Member Info for Biffadog

Morning proverloop,

Good advice. That’s the best post on here for quite a while. Agree with you 100%.

GLA.

Careful,

Some are pure shorts and some may be held in conjunction with CBs. I can't comment on their other positions.

I can only comment on what I have heard with regard to HUR.

They were heavily involved in the PMO CB Arbitrage play a few years ago and it's right up their street.

You can also think of it as insurance in the unlikely event that HUR's cashflow dries up.

GLA.

JAdam,

I think this was the one you were looking for.....

http://www.investopedia.com/terms/d/deadcatbounce.asp

It wasn't a bullish engulfing pattern anyway.

Very close but not quite as per the exact definition and the preceding candles weren't what they could have been either.

GLA.

Careful,

You need to read up a bit on Convertible Bond Arbitrage.

These small adjustments in the Marshall Wace short position are all part of a CB Arbitrage strategy.

I would explain it to you in detail but it's been covered on here numerous times over the years.

Nothing to worry about.

GLA.

dspp is a ****ing charlatan pushing his agenda with ill conceived diagrams and graphs based on meagre data in which he uses to try and add credibility to his posts and fool the uninitiated and not so well informed.

His latest diagram used to show his theory on the water cut of Well 7Z is a ****ing joke.

dspp claims there is an entire layer of water running across all the fissures (yes the full 1km horizontal) at the exact height of Well 7Z.

dspp is basically saying the OWC is at this level. The OWC has been established at around 1678m and this is way, way below the height of Well 7Z. If in doubt, read the CPR, read the company presentations etc.

He also lied (or made a serious error) by stating categorically that water coning could not be reversed but back tracked on this to say that it could, but was not an easy process, when his error was pointed out to him. As aduk rightly says, anybody that doesn't know the horizontal is "barefoot" is demonstrating a lack of basic knowledge on HUR's FB efforts.

If you haven't worked this out by now then perhaps its time you boned up a bit more on HUR.

Nobody is saying that there are not some doubts hanging in the air but the likes of Nimrod and dspp are deliberately undermining HUR and are running a concerted campaign to do so.

If you are fooled by them, then more fool you.....

GLA.

CA have picked some real lemons over the past few years, hence their poor fund performance.

Let’s hope HUR are not one of them.

As I said earlier, it’s all down to the EPS.

It always has been.

GLA.

I should have added that there is zero chance of a share buy back.

If you believe that, you are deluded and it wouldn't't help HUR holders one iota anyway.

Although it might make good reading for CA holders.

HUR just need to provide some definition around the 6-12 months time frame and demonstrate that the EPS is a success.

That is all that matters.

CA have no relevance and RB still knows SFA about oil companies, that much is true.

GLA.

Share buy backs are for established companies with plenty of free cash, a rock solid income stream and no immediate requirements for essential Capex investment.

HUR do not fit the profile for a share buy back.

It’s frankly laughable for RB to suggest this as a good use of HUR’s available funds.

On a separate note, it’s worth highlighting how badly CA are doing at the moment. Down 37% (approx) in the last year, so maybe not the go to place for advice.

GLA.

"Premier and Navitas will fund all of Rockhopper's project development costs (excluding production area licence fees and
taxes) from 1 March 2020 to Phase 1 Project Completion (estimated to occur 9-12 months after first oil) through an interest
free loan ("Loan"). Funds drawn under the Loan will be repaid from 85% of Rockhopper's working interest share of free cash
flow." From the RNS.

I agree with Fernan10.

I think it is perfectly clear from the RNS that Capex is covered until 9-12 months after Foil. That period could in fact be longer or shorter as it is an estimate but the loan will certainly become payable from the moment revue producing oil starts to flow.

GLA.

Just filtered GOZZIE2, Ollie sky, Trop,Kurgan2.0 and Nigoil and all of a sudden you have a BB worth participating in.

I'm sure I've missed a few (Morons) but it sure as hell helps.

GLA.

Hi rpoodle,

Good to see you are still here !

If RKH paid £26M tax in 2013/14 it must have been for the £231M cash element because it sure as hell wasn't on operating profits from oil production or disposal of assets.

Will check with SM when I get through to him.

Are you likely to be going to the AGM this year ?

What a deal for Navitas though (as I previously outlined).

I don't think it will be tricky to sell it to those that provide the funding.

Navitas seem to specialise in getting in just before FID with projects that are lacking a bit of funding. Good work if you can get it.

Hi Fernan,

I read your earlier post (7th Jan @12:17) regarding Navitas with considerable interest and agree with the point you made about their ability to finance this deal. I will be trying to speak to RKH at some stage next week and this will be on my agenda.

However, I think that with Gideon Tadmor as Chairman and given their ability to raise funds thus far, they are a probably a serious proposition.

http://www.navitaspet.com/gideon-tadmor-chairman-2/

GLA.

Hi Fernan10,

That clarifies things substantially. Thank you.

However, I think you will find that tax is now only owed on the $231M as the $48M was actually used for exploration carry and as such is then not a taxable entity.

That would give total tax liability of $17.3M, being $231M @7.5% tax rate.

"Outstanding tax liability amount may be revised downwards if the Falkland Islands'
Commissioner of Taxation is satisfied that either (i) the Exploration Carry from Premier
is used to fund exploration activities in the Falkland Island license areas; or (ii) any
element of the Development Carry from Premier becomes "irrecoverable""

GLA.

Nice post SecretBlueprint.

Shame it will get lost in the waterfall of constant dross on this board.

GLA.

All credit for what must be the O&G deal of the century.

Navitas walk in out of nowhere and for arranging an interest free loan (likely to be in the region of $250M) and roughly $20M ($12M+$36M=$48M pro rata between PMO and Navitas) in contingency payments to RKH, they get the following for absolutely NOTHING.

30% share of Sea Lion Phase 1 and 2, having spent zero on exploration, appraisal and project costs to get Sea Lion to FID.

75M bbls of 2P on Sea Lion Phase 1 FID.

An option on 30% of what could possibly add up to 2B barrels of oil at Isobel and Elaine.

All this for having a CEO with some relevant experience and much more relevant financial contacts.

To put it into prospective, Navitas are a company with production of circa 3k bopd and an income of $68M for 2020.

Their share of the loan made to RKH will be repaid between 2 and 3 years from FOIL, so the interest payments they are covering is negligible (certainly less than $35M, assuming 10% p.a. and a reducing loan balance).

So for the princely sum of roughly $55M and no share of all the costs and aggravation endured over the years, Navitas have taken a 30% seat at the FI table just when the action is finally about to begin.

Hats off to them.

I have nothing to add to the posts of rpoodle and GreySquirrel as they are absolutely on the money.

The only carry is the minimal amount needed to cover RKH between now and the 29th February (which is provided by PMO).

The rest is all either interest free loans or standby loans at 15%.

GLA.

Back on board the RKH train after bailing out in early April 2019 when my patience finally wore a bit too thin.

Didn't see this one coming. Like most on here was waiting for UKEF to pull their finger out.

Squeezed a bit on the deal but RKH's financial future is assured and the FID for Sea Lion looks pretty much a done deal.

Are any of the old crew still about ?

Hopefully all the riff raff on here will disappear as this one finally comes together.

Been a while mind but the AGM might not be so glum this year.

GLA.

dspp,

"What we don't know at present is the extent to which the AM's prod water system is fully functional and commissioned. If it is not yet fully functional & commissioned then they have the ability (which a platform, or land facility does not ordinarily have) to offload to other vessels. By offloading to a shuttle tanker at the same time as an oil offload they could (if they wished) conceal what was going on. Especially if they were not to discharge at Rotterdam because they know that the shipwatchers (i.e. Amaja in this instance) would get the data." (dspp on Jan 2nd at 3:59pm. Apologies as I don't know how to work the fancy quote facility on LF).

I've very recently contacted HUR, as you obviously hadn't bothered to and found out the following.

The AM has a total liquids handling capacity of 35k bbl/d and when producing 20k bbl/d of oil this leaves 15k bbl/d of spare capacity which can be used to process and treat the water for overboard discharge. Any produced water that is not immediately cleaned up can be stored in the slop tanks. HUR are not using tankers to offload the water and the total liquid handling capacity will be increased (TBA) as part of the debottlenecking work.

At a 15% aggregate water cut (assuming 50/50 split between wells 6 and 7z) you have circa 3.5k bbl/p of water to process (3.5/23.5 total volume gives a 15% water cut), so you can see that the current situation is well within current limits and is not restricting production or incurring additional costs.

So that's that particular theory debunked.

I notice that you have also climbed down from your statement that coning cannot be reversed “or to prove up aquifer ingress (which of course cannot be reversed)” and are now simply saying that it is possible but it's tricky. Nobody suggested it was either desirable, or necessarily easy to reverse, but the fact of the matter is that it can be.

I'll leave others to decide if your original statement was made with the deliberate intention to mislead or was a simple mistake that came about by lack of knowledge on the subject.

I think combining all of this with the the impending doom of Brexit, indyref2 and a meteor strike that you have previously mentioned and some might say you have overplayed your hand somewhat. That's for others to decide but I can certainly see your cards.

TTFN
Biffadog.

dspp,

That certainly is a bleak view of HUR’s prospects and to be frank, I’ve amazed that you continue to hold the stock. However, on closer examination I would have to suggest that some of your observations are misleading and a couple are plain incorrect.

I also note your propensity to state some things as fact, when they are not proven as such but are just your opinion. Not a great trait for one supposedly expressing a balanced view. It’s fine to state facts as facts, just not opinions as facts.

It’s worth highlighting that the rider with HUR has always been that the EPS must be proven to be a success over a period of time (6-12 months), otherwise the investment case for HUR is fatally flawed. That has always been the case and is nothing new. It’s funny that you now choose to refer to HUR’s finances as “hanging by a delicate thread” when previously you were more than happy to band about pie in the sky figures for HUR’s assets and production. How times have changed.

I’ll start with the easy stuff. You say “or to prove up aquifer ingress (which of course cannot be reversed)”. Not true. Coning (water produced from the aquifer) is reversible. Fact. Whilst we all would agree it is not desirable in any shape or form, it can be reversed by simply shutting in the well for a period of time and allowing the water/oil equilibrium to reestablish itself.

You mention disappointing results from the EPS and the 2019 drilling campaign and state categorically that both models are plain “wrong”.

All reservoir models are developed over time and it might be more appropriate to say that the model used needs further refining rather than be confined to the bin. In actual fact, HUR have had considerable success with drilling FB WOS. They have two successful horizontal drills on Lancaster and although the results at Warwick were poor, they hit significant oil with the Lincoln Crestal drill producing 9.8k bopd (likely to increase after further cleaning up of the well). Even in sandstone reservoirs drilling and models are not an exact science and in the early stage of field development, unsuccessful wells are regularly drilled, So all in all, not too bad for a model that is “wrong”.

As for the EPS, I don’t see how you can possible say it is anything other than successful at this moment in time (and that’s all we can go on as nobody can foresee the future performance). HUR have two wells on Lancaster, which when run individually, are producing at 14.7k and 9.4k respectively without the aid of the ESPs and have so far delivered up 2.8M barrels of oil ($165M revenue), giving an average of 13.3k bopd since hydrocarbons were introduced back in May 2019. More importantly, HUR expect to be flowing both wells simultaneously from the end of January at 20k bopd (giving 18k bopd with an expected 90% availability). Not bad at all and hardly the result a “wrong” model would deliver. Perched water was always part of the equation and whilst now higher than the base case forecast was nevertheless an expected outcome.

“The results of the individual well tests have surpassed our expectations.” (HUR TOU 13th Dec)

To address the water cut issue, I think the best bet is to look at the facts, figures and statements given by HUR themselves. I note your penchant for using out of date OGA data that doesn’t break down production between wells, and as such, is pretty useless for the purpose of dissecting the water cut issue. Whilst your graphs look pretty and give an air of superior knowledge, they do not add anything to the discussion and you might be better off using the more recent data supplied by HUR, that does at last break things down on an individual well basis.