The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Can someone explain in layman terms what this means please. I think 2022 is a long way off, many many good things could happen before then and if all goes well the bond is converted into shares at £0.52....
In July 2017, Hurricane issued US$230,000,000 in 7.5% convertible bonds due 2022 (“Convertible Bond”). The Convertible Bond was issued at par and carries a coupon of 7.5%, payable quarterly in arrears. The Convertible Bond is convertible into fully paid Ordinary Shares with the initial conversion price set at $0.52, representing a 25% premium above the placing price of the concurrent equity placement, being £0.32 (converted into US dollars at USD/GBP 1.30). Unless previously converted, redeemed or purchased and cancelled, the Convertible Bond will be redeemed at par on 24 July 2022. The Convertible Bond was admitted to the Official List of International Stock Exchange in September 2017.
Maths,
It is perfectly realistic to believe we won't havw the cash to repay the bonds. I don't have the cash to repay my mortgage, but a steady income into my bank account can assure another mortgage company that I am sufficiently credit-worthy to take out a new loan to repay my existing one at the appropriate time.
We are not out of options. Should we not be bought-out over the coming years (I still suspect we will), then either the bonds can be renegotiated, or we can look to other areas of lending.
If I was sat in Mr Chaffe's chair, I would wait for the CPR to come in January, and then negotiate RBL based on the revised figures. We may only end up with 700mmbls (finger in the air, nobody shout me down), but it would be more than enough to take on £500m to clear bonds and give sufficinet working capital going forward. This is just one option.
I'm hoping that by bond redemption date, we could have cash to settle at least half, leaving a much mroe managebale figure through alternative funding.
Sit back, don't panic. the finances are all under control.
As for the water, well, that's for another discussion.
Or maybe:
Some posters here are too good to be true.
Maths- 16/12. '' They are unlikely to have enough money to repay the bonds'' making poor statements about the future financial position of the Company. Reported this post as Libellous/Defamatory. HOW CAN THE ADMIN., here let such assumed or purposefully negative post about the future health of the Company stand. Is this a board of Children's comic board or HUR's board/
Maths-16/41, the nursery school toddler is here.
Mathematics would you please tell us what inspires you to spend signifificant time posting negatively on a share that you believe has a disastrous future? Do you have a short position or are you spending your time trying to prevent others from making a poor investment decisions?
A simple honest answer would be appreciated.
genghis - i thought total costs were $26-$27 per barrel. I would say that would go to $30-$32 on current production. However costs will probably have been saved as a priority with new board and some were already reduced last year from previous year.
I agree with Dive centre - if the company is still around in 2 years time the bonds will have been sorted out. However I think hur will be sold on before then
It will depend on the conditions set in bond redemption. Normally bond holders can cash their bonds with equity. Does anyone know in details about these bonds?
Dc
No, i was referring to turbulence, and the OWC.
Rock rose has billions of debt...which has to be settled in event of take over.
DC,
I think minimum capex is for this year, surely they will need to have a 2021 drill program to honour their licence commitments and to develop the field/increase production. The best plan is to refinance the CB's surely!?
DiveCentre - Your last sentence puts the whole debt issue to bed. Perfect !
Genghis
"If the water and other issues resolve "
I assume by other issues you are referring to poo., but I'm happy to be corrected.
The latest RNS suggests the Company it prioritising the build up of a cash reserve and will keep CAPEX to he bare minimum.
Accordingly, and barring disaster with the w/c they should have sufficient cash to repay the majority of the CB's if not all., and if a little bit short the ongoing viability of the Company should permit refinancing of the balance.
To put it another way if the Company is still around in 2 years time when the CB's are due they will not be an issue.
Rockrose was just sold for less than cash and they were very cash rich
Yep the debt is 2 years away guys. Cash in bank equates to a MKT Cap valuation of 8p. That gives a zero value to Lancaster, Warwick and Lincoln. Production 15k at present.
The debt is only a problem if the wells/resrvoir don't perform.
If the water and other issues resolve there will be no problem roling that debt over, probably on cheaper terms than now. If not, then at worst the bondholders wipe out the equity.
It all comes back to the uncertainty over well performance. Everything else is noise.
And the debt to pay.
Sage
"Based on 15k bopd, 43$ Brent and 18$ cash cost per barrel with 95% uptime operating Cashflow is $2.5M per week."
All in sustaining cash costs were c. $28bl @18k bpd. At 15k bpd they will be close to the $35 at which the hedge was struck, mb a touch less. Net cashflow will likely be less than $1m pw.
Slift, SageOfOmagh, Theorem, thank you for your excellent replies. My holding here is very modest, 40K shares and I am very positive about HUR, they are exciting shares and I have gut feeling that even my modest holding could probably be worth in double figures in future. Good luck to all. If it is not so, than it will not disturb me too much.
Hi mjga786,
This year, to the end of June, I calculated circa. $40m cashflow after taking into account OPEX and CAPEX costs.
There'll have been expenses incurred as a result of the problems they have had recently (e.g. installation of ESPs, well shut ins etc.) that has not been taken into account.
Assuming 10% for the above, cash flow would be circa $35-36m.
Going forwards, assuming 15k production and $40/barrel Brent until the end of the year:
For the next 6 months, cash flow would be circa. $51m (taking into account 20% contingency for the unknown costs for H2).
So in total for this year, I'd estimate circa. $85-86m cashflow.
Slift.
Based on 15k bopd, 43$ Brent and 18$ cash cost per barrel with 95% uptime operating Cashflow is $2.5M per week.
could you please give your valuable opinions, of what the SP was or could be if the production is still 15K Barrels or increased. How much net cash flow will swell the bank balance each week of such production. I will be frank, the current SP, to me looks very cheap, I wonder if any agenda behind it, and if yes, than what type of agenda!!!?