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londoner,
(can't copy the relevent bit of your post as usin phone.)
the last Transocean fleet report dates from august, so is a bit old. but it had the TOL on contract to HUR until nov 30th. of course that may change slightly due to delays on WD. but equally I was very surprised that the Lincoln DST was of such short duration, so it's not impossible that things are being done to remain within timeplan and thus budget. remember, Spirit will have input on this, because it's they who are bankrolling the show.
either way, all seems pretty much 'on time', and avoidin the bad end-of-year weather.
Cheers Londoner, fingers crossed, I appreciate the clarity of your posts.
Beerbull, I agree, closure this year is important. But I'm relaxed on timescales and weather windows. The three well plan has only been delayed by perhaps two weeks on the Warwick Deep drill. The spud to results cycle looks to be about 2 months and the news on spudding the 3rd well is likely to come in the next week or so.
Storms can spring up in the WOS region anytime but I understand the worst weather is generally Q1. I've also heard there are some tough old boys (and no doubt girls) on these rigs but can't personally vouch for that.
It's this short termism that's caused massive sp volatility. Innit.
So what ? Because if expectations are raised that we will get results from the final drill this year & they are not realised then some might write more into it than justified.
We get a bad weather window every year - so what?
Re the 2nd FPSO - why not? A necessary investment.
Re the sp - I don't see it rising all the while there is continuing investment costs that are high in relation to earnings. As earnings flow increases then the sp should rise. The predictions of £1+ over the lasy year or so were always daft. I had always thought 46p was reasonable despite being berated often for that estimate.
I’m no expert, but aren’t we approaching the bad weather window, IMO uneducated opinion iis it not challenge enough to get the well drilled, without the additional accompanying tests?
Feel sure Longwait would agree, it has been. One upside to the two wells current outperformance and inreased revenue is the improved financial support for earliest possible LanFax drilling; a few bucks of extra poo helps, too, obs.
Aware that this is a repetitive bleat, but I'd love to see a 'HurProCo' plan released-to-market outlining two fpso's , twenty wells and 200kboe/d within 30 months. I'd wait for the 10 years of divs, before 'dirty' co'ys are too hot to handle ( i.e. taxed to hell).
GLA.
"The priority is proving up GLA ASAP and this means drilling in 2020."
Yes, I certainly agree this will be the objective, and if no partner is willing to come in on acceptable terms, they just might go it alone.
I'm hoping for the "interruption" before then, but it's been a long wait already!
If not a partner, then HUR could easily finance a $100-200M loan.
I think it can be financed from EPS cash flow or maybe they will consider a combination or the two.
The priority is proving up GLA ASAP and this means drilling in 2020.
WW,
That's strange because the first time drilling in Q2/3 2020 was mentioned was at the CMD.
If was contingent on H1 2019 revenue then I doubt they would have mentioned it, do you ?
Given HUR's cautious approach to PR, I doubt they would have even mentioned it unless they were already shopping around for a drilling rig.
In the short term the EPS can fund a drilling rig come what may. The EPS is not about to dry up in the next 12 months.
GLA.
Personally I cant see GLA wells being bf to 2020 just on HUR revenue ' I would expect to see a partner come in to enable that.
I recall it being contingent on a full years EPS revenue ie FOIL in jan/feb rather than H2 revenue alone.
We’re probably somewhere in the middle given the early good EPS performance but probably not far enough into the EPS to make firm commitments.
I agree, it was AS who raised the prospect of bringing the Rona Ridge wells forward to 2020. His prime consideration seemed to be whether it was HUR that broke the news or the drilling contractor. Let's see if he takes the opportunity this Friday to be 'first to the post'.
On cash flow the step that made this a possibility is the higher cash flow due to 'covering' the 15% FSPO downtime during the uptime. HUR could end the year with $150m in cash. Slide 21 slows their expectations for cash flows and Capex through 2020.
$47m from HUR covers the full tieback of the LC and the gas export requirements, leaving the 50% of the 3x GWA wells to fund from the balance of what appears to be $120m 2020 Capex guidance. The guidance for the Rona Ridge wells in 2021 looks around $100-120m. This looks very doable in 2020 from HUR cash flows.
It is only two and a bit months since the CMD but I for one will be listening for any stronger hints Friday as to whether this work is brought forward. If successful the payback on de-risking the GLA area further, i.e. in addition to good progress on the EPS would be significant.
I agree Biffa, if at this stage they can confirm as you outlined, it will be a very confident signal & it will hopefully monetise the asset that much quicker (assuming zero funding from shareholders).
I remember something about the possibility of the drilling programme being accelerated (in the context of better than expected income).
There's no secret about the very real potential of some GLA drilling in 2020.
It was mentioned in the CMD presentation that HUR will in all likelihood bring drilling forward from 2021 to Q2/Q3 2020.
I can't remember if it was RT or AS that actually said it but I have a sneaky suspicion it was AS.
I think this was always going to be the case but they had to be confident in the EPS producing decent cash flow before committing publicly.
GLA.
Gaping fracture, just to clarify, I do not know for sure about the GLA wells being brought forward, but after listening to AS talking, he at least hinted that this may be the case -
I think that Hurricane will need to ring-fence $80-100million for Hurricanes share of the 3 GWA wells, LC tieback to the AM and also to tieback the AM to the WOSP. I would still hope that hurricane would be confident enough to commit to, and self fund 2 extra wells on the GLA next year (another $100 approx IMO) - maybe more than 2 wells, hence a guess at a possible further 2 well option if and when they announce the rig contract. If I was to guess where the GLA wells would be, I suspect a step out on Lancaster towards Halifax, and then at least one on Halifax itself. - all IMO, and as they say, WTFDIK, not a lot :-)
I thought you'd sold out - why are you here?
Ta.
Driver, I'm not aware I did label you.
2 x GLA for 2021 coming forward into 2020?
Do tell us more.
2 rigs next year??
Yes my post wad BS but seems it enticed a little nugget out of you in the 2 Lancaster wells nect year!
Halifax horizontal will be 1 surely, the other? Risk a Lancaster deep to try prove the mobility below structural closure??
I'm all ears
Driver, not yet hence beer in fridge. NEVER swear on someone else's lives, use your own if you have to. Done all right so far with much more to come. Happy days. This is a share that will grow, I don't have the time to try and snatch 6% changes up and down.
It's like the Secret of Com"TIMING"edy.
Gaping Fracture, ref your post/dream. The three wells currently planned for next year are for the GWA, not GLA, although I expect we will soon be told that the GLA wells planned 2021 will now be drilled 2020 (2 GLA wells with further options for 2 more hopefully).
Ref the FPSO "news" - I would be very surprised if Hurricane weren't already looking at options for FPSOs but they need Warwick West result, and I suspect more drills before they can start any FEED studies or make any decision on that front. - I may be wrong but dont think we will get any concrete news on an FPSO any time soon.
I would also be cautious about trusting RedOctober - he is posting information that is already known or expected, claiming that he has inside information ("from the drillfloor") now why would you do that apart from to try and look credible?? - not only would the poster be on dodgy ground himself by posting info on a public BB, he would also be putting the jobs at risk of anyone that was passing on that info as well - he will guess a few correctly but huge bags of salt required when reading his ramblings. - I think it might also have come as a surprise to RedOctober to find out that FPSOs do not actually have drill floors.
You need to grow up, that’s for sure.