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Recipe for profits IMHO
Sell HUR: 6.60p
Buy TLW: 23.5p
Allow to brew for six months. Remove profits when account is a dense shade of black.
HUR is worth £132m with convertible bond debt of $230m - a coupon rate of c.7%. It is now a one-well producer (God forbid should that one well encounter difficulties!) and has no funds to drill another. Another big risk is that it won't be able to refinance debt and next year liability will become current. Simply put, it's way overvalued.
TLW is worth £333m but has a high net debt of $2.8bn. TLW has very low-cost producing assets in Ghana and highly prospective assets in Guyana among other places. The recent Uganda sale once completed should knock $500m of net debt with a target of $1bn of asset sales, which I am confident will be exceeded. New CEO starts in July. TLW must be a clear takeover candidate at this price imo.
Please don't attack me, I'm just trying to help you :-)
Happy
HappyInvestor100 -of course you are trying to help, you're a great guy.
We all need a good dose of obvious BS to make us focus on the facts, even if one thinks HUR is like being in the frying pan who wants to jump into a potential fire.
Thank you so much for trying to distress shareholders into selling.
@Happy : Could you please stay in your TLW-sh*tbrickhouse and spread your wise musings on their BB?
Tullow has plenty of downside risks whereas now with Hurricane, it's only massive upside potential from here with minimal downside IMO.
You have just ONE, yes ONE, producing well. If anything happens to that one well (including rapid increase in water cut, for example), you won't even be able to pay the coupon rate of 7% on your debt, never mind paying back the principle.
If TLW is high-risk (which it most certainly is), HUR is the mother, father and sister of high risk.
Happy
Thanks for the advice but we are all good. Enjoy another glorious day folks and try to resist feeding the devil.
GLA.
Very interesting , legitimate and logical (imho) arguments both in favour and against Tlw and Hur.
52 week low for tlw is 7p while same for hur is 6p. Tlw now stands at 23p. Therefore, isn’t hur a better buy at 6.8p?
Happy don't you read anything.We have one well in production ,yes,but only because the sister well is 'interfering'.This is probably a temporary phenomenon but if well 6 does fail for some obscure reason,well 7 can be brought back on line because then there will be no interference.
Yes, Littlened.
We have a two producing wells, but they interfere with one another, resulting in unstable production.
HUR have not said that either has failed.
Either can be used.
It's amazing that anyone can be thinking in terms of both being abandoned.
It just shows what an effective job the media and mass media have done to demoralise investors.
Littlened and Longwait
If only it were that easy.
First, even in a well-understood and established reservoir, a shut-in well is not always easy to bring back into production. It's not a risk-free process. In this case, evidently Hurricane have a relatively poor and incomplete understanding of the reservoir (perched water, high water production, now interference...). We can't be sure whether the shut-in well could be restarted successfully or if it could be restarted how productive it would be. My bet is it will eventually be P&D.
A lot of information was missing in the RNS. Was any damage caused to the integrity of the wells because of the interference? (Such damage may take time to manifest itself and we will only know once a stable flow rate has been re-established).
Questions, questions and so few answers.
Happy
'. It's not a risk-free process. ... We can't be sure whether the shut-in well could be restarted successfully or if it could be restarted how productive it would be. My bet is it will eventually be P&D.'
Conjecture.
Just put the filter on!!
Buy Tullow with there 5.8 billon debt!
Several months ago, a poster whose name I do not recall announced that he was selling HUR and reinvesting in TLW, whose SP was five times that of HUR's.
As LTHs moaned about HUR's poor performance, the poster gloated, 'I'm glad I bought TLW.'
About a day later, TLW collapsed precipitously.
They bottomed just above where HUR is now, at 7.168p.
They have trebled during the past 10 weeks.
This poster too is recommending buying TLW shares when they are a multiple of HUR's.
Note what JAdam wrote at 16:03 today.
Looks like a Sinking ship to me. Better get them life jackets out
Spoken like a true non investor. Idiot!
Directed at Slipperyone!