Member Info for GloucesterR

Sense . My understanding is that circa 90% of the capital cost in eligible exploration investment is basically offset against profits. So the simple example of $80m successful P8 well cost will be a net cost to HUR of circa $60m. ie almost all the EPL will be offset. I hope that makes sense.

I still believe however that P8 is simply providing a dual purpose 1. to provide as attractive expansionary proposition for the data room in any corporate event ( which I feel very certain about) or 2. If such corporate event can,t be agreed upon due to price then allows for HUR itself to go forward. We shall know in September!

I still feel that HUR will recieve an offer , or reverse merger in September. The work on P8 is to demonstrate in the data room the potential for future production etc... Everything smacks of such a corporate event. The EPL has made tax front and centre for the next few years and if a purchaser can mitigate almost all their tax over that period by utilising the significant HUR tax allowances/losses whilst also offsetting investment expenditure under EPL allowances it makes huge corporate and market sense. The million $ question is what is the price?

A good defensive strategic move would be an offer for HUR, utilising the tax breaks especially. My understanding is that the majority of Serica's profits are taxed, hence hugely negative impact of EPL. Interesting times!

One of the interesting factors albeit not mentioned here much is the strength of the $ v £ and we are currently sitting at circa £1.18. This represents about a 13% advantage to HUR since the new year. Hopefully the company are making the most of this in their currency hedging as the cash balance increase. Small comfort but represents about 50% of the EPL.

https://uk.investing.com/news/commodities-news/uk-oil-sector-secures-changes-to-windfall-tax-seeks-more-amid-govt-chaos-2682512

Hopefully this link confirms.

Mirasol, My understanding is that decomissioning is NOW included and a definite end date of 31st Dec 2025. But industry body pressure to go further and exclude small players, Monday presenting to parliament so hopefully successful lobying over weekend.

Schlemiel, good question! I suspect without proactive BOD HUR is going to drift unless macro improves. My hope is that WFT is further amended to exclude smaller players which would re rate HUR. Otherwise , yes bond repayment and confirmation in mid August of sizeable $ cash.

There may be a bit of optimism around.... Brent starting to regain a footing and the reality of even if recessionary fears increase tight supply will very likely keep POO circa $100 + Goldman Sachs again reiterating $140 oil by September regardless of recession. But also there could be the possibility of exemption for smaller producers from WFT. Fingers crossed that sense prevails on that one.

Hopefully smaller producer exemption comes in, which answers the question!

So reading the summary of potential changes to Windfall tax, am I correct in understanding that potentially decomissioning is allowed as expense to offset? Does anyone more experienced, knowledgeable know if HUR's other capital losses as opposed to trading losses are included in this potential offset.?

I am bullish on HUR as you know. but we have to be mindful of mixing up $ and £. It is anticipated that HUR will have circa $80-$90m at the end of July , once bonds have been paid off. A remarkable achievement. This will equate to around £70m. The strength of the $ is certainly helping the conversion to £, although it is a headwind for oil prices so a mixed bag. Kooba, whom I follow on the other board has a projection of circa 0.6p per month revenue accrual assuming WFT doesn,t improve. I hope thats ok to point out.

No one really knows what is going on at the moment. Fear and irrationality are stalking the market. I think we need to take a step back and take a breather! Oil is still circa $100,. At some point China will really start to open up and then PBOC will continue, unlike western central banks, its expansionary path. Russia will see production declines as supply services and maintenace issues with the withdrawl of western technical expertiese and parts. OPEC is maxed out and at some point the US and western govts will have to restock their reserves. I personally think a recession is imminent but it will have a limited effect on oil, unlike previous downturns, due to supply constraints. Having said that I was genuinely surprised that Simple wasnt, appointed to replace Rishi as he seems to be the font of all knowledge and have the ego to correct us all! i,m sure another global trip must be on the horizon? By the way didn,t Simple say that he owned 15k shares in HUR or did I miss hear?

El19, Thankyou for taking the time and trouble to reply. That makes absolute sense.

El19, I respect your argument. Can I just ask a question if thats ok. I agree entirely that the BOD are priming HUR for sale to fit in with CA's time horizon to exit. But as CA are looking to maximise returns for their fund what incentive is there for them to sell at a discounted price? I think they are presenting HUR as a listed vehicle with significant acreage and very significant tax losses and an attractive , simple income stream. But although I agree with the sentiment of your argument why would CA, who are basically controlling the BOD and NED appts as you say, sell for a huge discount? I hope thats makes sense!

I also believe another reassuring point is that unlike most AIM companies the BOD are not driven by a gravy train of salaries. CA are in control and although paying CEO and CFO handsomely they really control the purse strings and their focus is to exit in a timely manor at the highest possible price, regardless of BOD casualties. So many AIM companies are managed for the BOD's own benefit wheras HUR now is being driven for the benefit of its major shareholder. I am following , hanging on to its coat tails!!

Ron, spot on, completly agree. We have to work with what we know. Which is that the tail wind of OP is helping HUR to build a significant cash cushion. That within a couple of weeks no debt. That the BOD have appointed 2 new NED's with corporate and technical expertiese. To me this confirms that they will not be sitting on their hands for long. It will either, as you say, be a corporate action, which is my hope. or to grow and continue through P8 etc... I think that once the terms of the Windfall tax are confirmed we should have an answer, I think late Summer and without stating the obvious it is not the time to be Out of Hur. but thanks again to Senseman and the others who took the time and trouble to attend the AGM.

Senseman, as with everyone else , thankyou for attending AGM , collating questions and feedback. It seems there are a spread of options being considered, which is positive, but really no new news, and that we should have a decision re end of September. Hopefully tomorrow some clarity regarding Windfall tax too. Kooba highlighted Crystal Amber RNS informing significant distribution end of September, which may relate to HUR holding. I suspect a buyer is in the wings and the final touches of a deal are being ironed out.

So in the last month or so we have had 2 NED appointments, one corporate and one technical. The implication for me is that something pretty significant is brewing. IF CA and hence the BOD were going to sit on their hands and just let P6 run dry there would be no justification to make the appointments and for the appointees there would be no reputational upside, as no one would want to be tainted ( with full knowledge beforehand) with a sinking or becalmed ship. So I actually think we may be in for a pretty major surprise and it may or may not be a sale!

Bucket head. Completly agree. The appt of another NED points towards growth. The company knows something that we don,t, which sounds obvious. But such an appointment would only be made and accepted if there is significant reassurance regarding the growth prospects of HUR. My favoured choice would be an attractive offer but at least the old management is being dilluted!

Sense , Absolutely, I cannot believe even Sunak would have a meeting, which he himself is attending , rather than sending a junior minister, would not listen to the O & G industry. He knows politically it is the big boys the public want hitting and the smaller UK focused players are collateral damage with no political or economic benefit to the treasury, but important from a UK energy security perspective. I hope/ believe a compromise will occur and a minimum market cap or profit, threshold will come out. It has to be better than what is proposed and he will have to offer something!