Member Info for Genghis15

daltry,

You can hardly blame the BoD for being bat the mercy of geopolitics. It's the nature of the oil market, and was always, imv, the biggest risk here.

Oops, forgot link. Pedro, yes, I did say fwiw, but of course the KSA is hardly a pillar of rectitude either!

https://twitter.com/JavierBlas/status/1237052059796623363?s=20

Fwiw, Novak appears to blaming KSA for this, saying Russia wa willing to roll over exiting cuts to end Q2.

I agree, but we may have different ideas on the timeframe meant by "ultimately".

LW
I am sorry to say it, but your risk of being taken away mb higher than you think. We have two market leaders in a price war here, and I can't see them making up too quickly. Shale will not decline overnight, so until and unless Putin and MBS change tack, it's gonna stay ugly.

JS, you are hitting the nail.....

IF PoO stays at current levels, HUR's annual cashflow @ 20k bpd is c. $100m post opex. I capitalised IF, bcos Bob McNally of Rapidan is in Bloomberg today saying the price could go closer to $2 than $30. That is of course extreme, and unlikely ; but unless Russia & KSA kiss and make up, for the next few months, at least, the floor is uncertain.

I doubt there is spare cash now for many of the options detailed in the last RNS ; within regulatory requirements (and mb even they could be challenged, if necessary) some tough decisions must be taken on 2020 and 2021 capex programmes.

I suspect RT and co are having to rapidly rewrite their CMD presentations this week.

Many do, including, I believe, most in the shale patch. HUR could not b4 now bcos the 20k bpd was not up and running. I'm not sure any sensible forward hedges will be available next week given the huge discounts KSA are offering on their crude, which the Russians will have to match ; where will it end?

I'm not predicting a sudden fall to $30, $25, or any other level. But the situation that appears to be emerging has no real parallels afaik. There could be some pretty violent price moves in PoO this week.

LW, until this weekend I would have agreed that the bond issue was nonsense ; TLF have been flagging it for a few weeks, and given maturity is over 2 years away, it was irrelevant ; as long as the EPS and reservoir concerns are addressed (always crucial to the investment case here anyway) they should have remained irrelevant. After all, with a proved reservoir and 20k bpd bringing in c, $300m pa @$60 oil, they would be easily refinanceable, or convert into equity, on maturity.

But $60 oil is gone ; if Brent goes to 40, 30, or less, cashflow reduces and capex more of a burden. We don't know how low and for how long, but if PoO goes to 30s or less thru past end 2020, the existence of the bonds will weigh heavily on the SP.

Not by me.

I would say many those currently running the world seem over heavy in that dept, but light on the other qualities required.

daltry, that would have been a smart post if you'd said it a week ago. You didn't, bcos like everyone else you didn't see this coming.

So, tomorrow, everyone rushes to hedge forward, what do you think happens to forward rates?

Hindsight would make us all rich, if only it were that easy.

This really could drive prices down very very, quickly.
Brent could easily open 10% or more down on Monday if these discounts are as great as posted.

https://twitter.com/JavierBlas/status/1236430793838342144?s=19

KSA now "has every incentive to boost production"
https://twitter.com/JasonBordoff/status/1236371690998898690?s=19

2020 opex per barrel is $20 per barrel , per HUR presentations.

It's not the maths I don't get, it's the assumption of $15 a barrel ; why do you think that an appropriate reserves to Mcap figure?

Comparators?

We don't know ; at last AGM AS stated sales were at spot Brent, with minor adjustments. But that was early days ; it would have been foolish to hedge b4 the EPs had a production history.

Now it has ; but the ability that gives to sensibly hedge may have come just a little late to capture the benefits of doing so, given that the two well flow only commenced late Jan, and sometime between then and now was ramped up to 20k bpd.

"equating to an sp of 41p"

How so?

VVP, not VVD.

The world's best centre back may have many qualities, but making oil policy is not one of them.

FFS, I'm afraid.

I see on other threads people are assuming cashflow at $50, $60.

Forget it, even post covid, the collapse of NOPEC most likely means $30 Brent.
Unless, of course, either VVD changes course ( not something he is known 4) or KSA goes alone (unlikely imho).

Any cashflow assumptions here should be anchored on $40 max, and mb much less for the next year or so.

Again imho.

https://twitter.com/AnjliRaval/status/1236194074979446785?s=19

A figure which is completely meaningless.

NET income after opex @$50 is <$220m, assuming 365d production ave 20k bpd. Tht figure is geared to PoO by a c. $20per barrel opex.

No offence, but that is a dumb post.