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Like I said you let yourself down tonight
Hi PlantedBHA,
Say what you want, but I tend to look at the positives and negatives, whether i'm invested or not.
I like to know the risks as well as the positives to the company.
@chesee
The current market cap and the value of this company is based on the uncertainties and the problems (or challenges) that the company is currently facing regarding their assets.
I think you're forgetting the 230m debt in your valuation (would give the 3 fields $200m valuation that way). But ofcourse it's undervalued, but there 3 fields are in question.
Slift.
They have 130 million in cash in bank
The value of the company is at 5.8p is 100 million
Valuation based on cash is 8p
That’s with zero value on their 3 fields Lancaster ,Warwick ,and Lincoln ,
So you can see undervalued at present
My thoughts
And you were doing so well slift
Pity you let yourself down
The question that's been circulating today is:
"Is the Convertible Bond a problem?"
At this stage, no it isn't as HUR will have over $175m in cash at the end of the year (conservative with $40 Brent and contingencies).
But going forward, should we be concerned? I think so.
HUR have deferred their CAPEX for all well activity in Lancaster to 2021, and likely have deferred GWA following the license extensions for their commitments (we will know following the technical review).
That alone will increase CAPEX expenditure for 2021. Whilst it may seem like a good move (in the hope that oil recovers), there's still a lot of uncertainty around production and COVID19/market for 2021.
HUR have definitely bought themselves time in the current pandemic and market downturn to get production back on track. However there's still a lot of uncertainty around this (as discussed on this board).
Whilst 15k bopd average for this year will be good enough, production of 20k bopd is really needed for 2021 (should they be able to generate enough money for all financial commitments in 2022).
I think HUR have a lot of work to do from now and 2021 to solve all (or most) uncertainties (of what they can control) regarding their Lancaster production EPS:
- Water cut
- Production interferences
- Production stabilisation and guidance
- Confirm to theories regarding Lancaster and water production (or provide solid evidence)
Slift.
And what is the current mcap again ?
Total joke this sp.....
One day this will surprise everyone and do 100% rise....
Okay, I must admit. I have calculated the cashflow incorrectly.
Having gone through the accounts, there's additional costs i've missed.
By my calculations:
Total costs (with a 10% contingency): $185m
Assuming 15k bopd guidance for year, breakeven will be $31-34/barrel.
To the end of June, HUR have approx. $99m in Revenue.
Assuming $40/barrel to the end of the year and 15k bopd, revenue for the next 6 months (Jul-Dec) is approx $110m.
So total free cashflow is likely to be $24m to $41m.
Given HUR had $152m at the end of April, Year end cash balance would be approx. $176m to $193m.
Slift.