With many, many thanks to the CEO’s from Zephyr Energy, Power Metal Resources, Scirocco Energy and SpectrumX who entertained and informed us at last night’s investor event. To see their video presentations view here.
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Suspicions need proof of course. What about ECR? What about the Bondholders?.
We await updates from the new board
An insurance claim could be made for a wrongful act under D&O insurance
This could be a breach of trust, breach of duty, neglect, error, misleading statement or wrongful trading, committed or attempted by a director or officer whilst acting in this capacity on behalf of the company.
Agree personal indemnities should be used here! Foul play without the consent of shareholders so why should the business take the hit.
I didn't know that fella. Many thanks
Who is covered under directors and officers insurance?
'All current, future and past directors and officers of a company and its subsidiaries are covered under a D&O policy, which can also include non-executive directors. In very specific cases like securities claims, the policy can even be extended to cover claims against the company itself. Cover is usually taken out and paid for by the company. Depending on the respective local law and policy, this may or may not be viewed by legislators as a “benefit-in-kind” for those persons it covers.'
“Who's going to cough up $17m for decisions made by a BOD appointed by you ?”
How about their “Director”s Insurance” if lack of duty of care, negligence, or even some form of collision/corruption via one of the ongoing investigations becomes evident here overtime……..there can be many reasons s and many certainly did smell a rat with the unbelievably suspicious “restructuring sam” including a British Judge, after all that is what the “Director’s Insurance’ is for, DYOR!
What does BOD (Board of Directors) Salaries / remuneration have to do with the FPSO?
Possible recovery of $17m restructuring costs - SH's would be better off clubbing together and buying a Euro Lottery Ticket for HUR ! Who's going to cough up $17m for decisions made by a BOD appointed by you ?
"Reduced BOD so lower Wage costs"
regretfully an FPSO requires the almost the same crew to produce 5000 bopd as it does 20,000 bopd - and crew ages are probably the smallest cost item on the production operation
Sense i reckon production from existing Well6 ( maybe 7 ) will be around 4m boe over next 12 months .
All in Nett cost per boe should be a maximum of $30 .
Reduced BOD so lower Wage costs .
New negotiated AM cost .
Zero Restructure cost's , possible recovery of $17m
P+A complete on Lincoln .
Value of Lincoln Tie in Equipment, remember a figure 22m ?
Spirit settlement maybe ? Contract unfulfilled .
Lots of issues to finalise and mainly positive .
but of course my judgement call may be wrong
if u are correct circa $5 barrel hedge cost what is hur next 12 month projection?
4.5 mill barrels?
so $22.5 mill?
used to buy bonds so circa $30 mill+
that's why i wouldn't hedge
Should Hurricane negotiate a Good deal with AM and sign a Good hedging Deal the Discounted CB's will obviously reduce in Discount and Availability .
Prior to the Aforementioned being signed , BOD should offer the CB holders who apparently wish to trade , the following Deal .
70% of Face value , as with court case they obviously fear non repayment and having already received 30% over 4 years in interest they walk at Break even . ( $230m - 30% = $160m ) . Hurricane have $134 with Tanker due August lets say $16m to fc . $10m Discount recovered from $17m wasted at behest of Bondholders and there' s the Deal on the Table available until September 1st 2021 .
Take it or leave it and IF not take the risk of waiting and possibly non - repayment .
This i would consider a Fair offer at this point in time , with the HUGE downside risks the Old bod and CB holders put forward at the court case .
Just a Thought .
Good points All .
Having also attempted to find clarity and taking on board History (HH) and Schlemiel knowledge, would place a figure of $4-$6 per boe hedge cost . ( Happy to be corrected )Having to hold cash in Reserve and how much i would guess would be part of the negotiation .
Yes Hur could lose out on a predicted Brent Spike it's very possible . The unique situation we are in and have been in regarding a complete Shareholder wipe out, pushes my thinking to Secure the next 12 months and remove the Bond Holders . Brent below $60 again , cannot be ruled out from 3rd wave or new variant and any of many other scenario's .
On a Total cost to company of +-$30 boe and a Hedge at $70 for 10k we ride out the next 12 months and use the time to Review , Plan and Negotiate .
With a sound Hedging agreement we should still have room to buy Discounted CB'S .
Of course the best hedge is 'all in' minimal/ low production costs per barrel of oil. This does to a degree come under company control as opposed to oil-gas prices being subjected to wider market forces
Two kinds of indirect costs are worth discussing: the opportunity cost of holding margin capital and lost upside. First, when a company enters into some financial-hedging arrangements, it often must hold additional capital on its balance sheet against potential future obligations. This requirement ties up significant capital that might have been better applied to other projects, creating an opportunity cost that managers often overlook. A natural-gas producer that hedges its entire annual production output, valued at $3 billion in sales, for example, would be required to hold or post capital of around $1 billion, since gas prices can fluctuate up to 30 to 35 percent in a given year. At a 6 percent interest rate, the cost of holding or posting margin capital translates to $60 million per year.
Another indirect cost is lost upside. When the probability that prices will move favorably (rise, for example) is higher than the probability that they’ll move unfavorably (fall, for example), hedging to lock in current prices can cost more in forgone upside than the value of the downside protection. This cost depends on an organization’s view of commodity price floors and ceilings. A large independent natural-gas producer, for example, was evaluating a hedge for its production during the coming two years. The price of natural gas in the futures markets was $5.50 per million British thermal units (BTUs). The company’s fundamental perspective was that gas prices in the next two years would stay within a range of $5.00 to $8.00 per million BTUs. By hedging production at $5.50 per million BTUs, the company protected itself from only a $0.50 decline in prices and gave up a potential upside of $2.50 if prices rose to $8.00.
Hedge only what matters
Companies should hedge only exposures that pose a material risk to their financial health or threaten their strategic plans. (in HUR's case, debt redemptions)
“ In June 2020, Hurricane hedged a portion of its forecast production for the second half of 2020. A total of 1.8 million barrels (equivalent to c.10,000 bopd), was hedged through the purchase of put options with an average strike price of $35/bbl (Dated Brent). The average strike price of $35/bbl represented a floor for the hedged volumes with Hurricane retaining any upside in oil prices above this level. The cost of acquiring the put options was $3.4 million”
good question - there's nothing like a firm example to help
anyone up for it?
reason stuck in my mind was seeing figures someone once posted when hur hedged before - surprised me and remember thinking does it really cost that much?
had a little google yesterday for concrete example but gave up
so task of the day for someone to earn today's hero badge - cost of 12 month hedge on 10,000 boe at $70 for 12 months (a) for whole 12 months (b) per boe (c) any other way best put (for the oilers amongst us)
morning...i see you've crawled from the pond early this fine misty morning
quite correct, sensey's a twat some of the time
but you'r a twat all the time
who tf is sensey? Anyone who speaks about themselves in the third person is a twat.
What would a 12 month hedge on 10,000 boe at $70 for 12 months , cost per boe ?
sensey imagines how much extra profit can be made by zero hedging and those funds being used to buy discounted bonds...)
Also our Interest for 12 months = $16,000,000 so producing around 4,000,000 boe this year would mean that $4 per boe is interest .
With operating costs around $17 boe a nett cost to company of $27 boe should indeed cover all expenditure ( excluding any planned capex ) .
No room left on Back of Fag packet .
I'd ignore for now the book figure that is profit. More important is the actual cash movements in and movements out until bonds are stripped off the books.
Gb1's figures below reveal that this company is throwing off cash like a good 'un. No wonder those feckin' leeching bondholders wanted to get their grubbies on the company
I bet they could bump up Lancaster production beyond 13k bopd with further capex investment in the field
For the next 5 years or so Hurricane can become a proper cash cow and dividend payer if managed well
Net Profit : Hurricane is very interesting with Maris slipping up in Jan 2021, announcing Free cash had increased in December 2020 from end of November 2020 by $19m . Just one month and yes production was Higher although Brent at $50 boe . Maris had his ears pulled for this unscripted comment . Would be very interested to know the numbers behind that Spectacular month and maybe replicate .
As previously stated $10m+- is being added to fc on a monthly basis ignoring any shenanigans .
Lower production Ave 10k boepd at $70 . Cost boe all inclusive $27 boe net $43 boe .
Should deliver next 12 months $155m to add to $134 m . With Oil moving + $73 now is the time for Hedging at $70 . ( yes i know senseman)
Bonus : Buy back as many Bonds as possible at a Discount and secure AM for 12 months on a win win basis ( as we need each other) .
Also as stated by many Posters , recover unauthorised Expenditure of $17m .
We are now moving in the Right Direction so Good weekend All .
That's the figure that was mentioned and not questioned at the Hearing i.e. $1.8 Mill a week 'profit' but it our previous Board have been allocating sums for wind down etc which distorted the actual profit amount.
By my calculations hur still making $11,000,000
A month free cash flow
Any one care to comment