Member Info for GloucesterR

Very strong today, taking into account US inflation figures and general sentiment. At 1.14 £ to $. we should be circa 7p in cash (including escrow), with next offload early October.

Nice to have a bit of confidence building after recent weeks post debt repayment and a summer lull.
Hopefully news not far away, again it seems strange that the AGM was a couple of months away and yet BOD were able to indicate "news" late summer, ie towards end of September. To me that doesn,t point to flaring consent for P8 as too specific, I wouldn,t be surprised if that is already a given , but the "news" is how this permission ties in with plans. Do HUR drill or does someone else post takeover. The absence of securing a rig is a real pointer. P8 has been on the cards for a couple of years now. All ground work undertaken. I think the deal is determined by the post lockdown data. Ties in with CA's return of funds?!!

https://oilprice.com/Energy/Crude-Oil/Further-OPEC-Production-Cuts-Could-Be-Looming.html
Interesting that Chairman of OPEC can call meeting "At any time", to consider cuts to production. Suspect this may happen sooner than market thinks. the recent nominal 100,000 cut hasn,t done the trick to bring Brent back to $100 floor OPEC seeks.
Re windfall tax, doesn,t look like its going to be rescinded but hopefully some amendment for smaller players. Here's hoping. My solace is that £ v $ is going to do the trick. and if it falls as anticipated to 1.05 by January/ February. If HUR is still in existance ( which I hope not as you know!) the ability to fund share buyback will be at a 20% discount due to the strength of the $ which HUR will maintain as it quotes cash in $ and will obviously hedge.

So Tomorrow should get more details of Energy subsidies for families and businesses also a plan for energy independence. We know the new Chancellor is very pro business and anti windfall taxes. We also know he met smaller producers a month or so ago. I wonder if he will look at any amendments to the EPL. ?
Also Bloomberg analysts this morning looking at potential $ v £ parity in the next 6 to 12 months. But even say at 1.05 that would cover the EPL!

Thanks Sensee,
If you are right and possibly CA in for the slightly longer haul and P8 , ( as you know not my first choice). I understand that circa $80 -$90m will be ringfenced for P8, That really is circa 3 offloads (taking into account EPL offset) at $100. So assuming everything goes to plan and tie in this time next year, HUR should have circa$170m - $200m cash post P8 expense. I wonder if early into 2023 the BOD will then look at sharebuybacks as I cannot see other avenues for the cash outside of P8.?

Just been thinking. If rumours are true that HUR management are going to announce P8 drilling in a couple of weeks as per end of September update, I still can,t get my head around CA's intentions. To bring a succesful P8 into production towards the end of 2023 seems to be too far a time horizon for CA. I still push the argument that a buyer is lined up and P8 drilling licence is part of the negotiated value. My understanding is that the tax credits only apply if the relevant development is still in production? Even those tax losses are forwarded to the group.

At current exchange rate 1.14 with anticipation this will fall to circa 1.10 over coming months, Cash from next offload plus Am escrow equals 95% of market cap!

I believe someone posted earlier that HUR IR had replied news by end of September. Being this specific to me means that decisions have been made and HUR are simply awaiting for new PM and team and any change to EPL plus date on p6 shut down etc... If HUR were awaiting third party decision ie regarding permitting for P8 I don,t think end of September would have been flagged. As Sense says P8 has been on the blocks for 18 months and rigs need securing, i refer again to Harbour ,which has just increased buyback stating amongst other reasons lack of rig avaliability. I think all this points to a sale, the price being finally dependent upon the shut down and reservoir data and potentially EPL. P8 I am sure is being applied for but it won,t be HUR drilling. the SP is being held back . Management are not talking HUR up as they have already made the decision and won,t want to be asked any awkward questions.

Yes at current exchange rate and taking into account escrow monies for AM , we are 100% cash to market cap with next offload.

Small glimmer of comfort is that $ v£ is now at 1.15 which means HUR $ cash pile adds additional weight to cash v market cap. I am pretty confident that OPEC will make a token cut on Monday say 100,000 to reverse August increase with a signal that more decisive cut will be on the table if Oil continues to slide.

Growing concensus that Biden is manipulating US demand figures for mid terms . I would put money on the Saudi,s calling his bluff and cutting on the 6th meeting by 500k to reinforce $100 floor.

Agreed Sense, OPEC meeting 6th September I wouldn,t bet against a small cut to firm the market back above $100 and to show OPEC's determination to discourage volatility.

Really interesting Bloomberg analyst interviews over last few days re volitility in Oil price. This is really what the Saudi,s have alluded to. As August is quiet month the price has been subject almost entirely to Algarithmic trading and doesnt reflect the real world supply/demand. I suspect we will get a clearer idea come first second week of September when everyone returns to desks. But Saudi's have made it clear that they wish a floor of $100 going forward, regardless of Iran potential supply.

Daltry completly agree. The only caveat to this is CA. If you look at the holdings and commentary on CA's website of its various direct investments it is plain to see that CA is an actvist investor that will not shirk from acting to remove management teams. There must be a good reason why Maris etc... are still in situ. There is no way, I believe, that CA would support the current management if plans for HUR were long term, there is simply no confidence. I believe that the status quo is in place because short term action is going on behind the scenes.

The support for North Sea Gas and Oil exploration will mark a step change and make HUR's acerage more valuable. Also its tax credits. I think that unless HUR have already secured a Rig, there may be some considerable delay and increase in cost as competitors start to ramp up. Again , and sorry to bang on about this, I just cannot see this fitting in with CA's time line. P6 has a finite life span and it will be a huge risk to those tax credits, which potentially make up 30-40% of HUR embedded value, if HURS is looking towards the back end of 2023 to drill, let alone bring a sucessful well into production. The cost of buying another producing asset is getting more expensive and HUR doesn,t have the funds and will be reluctant to borrow after Bond holder experience. I just think everything points to a buyout.

https://www.thetimes.co.uk/article/tories-rush-to-drill-for-more-oil-in-north-sea-mtstjhv0d

Really positive article in todays Times. Truss will push through licences for North Sea drilling as priority, for longer term energy security. For HUR it means that acerage becomes more attractive and the general climate around the North Sea equally positive and valuable.

Over the past week all Oil analysts interviews I have seen have said the same thing, that this recent pull back in Oil price is only temporary and Oil will be going much higher over coming weeks and into Winter. The key factors are not only EU Russian embargo which will start to come into effect shortly but also the cost of EU gas which currently stands at circa $300 per barrel oil equivalent. There is talk of this going up to $500! Thus pressurising manufacturers etc... to switch to Oil as an alternative. Add the removal of Strategic reserve support at circa 1.3m Bof O per day and there will be a huge squeeze.

Schlemiel. All that you have quoted. As P6 is the only producer the reservoir data etc... will be crucial for primary valuation and cash flow modelling. So September is important for two reasons, 1st outcome of shut down and resulting data and also any amendment to EPL. Just my view!

That HUR has earmarked end of September for forward plan etc... I wonder if the imminent shutdown and workover is the main reason. A suitor would wish to have the post shutdown data before agreeing final terms?

There will be No Iranian Deal. Iran is just playing the same game as Russia and the US will balk at this. It will NOT get through Congress. But even if 1% chance most analysts have suggested that maximum Iranian OIl coming on to the market by year end would be 200K , The Elephant in the Room so,s to speak is the EU ban on seaborne Russian Oil from December 3rd and more importantly refined products February. Over the next month or so Russian output will begin to struggle for buyers as refiners stop forward ordering. August is a wiered month, low volume and wierd swings. September will be a true reflection and I think all sensible indicators are pointing to Oil going back above the floor of $100. Not to mention the last monthly strategic oil release !!!