The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I see this differently. Dr T is an accomplished geologist but he has not been up to the task of CEO. Anyone who witnessed his lamentable performance during CMD will have noted that. Time to get some experienced business brains on board. New team looks good - and bound to make a positive difference, imho.
Double: '...Followed by a poker-game at my place, which for myself was financially disastrous for myself, but what the heck?'
That's unlike you! Sorry to hear that you didn't win big - especially as we were relying on you to splurge your winnings on HUR shares tomorrow. :-(
Better luck next time!
Thanks Double. Always enjoy your posts since you clearly have relevant o&g experience - and you have a good way of imparting such knowledge.
Good luck with your poker this evening. Hope you win big, so that you have enough dough to move HUR's sp north come Tuesday...!
All the best.
Not sure why it's not showing here, but RNS out this morning. Popped up with header: Director Shareholders. That's good, I thought - that should help provide some good support of directors are buying...
RNS Number : 0451L. Hurricane Energy PLC - 28 April 2020 - Director Shareholdings
Turns out that its freebies for Dr T & COO - totaling just under half a million shares. Not quite what we were looking for right now.
COVID-19 (Coronavirus) update
The health and safety of Tullow's staff continues to be the Group's top priority and Tullow continues to carefully monitor the ongoing COVID-19 pandemic. Tullow has experience of managing infectious diseases of this nature following the significant contingency planning put in place during the West African Ebola outbreak in 2014. In our principal offices, Tullow staff are currently working from home in line with Host Government guidelines with negligible disruption to the business.
Production operations in West Africa have not been affected by COVID-19 as yet. In addition to the existing Infectious Disease mitigation plans already in place, Tullow is requiring all personnel to self-isolate in Ghana for two weeks before transferring to our FPSOs to ensure that the risk of a COVID-19 outbreak offshore is minimised. In the event that a case of COVID-19 is discovered offshore, robust mitigation and personnel evacuation plans are in place to ensure that the impact of any outbreak is minimised and operations are maintained.
Cost savings
As previously announced, Tullow took actions to reduce its planned capital expenditure (capex) for 2020 by c.30% year-on-year. Following another review of planned activity, the business has identified further savings and is now targeting capex of c.$300 million in 2020 (down from c.$350 million) and decommissioning expenditure of c.$65 million (down from c.$100 million).
Savings have been identified primarily through the deferral of activities across the portfolio and through savings that can be realised by ongoing farm-down activities. In Ghana, for example, savings will be made through the early termination of the Maersk Venturer rig and the deferral of some well activity, combined with the removal of any non-critical work that does not focus on safety and asset reliability.
While focus has been on further capex reductions, Tullow continues to invest in projects yielding good returns and the Board has agreed to progress the next phase of the Simba development in Gabon which will pay back before the end of 2021 at $30/bbl.
The Group's underlying operating costs remain less than $12/bbl, with Ghana operating costs at c.$9/bbl. With the benefit of the Group's hedging policy and production remaining on track within the Group's 70-80 kbopd guidance range, this results in a free cash flow breakeven oil price of c.$35/bbl for the rest of the year.
Hedging
As outlined at Tullow's Full Year Results, the impact of reduced oil prices is mitigated by the Group's robust hedging strategy. Tullow has 60% of its 2020 sales revenue hedged with a floor of c.$57/bbl and 40% of 2021 sales revenue hedged with a floor of c.$53/bbl. Tullow's realised oil price in January and February 2020 was c.$62/bbl and following the recent price drop, hedging receipts of c.$30 million are forecast for March 2020.
Reserves Based Lending (RBL) facility
Tullow is pleased to confirm that it has completed the bi-annual redetermination of its RBL credit facility with $1.9 billion of debt capacity approved by the lending syndicate. As a result, the Group has c.$700 million liquidity headroom of undrawn facilities and free cash at the start of the second quarter of the year. This level of headroom is deemed appropriate by the Board considering Tullow's much reduced future capital commitments.
Tullow has voluntarily reduced facility commitments from $2.4 billion to c.$2.2 billion, effectively accelerating the first scheduled commitment amortisation from October 2020. The reduction in debt capacity and commitments will result in a reduction of finance costs. The next scheduled amortisation of $211 million (commitment reduction, not repayment) will therefore be in April 2021. This amortisation schedule continues every six months until final maturity in 2024. The next contractual maturity in Tullow's capital structure is the $300 million Convertible Bond in July 2021.
Tullow Oil Business Update
RBL redetermination confirms debt capacity of $1.9 billion and headroom of c.$700 million
Further cost savings identified
3 April 2020 - Tullow Oil plc (Tullow) provides this update following the successful completion of its RBL redetermination and identification of further cost savings as the company continues to adapt to the challenging external environment.
Les Wood, Chief Financial Officer, commented today:
“Securing the ongoing support of our RBL lending banks and confirming our debt capacity has been important given the current challenging environment. Today’s positive news verifies the strength of our producing assets and robust hedging strategy which underpin the RBL and, combined with the further cost savings we have identified, confirms the strength of our liquidity in the medium-term. Nevertheless, strengthening the balance sheet continues to be a key priority with the Group seeking to raise proceeds in excess of $1 billion through portfolio management.
“Elsewhere in the business, Tullow is responding well to the challenges presented by the Coronavirus pandemic with strong controls and processes in place to allow the business to operate as close to normal as possible in spite of these difficult times.”
Thanks boyo - that chart speaks volumes.
Article is very one-sided as if focuses on negative aspects with no mention of plans to increase production from Lancaster...
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Cancelled Lincoln Crestal well kicks up a storm for Hurricane Energy
Shares in Hurricane Energy fell by 17 per cent after it warned it may have to plug and abandon a well to the west of the Shetland Islands.
The Aim-listed energy group struck oil at the Lincoln Crestal well last summer and suspended it with plans to hook it up to an existing production vessel this year, subject to regulatory approvals.
Hurricane said yesterday that it would not be possible to complete the tie-up this year and it had therefore released the installation vessels it had contracted.
On existing regulatory approvals the well can only remain suspended until June at the latest, when it would have to be permanently plugged and abandoned. Hurricane said it had applied to extend this deadline but if this was unsuccessful it would abandon it in March.
Hurricane explores “fractured basement” rock formations which lie below where most conventional oil has been produced. It has begun producing oil from the Greater Lancaster Area using the Aoka Mizu floating production, storage and offloading vessel. The Lincoln Crestal well lies within the neighbouring Greater Warwick Area where Hurricane is still exploring.
Spirit Energy, the Centrica-controlled oil venture, bought a 50 per cent stake in the Greater Warwick Area in 2018. There is spare capacity on the Aoka Mizu that Hurricane had hoped to utilise with Lincoln Crestal.
Analysts at Arden suggested that if the company gets approval it could “potentially make use of [the well] at a later date”.
The shares closed down 3½p, or 17 per cent, at 17½p.
RE: FRIDAY CLUBToday 07:28
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Here is the piece in today's Times:
'Wind is in Hurricane’s sails
After a tricky few months, Hurricane Energy shares found their mojo again. The stock was worth more than £1 billion last summer, but its value collapsed in recent months. However, the shares flowed 2p, or 9.4 per cent, higher to 23¾p yesterday, after the company topped forecasts in its first year as an oil producer.
Hurricane is working to extract oil from the North Sea west of the Shetland Islands. Before a full-field development, it set up an early production system at its Lancaster oilfield last May to improve its understanding of the reservoir below.
Hurricane has produced 3 million barrels from the field at 12,900 barrels a day, comfortably ahead of guidance. It ended the year with revenues of $170 million and cash of $157 million, better than City estimates.
The plan is to complete testing on another well in coming days, after which the aim is for both wells to produce 20,000 barrels a day.
The shares dropped sharply before yesterday’s update.
But Morgan Stanley could find nothing to worry about, saying: “There is nothing in the update that would remotely explain the 35 per cent drop in share price year-to-date and a 10 per cent fall [on Tuesday].”
I’ll go for it if I’m not too late...
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For anyone unable to download the Arden report, here's its Conclusion:
Conclusion: Hurricane has made a series of large discoveries West of Shetland in
fractured basement reservoir. Earlier this year the company reached first oil on the
Lancaster EPS development, which is to produce at 17-20mbbl/d gross for up to 10
years (Hurricane 100%). This will provide significant cash flow, and important
production data to help demonstrate the commerciality of the 2.6bn boe of
resources the company has discovered. Post a farm out to Spirit Energy in 2018,
Hurricane recently completed an appraisal/exploration drilling campaign on Lincoln
and Warwick, with plans for subsequent tieback development in 2020 there too.
Alongside funding increased activity, the farm out also provides important technical
endorsement of Hurricane’s discoveries. Going into 2020 we expect reporting of
further Lancaster production data and company cash flows. We have a Buy
recommendation 90p target.
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Go Digby!