The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
johnniefp
"Continue to run the business I suppose. We don't always get what we want and the BOD don't always get what they want. We'll be cash generative so in the absence of a buyer perhaps we turn into a producer on this asset once proven then move onto the next exploration. "
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Spirit's future in uncertain. Maybe they will get sold to someone that doesn't want to continue with us.
Perhaps we sell 4mn barrels a year at $35 net to us, that's an income of £140mn pa.
Would that pay for drills, tie-backs, installations?
Or have I got my sums out by several decimal points (always likely!)
'Hurricane continues to have a 100% interest in the GLA and is exploring a number of structures to fund full field development, including those that do not result in a reduction in licence equity. "
So that might involve equity and dilution.
But, lads and lasses, don't always assume that we will get it or that we will 100% get bought out.
I know from painful and costly experience and the obvious doesn't always happen so what will HUR do then with no "structures" or takeover?
Fingers crossed that doesn't happen. Again.
Looks like OPEX for 2019 will be $25/bbl
Spirit Energy carrying HUR on long lead items and engineering relating to tie-back.
How long does it take to move a rig?
Can anyone confirm (or otherwise) that the Transocean Leader is in the same place as yesterday.
I am struggling to post anything here for reasons unknown.
Anyway, the results are worse than last year and after all this time the company is going nowhere.
Oil down to $64.80 with Saudi saying that their oil supply will be back to normal by the end of the month.
Oops, of course.
Actually, Totdy, that is a very interesting question.
Cont'd
This cash flow underpins Hurricane’s options to appraise further its Great Lancaster asset either independently or in partnership.
The Fund is a longstanding supporter of Hurricane, having funded its exploration efforts since 2013 and its production strategy since 2016, when the EPS’s long lead items were first purchased. Over the last year, Hurricane has developed in size and complexity and continued to perform well. Over the period, the Fund reduced its opening position by 22% as it took profits of £17.9 million and exercised its warrants over 23.3 million shares. Despite banking total profits of £41.8 million on Hurricane, the year-end carrying value includes an unrealised profit of £28.0 million.
https://www.investegate.co.uk/crystal-amber-fund-limited--crs-/prn/final-results-for-the-year-ended-30-june-2019/20190913070000PC29E/
"Realised gains of £17.9 million on Hurricane Energy plc"
"Warrants over Hurricane Energy plc and Equals Group plc shares were exercised during the year."
HUR still top holding
Hurricane Energy plc
Hurricane is an oil exploration company targeting naturally fractured basement reservoirs in the West of Shetland. It controls 2.6 billion Barrels of Oil Equivalent (“BOE”) certified resources and reserves. The Fund’s previous annual reports include additional background information on this investment.
This was a year of great achievement for Hurricane. In September, it agreed a farm-in deal with Spirit Energy over 50% of its Greater Warwick acreage. The company’s first farm-in deal with an industry partner supports the case for basement reservoirs in the UK continental shelf. The deal also re-started Hurricane’s exploration operations with an intensive three-year appraisal campaign. As Warwick had only been drilled once by Hurricane in 2016, it was behind Lancaster in the appraisal and development process. Spirit’s commitment of $387 million should accelerate this. As such, we believe that the deal with Spirit is transformational for Hurricane.
The Greater Warwick exploration campaign started in the spring of 2019 with a three-well programme, fully funded by Spirit. The first well was the riskiest due to its depth, and unfortunately results were disappointing. Oil was discovered but it did not flow at commercial rates and so the well was abandoned. The campaign has continued with the Lincoln Crestal well. In parallel, long lead items have been ordered so that in 2020 one of the wells drilled in 2019 will be tied back to the Floating Production and Storage vessel for production appraisal. As with the Lancaster Early Production System (“EPS”), this step will enable collection of additional reservoir data ahead of an initial full field development of 500 million barrels of reserves. This approach is expected to leverage Hurricane’s Lancaster infrastructure, and generate incremental revenues to the company at little additional cost.
In June 2019, Hurricane announced first oil from its EPS. This has been delivered on time and on budget albeit with a protracted final hook-up phase. In July 2019, following the period end, the company advised that the EPS was performing above expectations during the first month of operation and increased its production forecast. The two horizontal wells are producing 20k BOE per day under natural flow conditions, that is, without electrical pumps. Whilst it is too early to establish the asset’s long-term potential, initial production data supports the company’s reservoir model. Hurricane retains 100% ownership of this asset that is expected to generate US$200 million per annum at US$60/BOE. This cash flow underpins Hurricane’s options to appraise further its Great Lancaster asset
My guess is that this will move the SP up by 2% by the end of the day.
I think we will have to wait until it starts producing for a re-rate.
I got a small handful at the early auction but had to pay 46.5.
Should have waited but hopefully in a week's time the difference will be negligible.
Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, provides an update in relation to the 205/26b-14 well ("Lincoln Crestal").
The Company notes speculation regarding the flare on the Transocean Leader drilling rig. The Company confirms that a drill stem test on the Lincoln Crestal well has produced oil to surface, resulting in a flare. At 13:10 on Sunday 8 September 2019, the well was shut-in to enable a planned pressure build-up test.
The Company will update the market on initial results of the well, including flow rates and oil type, following completion of the ongoing testing phase.
Halifax is nothing to do with Spirit! See P27 of the CMD presentation for breakdown of assets.
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Oops!
I have heard, and nothing whatsoever to do with HUR, that some naughty oil companies have burned diesel to pretend it's a strike.
Meanwhile, and without wishing to tempt fate, if Lincoln lives up to its promise, I wonder if it's worth HUR and Spirit getting together and changing tack and for the 3rd drill put WD on the back burner and having another go at the big one, Halifax?
I think tomorrow is a bit too soon for the RNS.
Tuesday or Wednesday for me.