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Well described, the previous BOD given their agenda was to report a massive reduction in resources
Hence the reason why they provided ECR with inaccurate data , and in process the new CPR produced based on that data was sure to provide massive write downs on potential resources
What is very strange is that why DR T did not despite the CPR produced by ECR as him of all people should sure have known that the née CPR was most inaccurate
Still all that is in the past but how the old BOD must feel now, when they managed to drag the SP to below 1P hoping that it could be given to the Ad hoc bunch of unknown people right under nose of the company’s true owners ie the shareholders
And today of all day it just shows how right we all were to stop that scam and throw out the scammers and instal a new more proactive and shareholders oriented BOD
The result the SP is up over 450% over those dark days and this is just the start
With clever CB offer saving us 22 million $ and POO in the north of 76$ is it any wonder that the markets are know realizing how wrong they were and how they fell for the hatched scam
Now soon we will be in double digit SP and from there on 40-45P as it is the least
“What about the reservoir engineers, ECR Equipouise? They produced the CPR. What's their role in all of this? Monetary dimension?”
ERCE produced their report/new HUR CPR based on data provided to them by HUR’s very very crooked Ex-BoD (as it was conducted in their time with their agenda!), hence no surprise there lol. Now HUR needs a new truly independent assessment here particularly as the divergence between the 2 assessments was strangely/incredibly huge!
'poise' 'produced'
What about the reservoir engineers, ECR Equipouise? They produce the CPR. What's their role in all of this? Monetary dimension?
consider this - bonds at 30c in $ mid Covid - in lay terms buying bonds (debt) back at 30c in $ would have been same as selling oil at S100 a barrel, eg spend $50 mill, debt reduced by $150 mill, only $80 mill debt remaining
before peeps line up to shoot me, i know all the parameters
but essential message remains - buying back bonds at two thirds discount gives same financial results as selling oil for silly money per barrel
the size of the opportunity missed is staggering
and pound to a penny post court hearing early july bonds were 50c is $ and CA were still pressing to be done asap.
yet still chaffe and maris delayed till mid/end aug - undoubtedly still at it chinwagging with bondholder mates to get bond price as high as poss (78c) so bondholders could get the most bucks
Reads to me CA lining up disposals at the right price. Trading at a discount of 40% to its NAV it may as well turn into cash
Minutes have to be a fair and accurate representation of board discussions, but yes, there will have been un-minuted conversations outside the board meetings as per any company. What is so damaging is the lengths the Board went to ignore all other courses of action, not to buy back bonds (assuming they were able to in the market which CA suggests they were), the shutting put of shareholders, the secrecy around the ad hoc bondholders, and then the attempt to use C-19 legislation to drive through the handover to bondholders on egregious terms. The Judge was crystal clear in his ruling and still the board continued to trash the company. The LSE that regulates AIM should insist on an inquiry into what happened, and I feel that is exactly what is going to happen.
' Outlook
The Fund's mature and highly concentrated portfolio of special situations is well placed to deliver not only value accretion but importantly the release of value. As the Fund's investee companies continue to make progress, we have been able to enter discussions with strategic and corporate buyers of the majority of our portfolio companies. In the coming weeks and months, we look forward to providing specific details. '
'the majority of our portfolio companies'?
What's CA's game here?
And given the damage done to Grant Thornton after the revelations re the collapse of Patisserie Valerie, there is a real need for an investigation here into the actions of McTiernan and the Board of Directors, their interactions with the bondholders, the advice given and options presented by the advisers, and the Board's decision-making, and whether undue influence was brought to bear on that process.
The written minutes will be sanitised garbage. Unless they were clinically stupid. Which they were. Mistakes will have been made and document trail will evidence these
'The Fund has written to the Hurricane Board under Article 94 of the company's articles of association to request that a committee (comprising the non-executive directors) be established with a mandate to investigate what happened and to engage external advisers (should that be needed) for the investigation. The committee would then make a recommendation to the Hurricane Board. '
So that's a two man cttee comprised of Wright and Craik and excluding Maris and Chaffe. What does that tell you...Balls have been tightly gripped and Bernstein's squeezing
'external advisers'? Wtf are those? Almost suggests the current auditors are not upto the task or some other type of external intervention
I totally agree. The fact is that under McTiernan there was a flagrant disregard for their duties to stakeholders. Equally extraordinary was the decision to spend $17m of those same said shareholders funds to effectively represent the ad hoc group of bondholders whilst refusing to engage more broadly and esp with CA. That the High Court ruled so decisively against the old Board should send shivers down the spine of them and the advisers who burned their way through our money in an effort to appease aggressive bondholders. CA's language is very controlled, but such was the nature of BoD's behaviour that I cannot see how this can be just ignored. What I would give to see the Board minutes of those meetings
I need another 4p to breakeven! I thought I lost but looks like Hur waking up … never know may go back to its old glory and surprise everyone again. Still remember it went 60p+ thrn fund raise of £500m at 30p. If oil price continue going up hurr may be able to pay off debts. No harm being optimistic since my money is stuck here for quite long
DYoR
"How is it possible that an independent assessment carried out in 2017 is able to produce in place volumes for Halifax amounting to 5,143 MMstb (best estimate), up to 9,043 MMstb as a High case, when only a few years later, without any more wells having been drilled on the discovery, its volumes essentially disappear from the radar?”;
Simple - because the analogous field on production showed large amounts of water incursion post the 2017 CPR - that read over to the Halifax model
Incredibly bullish
Perhaps it's the volume still in place
What an update for Hurricane.
I am intrigued by CA's assertion that HUR need a '12 month extension' for the FPSO. Why 12 months? Odd.
'The Fund has written to the Hurricane Board under Article 94 of the company's articles of association to request that a committee (comprising the non-executive directors) be established with a mandate to investigate what happened and to engage external advisers (should that be needed) for the investigation. The committee would then make a recommendation to the Hurricane Board. '
This sounds ominous for those that have now left the company. I reckon CA believes malpractice was at work
Whilst the Fund would have preferred not to have had to endure the past 18 months as a shareholder in Hurricane, the share price weakness enabled the Fund to take advantage by more than doubling its shareholding from 1 January 2021 to 30 June 2021 to 22.6% and it successfully defended the interests of all shareholders on a crucial point of law. The Fund currently owns more than 25% of Hurricane and is the largest shareholder.
In August 2021, after a further request from Crystal Amber, Hurricane finally launched a tender offer for up to 50% of the outstanding bonds. Allocating up to $80 million of its cash, initially the tender was priced at up to 72 cents, but this was increased to 78 cents. Whilst the Fund fails to understand the amount of time taken by the board to implement the buyback of the bonds (in early July 2021, the bonds were trading at just 49.25 cents), purchasing just over one third of the bonds in issue has reduced Hurricane's capital and interest obligations by approximately $22 million. This represents an important and material saving. Without the Fund's successful intervention at the High Court, this would not have happened.
The Fund now believes that Hurricane must secure an extension with Bluewater Energy Services B.V. (from whom Hurricane leases the Floating Production Storage and Offloading vessel). This will secure the prospects of significantly increased free cash flow generation for equity holders. The Fund believes that a twelve month extension is required.
Latest production information from Hurricane is that its P6 well is producing 11,100 barrels per day. This compares well with the company's production forecasts (released in May 2021) estimating production for August 2021 at 9,500 barrels per day. Production for June and July were also ahead of forecast. The latest production shipment in August 2021 was for 505,000 barrels and it is estimated that this generated around $34 million of revenue.
At anticipated production levels, the Fund estimates that by February 2024, 8.3 million barrels will be produced. At a selling price of $68 a barrel, $570 million of revenues will be achieved. Based on historic margins, this would deliver operating cash flows of around $250 million. By the time the bonds are due to be repaid, the Fund estimates that 3.3 million barrels can be produced, generating $227 million of revenue and around $110 million of operating cash flow. These revenues and cash flows are taken from the current oil producing asset within Hurricane's portfolio. Set against this context, whilst inevitable production risk remains, the Fund believes the prospects for Hurricane are far better than has been presented by its executives.
The Fund notes and welcomes that since the court hearing, actual production achieved has been running materially ahead of budget and in August, it exceeded budget by more than 20 per cent at 11,467 barrels a day.
end
Hurricane Energy ("Hurricane")
Hurricane is an oil exploration and production company targeting naturally fractured basement reservoirs in the West of Shetland. The Fund's previous annual reports include background information on this investment. The Fund has been an investor in Hurricane since 2013 and has to date realised profits of £43 million.
For the year under review, our intensive engagement with the board of directors culminated in the resignation of all five of the company's non-executive directors. This took place only hours before the AGM shareholder vote. In their stead, John Wright and David Craik, two experienced sector specialists who have been advising the Fund on Hurricane for several years, were appointed. The general meeting that the Fund had requisitioned to make these changes was therefore no longer required.
In June 2021 at the High Court, Mr Justice Zacaroli refused to sanction the Hurricane board's attempt to force through a highly dilutive debt for equity swap. The board had proposed that $50 million of the $230 million repayable to bondholders in July 2022 be converted into 95% of Hurricane's equity, with the remaining $180 million debt earning cash interest of 9.4% per annum plus payment in kind interest of 5% per annum. The coupon on the existing bonds is 7.5%.
Mr Justice Zacaroli referred in his judgment to the continued profitable trading at Hurricane and the prospects of that continuing long into the future. In this regard, Bluewater Energy Services B.V. (from whom Hurricane leases the FPSO - Floating Production Storage and Offloading - vessel) made contact directly with Crystal Amber and stated that it remains very keen to progress discussions and investigate solutions and proposals to extend the charter beyond June 2022. Last month, Hurricane confirmed that it is engaged in positive negotiations on securing an extension.
The threat of massive equity dilution combined with continued downbeat comments from the previous board with regard to the company's future prospects, heavily contributed to what has been a dreadful share price performance. Whilst there is no doubt that the fall in oil price in 2020 was entirely beyond management's control, the decision not to use some of its cash to buyback the bonds when they were trading at a discount of 70%, as urged to do so at the time by Crystal Amber, has proven extremely costly in addition to legal costs of $17 million on a restructuring plan that both Crystal Amber and more importantly the High Court found to be inappropriate.
The Fund has written to the Hurricane Board under Article 94 of the company's articles of association to request that a committee (comprising the non-executive directors) be established with a mandate to investigate what happened and to engage external advisers (should that be needed) for the investigation. The committee would then make a recommendation to the Hurricane Board.
cont......
https://www.londonstockexchange.com/news-article/CRS/final-results/15151535