Member Info for haggis_trap

Yup : take over on the cheap (20-30p) all be it with a little risk and work to do....

^ there seems to be a simplistic assumption there will be binary outcome here,
the dream of proving out a jumbo field and being quickly bought out or £3 a share is certainly gone for now.
however that doesn't mean that HUR cant resolve the current situation.
a successful side-track and price of oil returning to higher levels will see this bounce back.

of course the recent news is unwelcome. the risk has gone up. the potential reward is arguably lower.
share holders and rightly anxious. however that doesn't mean HUR cant be a longer-term success.
selling now means crystallizing a loss at historical lows. holding means you are invested in future opportunity (all be it a higher risk than many would like).

^ 6 well. (Not 6z) . Fwiw : Main reason I remain invested is that it appeared to perform fantastically on its own. Only time will tell....

4-bagger achievable with patience. 6z well behaving and price of oil rising will see this at 20p no bother

20p and I would be out of here
30p I would delighted

^ Cheers for considered reply. Certainly looking at data the 6-well was behaving perfectly until the 7-z production ramped up. I have given company benefit of doubt why they produced preferentially from the 6-well for several months. However reason for that is now obvious. Absolutely no doubt HUR knew something was up with 7z for a long time. What I would like to see now it's a plan to fix it. Covid / price of oil makes that risky....

Are the ESPs likely to help here ?
Or is the basic problem that 7z well intersects problematic zone of water ?

The one hope is that 6-well continues to perform.
Before 7-z was enabled it seemed to be performing very well.

Terrible RNS.
All bets now on the 6z-well.
**** or bust ?

Malcys view offers a small ray of hope than its not over (.... yet).

"I think it is worth noting that this unexpected development will have an impact on what options for the company are from existing well stock. I would think that some sort of re-intervention in the 7z well is necessary as it appears that it is flowing from a part of the reservoir that is not ideal, especially as the two wells are effectively on top of each other and acting as a single well. That re-intervention could be used to shut off the perched water or to help access a more permeable part of the reservoir further down the well bore. The company needs to assess the timing of this activity based on capital considerations and whilst also ensuring safe operations are possible with the COVID-19 backdrop.

In the meantime, the 6 well as I mentioned is going to build up production to see what production might realistically be, after all we know it has done nearly 15,000 b/d on a stable basis and this is the time to see how high it can go.

Hurricane will obviously be conducting a review of all these issues and whilst this is a disappointment, we always knew from its historical global history was never going to be straightforward. This latest challenge is a product of the well configuration which has led to high interference and doesn’t necessarily mean anything negative about the reservoir’s ultimate potential."
https://www.malcysblog.com/2020/05/oil-price-hurricane-coro-gms-echo/

Agree - Whilst the RNS contains bad news it should have contained some kind of statement about future plans / interpretation of the news.

^ I am not a geologist but have been invested since 2014. It seems to me there is no doubt that the oil is there. Todays RNS is open admission of technical issues. It is not game over - because they are still producing. However cash / time may limit what action they can take to rectify the situation. Everything now depends on one well - which is far from ideal. Previously the company talked of side-tracking 7z. They also now seem to think they can spot the problematic zones of perched water when drilling.

Further clarification about longer-term plans is required.
The risk certainly got much higher.

Cant imagine many would object to a take over : share price cant go much lower :-(

If he believes in fractures basement and HUR then he is going to have to dig deep and convince the market.

^ fair point! Hopefully oil price bouncing back gets this share back to 20-30p range (where most private investors would be approaching breakeven)

RRE energy are a good company (though I am not invested - already heavy in small oil stocks).
IMHO both companies should see 50% bounce-back in share price when oil price and economy recovers.

HUR => 11p -> 20p
RRE £8 -> £16

Good presentation and RNS. Oil price seems to be the main issue here.

Water cut seems is indeed a valid concern - however they seem to have a good handle on it and ability to manage it. All cutting edge projects will have technical issues and challenges. Some strong hints that the EPS is on track to prove out 0.5 billion barrels of oil.

500 000 000 barrels : Basically means the EPS could produce at 20K for the next 68 years...

Ahh... It seems RRE might have £300 million in bank. However they are also on hook to pay ~£500 million in decommissioning within 10 years (after purchasing Marathon). Which explains why their current market cap is way less than cash in bank.

There seem to be bulletin board rumors they might be interested in Spirit Energy - which would be interesting.

The interesting thing about HUR vs RRE is they both produce 20K bopd but go there by entirely different paths. Hurricane is an explorer while Rock Rose specialise in buying older north sea assets.

Market cap of RRE is 103 million.
PE ratio is 1.5!
Cash in bank is £300 million (x3 market cap?)
https://www.lse.co.uk/share-fundamentals.asp?shareprice=RRE&share=Rockrose-Energy

Market cap of HUR is 235 million
PE ratio is 5
https://www.lse.co.uk/share-fundamentals.asp?shareprice=HUR&share=Hurricane-Energ

Well : I am interested in people opinion of Rock Rose Energy.
Thread doesn't need to be HUR vs RRE ****ing match.

If you look at the share price RRE have certainly done well.
Even after the recent massive drop they are still double what the price was in 2018.
So must be doing something right ? Seems to be well run company

The way I see it :

1) Longer term : the company aim to increase production to 40K to add value for shareholders. Along with a decent oil price this could see the share price at near to £1.

2) Short-Medium term : Price of oil is key. Like all oil companies HUR have rightly gone into survival mode. The plan will be to focus on Lancaster and ensure there is £300 million in bank to pay the bonds in summer 2022. This strategy is correct - but wont leave much spare cash for #1.

The increasing water cut is mildly concerning. However the fact pressure remains good and the 2x wells are just 320m apart is reassuring. If the company thought they were damaging resevoir then they wouldn't continue to produce at 18K.

"Until the Capital Markets Day Webcast on 27th April where we will get much more flesh on the bones of all this I would say that Hurricane is in very good nick and look forward to reporting back from that."