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I thought the RNS specifically mentioned Lancaster being underdeveloped and having huge potential. hence the £250m fund raise?

So going into 2023 looks like a strong start for POO. The opening of China and Russian oil production being hit by price cap but more particularly the February EU oil products ban. $90 should become a solid floor. Still cannot get my head around what CA is playing at. !!!! $300m debt raise for huge drilling programme in the North Sea, where most major players are moving out due to Government tax disincentive. Putting HUR back into vulnerable position with creditors with only 1 diminishing source of income?!!! No mention of P8 , and a technical belief that the project should have gone ahead as a starter ( with NAV circa $250m). CA seem to have lost the plot. HUR is a minnow, $180m company that really has had its day , operating in a poor jurisdiction now. Its saving grace is simply that it is generating cash hand over fist for the next 24 months and very attractive to a 3rd pty with its tax credits. It is incredibly straightforward and tidy with decominishing ring fenced and a simple operation. Most of us would snap someones hand off with a circa 12p deal , as would a coherent CA. Where has this 10p come from? By the end of 2023, cash in the bank at $90 will be circa 10p plus!!! All I can think is that it is a ham fisted attempt to push both the BOD and "multiple credible parties" to get their finger out and put us out of our misery. Looks like POO is going to help lift sentiment and hopefully we will all be smiling (or grimicing less for LTH's) post January 7th! Thats my take anyway!

So HUR have to raise £250m ($300m)! this is absolutely crazy. HUR has just got itself out of a debt death spiral!!!!!! What are Albion providing? Lancaster has just asked for a potential lincence application for P8 which has not proceeded due to potential flaring concerns. What is the $300m for? The North Sea really is a no go area for most Oil companies now due to change in taxation treatment. it is highly likely that there will be a change in Govt in the next couple of years with an even harsher approach to the North Sea and enviromental concerns. I still cannot get my head around what CA are playing at? $300m equals about 4 well programme . What 4 wells,?!!! What targets? Where has this fugure come from? Does it include current and anticipated cash balance? I just hope that someone comes along and offers 12p and we bite their hand off!

But Flying PIE, HUR have to raise £250m ($300M)!!!! Where in earth will that come from and what terms, the interest rate/coupon will be crippling and back to square 1 if the drilling is a dud! I reiterate again the FSP allows uniquely all interested parties to see the date on an equal footing. If we get no increased bids especially as 10p is also such a low bar, then that tells me that Lancaster has very little potential and especially not none that any logical institution or bank would agree to lend $300m, in the current climate!

So we know that we have a baseline bid of 7.7p which was rejected. If no other bids come in higher then the Albion/CA option to me is dead in the water as multiple other potential suitors, all of which will have experience of the North Sea, as opposed to Africa etc... and have UK tax liabilties that the credits would provide a very attractive offset, will I am sure provide a far more reliable viewpoint of Lancasters potential. I honestly believe this current prospective RNS is another stalking horse to put pressure on the BOD and on the multiple credible parties! One thing you can say about Maris is that he is a cup half empty kind of guy. He doesn,t do PR and pumping up prospects, the complete opposite, so if he feels that significant progess has been made in the FSP I would give some credibility to that.

So Tony Buckingham, whom I admit I know very little about, and CA believe that not only the Lancaster field can justify a $300m (£250m) drilling programme, but also that CA which is an activist hedge fund looking to close down and distribute capital over the next 12 to 24 months , believes that the market will be willing to provide such capital on the security of cash flow from 1 depleating well? Unless the BOD of CA have lost the plot I cannot see the rationale. HUR, which LTH's know far more accutely than a newbie like me , has suffered at the hands of bondholders wanting their pound of flesh. Where does Buckingham and CA believe such funds will come from? a $300m facility for drilling in the North Sea with the regulator raising concern over flaring on a relatively modest p8 again causes me to question the sanity? For me to try and make some sense over yesterday's RNS , I am struggling. Buckingham and his team will have had access to Lancaster field data room under the FSP along with other interested parties. The positive that comes out of this , and I believe the real motivation for the CA RNS, is to give credibility that Lancaster has the potential to justify that kind of investment. Hence the sale price should include not only current cash in the bank. The valuable tax credits and the future income stream from P6 but also the inherent potential value in the Lancaster acerage. I personally had put this down as a big fat zero after P8, or maybe a modest 1p or so, but obviously Buckingham sees it differently. So apart from reputational risk what is Buckingham exposing himself too? he and his backers aren,t putting any money in, infact they are going to recieve a big fat wadge for signing up. What is CA playing at? It doesnt fit into their time scale of modus of operation? Hurricane represents by far the funds biggest asset so a real risk in leveraging HUR back up to fund exploration in a very limited time horizon to secure Buckingham,s involvement (12 months and £250m raised). No, the only logical reason I can find is to push potential bidders, and hence the BOD and to highlight what they percieve to be the true value of HUR. My saving grace is that CA aren,t fools and aren,t interested in oil, it could be baked beans, it is simply the maximum return. So that gives me some sense of reassurance to what I am finding hugely perplexing!

I have been travelling , so surprised at RNS, wondered why 80 odd posts today!! I had my suspicions that the 7.7p speculative offer may have been a CA inspired stalking horse. Likewise this current strategy and alternative smacks of putting pressure on a reluctant BOD to get things moving re FSP. I suspect BOD may have been delaying with the hope that winding the company down with capital reduction would have enabled a couple of years continued remuneration with little effort. from CA's RNS it appears to me that 10p is the new baseline starting offer price that they would deem acceptable. I have a gut feeling somewhere in the region of 12p will move their hand come 7th January.

https://oilprice.com/Energy/Energy-General/Yergin-Oil-Prices-Could-Break-120-If-China-Overcomes-Covid.html

One of the commentators. I suspect we will see $100 as a floor from March onwards as POO tends to be forward looking.

So having watched at least half a dozen oil analysts over recent week on Bloomberg the concensus is that by mid first qtr 2023 POO should be significantly higher. Circa $90 +. Going to be a difficult couple of months with Covid in China, but OPEC + unhappy with current price as budgets set at $95 and it looks like Russian OIl exports falling off a cliff. Add February EU ban on Oil products , which is really significant, and regardless of recession fears it looks like a much higher Oil Price. This offload will be circa $83 which should net HUR circa $22m to add to exiting cash balance. I am hopfull that even with incompetent BOD , that the focus on monetisation will mean that $ v £ hedges have been maintained and HUR should see a reversal of the previous currency loss of circa $4m.

Regardless of what Dad says, OPEC have made it abundantly clear that they will makes cuts if their goldilocks target range is not maintained and that price stability is key. They have also stated that they are currently in a wait and see mode with Trader confusion over fixed prices caused by the Russian oil cap. I suspect within the next week or so OPEC will have the clarity they need. This week both OPEC and IEA will have demand data and I suspect come Sunday we will get an announcement of production cuts. The aim being to get POO back to the $95 range most OPEC countries have set their 2023 budgets.

Thanks Laser so additional 5 days or so supply due to weather will hopefully negate the POO fall in respect of overall revenue.

So spending the last few days watching \Bloomberg, it appears the key driver of the fall in POO is the absence of Oil traders due to end of year reconciliation, but also due to terms of Russian Oil cap and 28days grace given by US and EU. What this means apparently is that prices have to be fixed during that period , which is a disincentive for Oil Traders and so they are sitting out. OPEC has made it clear that its No1 goal is to avoid such volatility so I suspect this weekend we will get something from them, either a strongly worded statement or indeed a cut. OPEC's goldilocks price is $95.

Reassuring news thanks Laser.

So EU price cap set at $60 and awaiting Poland's acceptance. Areasonable compromise as $65-$70 too high. But Poland may resist. Key really is what OPEC will signal on Sunday!

Good question.
Saudi Arabia which in essence is OPEC + has set its budget at circa $95 as a sweet spot. The recent weakness OPEC has tolerated due to the December 5th EU/Russia Oil embargo and awaiting the price cap. Also China weakness. So I suspect we will see $95 -$100 Oil towards the end of this month. As China begins to re open towards the Spring then I suspect $100 floor and OPEC may then be talking about increasing as opposed to cutting supply. I,m hopeful that HUR will be long gone by the Spring!

agree, Just read really interesting article looking at Russian energy strategy and Putin looks ready to play a really tough hand and freezing out Europe both from remaining pipeline oil and gas. You are right Poland particularly looking at $30 price cap , highly likely that $50 will be agreed as compromise.

Thanks Laser, I think the EPL will be a positive for the FSP rather than a headwind, especially as HUR, which tend to err on the side of caution have confirmed , very little if any impact.
For any purchaser HUR is a very tidy little proposition, All liabilities ring fenced, no skeletons in the cupboard. No drama now. Significant cash underpin and shortly to have circa $120m free with another circa $19m in escrow. Tax credits of Gross 15p equivalent. so 3p-4p minimum and avaliable to offset immediate group profits post transaction , on UK revenue. P8 , I am sure is a reasonably confident proposition for any other player and targeting circa $250m Nav., ahilst utilising EPL reliefs as well. Really a no brainer but the only variant is at what price?

So really interesting value scenarios to FSP. As Dive says, another larger player would take its own view of P8 and risk/reward. Its own relationship with regulator and not having CA breathing down its neck looking to exit. The value of the tax credits and the EPL potentially making them more valuable in offsetting 2023 tax bill. I suspect we will get an answer as to any bid or hopefully bids in the next few weeks, I would be really disappointed if no formal offers before the end of the year. Real positive is that HUR has options and hopefully a sellers market!

I completly agree with Dad on this occasion.

Multiple interested parties is a bit more encouraging than "several". Also to add the term "credible" hopefully indicates confidence. For me it indicates that the tax credits may be front and centre. I would certainly hope that the net value to HUR would be circa 3p + .

Really positive news, both in terms of EPL and FSP.
I suspect the increase in EPL will only enhance the attractiveness of HUR in allowing the Tax credits to mitigate the tax burden for the purchaser.

The fact that multiple interested parties allows for a potentially competitive bidding process. For management to put out statement so quickly and positively shows a real step change!