The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has 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.
aduk.re 18:56
I agree that WWN posts were something that in the main I could also agree with.
Whereas I find it difficult to understand quite where you are coming from re "GWA ought to be kept at almost any cost."
GWA is over two licences, and they have kept one, subject to the commitment well this year. The other P2294 expires on 1st September, and they have to relinquish 50% in order to continue with whatever commitment OGA dream up. Both drills into this licence were P&A'ed. [I say 'into' because WD was spud from outside, from P1368S.]
The results suggest that the geology was not analogous to Lancaster, as envisaged in the CPR. [The downside question now being whether Lancaster deep is analagous to GWA, and Halifax to both WD & WW.] (Fingers crossed for #8.)
But I also note your opinion re Solan, where the geology has led to below-expectation recovery and yet you see no parallels with the unexpectedly poor geology encountered by WD and WW, and believe it should be retained, yet were only too happy to see Whirlwind go.
Care to expand your thinking?
TIA.
wwn - i totally agree with you
"I personally would like to see HUR concentrate on Lancaster. If they can do the minimum to hold onto GWA really cheaply then fine, but if not we should park it quickly. More producers on Lancaster (shallow ones, not deeper on the structure!), increased production, increased reserves, de-bottlenecking the FPSO and WOSP. Everything else is a distraction."
GWA was a poor result - though i am sure lots of data.
Lancaster is working well and so should therefore be maximised to either produce cash or sell off/farm out. personally i would then like to see plans for halifax.
Only 7 of the last 33 years have seen an inflation-adjusted average POO of over $70 and the majority of those were early in the last decade. There is the potential for lots of volatility, but I think you're wrong to assume the current price is necessarily depressed when compared to historical norms.
At the macro-economic level, were a very long way into the current bull market for equities and I see as many downside as upside risks.
https://www.macrotrends.net/1369/crude-oil-price-history-chart
WWN,
Good post. Or rather, posts.
Your later one:
"No firm idea how the potential P&A and OGA well will be funded - best guess is 50/50 but that has to be confirmed"
I've been wondering about that, as well. But of course it's a big 'if'. Until we see the rig actually heading there, we won't know whwther the P&A is going to happen or not. If yes, I suspect it'll be on Spirit's tab, though could be 50/50, as you say. Things appear very uncertain about the continuation of the JV, but will no doubt be clarified at the CMD.
"I personally would like to see HUR concentrate on Lancaster. If they can do the minimum to hold onto GWA really cheaply then fine, but if not we should park it quickly."
Can't say I entirely agree with this. Again, we don't know the situation with Spirit, but even if they walk away, GWA ought to be kept at almost any cost, because despite the naysayers who consider WW to have been a 'duster' (which it wasn't), the thing's an obvious 'field', even just judging by Lincoln alone.
What I'm really wondering is how long the CMD's going to take? There's a lot of ground now to be covered. But an all-afternoon thing might be too much for both the speakers and the attendees.
ps WWW your 17.46 post was very good, I think you strike a realistic balance
WWW, wont some revenue be reserved against the CB repayment in 2022?
Re PoO, it is temporarily depressed due to Coronavirus, but I do not believe that will be a long term influence on it. Neither will scary Greta. The worlds economy is still predominately oil based. It will rebound, especially considering what we hear about shale.
I am beginning to think the best approach is stay with my not inconsiderable investment (Yep, a small top up today) and try to ignore it. If its going to f*ck up its going to f*ck up. If not then I can treat the daughters (and myself)
The 2019 wells were funded by Spirit. The 3 wells previously planned for GWA in 2020 were 50/50. Slide 16 of the Q2 presentation looks clear on this.
No firm idea how the potential P&A and OGA well will be funded - best guess is 50/50 but that has to be confirmed
'The cash was expected to be used [on] 3 more drills on the GWA'
I thought one of the ideas behind the farm-out was that HUR wouldn't need to use cash on drills in the GWA.
WWN,
Good summary of where we are at!
You are right that Hur will have to advise new 2020 drill/work plan shortly, probably before CMD as you say. I assume that they are still getting things clear with the OGA and detailing the drill plan, as we speak, otherwise would be rns'd by now.
Taverham
The cash was expected to be used in accordance with the Q3 presentation which from memory was 3 more drills on the GWA plus tie-back of Lincoln well plus long lead items for FID. It’s now changed and there are requirements for OGA mandated wells to test the OWC, no tie-back of Lincoln in 2020, possible P&A activity, and potentially drilling a further potential producer on Lancaster. I assume we’ll get clarity very soon as the CMD is too late.
Edison’s latest figure predicts $70m op cash flow last year and $230m this year. Hurs forecasts are a little lower. Moreover the Edison forecasts assume a $70 POO which seems unlikely. Edisons estimate of Capex over the same period was only$70m or so, however that will now change.
I personally would like to see HUR concentrate on Lancaster. If they can do the minimum to hold onto GWA really cheaply then fine, but if not we should park it quickly. More producers on Lancaster (shallow ones, not deeper on the structure!), increased production, increased reserves, de-bottlenecking the FPSO and WOSP. Everything else is a distraction.
My concern is how much they need to set aside for LWs ‘rainy day’. Without a sense of what the state of play is with Spirit it’s hard to estimate. And the bonds are a factor that cannot simply be ignored, despite some of the protestations on here. So it’s going to be a balancing act and one that will be a good indicator of confidence (likely ahead of the CMD).
I think some will be used to increase production from Lancaster, and the rest will be saved for a rainy day.
Serious question, what is hur planning to do with all the cash that is rolling in?
Yes, you're right, WWN: the fall since 29 November is only about £630 m and since just before First Oil, about £960 m.
'the fall from 50p+ is entirely justified.'
I disagree and I'm sure I am not alone!
' I think HUR is now under-valued'
I think that's an under-statement!
LW
I suppose my underlying point here is that this used to be a good forum to understand HUR, test ideas and get pointers to new sources of information. I personally feel I’ve benefited from diverse sources of knowledge whether that is from ADUK, DSPP or RicFle. Of course, I don’t always agree with them but at least they forced me to think through ideas.
That’s not happening now. Look at the post regarding a £1bn loss of MCap over 12 weeks. It’s not true yet at least 5 people believe it and have recommended it. How does that help anyone’s investment decision? It has lost circa £1bn but over 9 months - a time period encompassing both the GWA campaign and the water cut concerns.
For the record, I think HUR is now under-valued and offers a reasonable risk vs reward proposal. I think for reasons I’ve written that the fall from 50p+ is entirely justified. But I also think that the 20k per day output is most likely sustainable, despite the water risk and therefore underpins a P/E ratio. However, I’m keen to understand where the bottom is, what the potential upside is and as I’ve said (since July) I believe the CMD is key. RT left lots of hanging questions at the last event and how he answers them this time will determine much.
Yes, WWN.
I suggest we show leniency to rampers, in these circumstances.
An investor in JOG, which was trading unchanged at 103-106 this morning, was so indiscreet as to say that he wouldn't mind a share price of 500p in the next 12 months.
Up popped TSD to predict 50p.
Bear in mind that the NAV is 4216p and also that when TSD predicted 'low 30s' last year, the price went to 240.
As PTS implied, TSD obviously has a sadistic streak and ramping could provide some light relief.
Yes WWN when you are heavily underwater it is not pleasant to see TSD's gloating posts. It is the grim side of human nature - our irrational fear and TSD's pleasure in rubbing salt into the wound. The odd ramp slightly alleviates this.
Ha ha I am not good at many things but the ability to pick undervalued stocks I’m pretty good at :-)
Bonkers joe it’s down here
BTFATH1
It appears you are the ramping counterpart of TSD! Funny how you don’t cause the same outrage!
Down from the high on Monday morn - bounce back time