Member Info for Genghis15

The update is whenever there is something material to disclose in the view of the BoD.

Should production continue unhindered at 12k bpd, at some point they will increase to, say, 14k bpd, and after a few days of that I would expect an update. Should 12k bpd encounter problems, that should trigger an update.

The only certain update imo is that b4 end June we will hear if Lincoln has been given field status by OGA, or not.

As for a positive update giving a 100% sp rise, that's possible, but it would have to be v reassuring, and backdropped by a steady Poo, imho.

But if the next update reveals any more hiccups, ………..oh, dear.

A very balanced, fair, and sober assessment, imv.

JacD
As LW says, your comments re Dr T are unwarranted. He may have made some corporate misjudgements,, but let's wait and see what the new BoD does. The jury is currently out on some of the reservoir modelling, but that was backed up by respected independent consultants both on in house modelling and by the CPR providers. t cannot be laid solely at RT's door, and of course, it may yet be confirmed as correct, and the well issues just a hiccup.

To call him a snake oil salesman is just spiteful.

haggis
Yes, but we already knew the possible interventions, along with rough costs ; there will be timescale factors over the choice too, I imagine. Tough call for HUR at a time cash, and capex, is constrained.

Many of the rampers here keep projecting cash balance and generation firstly as a given, which with well performance to date it is not so. But more seriously they ignore capex, currently minimised, but without which the company cannot progress, and some of which is obligated by OGA. Even at $40, Brent a $35m intervention is a big decision given other competing capex demands.

But he just waffled on for 8 mins without saying anything. Hopefully S&S won't waste our money on Pro active, Cassiopeia, and the other PR agencies until they have something to say.

Why are so many here always talking of special dividend/ Dividends are normally paid out of rewvenue, not one off capital gains, tho the rule is not immutable.

Mush more likely, if money is to be returned to shareholders, is a tender repurchase offer or similar.

I have just read the report and struggle to see many positives.

it is mildly encouraging on OGA attitude and higher possibility of LC being approved for tieback, which would be a significant positive if it happened, but bear in mind it would also be subject to agreement with Spirit, who are not exactly well placed atm to commit to any capex decisions.
But the following is a bit worrying.
"As a consequence of the issues experienced at 205/21a-7z and its subsequent shut-in, we decrease our chance of success for Lancaster Full Field Development (FFD) from 81% to 30% with a geological chance of success of 60% and a commercial chance of success of 50%."

Patience pays, but in the long run we're all dead. Today's RNS is a distraction, what we want to see is progress on, or under, the ground.

We know the potential, and its far in excess of 1p, 2p at least is certainly feasible. But we need progress, especially now on the EWT.

"JUST" need a Covid vaccine. Lfmao.

"Once the required personnel and equipment are available the testing operations will recommence."

From 04 May RNS.

Very surprised nothing happened yet.

Sailplane

I pretty much agree with your comments. I trust Trice and his team to have got the OWC right, having seen all the RNSs for 6 years now, and having seen him present these things at AGMs, but most notably at the RGS last year, where he was completely convincing.
The higher OWC modelling the Bod have chosen seems to be an extremely conservative, and, as you say, low probability case.
I'm happy that Robert Trice, the geo team at HUR, and at Schlum and other consultants who contributed/checked that modelling, and the CPR co, have done a thorough and accurate job on the OWC.

What we don't know, is whether weave just been unlucky to hit a water pocket, or whether they are widespread, and likely to cause both ongoing problems in the current wells, and/or will complicate reservoir/well planning going forward.
I would like to see the company show us their modelling of this at the earliest opportunity.

I can't recall any detail ever being given on the technical details of the debottlenecking.

All I know is that

a) There was no time post Spirit deal to incorporate them in the DDD refurb.
b) the necessary works should be capable of being done offshore, with no significant interruption of production.

Be interested to know the results of your delving, as I think you know I have no geological, offshore or technical expertise, just long experience of the company as an investor.

My reading of that is that they want to maximise from existing wells, and postpone all avoidable capex to 2021, when they hope 4 a higher PoO.

The Spirit situation has hobbled things for a while, really, since at least when they were put up for sale. The lack of a buyer atm will be a drag for some time, just one of many complicating factors atm.

Sage

I don't believe comparisons to 2019 have relevance.

We know that cash opex is $17 @ 18kbpd average for the year, and somewhere ( I can't find the reference) it was said that "all in sustaining cash costs" were $26 or $27 per bl, I'm sure the word was "cash", so excluding non cash items like den. Just what the difference of $10bl includes was not made clear, I am assuming G&A, CB interest, for a start.

Nor do we know how much of the $17 opex is truly fixed and how much is variable. I have done a back of envelope scribble which indicates to me the CURRENT (ie, at 12k bpd) all in cash costs to b c. $34 to $37. This only has relevance to those who are making assumptions about cash generation at this point in time.
Of course, annual figures will be much different, a we don't yet know production rates, and of course there could be changes to cost structure too.

I'm not sure how to "ignore" a paywall, but agree that PE is on the prowl. They will certainly run the rule over HU at current valuation, and if there is to be a bid that's where it will come from, imho.

But i'm not holding my breath.

LW
"It was part of HUR's plan to increase production to 40 kbopd, but they also had plans to produce from another well and the latest RNS mentions the need to increase production, which means they still intend to find ways to reach that target."

As I think you must know, tho, going above 30k bpd requires 2 things, even assuming Lancaster can produce that level from ezisting wells (quite likely, imho) .
First, it needs the debottlenecking work done on the AM, which cost ws to be shared with Spirit as part of Licoln tie in. If HUR go alone, they pay the lot. Don't have the figures to hand, tho.

Second, the existing flare consent is for 30k bpd, and it is unlikely OGA would approve raising that ; inded, that consent is itself time limited. So the gas export solution is needed, and again HUR would shoulder al the costs in the absence f a Lincoln tie in.

"What do you think is inferred by, 'the possibility of a shallower oil water contact' ?"

It infers the possibility of a smaller, shallower, reservoir, so a possible reserves reduction in the next CPR. Or mb not, after al, the last CPR was happy with Dt T's model, and well problems might be resolved b4 then. But that's the inference.

What is not directly inferred, but which some will be worried about, is that with a shallower OWC the possibility that our perched water is actually connected by a down leg to the aquifer, which in turn could lead to an ongoing highwater cut, and require careful well management. And possible lower production rates.

As I say, that's the inference, the inference from the inference, and the possibility of that result.

So it's just that, a possibility, one which us LTers hoped would have been eliminated by now. It has frightened away many LT believers, but it remains only a possibility.

It is also possible that the next RNS says that well 6 has ramped up to 18k bpd, with minimal water cut, and that plans are afoot to open up both wells and ramp up to 25k bpd.

That's it here in a nutshell, imho.

Al the talk of cash in bank, future upside, takeover, low valuation, etc, is predicated on well performance.

Do you really believe this drivel? Can you read a BS, or consider fwd cash flow projection?

I wish they would monetise something b4 any new issuance.
BUT new equity is NOT dilution if it is used to acquire new assets.

LW
I dont know.
El19 says his mates r sure it will resolve, but with all due respect to him a bb post is not solid investment advice.
What I was trying to say was that if he is right, anything up to 30k bod is possible.
As to max capacity of one well alone, I've never seen that discussed.
Given the world class PIs, mb one well could do it, but my guess is they would not want to pull that hard on one well at this stage.