Member Info for GloucesterR

I just had a look at their website , specific to Hurricane's holding, Didn,t realise how blunt and uncompromising the fund is towards HUR and management. No love lost with CEO and CFO! My take is the CA have absolutely no loyalty to Gas and Oil industry, purely an equity investment, which they admit themeselves " They would not have wished to hold for the previous 18 months!". So reinforces my view that CA will simply want to maximise returns short term with the lowest possible risk. That I believe can only happen with a sale, drilling will take too long. CA clearly want to exit and have no faith in executives, hence recent appointment of M & A NED. great for us shareholders as we are aligned.

good point! I think the BOD will decide there is no point in buying into short term production as financially un attractive. Everything now points to a sale I believe, do the ground work on presenting the acerage data as attractive as possible, firm up on tax Counsels opinion re tax losses value and then present to the market. With no debt there is no pressure for early result. Thankfully CA is solely focued upon maximises returns rather than director salaries!

I think there is no doubt the windful tax has taken the wind out of HUR's sails. both the level of Tax at 25% without mitigation really and the undefined time period. looking out over the next 12 months Assuming the well maintains production with modest declines ( which seems to be the case with gas pressure etc...). we can see production of 6 lifts at circa 500k to 525k per lift equal gross of 3m BOE approx. Assuming a net reciept after tax of circa $55 per barrel would equal revenue of $175m (approx) or around £140m. Which is not far off current market cap. If we add in current post latest lift ( ignore tax ?) we should have circa £45m ($55m). Which would equate to a cash equivalent of 10p per share. Now the ? is how much is the Tax losses worth and how much is the additional acerage and prospects worth. BP has come out and said that the multi year capital offset at 90% is really attractive and will alter its investment plans. It allows for almost nil cost exploration and hence makes drilling highly attractive. So my thoughts are that firstly the windfall tax has hit sentiment intially, thats obvious, but I think it has enhanced the underlying non revenue value of HUR , in making its acerage much more valuable for nil cost exploration. Add the tax losses and I think we are back to pre windfall tax valuation. BUT it requires the BOD to plan an exit strategy. Sitting on their hands no longer provides the kind of value they may have been anticipating. Fortunately CA are now in control and have absolutely zero interest in the long term or in being explorers they simply want to exit at the highest possible valuation in the shortest possible time. So infact the Windfall Tax could ironically have done us a favour! Thats my take anyway!

If we step back and look at what we know and what we don,t. At the Q & A with results Maris answered that Hole 8 a real option for drilling, CFO said that multiple discussions ongoing with third parties. CA are in the driving seat and th recent appointment strengthens their position on the board and reduces power of the old guard. Windful tax really disappointing but thankfully not retrospective. I think it will require a change in tack from the BOD, in that sitting on their hands and allowing cash to roll in isn,t really an option any more, so it is either to drill or to really push a sale. I don,t think we will get any answers until after the AGM .

Absolutely, the Tax hike will spur the BOD into action. Either put For Sale sign up or Invest. Prevaricating and waiting for Cash to roll in will no longer cut it.

That it is a no brainer to sidetrack well 7 and go for well 8 now. HUR will be in a no loss situation, tax at 25% on profit or 90% offset against drilling. Makes HUR a really attractive proposition either for sale ( double tax break) or to pull trigger on drilling. Status quo no longer an option!

So will focus the BOD's mind. Either sell with the obvious tax benefits, both for existing production and now for field development, or decide to go ahead with well 8. Status quo won,t work now with 25% tax on net cash coming in.!

I think the windfall tax will make HUR an even more attractive proposition to a purchaser. Double tax break. existing tax allowances plus any development of acerage.

Good question CAT , My gut feeling is that if CA are looking for a corporate event over the near term then they will look to keep Maris in situ as the board is now positively balanced towards CA. The new appointment to me reinforces this. However if CA is looking longer term then the CEO and CFO are deadweight and will have been advised that it is better to do the honourable thing rather than the indignity of being voted off.

Its a difficult one. CA are obviously the main driver for HUR. They have a self imposed deadline to exit and realistically when hedge funds set a timeline, they tend to stick with it. So 18 months or so from now. Being a hedge fund they are there to make deals. Would they spend $80-$100m on well 8 to produce in 1 years time +, or simply bank the cash every lift and do the ground work for a purchaser to show the potential of the basin and the wider licence. The pressure on larger players to show they are doing something re North Sea investment also helps. I think a beauty parade is already underway and it is just a matter of who and when and how much. I cannot believe that if the BOD was serious about well 8 they would have done the ground work already. HUR is a tidy entity now. I simply can,t see HUR organically growing. Sale sign is up!

Plus talk on Bloomberg this morning of growing consensus of $170 oil .! As the wider markets begin to crash PI's will be looking for returns elsewhere with significant degree of downside protection.

Good to see water cut stable over last 2 months. Reassuring that pressure being maintained . 9100 daily production reassuring too. Solid ! AGM as LTH's say is key.

Does any LTH know if there is a prevailing authority for the company to buy back its own shares? Usually an ongoing 10% authority but unsure if this needs AGM ratification?
Would be a potentially good avenue for HUR as cash builds up and an alternative to a one off dividend.

Mirasol, I disagree. The price obtained will reflect vulnerability of 1 well and reserves etc... But the date room will show the potential together with the plans drawn up for well 8. Add the tax benefits and HUR is a tidy project, I still think HBR will bite.

Reach, I completly agree. I don,t think CA have the stomach or timescales to develop and drill. Existing management from what LTH's have explained are very poor to possibly worse, CA want out by end of 2023 at latest. I think negotiations are going on in the background. I am sure its just a matter of price. Come July HUR will be completely clean, great project to buy in the current climate.

so by my simple maths, if the dividend had not been paid HBR will be generating post tax $2bn FCF. By a multiple of 4 that should give a market cap of circa $8bn or £6.8bn which equates to £7.00 per share. That is even with the headwind of hedging. Analysts surely should start to re evaluate target prices, especially now greater FTSE 100 coverage and attraction for larger investment/pension funds. With Tolmount now producing and unhedged at plateau of 20k BOE should see cash flow at higher end of target. Someone mention debt free by November , which looks likely!!!

Everyone hammered today, not HBR specific. . Really good news re FTSE 100 just before update too so should showcase with the funds now. FTSE 100 whole different ball game!

1st June, is FTSE reshuffle, but you are correct there is every likelihood post update that HBR will be a shoe in for the upcomming qtr.
If as anticipated the update is as bullish on its future outlook as hoped we could see a 20% uplift to £6+ with funds looking forward to FTSE100 entry and the impact that will have on tracker fund uptake plus large fund exposure. Add to the macro cyclical sell off, the only safe havens according to Bloomberg polls are Energy and Staples.

I suspect after Wednesday's update and the scale of the debt reduction and revenue going forward that we should be very comfortable with gaining FTSE 100 entry. Coupled with significant downside risks for most FTSE companies HBR should get a significant boost both from the Index Funds who will have to invest and from equity funds looking for upside to mitigate losses elsewhere.

Someone Doesn,t want this to go any higher!

Pressure will be too great once results are announced and anticipation for move to FTSE100. Tracker funds and Equity will give the share a real boost simply through entry to the main market