Malcy - Hurricane Energy- The kitchen sink and then some…11 Sep 2020 18:17
Class action?
Hurricane Energy- The kitchen sink and then some…
Interims and a technical update from Hurricane today in which the interim management team have decided to take no risks, ensure that previous management and indeed the Competent Persons that advised them were working on over optimistic numbers.
First the figures, revenue in the 6 months was $18.9m, operating cash flow was $21.9m and costs were $18.20/bbl down from $24 this time last year. The loss was £307.7m includes a whopping impairment charge of $238.9m for the Lancaster field and a credit of $34m in relation to the fair value of the convertible. Net free cash of $102.6m and net debt of $123.8m.
Lancaster EPS production for September to December 2020 is expected to average 12,000-14,000 bopd, based on production from the 205/21a-6 well on natural flow, expected decline rates and 95% FPSO uptime. This is based on 14,600 bopd in H1 and 12,800-14,000 in H2, break-even is $35..
Here’s the bit I was referring to above ‘Reflecting these new technical interpretations, the Company’s unaudited estimate of 2C contingent resources in the Lancaster field has been reduced to 58 MMbbls remaining from 486 MMbbls in the 2017 CPR’.
It gets worse ‘Accordingly, the Company’s unaudited estimate of 2C contingent resources for the basement alone in the Lincoln field has been reduced to 45 MMbbls gross, compared to 565 MMbbls gross in the 2017 WoS CPR’.
The good news is that there is an ESG report coming out in April which should address a number of key investor questions.
Antony Maris, Chief Executive Officer Designate of Hurricane, commented:
Our near-term priority is further technical work to refine an activity plan for Lancaster, which we expect to be finalised by the end of this year and executed in 2021, with an overarching focus on capital discipline. We will be engaging with all our key stakeholders regarding our forward work programme and financing arrangements and updating the market on these efforts in due course.”
This is obviously even worse than the market and myself were expecting, whether or not the write downs have been overdone, or the possible good news of ‘material upside potential’ in the Mesozoic sandstones at Lancaster or even Lincoln being a success even the prospect of 15/- odd b/d at $40+ seems to be forgotten.
Sign In
Follow the stocks
