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Hurricane Energy plc (“Hurricane”)

Since achieving first oil on 4 June 2019, the company has been producing from its two Lancaster wells. The reservoir has performed at the higher end of expectations. Initiatives are under way to increase production over the next two years. For example, the reactivation of the gas compression system will enable gas export and increase the production vessel’s throughput.

Over the period, Hurricane drilled and tested two new wells at its Great Warwick Area, funded by Spirit Energy as part of their farm out deal. The Warwick Deep found hydrocarbons in the target fractured rock, but oil did not flow at commercial rates. The Lincoln Crestal produced oil at commercial rates and will be tied back in 2021 to the Lancaster Early Production System (EPS). This will allow production appraisal and generate additional cash flows at little additional capital expenditure. One final exploration well is currently underway.

The excellent results from the EPS have materially de-risked the company. Whilst the Fund is disappointed that Hurricane’s shares fell by 18.9% over the period, we are encouraged by management’s focus on growing cash flows. The operational initiatives in progress and the addition of the Lincoln Crestal well to the EPS could see production grow from 2020’s guidance of 17k barrels of oil per day to 30k in 2021. Assuming an oil price of US$60 per barrel, the base case guidance for operating cash flow could grow from $200m in 2020 to $300m in 2021. In our view, those cash flows will underpin the optionality that Hurricane will have to plan its future development.

Allied Minds

On 6 August 2019, HawkEye 360, one of Allied Minds’ top-four portfolio companies, announced it had raised US$70 million at a valuation more than double its September 2018 round. The Fund believes that this fundraising added at least 8p to Allied Minds’ net asset value per share, after accruing for the Phantom Plan.

On 24 September 2019, Allied Minds announced the sale of its stake in HawkEye 360 for US$65.6m, which represents the first successful exit in the 13 years since the company commenced investing. Disappointingly, the sale reduced net asset value per share by about 3p, as it was discounted by more than 13% from the valuation of the fundraising agreed one month earlier. Furthermore, despite having ceased all new company investment activity, Allied Minds’ management proposes to return only half of the proceeds to shareholders. Astonishingly, the sale will trigger a cash payout of almost US$5m out of the remaining proceeds to current and former executives of Allied Minds under the Phantom Plan, despite its shareholders having suffered a drop of around 90% in the share price over the four years since it first invested in HawkEye 360.

On 4 September 2019, Federated Wireless, another of the top-four portfolio companies, announced it had raised US$51 million at a valuation more than 20% higher than its September 2017 round, adding around 3.5p to Allied Minds’ net asset value per share. Federated Wireless received regulatory approval for its Initial Commercial Deployment on 16 September, allowing it to launch its Citizens Broadband Radio Service (CBRS) offering and begin to generate meaningful revenues.

Notwithstanding the recent news regarding HawkEye 360 and Federated Wireless, the Fund notes that the share price of Allied Minds continues to trade at a very material discount to its estimated net asset value. Following the closure of Precision Biopsy (a company that received at least $26m of funding from Allied Minds) and the disposal of HawkEye 360, the portfolio will consist of only seven investments, one of which has already been written to zero. This makes it all the more difficult to comprehend the increase in the company’s guidance for ongoing HQ cash operating costs (which excludes other costs such as severance, share-based payments and Phantom Plan payouts) from US$5-6m as announced on 26 April 2019, to US$7.5m as stated on 26 September 2019.

Over the quarter, Allied Minds’ share price fell by 27.9%. The Fund believes that the scale of the share price discount has still not been addressed by the board of Allied Minds and therefore intends to take appropriate action.

Bloomberg report on what;s left in Neil Woodford's fund.
loomberg) -- Neil Woodford’s flagship fund is to wind down and he has been removed as its manager. But what stocks are still sitting in the portfolio?

Housebuilder Barratt Developments Plc, Muddy Waters target Burford Capital Ltd. and embattled sub-prime lender Provident Financial Plc are among the top five holdings of the former star manager’s fund. The wind down is “the end to a sorry saga, but this will be of cold comfort for investors locked in the fund,” said Ryan Hughes, head of active portfolios at U.K. investment platform AJ Bell Plc. Investor returns will suffer, with high costs likely to be incurred as the administrators try to offload illiquid assets in the fund, Hughes said.

The liquidation of the LF Woodford Equity Income Fund will start in January, so the impact on its investments will become clearer then. Smallcap U.K. stocks in which Woodford holds significant stakes -- such as allergy medicines developer Circassia Pharmaceuticals Plc and tech and life science investor Allied Minds Plc -- could see greater impact from the sell down of Woodford’s holdings. His other listed fund, Woodford Patient Capital Trust Plc, fell further on Tuesday and is trading at a record low.

https://www.bnnbloomberg.ca/here-s-what-s-left-in-neil-woodford-s-fund-as-it-prepares-to-close-1.1331644

Late breaking Woodford Patient Capital Trust RNS

Tue, 15th Oct 2019 18:17
RNS Number : 9943P
Woodford Patient Capital Trust PLC
15 October 2019
Woodford Patient Capital Trust plc
Portfolio Manager
The Board of Woodford Patient Capital Trust plc (the "Company" or "WPCT") announces that, in light of recent events, Woodford Investment Management Limited ("WIM") has today served notice of termination in relation to its role as Portfolio Manager.
During its three-month notice period, WIM has committed to work collaboratively with the Board and its advisers throughout this transition period in order to protect the interests of shareholders.
The Board is in advanced discussions in relation to the ongoing management of the Company's portfolio and expects to be in a position to announce details of the new management arrangements shortly

Wasn't aware that Woodford had been sacked from Woodford Investment Management that owns the AM shares through Woodford Patient Capital Trust rather than WEIF which is where he has been sacked by Link Asset Management? Als, if it was a transfer to a new manager, why weren't all the shares transferred?

CMD Monday 21st Oct

Guess CA wont be selling anytime soon then

Richard Bernstein
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@CrystalAmberRB1
51m51 minutes ago
More
A very positive meeting with management of Hurricane Energy. We continue to believe that in 2021, Hurricane should be generating £300 million a year as against current value of £800 million. Our price target is 347p.

Just off to the opticians as I think I may be colour blind after all these years; share price had gone blue when I know it must be red!

And FWIW I fully agree with you JADAM and have put my money where my keyboard is and added :)

What do the candles tell us now wickerman?

Quite agree johnpwh, a 50/1 consolidation of Oxford Biomedica did nothing to stop share volatility or prop it up

Probably being held in a Candleshop run by JAdam

Pete, make sure you bury your shares nice and deep else escargot and any stray slugs will have 'em!

aduk "Plus there's also the dreamscape of a takeover by a major, instantly boosting the SP by orders of magnitude. But the more things go, the more that particular little scenario seems to be fading into the distance. The thing being, Hurricane's been doing things so well, there's absolutely no rush for someone big to wade in for now"

I don't know, with an Enterprise Value (EV) at a diminishing low £700M with the cash flowing in and MC reducing, compared to someone like PMO with an EV of £2.5 odd Billion, why wouldn't a big boy rush in now, were b*dy cheap?

pablo, it is under the Portfolio Manager's Review, sub heading, positive contributors

Heading should read Woodford Patient Capital Trust

Extracts from today's RNS

Federated Wireless
There was also a positive contribution to performance from the portfolio's unquoted holding in Federated Wireless. The company has developed an innovative spectrum-sharing framework which has the ability to solve the increasing wireless capacity problem that results from the relentless growth in data traffic. It expects to complete the roll-out of its Environmental Sensing Capability (ESC) system imminently, with regulatory adoption from the US Federal Communications Commission (FCC) anticipated later this year. The carrying value of the portfolio's holding was reviewed and increased to reflect this positive operational progress, which should result in revenues increasing significantly over the next two to three years.

Spin memory

Portfolio activity

In terms of portfolio activity, in March 2019 the Company acquired a portfolio of unquoted assets from WEIF in exchange for shares in the Company. The portfolio consisted of five unquoted assets in which the Company already had an interest: Atom Bank, Carrick Therapeutics, Cell Medica, RateSetter and Spin Memory. The acquisition allowed the portfolio to increase its exposure to these assets which I believe have the ability to disrupt and transform their respective industries

Chilting if shorts were closing and buying back in wouldn't that raise the sp? Not sure too much should be read into short activity for the following reasons:

The Bankruptcy Jackpot
A company may reach bankruptcy through a long slide or a quick implosion. If you had warning, you might have closed out your short by repurchasing the shares for a few pennies, returning them to the broker and retrieving your collateral. But if the company goes under before you cover your short, you will probably have to be patient as the courts liquidate the company to pay off the investors. When the court declares the bankruptcy, it cancels any shares still trading and the exchange delists the stock if it hasn't already done so. The stock is no more -- it has ceased to exist.

Repaying the Loan
Your broker will eventually declare a complete loss on the stock loan and cancel your debt. Only then will the broker release your collateral and stop charging you interest on the loan. As a stockholder, your broker may receive some money after the government, creditors and preferred stockholders squeeze as much as possible from the company liquidation. However, most likely your broker will recover little or nothing. By this time, if the stock had ever been part of an index, it’s long since been replaced.

So whether a short closes or not may be down to wanting a quick return for their money or not or hopefully for LTHs because they have wind of a deal.

Yes it may take a time to recover Academy although it doesn't take much of a volume to shift this share up or down very quickly. It is reassuring to know though that the overall profile of the reduced portfolio currently held represents far more value than is reflected in the current market cap. Hopefully, Crystal Amber will keep the pressure on the Board to reduce excessive costs and bonus payments.

Richard Bernstein
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@CrystalAmberRB1
24h24 hours ago
More
Allied Minds: Misleading statement that the remainder of the Hawkeye 360 proceeds is for investments and working capital- ignoring that 15% or $4.9m will be paid as a bonus. All $48m put into Sci Flour and PB has now been written off but this is excluded from the bonus. Shameful.

Sit tight, true valuation of the company much higher than current market sentiment.

https://www.investorschronicle.co.uk/company-news/2019/09/26/allied-minds-kicks-off-wind-up/

Are the fortunes of early-stage technology investor Allied Minds (ALM) starting to turn? The group, whose shares are down 88 per cent since the start of 2017, provided its latest cause for optimism on Tuesday 24 September, after unveiling plans to sell its entire stake in satellite technology firm HawkEye 360 for $65.6m (£52.8m) in cash.

ALM:LSE
Allied Minds PLC

1mth
Today change
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The disposal, to privately owned media firm Advance, is a major liquidation event for the group. Since founding HawkEye in 2015, Allied Minds has seen the radio frequency data analytics specialist grow into its largest single holding, recently helping it secure backing from aircraft manufacturing giant Airbus and Californian data company Esri.

Those investments arrived in a $70m Series B financing round in August, to which Allied Minds contributed a further $5m and which valued HawkEye at $200m. As such, this week’s sale was made at a 15 per cent discount, which might explain the muted investor reaction to the promise of a $32.8m return, equivalent to 11p a share.

However, there can be few grumbles about the exit, which represents a 5.6 times return on invested capital, or an internal rate of return of 96 per cent over four years. Other realisations have been scant. During the past three years, divestments have been limited to the sale of the trade and assets of IT security firm Percipient Networks for $4m in 2018.

News of the capital return should bring some relief to fund manager Neil Woodford, whose funds – including the currently shuttered Woodford Equity Income – own a 21.6 per cent stake in Allied Minds. Invesco, where Mr Woodford was a fund manager before striking out on his own in 2014, owns 23 per cent of the group.

Half-year results for the group had not yet been released when this article went to press.

IC View
Earlier this month, the value of Allied’s stake in mobile communications group Federated Wireless jumped to $72m – equal to 24p a share – following a $51m fundraising and recent commercial progress. According to analysts at Jefferies, stakes in Spin Memory and BridgeSat are worth 19p and 8p a share, respectively, while the HawkEye deal should still leave 21p of cash on the table. At 57p, Allied Minds' shares would therefore appear to trade at a discount to the sum of their parts, and sharply down on the two-year average price-to-book value multiple of 3.7. While issues within the broader investment portfolio are unlikely to herald a return to those valuation levels, investors may now ask whether the current market price fully captures the potential proceeds from a wind-up of the group’s remaining assets. Speculative buy.

Last IC View: Hold, 63p, 26 Apr 2019