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High crude quality with Brent price on the up, great assets/potential at a fantastic premium, and now with RT gone, ripe recipe for a potential takeover, hopefully also with an incredibly juicy premium priced in for the now much underwater shareholders, time will tell but realistically, HUR SP cannot remain so very much under fair value for lot longer here IMHO.
slift - trice never mentioned anything about the isolation being temporary and specifically made the point that they would also be able to isolate the poorer fractures. He seemed very bullish on this method.
If the perched water doesn't drain out of well 7 - one of the options they have is to isolate the perched water zone there. the cost was something like $30-40m (from memory) plus obviously downtime on the well(s).
Indeed Captain, there has been a steep learning curve.
If HUR had this knowledge before 6 and 7 imagine where we would be now.
Yes, it's too late at that point, because they could potentially be drilling into a water zone. They require drilling to analyse and identify the zones. The pre-drill model will not show oil/water fractures. That's the risk and that's where they will be drilling on "luck". They really need to identify the volume of trapped water along the whole network, or find a pre-drill method that will provide them a method to distinguish between oil and water within the drill area.
Whilst they may be able to isolate it, they'd only be able to "isolate" it on a short term, before the pressure difference starts to drive the perched water zone into the well reservoir.
On a very very long term basis (following FFD), if the number of trapped water fractures in the network is less than expected, than this will be very positive for HUR.
slift - yes they can use the pre drill model for identifying where to drill and then by TD using a combination of GC/GR/LWD they will have been able to identify perched water zones and isolate - so they are expecting to avoid the issues they have encountered with current wells.
"slift - using gas chromatography/gas ratios/ LWD data"
The LWD requires you to drill to analyse.
The GC analysis and gas ratios doesn't really work to analyse dead zones. They are stagnant zones. So even gas will be stagnant in these zones until there is a significant pressure drive to draw them out.
GC will however work for non-stagnant zones, within the fracture that is exposed to where the GC analysis is taken from. (If that makes sense). E.g. if a TRAPPED water fracture (that is not stagnant) is connected to the fractures surrounding the sample point.
"I don't understand why people think you're a paid ramper. If anything it just highlights to me those who are unwaveringly positive or have questionable motives."
I think it's because i've posted the risks too many times for discussion. If anything, i've highlighted them what they seem to oversee majority of the time. Most people on this board only want positivity and want to disregard the negativity. I suppose they treat investing as gambling at a casino. ALL IMO.
slift - using gas chromatography/gas ratios/ LWD data
Oil spot prices are extremely volatile. The price can move 50-100% in a single month. Analysts tend to put far too much emphasis on prevailing market conditions and give far too little consideration on the full cycle price range.
Brent has been below $50 for only 96 weeks of the last 780 weeks (780 weeks = past 15 years), this includes 22 weeks below $50 during the 2020 pandemic.
That is to say, of the past 15 years, Brent has been above $50 for 88% of the time.
It would be fair to assume that inflation adjusted oil prices will be above $50 for approx 88% of the next 15 years. As this will likely include multiple full cycles.
When you strip out the short term bias, and historical (inflation adjusted) prices of oil are plotted over a probability distribution curve it shows two very distinct artefacts (quasi-stable price ranges).
Brent spends 13%of the time at less than $50
Brent spends 49% of the time between $50 and $80
Brent spends just 10% of the time between $80 and $100
Brent spends 25% of the time between $100 and $120
Brent is above $120 for just 3% of the time.
The two quasi stable ranges are 50-80 and 100-120.
The median price is $65 the mean is $79.
But if you can’t survive below $50, you will go bankrupt very often. If you can survive below $50, you stand to do very well over 1-2 cycles.
That sounds almost impossible. You might be able to infer the water in surrounding parts of the fracture, but I doubt you'd be able to project far out from where the drill is. After all, the water reservoir could be anywhere nearby and doesn't have to be intercepted by the drill itself.
Swag, even if you are correct the market would require proof of this version 2.0 HUR model/plan which will be some time away.
Slift, I don't understand why people think you're a paid ramper. If anything it just highlights to me those who are unwaveringly positive or have questionable motives.
These water fractures are trapped in dead zones within the fracture network. That's the risk as I understand, there is no way to fully distinguish between oil and water when water is trapped in dead zones.
"However with the EPS they now have a method for identifying water zones in any subsequent wells at lancaster - which can then be isolated . They will also be able to isolate any poorer fractures."
Interested in knowing what you mean by this. What kind of method is this to identify water zones in the fractures with the EPS?
slift - my understanding is that the pre drill models of the two lancaster wells were robust - showing accurately the fault zones and fractures- however what they couldnt do pre EPS is identify any perched water zones. Of course lucky old HUR hit one.
However with the EPS they now have a method for identifying water zones in any subsequent wells at lancaster - which can then be isolated . They will also be able to isolate any poorer fractures.
If you had even a pound invested you would be an idiot to keep posting false posts.
Try wirecard they'll be glad of your assistance
I'm likely holding much more stock than you, based on your previous posts.
I always analyse stocks from a bearish point of view. You need to know the risks and the positives to know the true value of the company.
Why don't you stop attacking me and go back to comparing HUR to the likes of other oil stocks that are multiples of HUR's Mcap? lol.
Do one mate. 14 negative posts just today alone On here and your invested here.
Why don’t you sell up pal and invest in something you kind of like ...
I'm invested here.
Ok Slift we get your drift now do one if your not interested here at all in investing.
Or are you a charity here out of the goodness of your heart.
Your about as subtle as a rubber cosh pal.
"60% of the reservoir is water then that gives a bad return rate on future drills"
You are spot on there! That's exactly one of my worries. It doesn't even have to be 60% reservoir, but it seems like they have no way of properly detecting the water fractures. I understand that a lot of this depends on their fracture model, but as it stands, with their model in review - it's very hard for us investors to even have an idea of what the future would look like.
Future drills will be more "luck" based than not unless HUR come up with a strategy to minimise any exposure to these water fractures.
The cost of drilling on luck to find out that the well is similar to 7z with a water fracture nearby is a huge risk.
Honestly, I wish all the knowledgeable long term investors here the best for this company in the long term. But as it stands, the risk to reward ratio is very high for me (on a long term basis).
Yes - I agree. Basically, we'll know about HUR's direction of travel long before these oil supply/demand forecasts will come to fruition.
I agree water cut in and of itself isn't so much an issue. I guess it's just if it turns out 60% of the reservoir is water then that gives a bad return rate on future drills...and an increase OPEX/reduced income to actually fund them all. I'm very nervous about the downside here and I'd have thought all of it is baked into a 6p share price, but unfortunately it isn't.
Thanks for this. This is definitely a good read. They make a good argument for oil and most of it is accurate.
I'm also longterm bullish for oil. Short term, i'd like to see the prices depressed as much as possible sub $50 for as long as possible. As they say, coronavirus has allowed this to happen, and sooner or later, bankruptcies will follow.
However, HUR wouldn't be my bet on this long term if things didn't significantly improve with operations and if uncertainties surrounding the concept and aquifer/perched water isn't rectified.
I don't believe the water cut is a major issue for long term production, but it definitely doesn't provide much confidence for the concept.
As you say, on a short term basis the model reviews and stabilisation of water cut is key.
But when you look at the potential for oil prices and the oil sector for the future, it's long term that counts.
Slift, the Goering & Rozencwajg commentary "On the verge of an energy crisis" makes for an interesting read regarding forecasting the drawdown. They're more bullish than I am but not by much.
Not that it matters too much with HUR, it's all about the model updates and water cut in the short term here.
Since March 10, stockpiles in US crude has increased circa. 74m.
US total stockpiles of crude as at 31st July is 519m (excluding strategic reserves).
Good to see consecutive draws in crude, but still a long way to go before there is a shortage in supply of crude.
The oil price continues to quietly show fortitude despite most analysts trying to do it down. Yes we all see some shaving of demand forecasts due to the virus as well as increased supply from Opec+ since the start of August.
But in the here and now the US stimulus is under discussion and data such as factory orders are showing that there is scope for growth, markets ‘crawled’ higher by a very decent 3.9% in the Dow, 5.6% in the S&P and 7.2% at the Nasdaq…
Finally the API stats not only continued a better trend but also to defeat the analyst community, crude inventories actually drew by 8.6m barrels when the teenage scribblers had a build of 3m b’s penned in…How we laughed until we think what these buffoons are being paid.