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AD This is also important though I believe they HUR would have progressed their knowledge over the past 5/6 years regarding the cracks, but due to the Warwick which was Plugged and the rubbish knocked on by many about water cut these are the reasons why the SP is at where it is and it will take HUR drilling results to show they can accomplish what they say they can and move this company from an explorer to producer in peoples thinking then it will massively rerate IMO.
From the link on my post at 18:54.
Given the very low matrix permeability of most crystalline basement rocks, oil and other associated fluids are transported and stored via well-connected fracture systems. The geological characteristics of these fracture systems are not well understood because they are poorly imaged in seismic reflection data, and core samples are sparse.
Technical from the HUR website
https://www.hurricaneenergy.com/assets/technical-library
shedful,
"Critically, the processes involved in fluid transport and storage are also uncertain, although it is often assumed that migration into the basement high is primarily a passive process driven by the relative buoyancy of hydrocarbons following maturation at the source (e.g., Trice, 2014)."
Yes, well pointed out. A lot of the 'mechanisms' still require explanation, and it's quite possible that no generic model exists that applies in general terms between one FB reservoir and another. The same applies to 'conventional', of course, but these days it's fairly easy to recognise what sort of model a given conventional reservoir fits into, and then a wealth of past knowledge can be applied as how to best exploit it.
However, reverting to Dspp's graphic on Lemonfool, the suggestion that there is 'oil migration' taking place below the aquifer that provides the pressure drive on Rona is ipso facto absurd. And just before anybody really knowledgable starts quoting the huge W.Canadian Elmsworth gas fields where the gas is below the water, that's a different animal altogether!
The less technical version from the website
https://www.hurricaneenergy.com/assets/basement-reservoirs
Fractured basement hydrocarbon reservoirs are recognized worldwide, but they are relatively poorly understood and underexploited (Trice, 2014). In such plays, oil migrates laterally from an organic-rich source rock into a subsurface paleohigh of fractured crystalline basement, forming a so-called “buried hill” trap (Biddle and Wielchowsky, 1994). The seal is provided by a blanketing sequence of clay-rich mudstone.
Given the very low matrix permeability of most crystalline basement rocks, oil and other associated fluids are transported and stored via well-connected fracture systems. The geological characteristics of these fracture systems are not well understood because they are poorly imaged in seismic reflection data, and core samples are sparse. Critically, the processes involved in fluid transport and storage are also uncertain, although it is often assumed that migration into the basement high is primarily a passive process driven by the relative buoyancy of hydrocarbons following maturation at the source (e.g., Trice, 2014).
Wellwell,
"THere's a graphic to support DSPP's own interpretations on migration of oil from adjacent source below the hill.."
Yeah, OK, touche. But NOT below the aquifer!
:-)
*I did type "[open to] interpretation" but looks like I deleted the word before posting.
AK it's open to
"By definition, basement rocks cannot overlie younger sedimentary source rocks, and so hydrocarbons will not have migrated directly upwards into them, as occurs in a classic petroleum system. However, in areas where basement has been uplifted so that it is adjacent to a deep source, a migration pathway can exist either through the basement itself or through a carrier bed that connects the source rock to the basement. An alternative migration route could be from a source rock that is draped over the basement high, allowing hydrocarbons to be expelled directly into the basement underneath. "
THere's a graphic to support DSPP's own interpretations on migration of oil from adjacent source below the hill.
https://www.geoexpro.com/articles/2017/01/hiding-in-the-basement
'Question, is this downtrend likely to stop at around the 24p support? Or there are fundamentals to take the price back around the 9p mark where it was in 2016?'
No-one can tell you where or when the decline will end.
History consists largely of unlikely events and the same applies to the stock market.
What I can say is that after reaching 64.5p on the day before first oil, no-one could have anticipated a share price of just above 25p after more than seven months of steady production - and production exceeding expectations.
The last major correction - from 67.5p - ended at 24p, but that was after a placing at 32p.
HUR no longer needs to raise cash as it has an income.
As for the previous low, which was at 8.85p mid-price, that was where it bottomed after falling from the high forties (although one poster was quite definite that he had bought shares in the 50s), at a time when there was uncertainty about funding.
In answer to your question about fundamentals: the fundamentals cannot justify a price of 25p, let alone a price of 9p!
Yes I agree with you about the water being different and perched its simple analytical testing at the minute where I am the island has no fresh water as the aquifer which is quite shallow has been contaminated by salt water (sea) later in a couple months time hopefully the TDS will be low enough for drinking water. IF it came to water or oil -water to drink would win
regarding the oil migration both of you are correct the oil has came in from the sides and moved all over then later in geological terms has been buoyancy driven and come from the head at least that's what I gather.
buyinmay,
" Who in their right minds would hold shares in a company for which they had as little confidence as DSPP has in Hur?"
You're assuming that Dspp is in his 'right mind', which is something I wonder about, sometimes. I mean I know I sometimes write at length about HUR, and so on, but I don't start making powerpoint presentations about it. You've got to pay me before I go to that sort of trouble.
It seems Hurricane is keeping everyone warm and excited in this cold weather. Looking to make an entry...
Question, is this downtrend likely to stop at around the 24p support? Or there are fundamentals to take the price back around the 9p mark where it was in 2016?
Thanks for the answer! GL
shedful,
"The perched water can just be that - perched water and for sure the possibility of it being different water from the aquifer is a possibility as this perched water "
It's not just a possibility. The company has gone to length in RNS and presentations to stress it's done all the most basic stuff (temperature, chemical analysis, etc.) to discern whether the watercut is the same as the aquifer or not. And it has said it ain't. And this really IS basic stuff. I'm sure they've gone to great lengths to ascertain that before saying they're 'confident' in their claims.
Heck, I'm sure you've seen one of those TV programs where a criminal has been caught because the mud on his shoes shows he was at a certain place at a certain time? It's the same sort of thing. Oil companies don't just dip their finger into a sample of water, lick it, and say "this comes from the aquifer", or "this is 'perched'". It's a bit cleverer than that.
This, essentially is what bugs me about all of Dspp's arguments. They've got something which looks like a duck, quacks like a duck, and walks like one. Even if they were out shooting for geese. And Dspp's saying, "because you've shot a duck, there are no geese around anymore", despite all the evidence to the contrary.
DSPP would be taken far more seriously if he didn’t claim to be a long term holder. Who in their right minds would hold shares in a company for which they had as little confidence as DSPP has in Hur?
Actually the oil done both
Wellwell,
"PS he's not entirely incorrect about the charge system. The summit of the buried hill is above the Kimmeridge source and as such the oil has migrated up into the lifted portion of the ridge."
Yes he is, and not it didn't (migrate up). Look at the stratigraphy and the (very very simplistic) seismic maps. Of the stuff further west, and relationship with Rona. Kimmeridge is THICK. Overlaid with sands. Then came the 'upthrust' (over a few hundred of thousand years or so, give or take). Now look at the strat on Rona crest. NO Kimmeridge! Where did it go? (Remember, the 'Victory sand' still holds oil.)
"Personally, having reread DSPP's posts I find it hard to believe he is trying to discredit Hurricane. "
I initially gave him the benefit of the doubt ...but I am afraid that his continuous inference that Hur are being dishonest now seems to suggest an agenda to me. saying he is still invested may or may not be true ...but it does not give him a free pass.
Let's give DSPP the benefit of the doubt. He's a tech driven investor with both knowledge in the field, and an interest in both the geology and his investment.
That doesn't excuse however, arriving at conclusions without any alternate hypothesis especially when that conclusion had been arrived at with scant and lagging information in contradiction of explicit company guidance AFTER the lagging data being used was issued.
PS he's not entirely incorrect about the charge system. The summit of the buried hill is above the Kimmeridge source and as such the oil has migrated up into the lifted portion of the ridge.
BobHope1,
"There were a few on here in big profit having bought at current price, must be crying in their beer now if they didn't sell in the 50's"
And you're trying to say... what?, exactly?
Yes, I did a cheeky little sell at 55p, and rather regret now that it wasn't a far bigger one. But it'll get back there one day.
Crying in one's beer? C'mon, some of us are big boys here. Crying in one's beer just dilutes the stuff, making it even less help!
Albi1,
"Personally, having reread DSPP's posts I find it hard to believe he is trying to discredit Hurricane. "
Despite the obvious 'slant' to my own posts which others may interpret as disagreeing with your phrase above, I remain slightly sitting on the fence, but definitely leaning in a certain direction. If Dspp is not deliberately trying to discredit the company, posting his latest 'slide' (which I consider to be rubbish) is certainly doing no credit to himself. For those interested in the technicalities, I'd recommend they read the fine print on top of his 'presentation', which illustrate some of his 'conclusions' regarding his latest theories.
He overlooks one basic fact. The reservoir's 'pressure-drive'. And in the case of Rona Ridge, the 'drive' is from the underlying aquifer. It ain't gas-cap driven, nor is it something like deep in the GoM, buried beneath miles of undercompacted sediments with overlying salts or adjoining salt-domes adding to the fiendish mix.
So he's mistaking OWC and ODT, and coming up with gloomy conclusions: maybe deliberately or not. Sure, if we have 'perched water' (as seems to be the case), little 'compartments' of the reservoir will have different pressure gradients, due to the composition of the fluids intersected by each individual wellbore. Which explains why one well (6) produces essentially 'dry' oil (no intersection with a perched water zone) whereas 7z does. But that changes nothing relating to the OWC (where the oil column stops and intersects the 'drive' aquifer), which is some 600 m below the wells' TVD.
Also, in another part of his post (or maybe in a different post but on the same page), he asserts that water-disposal (or an increase thereof) increases Opex. I can't for the life of me think of any reason why that might be the case, other than maybe having to add an extra drum or two of chemical (costing a hundred bucks or so) to the treatment before the produced water gets chucked over into the 'oggin. An infinitesimally small cost increase, in other words.
Here's a curious thing. When I open Lemonfool (on rare occasions), it goes to page 3, in other words 2017. I have to click another tab to get the latest stuff. But there, back on page three is Dspp, and also his seemingly mirror-image, Peter Grey! Same old, same old...
Jiffybag
No idea as to DSPP's credentials other than I vaguely recall something about working in this field in his day job and possibly for BP? I can't be bothered to read through every previous post again right now to be honest.
Just saying, main point, - the MM's are the ones who have orchestrated this from the get go a long time ago. Don't ask me how, but it's the only rational explanation that makes sense to me. They will have a clear picture of various factors that can be played to their advantage to drive SP or ride SP down at certain points in time that we simply don't. I personally think DSPP has just been used as part of that, probably quite unwittingly. Entirely my own view, yes, but prefer to look it at that way for the moment.
DiveCentre
Obviously the ensuring 'gossip and speculation' can be attributed to DSPP's posts but he may be as mortified as any one of us if our posts were used in that way. Just saying -benefit of the doubt until proven (underlined) otherwise. I don't agree with anything he's posted because it simply doesn't align with operational updates and presentations from Hurricane and, as I said a while back, is not based on the complete picture - or dataset - as others have said here today.
I suspect his motives are not to bring the SP down but other motives which are more personal in nature, either to appear as an authority in this area or otherwise, but that's assumption on my part, nothing more.
At the end of the day I genuinely believe the SP today is no surprise at all to certain folks in the City who have played this long. I note as IJWT reposted a day or so ago, Morgan Stanley quoted 25p bear case. Mmmm - and look where we are. Funnily enough! I've seen posters who clearly short post this will hit 10p. Well, if it breaks 24p it may do just that. I'm not discouraged by that as equally bull case could see us above £2 or £3 at some point in the future based on Lincoln/Lancaster and I don't forget Halifax!
Albi1
That would be nice to believe and I have to say I would like to believe dspp is being purely objective.
The problem is that he must have realised that the tone of his posts over the last couple of months would create doubt in the minds of readers and at a time when the sp lacked support. It raises the suspicion of a motive.
Albi,
'Personally, having reread DSPP's posts I find it hard to believe he is trying to discredit Hurricane. I would prefer to believe he is genuinely trying to make sensible appraisals of the current situation.'
Albi, how can you discern that.?
Has anyone verified DSPP's credentials? Is he a practiced Reservoir Engineer, A Geologist? I don't know do you?
Personally, having reread DSPP's posts I find it hard to believe he is trying to discredit Hurricane. I would prefer to believe he is genuinely trying to make sensible appraisals of the current situation. 1) He claims to be a LTH, 2) the consistent style and response - appears analytical, methodical and fair in approach.
It is more likely others have used DSPP's posts to their own ends. Anyway, that's what I'd prefer to think based on what I've read.