We would love to hear your thoughts about our site and services, please take our survey 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.
Trice was selling a dream - just like Sanderson over at UKOG or Encor or.... lots of small oilers - problem is that the facts eventually intervene......................
And one can bet the farm that Malcolm Pye did not think there were only 7m barrels down there either,,,,)
Ouch - from probable 2.6Bn barrels to just 7Mn....
Another twitch in the death throes’ for Hurricane Energy
A major downgrade in reserves, a written-off discovery and warnings of a shareholder wipeout are a “real blow to investors and debt holders” of Hurricane Energy, an analyst has said.
08/04/2021, 12:01 am
By Allister Thomas
major downgrade in reserves, a written-off discovery and warnings of a shareholder wipeout are a “real blow to investors and debt holders” of Hurricane Energy, an analyst has said.
The troubled West of Shetland operator unveiled a new competent persons report from ERC Equipoise on Wednesday, saying there is “no certainty of any future activity” for its assets.
Its flagship Lancaster field, once expected to be the focal point for developing huge Hurricane proven, probable and contingent resources of up to 2.6 billion barrels in the region, has had its proven plus probable reserves cut to just seven million barrels.
Ashley Kelty, oil and gas analyst at investment bank Panmure Gordon, said the write-down is “horrific”.
CEO Anthony Maris said the new report is “broadly consistent” with a huge drop in reserves and resources at the Lancaster and Lincoln assets, which Hurricane Energy updated shareholders with in September.
Extra development at Lancaster is possible, but not without new funding.
Hurricane Energy, which has to pay or refinance a £180million convertible bond in 2022 – and had just £64m cash reserves in November – issued a warning that restructuring could mean “limited or no value being returned to shareholders”.
Mr Kelty, who has long been a supporter of the West of Shetland pioneers, said the outlook is grim.
“It certainly looks like debt holders will get very little in return, so I don’t know what viable options are available”, he said.
“Debt for equity may be an option, but this wipes out current shareholders completely, and would require a large haircut for bondholders too. I can’t see there being any appetite to give Hurricane management further funds – investors are wary of highly indebted companies (cf Premier and Tullow) who have diverse portfolios – which Hurricane doesn’t.
“I think this is just another twitch in the death throes of Hurricane. It’s very sad as I was a big fan, and had high hopes for the basement play.”
So according to Mr Pye’s claims he disputed Hur's interpretation of the data that there was 1Bn barrels of oil down there in the first place.
So it's not a case of the oil just disappearing, according to Mr Pye the oil in huge quantities was probably never there to start with?....
But unfortunately this doesn't help the simple fact that the company is now in financial difficulty, thanks to massive downgrade in reserves, problematic and declining production and huge debt that simply can't be paid back now without doing a £50M debt write down. The rest is history as they say.
According to this article you could either lay the blame at the door of Robert Trice or the OGA, take your pick......
https://www.energyvoice.com/oilandgas/north-sea/280759/oga-geologist-clashed-hurricane-west-shetland/amp
Exclusive: "Lancaster climbdown no surprise to geologist who clashed with OGA and Hurricane management
A retired geologist has claimed Hurricane Energy’s huge climbdown on its west of Shetland oil resource estimates could have been avoided if his warning had been heeded in 2016-17."
Malcolm Pye accused his former employer, the Oil and Gas Authority (OGA), of not challenging Hurricane’s plans for its Lancaster field strongly enough because it was afraid of killing a “golden goose” potentially bearing billions of barrels of oil.
He was involved in the regulator’s review of the field development plan (FDP) for phase one of Hurricane’s Lancaster project, which started production in May 2019.
Mr Pye alleges he was kicked off the review process in 2017 after a “stormy” conference call in which he claims to have challenged the company’s interpretation of the reservoir and expectations for production.
His removal from the process was specifically requested by Hurricane’s then-chief executive, Robert Trice, in an email to the OGA in February 2017, seen by Energy Voice.
Mr Trice said feedback from his team indicated Mr Pye was “inexperienced” with respect to fractured basement reservoirs like Lancaster and that the geologist was “unsuitably placed” to do the job.
He also complained about Mr Pye’s “demeanour”.
In a response to Mr Trice, Gunther Newcombe, the OGA’s then-operations director, said Mr Pye’s technical capability was “highly respected”.
But Mr Newcombe acknowledged Mr Pye’s “line of questioning was not helpful” during the call and that his behaviour may have been overly and uncharacteristically “robust”.
Mr Pye worked as a geologist for 37 years under the employment of the likes of Britoil, BP and the UK Government.
In his CV, he cites several examples of his “specific experience of working” on fractured fields in the UK Continental Shelf (UKCS).
He worked for the OGA from 2015 until August 2017, when he was sacked.
Mr Pye took the regulator to an industrial tribunal in 2017, but was unsuccessful.
The OGA said it didn’t comment on internal staff matters, but it’s understood the regulator does not agree with Mr Pye’s assertion that he was removed from the Lancaster review process at Mr Trice’s insistence.
In his email, Mr Newcombe said he had asked Mr Pye to “fully uphold the OGA’s values of being fair, robust, accountable and considerate and focus his technical questions on the issues in hand” in future meetings with Hurricane about the Lancaster project."