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good work judge....why have HuR not done their duty and extended the AM....and assuming it is done...then the BH can then decide 2022 or liquidate HUR with the creditors THEN being the priority....even though it seems BH best interest then may be to keep going...first real poking by the judge
The Blue Water extension is be used by Smith as an major hurdle, however the reality is BW will almost definitely extend their lease terms.
The judge just queried that there is no external pressure, no defaults so this is a very special case where maturity is in July 2022 and the scheme is being done now. The question of urgency has come back.
thanks rns - it just struck me it might be a way out where everyone gets something.
CaptainSwag,
As RNS has pointed out, the Judge can only sanction or not sanction the scheme.
Any changes to the scheme (as a result of these hearings) will require adjournment and the required documentation being issued for sign off to all relevant parties - before it can be sanctioned.
The honourable judge has a duty to listen to all sides which he is doing. Tom Smith is making some repetitive and well known points. However, he has failed to address judge's key concern related to urgency.
Its not up to the Judge to set the terms of the deal with the bondholders.
The only people that can agree to a new deal are the bondholders, and if they wish they could agree to make it 10% or whatever they wish.
It's his job to either approve or not approve (or delay approval) of the scheme.
slift - i am wondering if the judge could compromise and adjust the equity ?
say the sanction could be agreed with 50% of equity transfer rather than 95%?
slift - i think the issue might be that CA do not agree with hur's estimation in oil present and therefore the future of the project. they are looking at investing in future development whereas hur are just looking to transfer the company over to bondholders (whatever their plans maybe) or wind up
"The document by the expert, Xodus Group (on behalf of CA) is quite funny, particular page 24.
The "expert" doesn't realise that a larger scale water injection will require more investment... laughable really."
he didn't say anything about costs on page 24 but he does look at the cost quoted by the company for water injection on Page 30 . Fuller has not rerun the economics but he's apparently very well known and well regarded in the industry (as is Law for the BoD) - he's anything but stupid so he will be aware of the costs of a big (in fact a monster water flood as he suggests). If CA don't show the economics we have to assume they aren't terribly good
Shift,working overtime, I see. Must have had a good telling off by the boiler room boss.LoL
Also, worth noting from the same document:
"Thus, to produce ~40-50 MMstb, it could require up to 6 producers and 3 water-injectors"
I had suggested something like this before, but clearly Xodus/CA do not consider cost for this..
6 producers and 3 water injectors.. $500-550m
"Any alternatives must be submitted to all parties before the hearing."
Looks like CA HAVE submitted documents. It's on HUR's website.
The document by the expert, Xodus Group (on behalf of CA) is quite funny, particular page 24.
The "expert" doesn't realise that a larger scale water injection will require more investment... laughable really.
HUR couldn't even secure funding for small scale development.. and thinks that there is room and consideration for a larger scale project.
Fair enough if CA back this up with funding for the larger scale project - but providing $0 for any future investment and still wanting a larger scale project is just being desperate to save their own skin.
So three outcomes:
*Four outcomes:
4. Adjournment in favour of CA.
"CA will more than likely lay out their alternative tomorrow."
... yes, and ofcourse the judge and everyone else is gonna sit there for hours reading and analysing the comprehensive plan put forward by CA during the hearing...
How deluded you must be.
Any alternatives must be submitted to all parties before the hearing.
Similar to how HUR had provided all parties with information on their restructure plan before the hearing (presentation, plan documents, explanatory statement etc.)
CA will more than likely lay out their alternative tomorrow.
*by "of course the judge may not take such a threat favourably but what can he do to negate it"
CaptainSwag,
I don't understand what you mean by "So why the hell did they not buy in the market. It beggars belief."
The judge cannot do anything but two things:
1. Sanction the Restructure (in which case 95% dilution and bondholders extend bond to 2024)
2. Not sanction the restructure (in which case HUR will wind down the company and finish operations by June 2022).
HUR is running the company, not the judge. HUR have proposed the two options available. The Judge has no authority to do anything else.
However, judge can prevent sanction of the restructure (provided there is an alternative put forward).
So three outcomes:
1. Sanction and dilution
2. No sanction and wind down
3. No sanction and alternative
However, no alternatives have been put forward.
Well when are the Bonds due and what would change if the B_Holders have to wait and sit things out?
For a company that has no future according to its own BOD, having a future work program lined up does seem rather at odds with the narrative wouldn't you agree?
This currant BOD are toast anyway, the general consensus is that there will be a new BOD installed post July 5th.
slift - there was mention of cash - 168million(?) but some has been earmarked. i was a little distracted at that moment
as i posted earlier - i do think a lot will depend on how the bondholders want to play it. the longer there is production the more chance of getting back more of their money - and i think that is what the judge is thinking . however once the bondholders have had a sniff of getting the company are they going to let go easy? their lawyer may indicate if the restructure does not go ahead they will call in the chips regardless. of course the judge may not take such a threat favourably but what can he do to negate it
the judge is in a tricky place as this could easily be a reference case for future courts. i sense he is sympathetic to the shareholders but he also knows a delay and the bod is toast.
CaptainSwag,
I haven't been following this much, but did notice a mention of $170m cash in bank posted here.
Was that mentioned?
I expect over $20m of that to be gone by the end of this month on quarterly bond interest payments and outstanding liabilites for the quarter (AM interest, salaries, etc.).
No matter what happens, it's game over.
I really don't think the bondholders will budge. If plan isn't sanctioned, then wind-down and bondholders will take what's left. Simple as that.
CA have been given enough time for an alternative, and nothing.
Whether sanctioned or not sanctioned... the issue is complicated further with BOD removal set for July.
I don't think the BOD have anything to gain at this point, they'll be voted out soon, and there is no hope for a turnaround.
Time is ticking.
i think i would just give the edge to hur today- their lawyer dragged the session on got their points made. the judge had him on the ropes a couple of times but potentially let him off the hook. however he did similar in the first hearing and came up with the right decision.
hopefully they will quickly move on to the bondholders lawyer - and he will just concur without repeating it all again. then we can move onto CA. it will be interesting how they play it...obviously their expert v maris/erce but how much emphasis on the obstructive behaviour of the bod?
Possibly 5!
Whilst viewers may think that the case is going well for the owners of the business, I would urge caution in speculating on the result. Whilst the advocates for the involved parties may exhibit different styles and levels of performance, it is the relevant strengths of the arguments that the Judge has to decide. A bumbling performance with a strong argument is better than a brilliant oratory of a weak argument, and vice versa.
I thought that the action of the OGA’s insistence on the whole field development of Lincoln might be further scrutinised. In a perfect world a well-ordered oil field development, rather than several “wildcat” operations, is sensible, logical and clearly desirable. But surely there are other scenarios were discretion and flexibility could be employed. Particularly as the longer-term development, of what might prove to be a necessary UK strategic asset, may prove very necessary in the emerging turbulence that is blighting the World! A quiet word in the ear of the OGA from an appropriate quarter may have assisted – but was that call made, or is it still hovering in the wings?
Clearly the main arguments are centred in future near events. It is essential for those supporting the Bondholders case get the success of their one plan before the end of the month, no matter what! The owners, who have been “wrong footed” by the timings and availability of necessary data to formulate clear alternative plans – seek a delay. A delay necessary to clarify the various alternatives, and ensure the veracity of any of subsequent proposals, in a timeframe similar to that afforded to the plan which is before the Court.
Furthermore, as the Court elicits further information, it becomes clearer that the situation of the company may be more positive then pessimistically claimed. Consequently, more thought, different leadership and flexibility by all the parties concerned, should produce a better result for all – time not being of the essence.
I wonder what “the man on the Clapham omnibus” would opine on this unfolding saga?
Bare in mind that I also bought in here with my own estimate for reserves/resources during downgrade.
And immediately sold following September update as the company no longer fit the fundamentals I bought it on.