Member Info for Biffadog

Hi wellwell,

A lot of rumours were doing the rounds at that time and most proved to have little or no substance but that aside, nobody in their right mind pays $500M to buy an undrilled prospect and that was what RB was proposing.

What's actually happened with Spirit is not the same thing at all and again RB shows his ignorance or arrogance (take your pick) by suggesting that it is.

What we have here is a good old fashioned Farm-In deal with Spirit. GWA has not been "sold" not have HUR received any cash as part of the deal. They have only received a carry.

The two scenarios are simply not the same. He was lambasted at the time because it was a dumb idea with no substance.

So for RB to claim his suggestion has now come to fruition is frankly absurd.

He also has plenty of previous for ramping HUR on Twitter when selling into the the rise. Very unprofessional I would suggest.

I'm sure we are due a TR-1 from CA very shortly.

GLA.

Hi IJWT,

HUR can fund some drilling from cash flow. I'm not disputing that. The important words here are "some drilling".

It's just that by farming out they can do more drilling and do it more quickly. There is really very little else to understand.

Risk is also greatly reduced.

HUR are just doing what they said they would do at the AGM.

You would obviously prefer the organic self funded and riskier route but that's not what's going to happen.

Neither route to monetarisation is right or wrong and each have their advantages and disadvantages but it's out of our hands.

Don't forget that Kerogen have a huge stake in HUR and will have run the numbers and considered the strategy going forward. If they are happy then that should provide you with some faith in the decision that has been made.

We will have to agree to disagree on what is the optimum route to take, otherwise we are just going round in circles, but I look forward to chatting about it after the next AGM as we only spoke briefly this year.

GLA.

Hi wellwell,

I was at the 2016 AGM.

I was sitting in the front row in the furthest right seat as you walked into the room. I asked a number of questions. RB was in the 2nd row or 3rd row sitting in the aisle seat, also on the right. Malcy was 2/3rds of the way back in a seat on the aisle as well. Left hand side of the aisle though. Hopefully that establishes my credentials.

I have been invested in HUR since 2015 but I had previously mostly posted on the ii board until it's recent demise, maybe that's why you thought I wasn't around in those days.

Anyway, you asked for my comments so here goes. This is pretty much what I said on ii at the time.

I always thought it was a dumb question because at that stage Lincoln was clearly worth very little. It hadn't even been drilled, so information on it was sparse to say the least.

So to ask would you "sell" Lincoln for $500M cash didn't make any sense. Nobody in their right mind would offer up $500M in cold hard cash for Lincoln at that stage in the proceedings. If they had, then I'm sure the BOD would probably have gladly taken it and righly so.

If RB had talked about a FO and raising some cash as part of such a deal it would have made more sense.

When RT said he wouldn't take it and Lincoln was worth more than that he was looking at a future valuation of the field. I also think he was stunned slightly by the odd nature of the question as were many others at the time.

I'd not met RB before but he certainly made an impression on me. I thought he came over as rather arrogant and smarmy or maybe it's just an unfortunate act of nature.

His Twitter account would lead one to believe that the former is probably true. The most recent Tweet regarding the Spirit FO made me laugh, I must say.

I also dislike the way he presents his charitable donations as being somewhat personal, when the reality of the situation is he just dilutes his fund's shareholders and gives newly issued CA shares to the chosen charity. Nice one RB. Next time try putting your hand in your own pocket.

Anyway, I know you are his biggest fan on this board (not withstanding NigWig) and think that without him HUR would not exist but I beg to disagree.

However, you did ask me for my thoughts and now you have them.

As I say, it was a dumb question at the time.

GLA.

IJWT,

I'm not saying the presentation is wrong. It is correct as things stand today but tomorrow will be different and so things involve.

However, HUR's plans are nothing if not fluid and I'd be frankly amazed if a deal is not done for the GLA area by mid 2019 and would expect a drilling to star in earnest on GLA in late 2019 or early 2020, as a direct result.

I can't believe that you seriously think that GLA won't get drilled earlier than 2021.

Also, EPS funding is not as significant a revenue flow as you seem to think. There are CBHs to pay off for starters and some of it must be kept back for a rainy day. HUR needed derisking a bit and it couldn't have come at a better time for the average investor (but that's a whole new post).

As I said, you need to raise your line of vision in tune with your BOD.

Monetarise and do it as quickly as possible doesn't leave room for comfy old organic growth and the associated risks with taking all day.

I'm sure you'll do OK out of it, so don't worry so much. Let the BOD do the fretting.

GLA.

typo: should read "mid 2021" and not "mid 2012"

Hi IJWT,

Your point of view is just as valid, as there is no right or wrong answer.

As I said in my post, some prefer the slower/more risky organic growth route.

However, I'm with the BOD on this one.

The only caveat being that maybe (but only maybe), they could have got a slightly better deal out of Spirit. We will never know and if you invest in a company you just have to trust the BOD and let them get on with it.

HUR's stated aim is to monetarise the company and to do it quickly, so nobody should be too surprised at the Spirit deal, even though it came out of the blue somewhat.

If you seriously think activity on Lancaster will be pushed back to mid 2012 (I know it says that on the recent presentation), then you need to raise your line of vision somewhat, as my bet is on some serious drilling on Lancaster/Halifax in the not too distant future.

My advice to you is don't get so bogged down in the fine detail and figures, as escargot says, you need to look at the bigger picture but I suspect you are a detail man and that will prove difficult for you.

The world and the markets are very unpredictable and sometimes it's best to act like a robber's dog.

GLA.

Hi rex,

Just read your post a coupe of times and you certainly have a point.

Spirit have secured an absolute peach of a deal but from HUR's side we simply don't know what other options (if any) they had available to get the appraisal process really moving.

I'm all for really getting the foot on the gas and appraising and monetarising the company as quickly as possible and to do that will mean sacrificing some of the value along the way but we should see a great return in a much shorter time period. The longer you spend developing things the more likely you are to hit a down cycle in oil or a world recession. The latter is certainly a very distinct possibilities over the next 2-5 years and oil is looking good in the near term but who knows after that.

I was at the last AGM and the BOD made it very, very clear that the aim of the company was to monetarise itself and to do this as quickly as possible. This deal achieves that aim.

Where I agree with your post, is that maybe a better deal could have been struck across the board room table with Spirit and maybe HUR could have got more carry for the FFD aspect or held onto a higher percentage of GWA but we just don't know how far each party was prepared to go. I suspect Spirit had at least one drop back to go and I'm pretty sure Chris Cox will have let out a silent cheer as it was signed.

However, where were BP, Shell et al. Not available to do a deal and I don't think you're going to see any more money from the banks until the Lancaster EPS is up and running, so it looks like Spirit were the only deal in town.

I see this deal as the much needed catalyst that will really wake everybody up a bit. This applies as much to BP, Shell etc as the institutional investors and banks. Sometimes you have to give a bit and the rewards are not always immediately obvious on the bottom line.

What it certainly does achieve, is that going forward, HUR now hold all the aces with any negotiations over the GLA. There is absolutely no excuse for any deal on GLA (or company sale) not being an absolute blinder. BOD take note.

On balance, I'm really happy the deal has been done but I'd wager a bet HUR could have squeezed a bit more out of Spirit, but we will never know.

I'm with the BOD and after a fast profit so it suits me but I appreciate not all will see it that way. Some would undoubtably prefer the riskier organic growth way. At the end of the day It's all a balancing act between risk and reward.

FWIW I'm one of the investors that absolutely filed his boots when HUR were at 10p-15p, held all the way up to 67p and back down to 24p, bought a load more and have held ever since. I don't trade HUR and dislike rampers and derampers with equal measure.

GLA.

74p
MacMillan Cancer Support

IJWT,

Having met you at the AGM you seemed like a sensible chap but I have to say that you don’t half spout some rubbish at times.

Whether people like or dislike this deal is another matter but the “train set” anology is total crap and you should know better.

GLA

It’a good to hear that you have forgiven the Directors. I’m sure it will be a weight off their shoulders , what with FOIL and all that.

GLA

It's also worth noting when trying to make any meaningful comparison between a future value of HUR and Lundin (£8.5B mcap) is that Lundin currently have a net debt of $3.9B.

"The net debt position of Lundin Petroleum at 31 December 2017 amounted to USD 3.9 billion resulting in available liquidity of USD 1.1 billion within its USD 5.0 billion reserve-based lending facility."

Having said this and previously highlighted the fact that Lundin are currently producing in the region of 80k bopd with the prospect of doubling this by 2020, I wouldn't even begin to hazard a guess at the future SP of HUR.

Great news from Lundin on the potential of the FB play and who knows, combined with some movement from the AM, we might finally move the SP up a leg.

GLA.

2P is just a small part of that £8.5B Mcap

I think circa 80k bopd production (ramping up to 160k bopd by 2022) might be a contributing factor.

Great news for HUR mind, as it would appear that FB is not constrained by geographical location, as if it ever was.

https://www.lundin-petroleum.com/operations/production/

Could it be yet another Fractured Basement play coming up trumps......

GLA.

True. I'm just saying that unless you are a day trader none of this matters one bit.

That's where a lot of the friction comes from on here. DT vs LTH.

As long as everybody posts in good faith, it's fine but unfortunately it doesn't always happen that way. That's not aimed at you by the way.

GLA.

"Fractured basements are a global phenomenon which have been produced successfully for extended periods in multiple locations around the world"

From Page 7 of the Q3 Corporate Presentation. Worth just letting this one line sink in a bit, as it's important.

GLA.

Hard Sell/Strong Buy covering a period of couple of weeks and a few pence either way on the SP.

Meanwhile the fundamentals have not changed one bit. Not even a tiny little bit.

It's all just a load of noise and best totally ignored.

GLA.

Hi Cebo,

I agree with your prognosis.

EPS, proof of concept, appraise like a loon and then sell in one simple transaction to the highest bidder(s) once there is a good idea of asset size.

RT could easily set up a new company (AIM or private) to look at the new FB areas he has obviously already identified as being a good bet. There would be no problem in finding backers.

I'm pretty relaxed about it all. The chances of success looks very high and It's out my hands anyway, so I'm happy for the BOD to make whatever call they see fit at the time.

GLA.

Perhaps you could introduce yourself at the next RKH AGM.

I would love to have a chat face to face and exchange pleasantries with you.

pijoe1212,

That would be very tricky for you to do as you don't know my name or what I look like. Not the sharpest cookie are you.

I have never discussed my holding with Fiona, although I did divulge it to Sam Moody on one occasion.

The only time I have ever spoken to any other RKH shareholders was after the 2018 AGM when I went for a drink with about a dozen of them after the meeting.

I don't ever discuss when I buy or sell shares. I leave that to the fantasy traders.

GLA.

pijoe1212,

I've only ever bought RKH in the 20's. I have a long term view on Rocky. You have to, as you well know.

It will pay off big time and as it stands, I am in profit anyway, despite buying quite a few on the way down from about the 64p level, when I first got involved back in 2014. I have a massive holding in RKH as I'm sure you are well aware from the ii board.

In future, I'll try and stick to just pointing out the deliberate attempts at muddying the water on this share and avoid direct insults. Is he one of your mob out of interest ?

GLA.