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I am out but watching with interest. Hope you are right and wish you the best
“Likely to be shorted to death again.”
I dont think so SuperRoty. The share price didnt fall of a cliff after the last RNS warning of risk of reserve downgrade. Remember the shorters do have to buy back the shares at some point. Remember this from the latest RNS: “This assessment does not take into account any production enhancement options for the Lancaster field which are currently under evaluation”. With a only 100 million market cap, 17000bopd and possible enhancement options the shorters might have had their day already.
Imho
N
Likely to be shorted to death again.
I always thought most oil people ( Pc correct lol) were freleancers apart from the company climbers in the majors
Why will Scotland grab it as a strategic asset as it seems the SNP want to turn Scotland green ASAP
DC,
"If you are alluding to the interim CEO just bear in mind that she was a BG employee which Company was taken over by Shell and she left shortly thereafter. I should not need to remind you that RT was an employee of Enterprise which was taken over by Shell and he fairly soon parted company."
Precisely.
I too have worked on a consultancy basis for Shell, for atwo or three years. But we parted company. However in that instance, it was simply because the ongoing drilling campaign was ending, the rig was being retired, and for future work it would be cheaper to hire three 'local' trainees (who I'd trained-up) than to keep one expat adoubleuk on the books. But I know how such things work.
AS to RT and Enterprise? Anyone with Enterprise on their CV is OK in my books. Even if some of them turned maverick. Shell took Enterprise over because that little outfit represented a huge threat to them, technically speaking.
Sound familiar?
adoubleuk
"some people (especially ex-Shell)"
If you are alluding to the interim CEO just bear in mind that she was a BG employee which Company was taken over by Shell and she left shortly thereafter. I should not need to remind you that RT was an employee of Enterprise which was taken over by Shell and he fairly soon parted company.
MCB55.
"So on that basis, surely best to plug off the first fracture (not sure how, but Dr T seems to know!?) and produce from further along the 2 kms of the horizontal? I know Aduk not keen on this"
Any squeak of an idea about this, and I'll sell out again, without even leaving one share in my account for fast re-buying purposes ! Sure, a tie-in (however done) of a new well on Lancaster would be expensive regarding subsea flowlines, etc. But there's all that kit already bought for Lincoln that could be used. For eventual tie-in to the existant Lancaster manifold. And the idea of a postulated L8 5km away is imho absurd, as well. Maybe just 1km, so a rig could come in and lay anchors without having to have to shut down existent production for safety reasons...
Big Boys Toys stuff, but fairly simple.
Except that some people (especially ex-Shell) love to make things complicated.
"LanFax will be deemed a 'strategic asset' - by Scotland if not the UK)."
They both will see it as strategic, but will want to publicly down play it a bit, but behind the scenes encourage it! IMHO.
On the OWC, any revision in reserves will not be that great (10-20%?) IMO and overall rationally not that material as the reserves would still be huge by any measure.......however the initial impact on investor sentiment might well be! Hence the need to soften up the market early!
The real impact on a higher OWC is how much it potentially affects the longevity of well 7 (assuming not much perched water, but a lot of basement water)!? It could be that the first fracture is particularly large (hence high PI) and well connected to the basement, so that fracture may water out fairly quickly (a year or so), however that does not necessarily mean all the other fractures behave in the same way. So on that basis, surely best to plug off the first fracture (not sure how, but Dr T seems to know!?) and produce from further along the 2 kms of the horizontal? I know Aduk not keen on this, but seems to be cheapest option for more stable production, albeit with some risk (nothing in life and the oilfield is without risk anyway!).
SG2
"I should naffin' well hope so, anyway."
Agreed, every days lost production is $0.765m lost revenue
14/24, Totally agree, there is nothing wrong with HUR, a first class prospect, but the issue as you say is Management, Could they be in BED with somebody!!!
apologies genghis - i see what you mean - i read reduced and it didnt make sense
for 170m total costs they need 3,777,777 barrels of oil. which is 11157 over 328 days
Ghengis; fpso downtime it seems was conservatively set; recent discussion in the field has been suggesting major servicing/downtime could be somewhat less than the current standard. If the recent 'outage' was unscheduled, it may well be (one would hope, given the approaching scheduled maintenance shutdown, that much - if not all - of September's work has been brought-forward and performed last week. (I should naffin' well hope so, anyway.)
gla
WWW;
"I personally don’t think the 2017 CPR is an issue. I think the issue has been HUR management."
yep, agreed totally. Trainset. Ropery. 'kin 'ell.
gla
MCB:
"However the big issue is who is going to touch it and spend billions to develop it!? Anybody announcing a new Field Development will not get great press!"
Yes, exactly - who/how will it be funded? One doubts whether another market cash-raise will be well (sorry) supported. I've always thought, post dspp's 'buyers-strike' suggestion, that Hur should morph into HurProCo. But am also wary, especially at the current 'chapter 11' mcap, of the likes of Delek etc (I guess Cnooc are out the equation in the current political environment, as LanFax will be deemed a 'strategic asset' - by Scotland if not the UK).
The watercut of 7z is indeed an interesting topic. As you say, a proper tech explanation - from the company - is in order.
gla
genghis - the total costs were calculated with 20,000 bod at 90% uptime. hence why 18000 is used. so 10,400 would be comparable
As you sat there are variables, but also the CMd feom memory was less than clear on those cpsts that were truly fixed and those which were not.
The main thing to remember, tho, is the calcs ppl are making on this are based on the 18k bpd annualised figure. that is NOT comparable to any quoted current figures, which will need to be reduced for a 10% downtime allowance.
Just to add to my last post...
I get 10,750bopd to b/e at $35
And the companies recent hedging strategy seems to fit this within +/-10%
Buying $35 puts for 1.8m barrels for H2
= puts for ~10,000bopd
That sits pretty much on my b/e curve.
The annualised cost can be extracted from the CMD Presentation.
I did this the other day and found it was $146m this include the whole group. No doubt lots of contracts are fixed cost.
This assumed 18,000bopd but the slides also show the costs are about 85% fixed.
You can therefore go further and break it down as
Annual fixed cost = $124m
Process costs = $22m or $3.40 / bbl
You can all try the following
1). Guess the oil price.
2). Subtract the process cost ($3.40) from your oil price.
3). Divide the annual fixed cost by your answer from 2).
4). Divide answer from 3). by 365 days.
I get ~9,400 bopd, assuming $40 oil price.
I get ~8,100 bopd, assuming $45 oil price.
A few noisy variables at play.
But the company recently hedged 1.8m barrels for H2, they obviously expect to produce those!
Thenorseman
You are right, temporary lapse of memory.
slift - the only issue is that lancaster is their own source of income at the moment. in my view they need to cover all costs from lancaster - anything less and they will start burning the cash they need cash to move forward . 10,400 is currently very achievable .
DC
Im sure I read somewhere the FPSO prod water capacity being 20kbpd (tot liq handling cap 35kbpd). Thus 27kbpd in total with a water cut of 74% would be the case. Could be wrong.
N.
CaptainSwag,
Yes, the cost to operate and produce from wells 6 and 7z. If production exceeds 7k, then it is covering the cost.
The total costs covers the wider business, rather than production from 6 and 7z. These "excess" costs are on the company, but obviously any company would like to cover these costs using proceeds from other parts of the business (in this case, Lancaster).
Hi Dive,
Yes DiveCentre.
As a good estimate with how the wells have been behaving, 7k bopd can be achieved with maximum watercuts:
60% watercut from well 6 and 90% watercut from well 7z.
Or circa. 74% overall watercut.
Slift.
slift - i am guessing you are just talking about lancaster costs?
if the total costs were 18000 x 365 x $26 = $170m
At $45 that wouldn't that be 10,400 bod?