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Just a quick thought on the WW drill, as it's seems to have been largely forgotten of late. It was spudded yesterday for those that missed it in all the other excitement on here.
When we get the official result in 8-10 weeks time (I'm sure rumours of drilling fluid losses and flaring will surface in due course long before then), we will be another 2 moths odd into the EPS and only a month or so away from the next CMD.
Assuming we don't get an RNS for HUR to the contrary, we can assume the EPS is progressing as planned and will have 6 months production under its belt.
Whatever happens with WW, the HUR investment case is already underwritten by a successful EPS and the option of a FFD on Lincoln.
Whilst getting a result at Warwick is highly desirable, it is not essential.
So, even if WW fails to produce a result, there is every chance that the initial SP drop will be bought into (if the SP remains this low) with the Lincoln FFD option and a very near proven EPS very much on the table.
What I'm trying to say is that the WW is not critical.
Lincoln was critical and so is the EPS but these factors are looking good already.
Just my thoughts and no harm in a change of subject.
GLA.
I have borrowed this post from hiddendepths on advfn.
I hope he/she doesn't mind but it makes a good point very succinctly and offers a very real explanation of why we are currently sitting at 43p.
"It's worth remembering that the share price does NOT reflect the value that the market places on the company. It is merely the price where the buyers and sellers AT THE MARGIN meet. This is a very different concept, one that is understood by very few.
The point is that individual buyers and, more particularly, sellers have their own reasons for taking action and most of those possible reasons have nothing whatever to do with what value the investor places on the company.
This factor creates excellent buying and selling opportunities in virtually every stock from time to time. In my (lengthy) time analysing oil companies, the best long term results have always come about from buying quality shares at times when, for whatever reason, the marginal sellers have held sway over the marginal buyers and driven the price down too far. And then waiting, sometimes for years, for the underlying value to be realised. It doesn't always come right - far from it - but over time the multibags from the winners dwarf the losses from those that go wrong.
I do think it's really important to DYOR and not to allow emotions to colour investment decisions.
HUR at present is valued so low against what we know it has, let alone what it probably has, that in my professional judgement it represents an exceptional investment at anything like these prices. Would I put my 93 year old mother into these? Yes, she has loads!"
Geo101,
The points you made were read and considered by many posters on here.
It would appear that the majority did not agree with these points and some went to considerable effort to politely explain why your key points were invalid or misplaced.
A number of examples were given to you whereby HUR have made categoric statements which do not support your hypothesis.
I'm going to quote part of the post by Genghis15 at 09:39 today, as I feel it hits the nail on the head.
"For all the detail in there, I cannot see how you can be taken seriously. the producing wells are nowhere near OWC, how can the tail of one be in contact?
But the main point is, if you're right, RT is wrong, and HUR are lying to us. They are saying pretty categorically that it is perched water. They have said that any deviation from projection on the EPS will be RNS'd when known".
I'm not sure there is anything much to add to that.
GLA.
Here is HUR's explanation of 7Z water cut taken from the recent trading update.
"Now that both flowlines are in operation again, we can see that production from the -6 well continues to be of dry oil. Given the proximity of the wells and strong interference between them, this is supportive of a stranded pocket of water being intersected by the -7Z well. Hurricane's analysis suggests that current production is only coming froma relatively short section of the borehole in the vicinity of the heel in each well. Over time, fractures further along each well bore are expected to contribute to production, reducing the impact of any individual water-bearing fracture."
So water pockets as predicted by HUR before the EPS and nothing to do with coning.
GLA.
FB even...
Geo101,
HUR categorically state in their recent CMD that this water is perched water and not from the aquifer and go onto explain in detail why this is the case.
They also explain why they think only one of the wells is producing perched water at this stage.
Lastly the water cut is at the bottom end of the expected range.
Can I very politely suggest that Rob Trice and his team know a damm sign more about FN than you do.
Maybe you should watch the CMD again.
I'm not going to enter into further discussion with you as that's what you want to enable you to highlight your false and misleading reading of a successful EPS.
I note that you spent the majority of your time trading and posting on PMO and have done for years. Says a lot to me.
GLA.
WWN,
Having said this maybe the following would put your mind at rest.
HUR have categorically stated that there is no read over from WD to Lincoln or Lancaster.
HUR have categorically stated that 6-12 months is enough to prove the validity of the FB concept as far as the Lancaster EPS is concerned (not 3 years).
HUR have said "Init??al analysis suggests the well intersected a poorly connected section??on of the fracture network within the oil
column - further analysis to take place". So there's already a perfectly viable explanation as why the WD drill was unsuccessful.
You appear to be jumping to conclusions here against the flow of information from HUR.
If you contact to HUR perhaps you be good enough to share.
GLA.
WWN,
If it's bothering you then can I suggest you ask HUR for clarification.
I have always found they are happy to reply to any politely worded email.
Just an idea.
GLA.
WW,
To disconnect a successfully producing FPSO, move it and risking damaging it by attempting to connect up to a new turret that hasn't been "dry fitted" is extreme folly IMHO.
The other factor here is a Lincoln FFD will probably be for 250-500M barrels and would suit a custom built FPSO of a capacity well above the AM's 40k bopd. The AM has only few more good years left in it anyway.
So it makes sense to leave the AM alone producing the "safe" cashflow to fund HUR's ongoing expansion programme.
Argue the case for this by all means but I think your argument is weak and that's being generous.
GLA.
JoeSoap,
Oil samples were taken from WD and Lincoln.
WD was 40 API and Lincoln 43 API. Therefore they are broadly similar.
Whether the oil in WD and Lincoln are similar or not has absolutely no bearing on whether a tie-back from Lincoln is viable.
As a stand alone field HUR have demonstrated from the recent drill results from the Lincoln horizontal that it is a viable option for a tie-back to the AM.
I think you might be clutching at straws here.
GLA.
Hi DC,
That would be fantastic but HUR always seemed to discount anything before FOIL as "messing about" so I think if you check with IR you will find RT means 6 months from FOIL.
Not long to wait......
GLA.
Cebo-456,
To add to your post on financing a FFD at GLA.
Key contractor finance is another option to fund some of any FFD.
PMO have actually secured $400M of contractor finance for Sea Lion subject to raising the rest elsewhere. That's it on Sea Lion. I know the story but for the purpose of this example, my point holds good.
There are a myriad of financial options available to an O&G company with $427M free cash flow (30k bond net @$60 Brent and $20 Opex) and 1B barrels of oil plus on GLA alone (subject to successful drilling on GLA).
Nobody (inc the BOD) wants any more dilution. We did that in a major way to get us where we are now and as things look to be panning out there should be no need for any more. If anybody gets cold feet then they can always jump ship straight after the GLA drilling anyway.
All this is assuming that GLA comes good.
If it doesn't then you don't need to worry about any of the above, as you will have bigger fish to fry.
GLA.
aduk,
I'd be amazed if we do not hear about a drilling rig being booked for GLA in the next few months. My money is on 2 GLA wells in Q2/3 of 2020.
More interestingly, I note that RT is now quoting circa 6 month of stable production to prove up the EPS. If we take FOIL at 5th June and forest the previous 3 months of "messing about" then that's only the start of December. I fully appreciate this is not binary but it's at this stage that people should really start to sit up and take notice. Most on here did that a long time ago.
GLA.
LONGWAIT,
For somebody that says they spend their time chilling out in a freezer waiting for HUR to come good, you don't half spent a lot of time out here defrosting.
A couple of points whilst you're out and about.....
Firstly who said anything about a rights issue and dilution. The FFD could be financed by bonds and revolving loan facilities and any number of other financial options held against HUR's considerable assets (Don't forget GLA will be proven up to even be in this position).
Secondly, this is years away and should be way down your worry list. Come back Q4 2020 when hopefully GLA will have had a few more wells drilled on it.
I'd get back in your freezer and chill out if I was you.
GLA.
Hi Genghis,
I imagine that HUR's preference is most definitely for a FO. Taking on a FFD of GLA is a major undertaking of which they have limited experience. Having said that experience can be bought in and responsibility outsourced to the key contractors.
However, it does no harm to the negotiating process to make this type of statement not does it do any harm to have a Plan B, much like they did for the Lancaster EPS when potential suitors failed to materialise back in 2017.
I thought we had ALL got way past comparing HUR to XEL on here .
There is absolutely no comparison between their position and the one HUR find themselves in.
Anybody suggesting this is the case needs their bumps felt or is deliberately trying to mislead less we'll informed punters.
GLA.
I had it confirmed by HUR a long time ago now that all the upgrades required for a GWA tie back could be done in-situ.
Total cost is of the GWA tie-in is $187.5M and includes SURF, well completion, FPSO modifications and WOSP tie-in.
HUR have a carry of $46.9M and are on the hook for the other $46.9M.
For the avoidance of any doubt HUR need to shell out $46.9M in total.
GLA.
As was formally hinted at the AGM back in June.....some action at Whirlwind in the not too distant future.
Whatever info is released, I just bloody well hope that somebody sells it better for once !!
GLA.
If not a partner, then HUR could easily finance a $100-200M loan.
I think it can be financed from EPS cash flow or maybe they will consider a combination or the two.
The priority is proving up GLA ASAP and this means drilling in 2020.
WW,
That's strange because the first time drilling in Q2/3 2020 was mentioned was at the CMD.
If was contingent on H1 2019 revenue then I doubt they would have mentioned it, do you ?
Given HUR's cautious approach to PR, I doubt they would have even mentioned it unless they were already shopping around for a drilling rig.
In the short term the EPS can fund a drilling rig come what may. The EPS is not about to dry up in the next 12 months.
GLA.
There's no secret about the very real potential of some GLA drilling in 2020.
It was mentioned in the CMD presentation that HUR will in all likelihood bring drilling forward from 2021 to Q2/Q3 2020.
I can't remember if it was RT or AS that actually said it but I have a sneaky suspicion it was AS.
I think this was always going to be the case but they had to be confident in the EPS producing decent cash flow before committing publicly.
GLA.