Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
SG,
Totally agree!
"fastest possible incremental; ie fpso's"
That is the key to a credible plan for Hur.......and I now believe for a farm in/buy out too, because it gives early return on investment (it may not maximise total return, but that's maybe gone now!?).
Hi AK; yes the 'big fpso' IS a bit of fantasy-land thinking,but in my case its 'wishful'. There are a few factors here:
(i) O.k; most realists accept that oil has a substantial part to play in the worlds economies for 10-30 years. But climate activism is rapidly making it difficult/impossible for many major insti's to invest in carbon fuels. This is, and will continue to, accelerate in effect. Where is the 'big money' going to come from, following the less-than-ideal dents in Hur's philosophy arising from GWA results last year?
(ii) Known existance of a 'plan B' several years ago would, imo, have put Hur in a much better bargaining position than it is now. imo again, that omission was a major strategic fox-up, and has opened the door to 'distressed co'y' status, which the sp is now indicating.
(iii) Fixed-vs-fpso: the issue here is likely to be the availability of Capex cash (item (i)) vs return period. Imo, this is shifting quickly away from a $5bn+ up-front-er to fastest possible incremental; i.e; fpso's.
(iv) I'd have thought a boat of multiples of the displacement of the AM would probably cope with WoS (?) And one is available, if a funding route can be found.....
(v) My prediction is that Hur will hatch HurProCo soon, and the latter will become a divi provider to those brave enough to invest (similar to BATS etc)
This is no time to f***-around with ego's and trainsets, last year's performance then AS's departure means Hur needs to get a grip. imo.
atb
GLA
SG2,
" If only there were a way to get hold of that boat, Hur would be flying. "
Oh dear. Back into fantasy-land. Where was that boat supposed to go before the order was cancelled? West of Shetland? I doubt it. It;s why a few years ago I was sceptical about a multiple-fpso FFD, and despite MCB55's reasonable post arguing otherwise, remain so, Sure, maybe an 'incremental' FFD using boats might just about be feasible, but could it actually become profitable? Hmm. BP is basing Claire Ridge on fixed platforms, and for a very good reason, too. It's shallow water (relatively) so out there that's where the weather is worst in terms of sea-state. But you can drill a couple of dozens or so directional wells from a fixed platform, whereas an FPSO requires wells to be drilled from a semi (weather-dependent) and then tied-in. The trouble with a fixed-platform strategy is that initial capex is a lot higher, and so will be eventual decommissioning costs, looking forward to when coronavirus will have wiped us all out anyway.
There's one thing that mustn't be forgotten. The Aoka Mizu is a big boat, for sure, not something for Sunday afternoon in the Solant. Producing a fair bit of oil, maybe with mods capable of more. But it's still just an 'Early Production System'. Not the 'Hurricane Hub'. There's no reason why an eventual production-line should resemble a cheapa** breadboard testbed model.
MCB: 'post of hur's existance', imo. Spot-on.
One of those (four) topsides-modular super-fspo's being built somewhere is 'unallocated', i read a few days ago: 200,000bopd. Funding was being discussed at base + about 1% if i recall correctly. If only there were a way to get hold of that boat, Hur would be flying.
gla
Adult,
I agree in principle, there are too many variables to get a clear idea what the 5 + year plan should be! That’s one reason the CMD will herald a major change in the future plan, the cost of the extra delineation wells being a big factor. However if another Lancaster well is brought forward to this year and is successful may hopefully also bring forward the FID for Lancaster FFD phase 1 to next year, etc, etc.
So hopefully not all delays and extra costs. Hur May not be in a position to detail the new 5 year plan by CMD as they are probably too pre occupied with all the last minute 2020 drill plan changes, but some clarity should be forthcoming!
MCB55,
"I think we've been here before, Hur could (IMO without a detailed cash flow forecast) develop Lancaster on a phased basis (say 2-3 phases), that is multiple FPSO's rather than a big bang FFD. "
You're absolutely right 'we've been here before', especially on this BB!
And here, I'm casting my mind back about four years ago, when there was a lot of technical 'opinion' going back-and-fro on this BB about the 'way forward' . There were some posters back then (where have they gone?) who say much the same as you, with multiple (incremental) FPSO development, whereas I thought more (and still dream about) a line of fixed-jacket platforms marching like soldiers all the way up the Rona Ridge from Lancaster to Halifax. Look at old 70' s pictures of the Frigg field to get an idea.
But it ain't a crime to change your mind, and as 'twixt then and now nobody's come in to buy Hurricane for a fiver a share and make us all millionaires, maybe that won't happen. Nevertheless, and that being said, there's a huge financial difference between drilling a new Lancaster well and a couple of 'delineations' on GWA (the latter two maybe being co-financed by Spirit ??) backed up by EPS income, and financing a second GLA 'EPS-style' FPSO including the extra wells to be drilled to feed it.
This is why I await the CMD with some impatience, because ther's obviously been some sort of 'strategy-change' which we don't know about, and which might also have a bearing on the CFO departing.
Via RNS we've already been appraised of the new tactics, more or less. But not the strategy.
Aduk,
"FFD is something that Hurricane just cannot do 'standalone' by itself. It must involve partners with deep pockets."
I think we've been here before, Hur could (IMO without a detailed cash flow forecast) develop Lancaster on a phased basis (say 2-3 phases), that is multiple FPSO's rather than a big bang FFD. Much as they have done with the EPS. The main capex for Hur would then be the drills and the sub surface kit (xmas trees and flow lines) and the FPSO conversion/upgrade would be at the supplier's cost and recovered at day rate related to actual production. Any hopefully smallish shortfall in capital could be covered by a bank loan rather than another cash call/dilution of shares.
I think they have to demonstrate that this is possible via a credible plan/way forward to both OGA and the market, whilst continuing to court a farm in/buy out. Otherwise they would get on the wrong side of the OGA in not being able to fulfil their licence obligations in a reasonable timescale and also be exposed as a lame duck to a predator!
awk - yes. Obviously FFD is the idea and favoured choice but will depend probably on a farm out.
Extending the AM from 6- 10 years will not only increase revenue but should raise the resource figures as follows :
"In the event of Hurricane extending the EPS duration from six to ten years, additional P90, P50, P10 volumes of 16.4, 24.8
and 39.4 MMstb respectively would be produced in these additional four years which would then qualify as Reserves."
"If the casino in Marrakesh cancels the 'Golden Million' tournament weekend in 12 days' time "
Sorry, I meant WEEK !
'Cos that's where I intend to go. Back (hopefully heavier in wallet) just in time for the March 19th financials and then the CMD RNS's.
And assuming all is well, airlines haven't stopped flying completely, and so on, I hope not to have to think deeply about my HUR shares at all.
I wrote "CMD will indeed be very interesting.".
But forgot something. By three weeks' time will all gatherings of a hundred people or more have been banned?
If the casino in Marrakesh cancels the 'Golden Million' tournament weekend in 12 days' time because some people in China like eating animals already at the point of extinction, I will be very p**sed-off indeed. And hope that the airline insurance cancellation company will refund my bookings.
Cap't Swag,
"The thing is if the cmd they clear all issues that have been raised. Confirm drilling plans. And have news on ffd or extension of am and increase in reserves."
One of the day's more interesting posts.
By 'extension of am' do you mean carrying on the EPS as it stands, and prognosed, for six years, maybe ten?
But also, you mention 'ffd' (Full Field Development').
This is something I've been thinking about of late. The thing being, FFD is something that Hurricane just cannot do 'standalone' by itself. It must involve partners with deep pockets. But what they CAN do is continue the EPS chugging along and paying for itself almost indefinitely, including further Lancaster drilling, and proably the WOSP tie-in to increase production.
I suggest we forget FFD for the moment, 'cos that's just the 'bait' for a big fish. (And I'm not using the word 'fish' in a poker-player's derogatory way !) 'Cos the oil's not going to disappear, and the big boys are falling over themselves to try to get more reserves online. Temporary drop in demand due to virus scares notwithstanding.
CMD will indeed be very interesting.
There is no comparison to AMER.
Jurisdiction, director reputation, reservoirs, reserves potential, production, all totally different. just simply irrelevant.
The HUR SP rose 660 percent in little more than a year in 2016-2017, and by about 170 percent in less than 10 months between December 2017 and 21 September 2018.
a rise of 660 percent would take the SP to 111, which is only just above Edison last NAV estimate - hardly demanding.
FWIW, Amerisur dropped to around 12p, not 1.2p. I bought at 19p and held for about two and a half years and sold at 19p. Rinse and repeat at HUR.
MATHEMATICAL POLICE ALERT
This is to notify you of a correction to the calculation in the previous post:
( 15 x 1.2) + 1.2 = 16 x 1.2 = 19.2
That's an increase of almost 1500 percent, JA, as
( 15 x 1.2) + 1 = 16 x 1.2 = 19.2
Although I have said that I don't believe the price has been manipulated downwards in preparation for a bid, I do think it possible that some time after the price has made a new high, and the oil price is strong again, a bidding war could erupt.
There would then be no way that manipulators could stop the price from soaring, and if they tried, they would be wiped out.
I know that other old-timers here will remember the scramble to buy here, in July 2016, at around 20p.
The price was on its way from 8.85 to 67.5.
We thought it was cheap then, even though we didn't know that HUR would become a producer, eyeing 40 kbopd in 2022.
Were we really suffering from a delusion then?
mover123, that's precisely (almost word for word) what was said about Amerisur. Sadly, I see remarkable similarities. I hope I am very wrong though.
I think that would be premature Fred. This is an oil-producing, cash generating company sitting on significant potential. Easy to get sucked into the doom and gloom but there is no denying the long term value locked up here. Depends what your appetite to stick it out is...
Right now, I'd call it quits if I broke even sometime this year. For me, the multi-bagger has gone. I suspect I am one of many. It's beginning to look and feel a lot like Amerisur was.
I agree with longwait. Hur went down to 10p before and then all the way above at 60p. At that time we were not a producer.
The thing is if the cmd they clear all issues that have been raised. Confirm drilling plans. And have news on ffd or extension of am and increase in reserves. Then what do you think will happen to the sp?
My only worry is that the squids mum is heading towards am for revenge. She thinks her baby was given coronavirus by stobie and he is still on board.
To buyinmay:
Your enquiry has been forwarded to the Grammar Police, Bracket Department, for consideration.
There is a distinct possibility that this grammatical controversy will become a distant memory, like the HUR share price collapse.
There may be some delay in receiving a definitive answer, as Grammar Police officers have been inundated with requests for grammatical assistance during the ongoing Corona Grammar Virus outbreak.
Shouldn’t “sic” be placed in square brackets?
;)
Gosh, you live up to your handle lol
'The dream that was £1 is a distinct (sic) memory, never to be repeated'
Markets have always overshot in both directions and always will.
There are many cases in which people have convinced themselves that prices would never recover, but been proven wrong.
It's all; if's, buts, maybes and possibilities... Of course, everything changes, even your socks...