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Amongst all the negativity, as an investment I'm torn. If the 12.5p is delivered over the next couple of years it's a really good return, although I feel for long term investors who are looking at potential losses. We'd all like more cash right now but I can see how this might look like an attractive investment albeit a bit risky. I thought 12p cash would be the offer but Prax have obviously got better, more shrewd negotiators on board than me!
Thank you Eski for your kind words - as usual still nothing constructive
I argued against what I viewed unfair CA criticism for lack of HUR news, reminding people of what they had done for us (and themselves), and saying it was wrong to desert a friend without good cause. I stated the news delay was likely because CA were allowing enough time for the FSP to be completed. That has proven correct.
I have never tried to stifle debate. Don't lie.
Had a deal been announced which I perceived to be fair to PIs, I would have had no complaints. I may personally not have liked the deal, but I would not have chastised CA. I now criticize CA because I believe it agreed the deal (to my considerable surprise) to suit it's own narrow purpose, and which it knew most if not all PIs would hate. It was under no pressure to do so. if I were a CA lickspittle (your previous accusation), would I not now argue the deal was good? I believe the Irrevocables are in place because Prax, HUR, CA & Ker know that whilst the deal suits all their narrow purposes, it would be hated by us active 21% PIs which it knows could endanger the necessary 75% AGM vote needed. The best way to secure 75% is to persuade other inst invests it is a done deal so easier to follow the already 45% herd, and to disenchant the 21% PIs.
Should I keep quiet when I believe CA have, for the first time, knowingly let us down when it need not have? What would your comment be then, Eski.? Or should I voice criticism? I believe CA was obligated not to agree a deal it knew PIs would hate, and have earlier given my reasons. It was my view of that reciprocal obligation which caused me to opine that PIs should not precipitously criticize CA when no just cause existed. it's called loyalty - something I place great store on. But being loyal does not mean blind loyalty. If a friend let's one down badly - should one keep quiet, or call that friend out? The answer is clear. FWIW, I have made my views crystal clear to CA.
The logical consequence of what you say, Eski, is that I would be a CA lickspittle and be dammed if I opined the deal was good. But I am also dammed because I argue it is a bad deal and CA have needlessly let us down. That is the problem of malicious argument such as yours Eski - it seeks to damn the target all ways. Sensible posters understand both the concept of loyalty, and also that loyalty does not mean turning a blind eye when bad things occur. Are you a sensible poster, or not?
Sorry, my mistake 89.69% to stay at the AGM held on 29 June 2022.
Orbilune - when you suggest nobody likes or trusts Maris to do his job everybody had the opportunity to vote him out of office but instead a whopping 96% chose to vote for him to stay. This doesn't suggest 'everybody' shares your opinion, just the vocal minority on this forum, some of whom are saying so in public just following the herd to not get flamed by others.
RodneyT I see your point on well6 resources which are growing
A/ refilling as oil sucked in to reservoir?
B / that the reservoir was never correctly assessed and indicated was always larger but unrecognised?
C/ they are lying scum bags who held the full size of reserves back in 2021 cpr?
On ESPs this is a response from the company i received in Nov 2022. After assessing the risk of pump failure.
What is interesting from a DCU point of view is if there is repair to do or downtime where fixed costs rack up ..the DCU’s might miss out on some short term revenues as far as i can tell but meet none of the costs. So if there was a 2 month shut down to switch over then PRAX covers the $20m plus cost …once repaired DCUs just start picking up the revenues again, ..which would be better than equity earnings.just a thought.
Here is company answer on ESP’s
As was explained at the AGM, while each well has two downhole Electric Submersible Pumps (ESPs), only one is running, with the second available as a “back up”. Depending on the cause of any “issue” with the ESP, the Company is faced with a choice of
Switching between ESPs through a ROV visit to the wellhead
Engaging a rig to visit to wellsite and perform a workover to replace/repair the ESP
Doing nothing
The cost and time of performing each task varies, dependant on many factors although guidance was given if all equipment and services were freely available, and the weather favourable, the ROV approach would take of the order of 6-8 weeks and cost, in round numbers, in the region of US$500,000. A workover would, again in round numbers, cost in the region of US$30-40 million and take 6 months.
The decision to perform any of the tasks would be an economic decision and be highly dependent on the circumstances at the time, including equipment and services availability, weather conditions (both actual and predicted), time of year (weather impact), the current and predicted production rate, the current and predicted oil price, etc.
The specific question asked at the AGM was, given the issue with the pump previously encountered, what was the chance of success of it restarting if swapped? The answer was that there was a 75% chance of it restarting but its performance levels would be uncertain.
Well said Orbilune. There should be some accountability for the decisions he makes. I'm pressing for some transparency.
As I see it the more pressure we can put on him the more chance we have got to get closer to the truth.
An extract from a prvious posts showing an example from Hurricane's own reports and data. My chief query is the low (maximum) sale price . Concerning pumps, with 2P reserves at £432 million, either a sigificant amount of that is lifted or it remains in place. Supposing £200 million of oil remains and the pump fails. Would Hurricane be able to have the pump repaired or replaced?
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?
Nobody trusts Maris and, in truth, Maris has never done anything to earn our trust. His scornful, dismissive treatment of rank and file shareholders is a disgrace. He will do whatever he can get away with to feather his own nest as he approaches retirement - one last score. He has already wasted millions of pounds of shareholder's money in a scandalous attempt to gift the company to bondholders. We can only surmise what his reward might have been had he succeeded. Anybody with an ounce of self respect or integrity would have resigned after losing that court case - after facing his own shareholders in court - not Maris. No he endured, shamed, bitter and profoundly hostile to the shareholders who had frustrated his scheme.
Nobody should trust such a man or believe a word he says. We need to doubt everything. Resource downgrade? - paid for by Maris. No chance to drill well 8? - decision taken by Maris. Now Prax and their bogus offer...the best bid... says Maris. Best for who?...Maris.
Lots of numbers and assumptions but just to comment on 1 you make irrespective that you make no comments whatsoever on the potential of early cessation the main reason no body wants to bid a premium.
‘Page 21 shows 2P reserves (the best estimate of reserves – page 61) of 6.6 million barrels. Based on $ 80 per barrel (page 6) and production to August 2025, this amounts to around $ 528 million or £432 million projected revenue over the next 30 months.’
So to end August 2025 the expected cessation date taken from the up to date cpr.
I make end august as being more like 28 months or 850 days or 807 days allowing for normal level of downtime. Last known production 7700 bopd and declining steadily as the water cut creeps higher.. To get 6.6m barrels out of the ground in 807 days that would mean you expect production to jump and hold at around 8200 bopd and hold for the next 28 months. Is that right? I think it more likely that they get far less out before they hit economic limit and there is several M left in the ground uneconomically available. Think big numbers need to be thought though.
P/I's expected 'extra money' years ago. That didn't turn out to be the case.
Too much attention given to the minutiae, not enough to the (what should be) obvious.
why would these royalties' keep being mentioned in Hur presentation and CA statement .. extra monies
I'm not convinced and will wait the EGM to understand the terms better.
The proposed sale price of Hurricane can be no more than £249 million and could be as low as £82.7 million based on the 16 March document. Page 6 of the document shows free cash of $ 140.1 million and $ 60.7 million of restricted funds so $200.8 million as at 28 February 2023. This amounts to a total of around £164.6 million based on £1 = $1.22.
Page 21 shows 2P reserves (the best estimate of reserves – page 61) of 6.6 million barrels. Based on $ 80 per barrel (page 6) and production to August 2025, this amounts to around $ 528 million or £432 million projected revenue over the next 30 months.
Page 20 refers to up to $ 370 million of accrued tax losses remaining unused in an orderly wind down of the business ‘and thus will not provide any benefit to Hurricane Shareholders’. These accrued losses might clearly have a value to a buyer such as Prax who indeed could eventually use all the $370 million of losses to their benefit!
2C (best estimate of contingent resources) are shown as 31.6 million barrels on page 22. At S 80 per barrel this is S 2.52 billion or £2.06 billion.
Maximum sale proceeds are £249 million. Setting aside restricted funds and the value of $ 370 million of accrued losses (i.e. valuing these as zero for the purpose of this comparison) the value of reserves (£432 million) plus contingent resources (£2.06 billion) plus cash at bank (£ 114.8 million) totals ca £2.606 billion i.e. just over 10 times more than the maximum sale proceeds. In other words, the company is selling its assets based on assumptions derived the Company’s 16 March 2023 document at about 10p in the pound. One would expect a figure somewhere in between fair estimated value and nil. But 10% or so of projected value? Why is the Board recommending this and what is its motive to do so? It is easy to sell a £20 note for £10 especially if you are the keeper of the £20 note rather than the owner. You make £10!
Finally, page 18 5.2 covers the North Sea Transition Authority and Hurricane’s inability to obtain support to develop Lancaster. Is it possible that the NSTA were not happy with some aspect of Hurricane or the data it provided? Are there any public records of those discussions available for inspection? Through a FOIA request perhaps?
Hmm..., observe chart activity, s/p promotion for those looking for an early exit. Who can blame them.
Now I'm even more envious. Ho hum.
Oldman I'm not a Maris man but I have a copy of the court documents so are abreast of what did and what din't take place during the hearings I also have a thorough understanding of the Companies Act in a capacity of having been a executive director in two companies for coming up to 37 years so have a certain understand of what Maris's position entails.. I'm sure if senseman pops in he was confirm that I haven't been averse to defending the position Maris holds in previous posts over the years cos I'm a nasty former bond holder lol. Outside of that omitting facts to serve your purpose doesn't help anyone.
Could have structured my post better but on reflection, the points all remain.
I am just stunned reading back on the last few days on how best to sumamrise it bar senseman has completely lost it. It actually reminds me of a poster called Heid on UKOG and UJO. Similar how they refer to themselves and talk in third person and disregard anything anyone says and makes wild theories.
FYI Kooba seems to have the best understanding here of a) the legal framework around offers and b) the Takeover Code and how offer processes have to be managed.
Gazman,
The total of 12.5p is the maximum value share holder will receive. Even if 'royalties' are included.
If Prax makes use of the tax credits immediately to buy producing assets, that for example generate £1 Billion in net revenue per annum, and we assume Well 6 has failed almost immediately, shareholders will only be entitled to 6.48p (£129.1M) not the circa 30p (£612.5M) that would be generated from ongoing royalties at 17.5% for an assumed 3.5 years (through to Dec 26).
This case is completely un-realistic and for explanatory purposes only.
ADHD
The way he talks to fellow contributors on here and tries to rule the roost I found disgusting. Then, how he tries to blame previous posters for their treatment of Adouble!! It's unbelievable and incredibly two faced. In the end, it makes the board a place you tend to avoid.
Im a little stunned at senseman.
I notice after getting dogged by Senseman who at this time was already starting to act like Lord of the Manor and no onr could voice a contrasting opinion. What I said actually materialised regarding CA maris et al, let's be honest, it was obvious wasn't it. Ca protected themselves and would now be happy to leave, they made it clear for a long time and we always knew maris and Co would take the settlement and sail off. What's the surprise here? Aim shareholders always get it this way.
Anyway, since protector of CA sense he has completely changed his tune and tone and in turn becoming even more intolerable now.
I didn't want to say it before, but, since yestersay especially he has shown what a t*sser he his, i will.
who takes advice from a forceful bulletin board dictator who can't view any side or point past his own one dimensional view.
Let's be honest, his view points and handling of his personal affairs have left him in a mess. Who buys lease hold anyway? Who lets a lease run that far and risks its further by trying to put the money he has into aim to generate money to cover the lease?
I hardly then think that person is best suited to lead an investment board, give advice or lead a charge against the BOD.
My understanding is that the offer of 12.5p max is tied with Hurricane energy, however if Prax buy's a producing asset , we would be entitled to royalties 17.55 , see below from CA
By contrast, this takeover offer provides growth potential which the Fund believes will deliver a far more capable and commercial management that is motivated to ensure that the contingent consideration of 6.48p per share is paid to Hurricane shareholders, resulting in Hurricane shareholders receiving 12.5p per share. Crystal Amber also believes that Hurricane's tax losses will provide Prax with significant incentives to purchase production assets, all of which will deliver existing Hurricane shareholders with what is effectively royalty income through to December 2026.
Crystal Amber believes that Prax has the firm intention of using the Hurricane vehicle to make significant acquisitions. For context, the P6 well at Hurricane currently produces 7,700 barrels a day. Were Prax to make an acquisition producing 10,000 barrels a day, based on $80 a barrel, Crystal Amber believes that Hurricane shareholders would be entitled to 2p per share per annum from this one acquisition. This would be in addition to approximately 1.5p a share from the P6 well.
My understanding is that the offer of 12.5p max is tied with Hurricane energy, however if Prax buy's a producing asset , we would be entitled to royalties 17.55 , see below from CA
By contrast, this takeover offer provides growth potential which the Fund believes will deliver a far more capable and commercial management that is motivated to ensure that the contingent consideration of 6.48p per share is paid to Hurricane shareholders, resulting in Hurricane shareholders receiving 12.5p per share. Crystal Amber also believes that Hurricane's tax losses will provide Prax with significant incentives to purchase production assets, all of which will deliver existing Hurricane shareholders with what is effectively royalty income through to December 2026.
Me rattled not at all…just amazed that you think i am Maris…absolutely bizarre and to be fair a very nasty thing to call anyone ..so less of the personal stuff or i will suggest you are Chaffe in deep cover working covertly to uncover shareholders against the scheme…i think thats how it works isn’t it. Just make stuff up regardless of any reasonable basis.