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Latest holding report shows that they have sold 0.2% of HUR shares in issue this month ~4 mill shares.out of roughly 200 mill traded in the month, impact slightly negative?

MILO extracted from the doc I quoted earlier "HMT will provide an unconditional guarantee......... of scheduled principal and interest"

Scotman Its a casio MS 80 A and its solar powered so environmentally friendly! But its use and my approximation lead to a result of $4.5 bill over the period which is indicative of the likely bill to SXX . Thats a useful sum to bear in mind when evaluating longer term returns on a potential investment .It also implies that SXX are looking to HMG and us , the taxpayer to underwrite something like $2. 3 bill . With Hinkley point C already looking like a funding disaster, HS2 a waste of time IMV and suggestions from the transport minister that it might never get further north than Birmingham, Crossrail needing a further bailout .....somebody in the treasury with a highly sophisticated risk analysis model is no doubt coming up with a more precise (but maybe not more accurate) answer.

LITC true, I misread the doc I quoted.

I think there may be a misunderstanding of the nature of the support offered by the Treasury (or specifically the IPA)to SXX in the ST2 funding . Taking GK's example which assumes $1.5 bill as straight lending at commercial rates(say 7%)where the lenders bear the risk ie if SXX defaults on either interest payments or capital the individual lender is on the hook . The second $1.5 billion will STILL be lent by the consortium of lenders at similar rates BUT if SXX default on either interest payment the GOV is contractually bound to pay up. In order to buy this "insurance" the lenders will pay a fee to HMG the lenders(if its at the level of say bookrunners in a placing it will be between 1-4%ie ~$15-60 mill -whether the lenders will successfully pass this through to SXX is debatable.
see
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/209806/UK_Guarantee_-_A_brief_overview_-_Allen___Overy.pdf

The point is the GOV puts up no cash and does receive a capital sum for its guarantee BUt it is the taxpayer on the hook for a sum of $1.5 billion plus interest at 7%
As to repayment , i think (though i haven't checked lately )that the loan period was set at 15 years so taking a very simple schedule as follows:
Total liability at outset $3bill, assume draw down at $500 mill pa for 6 years ,payback over 15 years, my fagpacket calculation indicates a total to clear the debt of around $4.5 bill assuming a repayment of $700 mill pa from year 6. I accept that the ramp up of output may allow for faster repayment but its just too complex a calc with too many variables.

Ricfle guilty as charged but I've been thinking about the shorting issues since the weekend - so here goes:

I buy shares when I believe the price is , on balance, likely to rise(lets say at >twice the rate of inflation) within my timescale(normally several years).I sell shares when I think, on balance, the price is likely to go down (normally within a shorter timescale say 6 months).
When I sell I am in effect "shorting " the share ie selling in expectation of a price fall, when I buy I am basically "longing " the share, ie buying in expectation of a price rise.
It follows that all of us are at various times doing both , we buy looking for a rises and will (eventually?)sell when we expect the price to fall (or do some of you expect to hold forever?- that only works for dividend seekers)
Because the market is made up of people with divergent views at any time it is reasonable to suppose that the shares you buy were sold by someone who thinks the price will fall and when you sell the other guy expects a rise.
So we are all guilty of shorting, its just that we normally buy before selling and shorters do it the other way round(is there a slogan there?)
Despite all the conspiracy theories i still maintain that shorting is no more than a different opinion and even though it doesn't seem common these days I respect opinions which differ from mine(though of course that means they're wrong!)
In the specific instance of HUR and as often repeated the "shorters" are in the main hedgies with CB's and I KNOW that to be true in one case, consequently they are using shorting to subsidise their loan position and hence offer HUR funding at less than the market rate , at this stage in the company's life the possible (minor and impermanent) damage to the SP is tolerable.

Should add that analysis is in TODAY s notional values.

HIDunna My (quick) take on your conundrum is as follows. you have two options buy or wait and two outcomes SP rise or fall. My analysis is this:

Buy now, SP falls outcome minus £10k (holding value £40k)
Buy now, SP rises outcome plus15k (holding value £65k)
Wait SP falls outcome +£10k (holding value £60k)
Wait SP rises outcome break even(holding value £50k)
Does that help?

Hi sookma, unsurprisingly your posts aren't going to be greeted rapturously, if you want to engage in a sensible debate you will need to explain why you bother to post and to justify your valuation rather better than you have done to date.
Your comments about overhyped companies whether oilies or "tech" or bitcoin/ blockchain etc are perfectly valid , and there are far too many of them where they were either obvious scams or bandwagon jumping etc etc .
I am cautious on HUR and am not currently invested but there are significant factors which justify some optimism , ie drilling results to date , the presence of a large and well-respected investor in Kerogen , the evidence that there may be very significant oil reserves on HUR's patch and the well established conventions of measuring the proven and probable reserves in situ, which render your "I have valued the assets at 0..." as inappropriate . What a sensible valuation is , is up for discussion and is of course, the reason underpinning the SP, which as you say, may be lower than today's but should exceed the cash reserves. as it does for almost all companies .After all if that was the simple way to value companies life would be easy!

HUR have ~2 billion shares in issue so Marshall Wace shorts are a very small drop in the bucket, about equal to an average days trades, and its highly likely that Marshalls are also lenders to the company in the form of Convertible bonds without which the AM probably wouldn't be on charter to HUR and wouldn't be on her way WOS. I wish posters getting their underwear tangled would find out how the company managed to get $230 million of funding to advance the EPS and why set against that the existence of shorts is no more than a minor inconvenience.
FAO prince of.... The SP has been falling since early oct, the short shares were clearly borrowed and sold into the market in the last few days,having little impact on the SP, certainly much less than the benefit of the cash they (probably ) stumped up last year.
I restate my position that the SP is languishing mainly due to caution before the establishment of steady oil flow from ESP and , in part, POO fall, and general market nervousness.

Hi Scotman

The reference you quote is dated 6 sep - on 6 aug the SP was 38p, on 6 sep it was 27p ,a drop of nearly 30%
If I were to suggest that your reference includes a tacit(or even explicit) acknowledgement by the Co.that it should have been more upfront sooner would you say that was unfair?
It is also I think fair to point out that a lot of holders repeatedly asserted that no dilution would occur so I'm not sure that the reference you give had entirely achieved the objective of getting the risks in to the mind of many PI's.
It is fairly clear that the possibility of dilution has had an effect on the SP , that can only be opinion but it is a reasonable hypothesis.
In my view, the attention I get is because I am one of the few posters who doesn't entirely subscribe to the euphoria here.What i don't get or expect is many Rec's!!

Hi sheps enjoy your day and don't let me spoil it!
On a specific point I was referring to the emergence of the need for $400-600 million of additional funding which was I believe a surprise to everyone and I have explained in my previous post why I believe(yeah my opinions only )that came about.
As to the assertion about the prospective placing I haven't got the time or inclination to trawl this board and count the number of times"NO dilution" was stated as being an incontrovertible truth, maybe even by yourself?

HI gd you are correct and when I reread my post I recognised that I was sort of implying concealment, but as we all know the underlying calculations for costing such a large project all rest on a whole range of estimates any of which can be tweaked(and in my experience are)to reach a final figure acceptable to all parties. To seek to express myself more clearly i could/should have said that it was clear that the additional funding need was driven out by a series of more(and possibly over-) conservative estimates on progress , probably driven by the putative lenders and contractors, thus supporting my point that SXX is very constrained in its options for funding.Lets hope that the outcome is a revelation of lower costs as the real rates of progress exceed estimate.

Hi wwg Full marks for effort in both attempting an analysis and doggedly following it through.
There are a number of caveats I would like to offer.
Remember this is a product of a "house broker" whose primary income stream comes from the trading activity related to this share and therefore it should be treated with some care.
Second all the detail numbers rest on the somewhat shaky foundation of a set of estimates as to the primary drivers of the business. there is a hot debate going on in the city WRT "precision versus accuracy" ie the most accurate calculation is worthless if the basis of calculation is inaccurate, I fear there is some of this in your effort.

As to specifics:
It is a good thing that the underlying report assumes that the extra $400-600 million of funding might be met by a placing , IMV much of the SP fall of late has been as a result of the CO. not facing up to and admitting that possibility.
The timing of the announcement of that funding need begins to look more and more "forced"after all we all recognise that the total funding will not be drawn down on day one and , a revelation of extra funding when the mine was nearing completion would have caused much less stress.It implies that SXX are being given a very hard time by their prospective lenders.
I asked about the date of the report because it seems highly unlikely that a placing could be got away at a premium to the current SP and IMV WH Ireland are highly remiss in including that assumption.
On the positive side I think that it is very likely that the all the remaining senior debt (ie the further $1.5 bill) will be gov. guaranteed, that is the only scenario that really works. Without the gov guarantee SXX haven't got a hope in hell of placing between 1 and 2 billion extra shares.
So i'd go with your scenario A) but a placement at <20p giving rise to 2.4 bill extra shares, total shares in issue ~8 billion, if the SP settled immediately after that at say 18p {just a guess for illustrative purposes} the implied MC of the company would be £1.6 billion.
Thereafter though, I feel bound to say that your calculations build an inverted pyramid of numbers on a very shaky point of estimate.Predicting the short to medium term is difficult but possible, extrapolating to a point a decade ahead is an exercise in optimism rather than realism. The accuracy of your calcs , I have neither tested nor do I doubt , the likelihood of them proving accurate rest entirely on the"wet finger in the air" of an arbitrarily chosen risk factor.

Having opened myself to the risk of further negative comment (TBH I don't mind!) may I repeat my approval of you for at least trying to apply a bit of mental effort and arithmetic rigour to your investment - after all you could just have said, as some (repeatedly) do "this share will reach 50p early next year!!"

Hi Tom, is there a date on that research note? 'cos an " equity raise at 25p/sh" seems a bit unlikely at the mo.

HI Fred Not trying to justify myself merely to justify my reservations about the SP in the short/medium term.I really was trying to save some of you from the losses I was fairly certain were coming and , yes I was arrogant enough to believe that I could construct a soundly based case for my concerns.It is however clear that the degree of (blind?) faith SXX engenders is beyond my powers to disturb. I now fully accept that there are many who will stick with SXX through thick and thin and despite my fears, I wish you well. I promise to shut up and go away for a while .

Hi cranleigh
Haven't researched thoroughly but I suspect CF's £837k pa salary insulates him fairly well from worries about the SP.
Poor Scrimshaw is only on £188 kpa .(source FT)
The only director buy at over 21p (until some recent small buys by Dame Eliz.)was by Scrimshaw in 2013,so all director buys are still above water. I believe that many(most) of the directors shares will be as a result of incentive plans and either free or at reduced prices .I also see that the LTIP as detailed in the latest annual report offers"conditional shares, nil cost options or jointly owned equity....up to 500% of base salary!"
I will stick by my assertion that(based on a recent thread here and assuming honesty from the posters) the relationship between investment in SXX and personal wealth is higher for a good number of PI's than for the senior execs of SXX.
If you re read my previous post what I said was "as much of THEIR wealth invested in this...." ie a ratio not an absolute value.Without evidence to the contrary I accept what posters say and stand by my analysis .
PS
I don't know how dispassionate your elbow is, should we compare notes?

Assorted observations.

I still believe that there is a better than even chance that SXX will get an ST2 funding deal that will allow them to build the mine.
I am not invested currently 'cos the risk of that NOT happening is one I ,personally am not willing to take.
Assuming a negative case (ie a deal on onerous terms, a large dilution , a low ball placing) the SP could fall further.
If the current market nervousness persists then high risk shares ie SXX could fall further.
I have said before that I generally hold shares for years BUT when it is very obvious that a major risk is present I reduce or sell.I have developed a deep aversion to losing money.
Absolutely nothing I say or do will affect the SP
Anybody buying now is buying at a 40% discount to the price a couple of months ago, but is still buying into a high risk company with many major hurdles to overcome.
None of the banks, government employees negotiating the terms of the funding support or even the company directors have as much of their wealth invested in this as some of you do.
I don't post here to garner praise. I post because I think I can offer a different perspective and a somewhat more dispassionate view
I have no idea where the SP will now go , if pressed I would say that it has a little further to fall and that when ST2 is announced it could move 50% either way .
Those who are willing to ride out the next 6 months will, eventually see a profit , though that doesn't necessarily mean a 10 bagger and/or dividends of 5-10% of the current SP.(allowing for dilution)
I don't think you are all thick, I do think many of you have insufficient experience of the vagaries of the stock market to have gone all in on this share.
I have no problem with the sometimes aggressively negative comment my posts get , so long as you are not downright unpleasant I will respond and seek to explain my position,I will continue to post what I believe to be a rational analysis of SXX prospects.

HI Sheps!

I won't engage in a lengthy tit-for-tat as that isn't my style so this will be my only response to your post.
I have , on a number of occasions in recent months expressed my view that the SXX SP was likely to fall, and I note below extracts from just a few of my posts

2 July SP 32p " I cannot see much progress in the SP until funding is achieved...."
23 July "Funding is why the SP is where it is...."
6 Aug SP 38.7p "I may sell,,,,"
7 Aug SP 38p "there is a bout of jitters setting in...."
8 Aug "A note of caution......"
!5Aug " I have reduced my position .....

I need not , I think, go on. I have shared my views as is the purpose of this forum and have no other agenda than to offer a reasonably informed view to others . That view has been proved correct at least in the short term . If there are any who noted my concerns and acted upon them , then I am glad to have contributed. If not then I have no shame in repeatedly setting out the concerns i knew existed in the market.
To be " A genuine poster..." in my case, is to tell it as it is , not to indulge in repetitive cheerleading,and then moaning when things aren't quite as rosy as you may have wished.
For the absence of doubt none of the above is meant to insult or offend , merely to defend my contribution here as well meant and constructive.

The question is "what makes it special...."? IMV cash is the least important thing, In what was very obviously an electioneering budget(General election next year with a new tory leader?) it seemed that there was little of substance , other than the bribe to the electorate of an increase in tax allowances and a series of targetted (low cost) perks for N Ireland, Scotland , Wales, Teesside, small business etc etc.I note that teesside has four labour MP's and one Tory, could that balance be changed with a "bribe"in the form of a legislative easement to local voters and exactly what form will it take?