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13x15,300x365 = 72,598,500
The only person capable of shifting the price here is Stu (BMU) and his associates.
BTFATH1,
I've already made an investment here. I don't plan on buying more.
Slift astounded you are subtly deramping this for a lower entry. This market cap is an absolute farce and currently we should be sitting at least the 12-15p level
Those numbers are off. ( I accept it's not possible to perfectly accurately forecast, but we can do better).
See pg47 of the Capital Markets Day presentation from April 27th.
https://www.hurricaneenergy.com/download_file/force/557/220
It shows Net Cash generated as $24m, from April to December (9 months) assuming an oil price of $30.
On top of that, pg 42 assumes 18k bopd for 2020 and shows that most of the operating costs ($/bbl) are actually fixed and not variable.
So we can unpack the costs.
CMD forecast oil sales (April - December) = 18,000 bopd * 365 days * (9 months / 12 months) * $30 * 90% uptime = $133m
They expected $23m free cash from this^
So forecast operating costs, April to December = $133m - $23m = $110m
Annualised operating cost forecast = $110m * (12 months / 9 months) = $146m
The operating cost is largely fixed (maybe 80% fixed cost), but has some variability.
Oil price today is ~$44, lets discount this 10% and assume an average oil price of $40 over the next 12 months.
Forecast 12 month oil sales = 17,000 bopd * 365 * 90% uptime * $40 = $223.4m
Forecast 12 month free cash = $223.4m - $146m = $76.7m
Now this figure might go up if the oil price rises or if production is increased.
Likewise this figure might go down if the oil price falls or if production falls.
But a free cash flow of $76m from a company valued at $150m is a HUGE discount.
Typically this ratio would be 1:15 for a large company with diversified risks e.g. Unilever.
It is discounted because there are some risks. But is the discount proportional to the risk.
But everyday that passes where HUR continues to operate this cashflow, it just adds more evidence to the case that this business is real. All the other stuff (GWA and infill drilling on Lancaster) is nice but not necessary for now.
No news is good news.
Good luck if your shorting genghis
You’ll need it come time
Try engaging with the facts as stated. Am i incorrect in any way?
In fact, I haven't even mentioned the bonds. If EPS performs, they will either be easily refinanced, or be converted. But if not, they could wipe out the equity.
Again, it all comes down to the wells, and to the revised OWC, and therefrom the reservoir size.
Genghis
Utter b@ll@cks
Obviously one of the shorters
Al utter *******s.
Current production 17 k bpd, less 10% downtime = 15,300 bpd annualised. B/even cash costs at this level are $30 or so. Brent $43.
$13 X 15300 X 365 = $24m pa gross profit, subtract committed capex, which is not clear.
hat will still leave a healthy surplus, BUT ;
1. EPS has less than 2 years b4 flaring consent expires. Renewal cannot ne taken for granted, and if gtranted, it would only be for a short time, say another year, to enable the gas pipeline installation. Capex for that, on a go it alone basis (Spirit deal looks dead atm ) not sure, but a lot of $ms.
2. The EPS is not standalone ; it is proof od concept. The value in this co is in proving that Lancaster has 500MB of oil, and then finding a partner to spend $100Ms to decelop it.
3. All of the above only works if the EPS works. It mkay. It may not. There have been many unanticipated problems, the Bod have clearly lost confidence in the visionary founder, and the modelling is in doubt.
In short, the jury is out, ladies and gentlemen. Place your bets. But remember the SP is where it is for a reason, and that reason is the high degree of uncertainty.
And inspite of all you have written the sp continues to drift!! Doesn't make any sense. Should be heading to double digits by now.
18000 x 43x365x0.9 = $254 million
Total costs at $26 a barrel at this production = $171 million
Profit is what’s left / year
If production rises, so does profit
If oil price rises , so does profit
Try the calcs at $45 / $50 oil
Sp is way way too low for this level of success