Member Info for HeidHoncho

At the time that the aggressive “kitchen sinking” started around September time, and arguably the mind set of the BoD apparently switched to promoting a “bond holder friendly” attitude, I note that was around the time (if memory serves me) that Kerogen withdrew from being BoD participants.

I’m sure that may merely have been a coincidence, but I’m sure that some may perceive that may have happened to reduce the belief that there may be a conflict of interest, if indeed it is proven that Kerogen are a significant bond holder.
As ultimately, the plan currently being proposed by the BoD is apparently very bond holder beneficial, with little or zero consideration being given to the shareholders that they are meant to protect the interests of.

IMHO, obviously.

CaptainSwag, further to my previous post, if they were to conduct a well test of the exploration well (which it would be almost certain) then there would be a similar exposure to adverse weather when it came to landing the SSTT, as it would when running the completion on a production well.

So, in essence, not a great deal of difference in exposure between a well tested exploration well and a completed production well (other than perhaps the surface tree landing parameters).

It wouldn’t be an exploration well necessarily, as I would assume it may be an appraisal well.

Now this wouldn’t make a difference to any adverse weather exposure, but it would make a difference to the necessary drilling parameters, hence me highlighting the difference between an exploration well and an appraisal well.

CaptainSwag, there are certain periods (a minor proportion of the overall well duration) that is more susceptible to adverse weather conditions.

Such as when they are running the completion, and when they are landing the tree.

However, those were both successfully managed during the completion of the P6 and P7 wells, with an insignificant period of adverse weather downtime being encountered.

CaptainSwag, “ do not remember which months the 2016/17 campaign was undertaken .”

It was conducted throughout the winter months, with an insignificant amount of adverse weather downtime.

I cannot remember when the campaign commenced, but I certainly recall it still occurring during the months of November/December/January, and I believe maybe into February.

I could check my records and see if I could find more definitive dates if absolutely necessary.

“For bondholders, it's get back majority of the money, or take the risk and get back even more.”

Unique reading of the proposal.

The bond holders level of risk, be that to their existing bond level of $230 million, or their slightly reduced level of $180 million should the currently proposed plan be accepted, would remain unchanged as to the risk to their bond recovery.

Therefore, the only variable being the equity requested for a pitiful 21.7% reduction in the level of bonds remaining outstanding, given that they are willing to reduce the level of remaining bond by merely $50 million.

In essence, the shareholders are being requested to give up 95% of the company for merely a pitiful $50 million reduction in the level of outstanding bonds.

There is little incentive being offered for existing shareholders, so the likely response from shareholders were it to be put to the vote would be to reject it, as the sword of Damocles is a guaranteed 95% reduction in their shareholding if the proposal is accepted against a potential (not guaranteed) wipeout.

Who wouldn’t accept a chance for recovery for risking only 5% of their equity.

I think greed has gotten the better of the bond holders, and by association the BoD, for them to make such a derisory offer against a very limited (5%) risk to the shareholders that they are trying to entice.

IMHO

So, as I read it, they are requesting authority to issue 4 billion shares by means of an open offer to existing shareholders, and 4 billion shares by means of a placing with disapplication of pre-emotion rights.

Although they have stated that both will be done on the same terms, which would appear equitable, there is the potential that the parity may not be all that it first appears.

The authorities are maximums, and not minimums, and there is no guarantee that both authorities will be utilised to the maximum.

There is the potential, and the right, for the company to fully utilise the entirety of the authority to issue 4 billion placement shares, and (for the sake of argument) only utilise 1 billion of the open offer allocation.

As long as the “terms” (price, and any associated warrants) were the same, then there is nothing to prevent them doing so should resolution 6 be passed.

Were they to have requested to have sought authority to issue 4 billion shares through means of a placement, yet offer only 1 billion shares (could be more, or could be even less) for purchase by existing shareholders through means of an open offer, do you feel that the shareholders be as likely to pass the resolution ?

So, given the above, they have increased the authority to issue shares by means of a placement (4 billion as opposed to the originally sought 3 billion), but not guaranteed that the same number of shares can be purchased by the existing shareholders (a request for authority does not necessitate that the authority requires to be utilised in full).

There is the potential that a carrot being dangled on a stick in front of a donkey will get the donkey to perform as required, yet the donkey never gets to the carrot that it thought was its reward.

There is no intimation that the shareholders are donkeys, just that the above was utilised as a simplistic analogy to get the point across, that when you are in a room with mirrored rooms full of smoke that prevents you from seeing that the building’s structure is formed by a pack of cards.

Mo intimation whatsoever that this is what the company are seeking to achieve, just something to consider when evaluating how you propose to vote on the resolution, as all that apparently glitters may not be gold.

All of the above is merely made IMHO.

Slift, thank you for taking the time to respond, and confirming that you are stating as fact that the company is trading whilst insolvent.

I’m sure that will come in handy in due course, who knows.

“ HUR are still in a financial difficulty and are insolvent. “

Slift, are you stating that HUR are currently trading insolvently ?

Although dissimilar, it may be worth looking at the court case that AMGO are going through today.

From the snippets that I have witnessed the judge is getting irate at the options being proposed by the company, i.e. accept our proposal or the company will go bust, and he is pushing them to show him what other options that they have attempted and rejected, and is questioning whether there has been consideration as to the effect on the shareholders, as it appears to be weighted towards the bond holders.

Maybe I’m reading it wrong, and although it is not a similar case I think there may be sufficient points of interest that extend across both cases.

Then again, I may be well wide of the mark, but what harm is there in at least reviewing whether there are any similarities in how the court/judge may look at the limited options being placed in front of him, and whether there is only beneficial bias to parties other than the shareholders, such are as likely in our upcoming case.

IMHO

Is that RNS showing Sprott selling, or is it due to a dilution in holding due to share issuance ?

If memory serves me correctly (though the passage of time may be clouding my memory) the rig manager at the time for the Ocean Bounty was Cliff Junkin, though it may have been Cotton Seymour (one was the rig manager for the Bounty, and the other the Victory, I cannot be 100% sure who was the rig manager for which).

Maybe you could confirm whether the grey matter has deteriorated more than I thought it had ?

With regards to the Covid vaccine product trial specifically, there is a likelihood that recruiting subjects to participate in the trial will become more problematic as each day passes ?

I am assuming that only those who have not previously received any of the other vaccines would be permitted to participate, and as each day passes that pool of previously unvaccinated individuals depreciates yet further, thereby increasing the problem of the recruitment of qualified individuals into the trial.

I think we really need to shake a leg and cross all of the hurdles necessary to get this trial started before recruitment becomes problematic in the U.K. due to a dwindling number of those yet to be vaccinated (which in itself is no bad thing), and we may require to have to reconsider the original plan, and have to look to move the trial to a country whose population has a high level of, unfortunately as yet, unvaccinated individuals.

Let me start by saying that I don’t know the answer to the question, hence me throwing it out there to see if others more knowledgeable on the subject may edify me further.

Who would it benefit (through a reduction in any tax potentially payable) more were an essential sale (i.e. as stated, not the “entire” company) be monetised through the distribution of the same being conducted as a dividend.

I am assuming that holders of very large quantities of shares are unlikely to have them all held under a tax efficient wrapper (such as an ISA), and it may be more tax efficient for them to receive this monetisation of their shareholding as a dividend rather than an outright sale.

Is the tax levied on dividend income lower than the tax levied as Capital Gains Tax ?

Would the sale of a substantial proportion of the assets rather than the “entire” company permit the utilisation of the dividend issue model of monetisation, whereas the sale of the “entire” company mean that the monetisation model through dividend distribution not be permissible thereby opening up exposure to CGT ?

I appreciate that for those of us holders that have our entire holding in a tax efficient wrapper that it is unlikely to matter to us whether the monetisation is subject to any income tax or CGT exposure, but for those who have very large holdings that they couldn’t cram into tax efficient wrappers due to the annual limitations on those wrappers it might likely make a significant difference to their outcome.

Is this perhaps why it is only a substantial number of the assets that are being sold rather than the entire company, for the potential tax benefits ?

Most likely just an error prefixing the 2.8 billion with the £ sign.

It may have been intended that the market size (i.e. number of shares currently in circulation) was circa 2,800,000,000 shares, and not that the market cap is £2,800,000,000 (which it currently isn’t).

Hey, but I wouldn’t turn my nose up at the offer of £1.00 per share if it was given.

I thought that the EBT (I seem to recall that it held in excess of 3% of the shares in issue) that was set up a little while back was intended to award incentives for performance.

That being the case, why on earth are they also receiving a bonus in the form of a relatively risk free option to purchase shares at a capped price.

Disappointing to see the snouts in the trough again, when an existing performance based bonus system already exists.

“ I had only decided this morning to unload the majority of my holdings” , at the same time stating “ I sold just under 10% of my holdings this morning” .

You appear confused, which was it, you unloaded the majority, or just 10% ?

“Tullow has no experience in gas development” ?

Do you mean, other than in the SNS sector of the U.K. ?

Bannor, I see your point regarding insurance, as I see it you are indicating that the buyer can obtain insurance whether they have title to the cargo at that point in time due to them having insurable risk. (much in the same way that a financial dependent can obtain insurance on those they are dependent on, as they have insurable risk).

But do you agree with the assumption (nothing is being portrayed as fact, as the sales/payment terms are not in the public domain) that, especially given the court oversight currently, payment for the cargo will be made upon the production of an original BoL ?

Banner, I accept the differential between the sale terms and the payment terms, but the principle regarding the insurance risk remains the same surely.

We are in agreement that insurance, or not, of the cargo once it is loaded onboard the vessel is at the buyer’s responsibility/cost/risk, don’t you agree ?

It would be foolhardy for the buyer to leave a multi million dollar cargo uninsured, don’t you agree ?

Would you agree with the logic/principle that you cannot obtain insurance over a cargo that you did not hold title/ownership of ?

We appear to be in agreement that title/ownership is unlikely (especially in this instance due to court oversight) to transfer from seller to buyer until payment has been made, and the normal means of initiating the payment to be made is by means of the provision of an original BoL.

So, I agree with your accurate differentiation between there being separate sales terms and payment terms (though both generally do not solely operate in isolation), but are we not ultimately agreeing in the main takeaway from my initial message ?

That being that payment for the cargo will be made upon the provision of an original BoL (i.e. upon completion of loading the vessel), and not at some far distant point in time (i.e. credit terms, be they 30 day, 60 day, 90 day, or whatever).

I was merely attempting to dampen any concerns that payment for these cargoes may be someway off yet.

Regarding payment terms there may be a clue in the RNS.

The transaction was conducted under the Incoterms of CFR.

Under CFR the seller is responsible for the loading costs, and costs of the transportation, to the buyers designated port of delivery.

What it singularly doesn’t cover however is insurance of the cargo, as this remains the responsibility of the buyer.

It is illogical to imagine that you can obtain insurance for something that you cannot prove that you own, hence it is logical that once loaded onto the vessel that title of ownership changes from the seller to the buyer at that point.

This I imagine would require payment to be made, likely upon submission of the Bill Of Lading, upon which immediate payment is made by wire transfer, permitting transfer of title to be made, and facilitating the buyer to obtain insurance of the cargo.

This is assuming that the buyer does not wish to run the risk of leaving a multi million dollar cargo uninsured, as under the Incoterms utilised the buyer assumes all risk for the cargo once it is loaded onto the vessel.

Just a thought perhaps worthy of pondering.