 13:37

Sorry, that was meant for soul.

Betty, lots of assets have been impaired since last year. Hibiscus wrote off their $1m downpayment in May (I believe).

[swanvesta] 19/11/2020 13:34

They had $1.2m at interims, and should be making reasonable cash from Egypt operations. It's all down to how well they manage it.

I don't see how oil prices can go down much from here. They're paying off BP. Once that debt is paid (July 2022) they'll have $3m+ pa extra free cash.

[bettyswollox] 19/11/2020 13:17

Not sure about that Swan, it would certainly go back on the balance sheet but can't see why there would be any impairment. According to the RNS on 12th Dec 2019 the licence will revert to UOG after 31st December if no payment is received. "Up to a further US$3 million will be paid by Hibiscus (US$2.85m net to United) before the end of 2020, subject to certain key milestones being achieved. In the event that these milestones are not achieved the licence will revert to United and Swift Exploration Limited, if Hibiscus exercises its option not to pay the US $3 million and the US$1 million will not be repaid."

If that happens there's no reason to think the asset is impaired, Hibiscus will simply not have managed to progress the FDP work because of Covid, and there's mention of timescales being pushed down the dateline when you dig into their latest investor presentation.
We've heard nothing to suggest any agreement has been reached to delay the timeframes on this so fingers crossed the cash comes in.

[soulsauce] 19/11/2020 13:01

I only hope that if the monies are not forthcoming that there is now enough on the balance sheet to prevent Larkers getting the confetti making machine out.

[swanvesta] 19/11/2020 12:45

Soul, good point. The asset would I imagine go back on the BS impaired.

[swanvesta] 19/11/2020 12:41

betty, I agree H2 should be OK without the payment, assuming the 2300bopd guidance is correct. Capex will be low, so there's just the BP loan to worry about. I'm struggling to work out the latter, but I think both will be covered as I'm expecting an extra $2-2.5m operating cashflow.

[soulsauce] 19/11/2020 12:31

Take your pick of interviews.

And how much of those £5.2m receivables in the interims is down to Crown.

[swanvesta] 19/11/2020 12:20

Soul, when was that? Certainly no talking up during the last conference call. As I recall, just a short and flat answer about the milestone condition: FDP submission. Obviously the FDP would have to include the asset!

[soulsauce] 19/11/2020 12:03

Well yes swanvesta if he hadn't already talked it up as if it was a done deal.

[bettyswollox] 19/11/2020 12:01

I can't be sure, but that's what the RNS said. If Hibiscus hand the licence back we've made an easy $1m for nothing, also worth noting that Hibiscus are awash with cash according to their last accounts so a couple of million is small change.
Still think we'll be pleasantly surprised even if this particular cash injection doesn't materialise.

[swanvesta] 19/11/2020 11:21

Well, I can't see that he needs an excuse. It's up to Hibiscus and oil prices isn't it?

[the chairman elect] 19/11/2020 09:45

Be happy soulsauce!

[soulsauce] 19/11/2020 09:44

Quite!!

I am sure Larkin is already reaching for book of excuses.

[swanvesta] 19/11/2020 09:37

Hibiscus have written off their 25% initial payment for Crown. How can you be so sure they'll complete the deal vs hand back the asset?

[bettyswollox] 19/11/2020 08:39

We’re due to receive another $2.85m before the end of December from Hibiscus for the sale of Crown. Pretty sure we’ll be pleasantly surprised at the next update. Tight control on capex and opex, higher oil price and reduced gas flaring all bode well. Hoping for a decent uplift in boed atoo.
GLA

[soulsauce] 17/11/2020 21:46

Lol, it's not got quite that bad yet valhalla but there are some similarities. Hope you are keeping well. All the best.

[valhalla3] 17/11/2020 21:36

Aup soul me duck u sound like when we were under dusta Derek lol. Time 4 a few ales $=#