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Slift,
"Reference document: The Refinancing presentation.
https://www.hurricaneenergy.com/investors/presentations"
Thank you for the link, which is definitely 'required viewing', as distinct from the RNS text version.
It would appear that whatever happens, the BoD are intent on operationally 'winding down' the company by 2014, (unless takeover of assets, of course), regardless of profitabilty, potential increased production, or whatever. While doubtless continuing to draw their own salaries.
Daylight robbery.
adoubleuk,
"However, wading back through the literature, I see no mention of the BoD stating explicitly that they intend to decomission the field next year. Instead, it's an implicit threat. Sabre-rattling."
In black and white (on the wind down case) see below.
"Wind-down Summary
- Assets are fully decommissioned and decommissioning liabilities discharged"
"Where, anywhere, is it stated that 'operations will cease in 12 months' ? Please reference document and page."
Just to clarify, the cease of production depends on the different cases provided. If there is no bondholder support (for 95% of the company), the date is 4th June 2022.
Reference document: The Refinancing presentation.
https://www.hurricaneenergy.com/investors/presentations
I'd suggest viewing all the slides..
But for reference of cease of production - Slide 18.
"More likely that the Aoka Mizu is still on station in five years' time, but with a Shell logo on the side rather than that of Hurricane."
Are Shell aiming to become a water producer as part of their efforts for net zero?
Slift,
"But bond is due in 14 months, and operations will cease in 12 months."
Where, anywhere, is it stated that 'operations will cease in 12 months' ? Please reference document and page.
Because if that is stated, I'll just sell tomorrow (or rather back down to just one share). Then call my lawyer, citing such a statement, and wait a year. And if the twelvemonths pass and Hurricane hasn't 'ceased operations' (of whatever sort), they can expect a writ though the door.
Slift,
"But doesn't change the fact that even during "operations" beyond production (decommissioning), HUR will not be producing cash, but instead burning cash."
However, wading back through the literature, I see no mention of the BoD stating explicitly that they intend to decomission the field next year. Instead, it's an implicit threat. Sabre-rattling.
More likely that the Aoka Mizu is still on station in five years' time, but with a Shell logo on the side rather than that of Hurricane.
Slift some good posts there thanks for your input and knowledge...
The writing has been on the wall here for some time
"Also any eventual decommissioning will still be 'operations'."
Fine, this is just being technical... not practical..
But doesn't change the fact that even during "operations" beyond production (decommissioning), HUR will not be producing cash, but instead burning cash.
adoubleuk,
"Please quote source."
12 months and 3 weeks*.
The FPSO term expires then.
From the presentation:
"Hurricane executes planned wind-down of operations starting in mid-22
- GLA continues production until end of initial hire period on 4-June-22
- Lancaster field produces an average of approximately c.9,500bpd to the beginning of June-22. As production is based on a single active well (P6), well failure is a significant operational risk for the business
- FPSO lease not extended in June-21, thus terminating at the beginning of June-22"
"Also any eventual decommissioning will still be 'operations'."
Not quite in this case as further cash is being allocated for the decomissioning as restricted.
"In April 2021, the Offshore Petroleum Regulator for Environment & Decommissioning (“OPRED”) formally requested that the Company increase the amount of decommissioning security for the Lancaster field by £11.2 million ($15.7 million), in order for the security to be in place on a pre-tax basis. Accordingly, the Company expects to classify this amount as restricted cash in May 2021, which will result in a total of £28.0 million ($39.2 million) of cash restricted for decommissioning security"
As for other decom expenses (such as GWA/Lincoln), sure that's operations CAPEX/Decom. But no denying that the FCF generation during this period would be subdued.
Slift,
"But bond is due in 14 months, and operations will cease in 12 months."
'Operations will cease in 12 momths" ??????????????
Well that's new news.
Please quote source.
Also any eventual decommissioning will still be 'operations'.
adoubleuk,
"The point being that there have been continuous tanker-loads of crude oil being offloaded from the Lancaster FPSO, bought and then sold to market at a profit via BP for a considerable time now, and the company is in cash-terms solvent. Selling the shareholders down the line at huge loss to them, just to satisfy a potential (hypothetical) loss to bondholders (creditors) who have already been getting been paid interest on their own investment would be an almost unprecidented thing to do."
Okay sure, the EPS is currently economical. I think that's what you're saying here.
But bond is due in 14 months, and operations will cease in 12 months.
So how or where do you suppose HUR will find the additional required cash to pay the bondholders if you believe that the company is "cash terms solvent"?
Free cash as at April: $127m
CAPEX, bond interest, decom etc. costs: $86m
Cash left currently to pay bondholders: $41m
"The fact remains. There is an FPSO out there, WoS, delivering oil at around 10,000 bopd via tanker offloads. More than Premier's Solan has ever managed."
Do you believe that the ongoing operations, producing 10k barrels for the next 12 months will produce $189m FREE cash flow?
Sure if Brent was $90/barrel.
Otherwise, just delusion.
"Not physically, of course, but asking questions right and left, via the press and though my oilfield contacts."
Ask as many question as you like, but you're just one person on small bulliten board....will anyone care, will it bring about any change ....of course not.... Hot air is best kept for balloons ....
tatt,
"Is there anyone that is hopeful this could somehow come right?"
Yes. Me. But I don't see 60p per share coming back again.
The point being that there have been continuous tanker-loads of crude oil being offloaded from the Lancaster FPSO, bought and then sold to market at a profit via BP for a considerable time now, and the company is in cash-terms solvent. Selling the shareholders down the line at huge loss to them, just to satisfy a potential (hypothetical) loss to bondholders (creditors) who have already been getting been paid interest on their own investment would be an almost unprecidented thing to do. And would (were that were the result) cause an enormous scandal which would (or maybe will) cost the reputations of lots of people, not least the judge (he/her) themselves.
Yes. Maybe I'm personally quite mad. Not much much left to lose. But Bob Dylan once wrote a song about that.
If this scandalous 'financial restructuring' is ratified, I'll peronally be coming in, firing on all cylinders. Not physically, of course, but asking questions right and left, via the press and though my oilfield contacts.
The fact remains. There is an FPSO out there, WoS, delivering oil at around 10,000 bopd via tanker offloads. More than Premier's Solan has ever managed.
No, something very very wrong. I hope that the judge wiill appreciate that.
Is there anyone that is hopeful this could somehow come right?