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DiveCentre, Thanks for updating
my view if we had say 200k uplifted as a part load then should be 525000 available from 24th April various unknows i will keep a look out for tankers , good to see the figure of 6590 daily production
HUR projected Nov 6.7: Dec 6.3: Jan 5.9: Feb 5.6 for economic life end Dec 26. Dec 6.72 and Feb at .6.59 beginning to confirm trend easily outperforming projections. Jan a clearly company induced reduction for unknown reasons.
6.59mbpd means tanks full every 82 days so still 2024 averaging over 4 full offloads a year and indicating months before reduces to 6mbpd and 90 day offload cycle
Going to help DCUs a little, sadness being Prax to reap most of benefit. Odds increasing of economic life extending beyond Dec 2026
NSTA have today published February production, and after January’s blip the figure is 6.59 which corresponds with what you might expect from extrapolation.
These are the last four months figures (mb/d)
November oil 6.87 water 8.95
December oil 6.72 water 9.01
January oil 5.69 water 7.69
February oil 6.59 water 9.04
*** packet = cigarette packet
back of a *** packet using old formula of 8% coming off top to aoka mizu owners, brent at $85 and costs say at $45pb (can't see it being higher yet with production holding up well and prax monitoring costs like hawks), each offload nets prax circa £13 mill with £6 mill to us, so £7 mill net to prax. meaning were shs still owning hur, cash would add circa .65p per offload to kitty rather than .3p per offload. put another way - if take brushstroke view we had circa 6p a share cash in bank at sale time (the common viewpoint), current cash in bank would be circa 7.9p a share compared with current 6.95p a share sale incl dcus cash, and shs still own company. add to that .6p for dec/jan offfoad and .6p for current full am tanks offload imminent if no smaller feb offload occurred, and cash in account would be circa 9.1p, compared with circa 7.55p p.sh via dcu route. extrapolate to dec 2026 cut off point and cash in bank would have been circa 13.5p - 14p p.sh with shs still owning company, compared with current projected dcu end figure of 9.5p a share.
"Watch them move post Dec 2026 when they are own HUR & producing P6 and we are off their backs, have a shedload of our profits banked, and can buy a distressed producing asset cheaply with (our) cash on the hip"
Post 2026 P6 will not be in production commercially so Prax will have to move well before 2026 to use the HUR tax losses to buy producing assets.
Dive - spot on. Mach & I used broad brushstrokes for working a sensible overall total and clean forgot the possible smaller Feb offload, also to take account of Jan's (we think intentionally) temporary lowered production. Either would explain why no offload yet by end March. And no Feb offload and no end March offload by now means no end June offload as the 3 month cycle needs 6000k bpd x 90days = 540k bpd to keep within the 3 months cycle.
For cashflow better there was Feb smaller offload and will be big one in May so we get your 8.0p - 8.8p. in Sept. Brent currently steady strong at $87 with upward pressure so by May could be higher and help us. No offload next 7 days should indicate which way things will pan out and Laser as ever the watchman.
Laser on t'other board makes salient point that:-'last day of (pre-sale) dealings could of sold for 7.77p so far to date received 6.94p break even point maybe on next DCU payment due Sept 2024 .' Which means that taking into account inflation also loss of interest, DCU's won't equal last day of (pre-sale) dealings until least March 25, ie 21 months post sale date. Further evidence that Prax '12.5p' deal was smoke and mirrors. And I tell all the simple reason why Prax have not been a rsed to buy a production asset to make use of hundreds of millions of tax entitlements and zing DCUs to 12.5p (which my cat could have done) - they bought us free with 6p of our own money already banked - and all we get that we did not already have banked is a small proportion of production profit (till end 26) whilst they bank the bulk - so they are already on a massive freebie if they do jack sh.it. Watch them move post Dec 2026 when they are own HUR & producing P6 and we are off their backs, have a shedload of our profits banked, and can buy a distressed producing asset cheaply with (our) cash on the hip
I doubt that the next payment in September will be 0.9p. At best I calculate around 0.8p-0.88p and at worst it could be 0.6p-0.66p. The uncertainty is due in part to the reduced production rate in January but also the question of whether there was an offload in February.
Laserdisc reported “Amundsen spirit moored at Am on 25th (February) at 19.48 unmoored on 26th at 14.34pm” I questioned whether there had been an offload because there was no reported increase in draught. Laserdisc suggested this might be due to ballast adjustment which may or may not be the case, but if there was infact an offload I calculate the maximum load at 330K given the production rate and timescale since the previous offload
So if there was an offload in February we will only get one more before end of June meaning that total production will be around 200K less than that to produce 0.9p. The only positive is the higher oil price hence my estimate of 0.8p-0.88p. However if there was no offload in February we should be due one about now but having reached the three month mark it is extremely unlikely there will be another before the end of June meaning revenue from two offloads only hence 0.6p-0.66p.
Thanks HANK for being definitive. With what we know now - I concur in spades. Realistic consensus helps all. We now have a template likely 3p to add to current 6.9p, ie: 9.9p total (less tax on DCUs if brokers roll over and HMRC get tough, so circa 9.5p net for most).
To save all from boredom - I suggest anyone diverging from this view provide basis maths to evidence.
In respect of the resident 12.5p nutter - I suggest abject ridicule until and unless lucid argument and basic maths are provided in support
I think we'll get another 3p total.
2024: 0.9p
2025: 0.6p
2025: 0.6p
2026: 0.3p
2026: 0.3p
2027: 0.3p
Hi Machin - this excerpt from my 28 March 11.03 post is situation precis:
"GOOD:- .6p via good production & $85 Brent sees all at 6.9p p.sh. Expected .9p end Sept (3 offloads) sees all at 7.8p p.sh, with another offload in AM tanks & another due end Dec (2 offloads). So 8.4p.sh end Dec 24, 1.5yrs post summer 2023 sale, with 2 yrs left till end 2026 cut-off date.
BAD:- 2.4p in 18 months (1.6p annually) = 3.2p due 2yrs 2025/2026. So 11.6p.p.sh total. Assuming no production fall, stable costs & $85 Brent. But production falling & costs rising. So barring lasting dramatic Brent rise to compensate, 11.6p p.sh will not occur, never mind 12.5p p.sh. Barring Prax/HUR buying producing assets, 10p p.sh more realistic - largely dependant on production not falling off a cliff."
Put another way - currently 1 offload circa every 3 months, netting us circa .3p an offload. Meaning we'll get cash from 13 offloads (incl 1 completed late Dec/early Jan) SHOULD production remain constant. But with production dropping, reasonable assumption we will lose 1 more likely 2 offloads, poss even 3 (longer time to fill AM tanks). So .3 x 12 = 3.6p, .3p x 11 = 3.3p, 03p x 10 = 3p. Most likely we'll lose 2, so 6.946' + 3.3p - 10.246p. But costs are rising hence soon we're likely to see each offload DCU payment drop below .3p. So 10p more likely. Even dramatic consistent much higher Brent will see us struggle to get above 10.5p.
It would help the forum if a nutter stopped chirping we will get 12.5,and rather explained his maths how we will get there. The only way we will is if Prax/HUR buy producing assets the profit from which we would be entitled to 17.5% net of. On that issue - we are already 10 months post-sale and since Prax knew it was a done deal 6 months earlier, it means they will have been looking at possible buys for 16 months. Our cut off date Dec 2026 means that 32 months remain. Knock 6 months off that for ANY purchase to be completed in time to produce ANY (small) DCU profit benefit to us, and 26 months remain for a purchase. So 16 months gone, with 26 months remaining. You get my drift. Also, since CA has sold 50% of it's DCUs (albeit at a suspiciously high premium), it is reasonable to assume no Prax/HUR purchase of a producing asset which will raise DCUs to 12.5p is imminent - or 'in the know' CA would not have sold. Prax's business model has always been to never pay fair market value but only purchase distressed companies or those with pliable BoDs and/or major shareholders - as they did with HUR. So far, if Prax have been looking they have not as yet found a producing asset company prepared to roll over as HUR did and sell itself on the cheap. For all these reasons, as well as being told by someone definately in the know that a purchase is unlikely prior to Dec 2026, I doubt a purchase will occur in time to do us any good. I remain hopeful I am wrong.
Hi again,
I am the bearer of good tidings.
Upon starting to prepare my Capital Gain calculations I realised that I made substantial mistakes over the figures I mentioned in my previous post of yesterday.
I had arrived at the total by adding 5.19 + 0.0083 + 0.0039 + 0.00617; 5.19 being HUR ‘s 2 dividends in pence, 0.0083 PRAX’s consideration in GBP as where the 2 DCUs payments per unit. Also, the first DCU value should have been 0.00309 GBP - Some showing of basic mathematical skills indeed, EH?
The correct amount so far received is 5.19 + 0.83 + 0.309 + 0.617, for a total of 6.946 PENCE.
Therefore, leaving an amount of 5.554 to reach 12.5p/share.
As I said above a very substantial discrepancy from my initial erroneous figure of 7.29163 and for which I apologise.
However, even considering the correct amount settled to date, there is still quite a way to reach the maximum 12.5p; of course, not promised nor guaranteed, as per the preposterous terms of the acquisition but so lauded in some quarters!
GLA 🐸
Hello NMBS,
It is very likely that IWeb will repeat what they said to their clients via a Corporate Action Notification on 23 June 2023, namely (amongst other things): -
“As the New DCU's are not listed on any Recognised Exchange as defined by HMRC for ISA qualifying purposes. Your New DCU's will not be eligible to be held in an ISA. Should you have held your Hurricane shares within an ISA, we will shortly transfer your New DCU's to your Share Dealing Account. If you do not have a Share Dealing Account, we will arrange to open one for you.
Each New DCU may entitle holders to an additional payment of up to 6.48 pence. Please note, however, that there can be no certainty that such distributions will be made.”
Best, 🐸
Only just got around to checking this morning. 0.617p paid into my trading account and not my ISA (IWeb). Previous DCU payment last September was the same. So they are at least being consistent.
I’m going to speak to them next week to argue that, in my opinion, these payments should have been paid into my ISA. I will try and have a proper read of the scheme document Corryvreckan1 as well.
We have had 6.02p , 0.309p and 0.617p = 6.946p so far.
So only another 5.5p to get to te full 12.5p
Hello all,
After yesterday’s DCU settlement, 5.20837p received (of which 5.19 came from OUR money, I like to remind everyone), 7.29163 remains to come; quite a way to reach 12.5p !
Regardless if you are in profit or seriously under water this was a deal made from a very demonic place, even hell pales in comparison. Put simply we have been fleeced !
I am firmly with senseman on this, and really commiserate on his and others’ losses. I have been there a few times and know how it feels
As for the tax treatment of this hellish scheme I stand by my posts of 22 Mar 2024 14:05 under RE: March DCU Payment – key information and 22 Mar 2024 16:25 under RE: Tax treatment of DCU payments
In my view, nimrod99 post of 23 Mar 2024 18:53 under DCU (started on 23 Feb 2023): -
“As to receipts ending up in a trading account I shall regard them as a return of the capital that will reduce to zero in 2026 which I shall neither report or regard as taxable”
is misguided on several level.
Firstly, there could not be a return of capital as we no longer own the company.
Secondly, I am not saying it applies under PRAX DCUs, the tax treatment regarding returns of capital has been settled very recently by the Court of Appeal in Alex Beard (a Glencore former executive) – v – HMRC
Whereas Glencore did not pay dividends but instead implemented a return of capital twice yearly, HMRC position was upheld, namely that such payments should be treated as income, i.e., as dividends, as opposed to Capital Gain – meaning a tax of 33.75% or 39.35% depending of tax rate on income over £50,270/125,140, as oppose to a flat 20% (https://uk.news.yahoo.com/glencores-ex-head-oil-loses-131802249.html)
Enjoy all Easter 🐸
Not sure who the moan moan moan culprit is here. Perhaps more than one K? Give it a rest.
How soon Kever?
The Prax deal was not "amoral" at all. It was a good deal for many. You only keep moaning about the bad deal as you lost on your shares. Assuming we get 12.5p isn't it time you told us all how much you are set to lose ? It must be a fair wedge as you keep moaning.
Had you have bought shed loads like me at 6p you would be delighted with the deal but you didn't
corry - thanks, and for replies to all. i know the time it takes. this living through the dcu saga has already further cemented my concrete view that the deal agreed with prax by hur and ca was amoral and negligent.
for any entity to hold another's interest funds for 6-9 months and retain such interest thus depriving the another from that interest is fundamentally amoral, and negligent negotiation. how difficult would it have been to negotiate, in a deal already a free gift to prax, that interest on dcu sums was payable from date of oil sale? would prax have refused the free gift of hur for the price of a lollipop? of course not. my cat would have negotiated that.
the other aspect peeing me off is the dcu isa drivel situation pis are presented with - prax statement are titled 'deferred payment calculation' (ie. deferred payment of agreed sale price). yet as you write(of prax promotional & court docs sales drivel):-
' may also now wish to have a read over page 81. the bi-annual payments are described in there as being a part disposal of the dcus for cgt purposes, i.e. no longer a part disposal of the original hurricane shares, and as the dcus themselves can't be held within an isa...taxable outside may yet prove to be correct...'
the reason brokers may be pivoting from paying funds into isas is because it ain't their cash and they can't be a.rsed to have a fight with hmrc. yet the basics are clear - dcus are neither cgt nor dividends, but are part of the original sale price deal. it is ultimately irrelevant what the limitations of hmrc category and/or regulation limitations are. a supreme court has the power to order governments and/or major institutions to amend /improve it's categories./ regulations/ definitions in order to accede and fall in line with basic principles (indeed that is one of it's primary functions). a properly conducted supreme court hearing would order hmrc to amend/improve it's definitions/ regulations to include and allow to remain within isa umbrella any dcu payment made on account of a sale agreed whilst the share was held under isa umbrella. a competent judge would say - this is basic stuff - i don't give a toss what either your regs or your ****pot arguments are - they are crap so change them - dcus are part of a sale price agreed whilst shs held shares under isa protection - no valid argument exists why part of that sale price should be removed from isa protection.
but brokers, hmrc, hur, prax ca are in this instance s cum looking for easy life so as usual it is poor jack-soap left holding the baby with the problem to solve! i won't be declaring anything to hmrc and will let they come after me before bothering to argue with them. the fundamental question remains - why the eff are pis left holding the baby because all the main players (apart from pis) have protected their interests and a rsses?
only positive - brent grinding higher now at $87. i expect and hope it higher to help us a little as least for 1-2 of
Petethestreet - I think the payments should still be part of your CGT thinking, not income tax, regardless of which account they are paid into. See Part VIII, page 81 of the original scheme document (not the Deed Poll) for more details on how it was analysed there.
I looked at that earlier and it has also thrown out a curious reading of the tax treatment of the DCU payments where the original shares were held in an ISA. It may be why some of the brokers are now getting a bit twitchy. There is a separate thread running from a few days ago on tax treatment and anyone contributing to that thread may also now wish to have a read over page 81. The bi-annual payments are described in there as being a part disposal of the DCUs for CGT purposes, i.e. no longer a part disposal of the original Hurricane shares, and as the DCUs themselves can't be held within an ISA...taxable outside may yet prove to be correct...
I don't have the answer, just flagging it for consideration. To repeat as I have always said - this, and the previous threads, are not tax advice, just individual views from various posters and different brokers on how they are approaching the payments received. The scheme document is also heavily loaded with disclaimers from the beginning, but particularly on page 79, so DYOR applies as per.
HANK13 - final payment could potentially come at end March 2027, for any qualifying sales between 1 July and 31 Dec 2026, unless the full 6.48p is already paid out prior to then. 31 Dec 2026 is the final qualifying Record Date to hold the DCUs for that potential payment, the DCUs would then expire on 31 March 2027 unless already expired due to the full 6.48p earlier.
The figure of 1.77p for matched bargaining represents a notional NPV equivalent of potential future receipts (and the inherent risks involved), not the actual likely receipts themselves. I agree with eskibeatbeater's comment below in that regard, would already expect them to have dropped. Which takes me back to mariog's comment this morning about a sale on 27/2 at 1.17p, not 1.77p - the difference being 0.6p. Coincident that is similar to today's payment?, which you would need to hold the DCU for on 31/12/23 as the seller did, so buying on 27/2/24 would not include the right to today's payment.
Short answer - yes, there is no provision in the scheme for DCU holders to gain any portion of any interest earned by Prax on cash they receive from the sale of the hydrocarbons.
It would be impossible to really quantify it in any case. They could immediately use the cash received for investment in other unrelated projects, and subsequently make available the cash due to DCU holders from other sources at the required time. Nothing in the docs (that I'm aware of) to say they have to set aside and retain the 17.5% straight away on receipt, it's just a liability they have to meet at the due time is my reading.
The FX conversion timing is just administrative, to ensure they have the necessary funds in £ in good time to transfer the money to Computershare for distribution. They have done it slightly earlier this time than in Sept and that was better as the £ strengthened immediately after they got the rate from HSBC, would have been an extra 0.5% or so hit if they had waited.
Corry - just read again yesterday's March Prax calculation statement, covers the end June 23 + end Sept 23 offloads. The FX for the whole sum was performed in March. Does this mean that Prax held our 17.5% for the end June offload for 8-9 months earning interest on it which they retain, and our 17.5% for the end Dept offload for 5-6 months earning interest which they retain? Put another way - does it mean that if things for right for the, that paying DCU cash every 6 months means they can make & retain interest on our 17.5% for up to 9 months eg they get the cash for the start Jan 24 offload but we don't see it till end Sept and they keep all the interest Jan-Sept on our 17/5%?
I guess the 1.77p sale price is for people in a hurry. If we get... 0.9p in Sept 2024, 0.6p in March 2025, 0.6p in Sept 2025, and maybe 0.3p in March 2026 and 0.2p in Sept 2026... 2.6p total. And they aren't outlandish guesstimates.