Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
https://www.hurricaneenergy.com/investors/formal-sale-process Under "Scheme Documentation" you'll find "Court and General Meeting Proxies"
Slight edit: Added in correction from @cat5 (Thank you):
1. Will DCUs remain under ISA or SIPPS umbrella?
2. Why did HUR cite cash production standalone figures based solely on $80 Brent? Why were not higher Brent sensitivity figures included in the estimates?
3. Would Messrs Maris & Chaffe explain why their 2022 AGM comment that P6 catastrophic failure risk was minimal has mutated, for deal justification purposes, into being major risk?
4. On 27th March, Hurricane communicated to a shareholder that up to another $60m would be needed in wind down costs on top of the $60m already collected, leading to only 0.83p expected dividends per share in 2024. Can the board please provide the reasoning/cost breakdown for the $120m wind down.
5. What is current OPEX April 2023? What is projected OPEX average for 2023?
Thanks Senseman, added a question below...
1. Will DCUs remain under ISA or SIPPS umbrella?
2. Why did HUR cite cash production standalone figures based solely on $80 Brent? Why were not higher Brent sensitivity figures included in the estimates?
3. Would Messrs Maris & Chaffe explain why their 2022 AGM comment that P6 catastrophic failure risk was minimal has mutated, for deal justification purposes, into being major risk?
4. On 27th March, Hurricane communicated to a shareholder that up to another $60m would be needed in wind down costs on top of the $60m already collected, leading to only £0.83 expected dividends per share in 2024. Can the board please provide the reasoning/cost breakdown for the $120m wind down.
"You can't simply get rid of the current BoD, rest assured that they'll not be going anywhere if the Prax deal were not to go ahead. To believe otherwise is fantasy."
Literally 3 months ago there was an EGM called precisely to get rid of them. It was only rescinded because of the sale. If the sale of the company does not go through, and if Prax do not give an improved offer, I cannot see them sticking around much longer.
"Could HUR be next? If not why?"
No - CA have already agreed an irrevocable undertaking regarding their votes, meaning they would like to sell. No point in getting rid of the BoD provided the deal goes through.
However, if the bid fails, then that's an entirely different matter...
"The tax credits are very complex but in the first instance you have to get HMRC to allow them to be transferred through an acquisition which is complex in itself and very specific criteria needs to be met.."
This is why I feel it would probably be best if we acquired an oil field ourselves to extract the maximum value from the tax credits - out of all the companies that would benefit most by using the tax credits, hurricane would be number 1.
Could you provide a link or tell me which section that's under?
Something else to mention regarding the Prax deal: Last time, when the 7.7p deal was rejected in November, it provided a baseline as the share price for a long while. My guess is that something similar would happen upon rejecting the 12.5p deal: namely that the share price would move up, certainly above 8p, and perhaps a little more (Although sadly stifled by the board's negative 8-9p valuation).
"The max value we could probably get out of the tax credits is a similar amount"
What is that based on?
My guess is that a lot of the Prax deal is based on CA wanting to exit rather than it being a good deal. The board said in their Q&A that it was CA who were not interested in acquiring new oil fields, which the more I think on it, is probably the correct thing to do.
"Nowhere near the full $370 million will be able to be used."
The maybe Prax are the wrong company, and we should be looking to utilise these tax credits ourselves to achieve their maximum value?
"Prax are close to taking over 2 producers to use the HUR tax losses."
Sounds to me like they would be willing to pay more/give a better deal structure if this original proposal fails then. Where else are they going to find a debt free company with $370m of tax credits?
Quite difficult to estimate. So instead let's go through what we know:
1) Most likely there will be an extremely high voter turn out due to the nature of the vote, so I will assume 100% of the vote is used (Or something very close, as was the case at the last AGM when the vote for/against Maris & co. was considered).
2) 45% of the vote has already gone to team "for", courtesy of CA & Kerogen.
3) Conservatively, I would say around 75% of PIs are "against" judging off what I've seen in the forum... I believe PIs make up about 20% of the vote, so this gives 15% against and another 5% for.
Off the (very) rough figures above that assume deviations in holdings make no difference to voting, I would say current voting figures are likely to be:
For: 50%
Against: 15%
Unknown: 35%
25% is required to stop the deal, meaning on average just under 2/7 remaining votes need to go against in order to stop the deal... so it'll be very heavily dependent on how other voters vote, including smaller IIs.
Now it makes sense why you keep wanting everyone tk vote yes... sorta.
Thanks Pedantic Petunia.
Here's my question then...
We already have about 5.5p per share in cash, of which we are only receiving 3.32p this year.
Does this mean their dividends offered for 2025/26 are not based on oil extraction for that year, but rather leftovers of oil extraction in previous years? And if so, why can we not share that out in 2024 after **up to** $120m has been stored for wind down costs?
So they expect wind down costs to be $120m
But hold on - I thought we already had $60m in escrow for the charter + decommissioning costs?
Got a response:
"""
Dear flyingpie,
Many thanks for your email.
As detailed in the RNS, in an orderly wind down of the business, Hurricane expects to pay for the ongoing costs of the business and the decommissioning of the wells and facilities during the period.
However, there remains the chance of an unplanned cessation of production. In this scenario, in addition to decommissioning costs held as restricted cash, Hurricane would be required to pay six months of the FPSO bareboat charter costs as well as ongoing operational and corporate costs, which Hurricane estimates could be as much as US$60 million. To do this it would need to retain funds in the business to pay for these, the effect of which is to limit the payout possible in 2024. In 2025, following cessation of production occuring as planned, some of these funds would be released as the unplanned situation had not occurred. Finally, in 2026 following the decommissioning of the field and the wind up of the Company, the remaining funds could be returned to Hurricane Shareholders.
Under the sale to Prax, given the Parent Company Guarantee from Prax to Hurricane, the need to retain the funds (to cover an unplanned cessation of production) is reduced significantly which allows Hurricane shareholders to benefit from more cash returns and faster than if Hurricane was to remain a standalone company.
We hope that this has addressed your question but please let us know if you need additional information.
Best regards
"""
"And why would Maris do that?
What are his motivations?"
Maris gets very little say in the company's sale. That is for shareholders to decide - and if there is any significant change to the EPL or indeed to flaring guidance, shareholders will likely reject the bid because it would be outdated.
...so to sum up, I think it unwise to assume the EPL will have little impact on our earnings in the future due to a low impact last year.