RE: HUR BoD10 May 2021 11:02
Spike...
You are referring to the RNS summaries and forecasts scenarios but these are the details....
Which were submitted to Bondholders and the basis of restructuring plans ...
“7.5 On 11 September 2020, the Plan Company released an announcement entitled "Half-year Results 2020 & Technical Update" (the September 2020 RNS) explaining that:
(a) the Plan Company had completed a preliminary reassessment of the Lancaster Area, and announcing, amongst other things, that the Lancaster Area was now understood to be more complex than previously thought. The September 2020 RNS set out new technical interpretations such that the Plan Company's unaudited best estimate of oil reserves from the Lancaster Area was significantly reduced; and
(b) recent low oil prices and changes to the Plan Company’s oil production forecasts might impact the Plan Company’s ability to repay or refinance the Bonds in full by the July 2022 maturity date, without additional funding and/or potential dilution to shareholders.
7.6 Further technical work is ongoing and since the September 2020 RNS there remains uncertainty as to the rate of decline of production at the Lancaster Area with production levels slowing and water levels increasing. At current production levels and oil prices, the Lancaster Area is generating positive cash flow. However, the reduced estimates of the Lancaster Area's reserves announced in September 2020 and the impact of producing from only one well with effect from May 2020, have negatively impacted anticipated future cash flows. Furthermore, during the period of severely depressed oil prices in the first half of 2020, the Lancaster Area was operating at or around operational break-even levels, meaning it was not able to materially contribute to the Group’s liquidity for a period of time.
Financial difficulties and Committee negotiations
7.7 The cumulative effect of the events described above will result, the Plan Company anticipates, in a liquidity shortfall. As a consequence, although the Plan Company will continue to be able to service interest on the Bonds, it will not be able to repay the Bonds at the final maturity date in July 2022.”
https://www.sec.gov/Archives/edgar/data/1859547/000121390021023963/ea140089ex99-1_hurricane.htm
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