Member Info for InJamesweTrust

Fred
With the seeming demise of Faroe for a lowly premium, following the same path as Ithaca I'd be careful as a HUR shareholder to consider Kerogen as a benign holder of the stock. Looking at the pattern of both companies ultimate TO - Kerogen would be well placed to act in concert with a CNOOC or other firm to secure a blocking holding.
If so, interesting if the CMA would take a view.....dare say it would make the price paid following successful EPS may be lower than many hope for.
Guess Kerogen have access to all the important info when voting their stock around reservoir performance etc.

The danger point which did for Ithaca and Faroe was a hostile holder stake building to a point that would make life difficult for other bidders to gain meaningful control (15% plus holding). Although currently benign holders, similar risk is present in HUR with Kerogen as a cornerstone investor.
The first drill is I think dual targeted as Gil (I think) states it could also unlock the field/formation below it. So not sure if this is near the KD or iatuk leads. KB, Amatuk or MJ-3 seem most likely size wise but neither is close to KD or iatuk.
So if they drill Jethro and sidetrack to target another play (as I recall Hammerhead sits aboce iatuk in Tertiary while iatik is cretaceous) it could be quite a drill. This may explain (along with positioning costs) the higher than expected cost of this drill.

Biffa
End of Oct is but a few weeks ago, even if it may seem longer.
The BoD has taken numerous decisions or made multiple statements that give me pause for thought/cause for concern. Do I think there is still value at todays price, yes but see the accretion being slower than I think it could/should be as a result of these actions and the end price being lower because of the BoD/attitude to outsiders/conservatism.
Hence I have diverted some capital to investments where I see greater upside short/medium term and a higher degree of certainty that upside will be achieved.

Biffa
Each to their own indeed. However, concern around BoD decisions is why I sold down 75% of my holding when it was in the mid-50s several weeks ago.

Biffa
Clearly from the SP people are choosing to deploy capital elsewhere. To Rangers1 post, the article reads to me as RT saying he'll go the full.9 yards developing the field and is in no rush to monetise.
Have said.previously the Spirit deal.is designed to take GWA out of the sights of predators (of which there seem none) and the delay in drilling Halifax again is doing likewise.
Interesting just how big a screw up using a drilling fluid that turns in to a blocking paste is yet how little comment it generates. How much was spent on that drill....not a complete bust but not genius either.

Whichwaynow
I'm not banned and have suggested the solution for donkeys to overcome potential absence of buyers in event global macro puts majors off.

They are unlikely to farm down for peanuts and from the narrative at the Capital Markets day not likely to do so before a) first drill or unitisation is confirmed and b) until seismic has been reprocessed to consider number of barrels when one includes the tertiary.
The price achieved for a farm down will have a direct bearing on the value applied to ECO stake - less two factors. Tullow desire to farm down to create headroom in their budget for accelerated drilling given balance sheet commitments elsewhere and b) greater Tullow desire to bring TOTAL (for instance) more into the project and perhaps take on operator status to improve negotiations with FPSO and service providers.
Both TOTAL and Tullow will be keen to accelerate once/if oil is shown to be in place as the speed with which Exxon are monetising is impressive indeed.
ECO funded for initial drilling and even in event of unitisation of Hammerhead - drilling of production wells (if Exxon accelerate ahead of Liza 3) not likely to commence until late 2021 or early 2022 (for 2023 production) as drillship can probably do each of these in 4-6 weeks and Liza 1 has 17 wells.
So while ECO is cashed up for drilling, concerns (I had some) around significant drilling Long Lead Item costs for Hammerhead should not materialise until licence is materially derisked and revalued as a company asset.

Thanks to the poster of EnergyVoice article.
The delay in drilling Lancaster seems remiss to my mind. Why 2021 when much of the BHP/Reservoir performance data is gleaned by late 2019? Is this to ensure potential bidders are left guessing as to the connection and hence value of the GLA. The Spirit deal already takes the GWA off the table for many.
Train set and lots of time to play with it.
To me the interview puts the potential monetization event further off in the distance which as a PI is frustrating.
His disdain is clear with comments around time taken to hook up and commission being meaningless - yes perhaps to him who looks at it from a theoretical proving up concept but that isnt the view of most providers of risk capital.

There is some disquiet though as Exxon can reclaim all costs from any phase from general revenues in Guyana, thus potentially delaying receipt of funds for government until 2025 or at least reducing available funds significantly.
However, $30 a barrel in 2023 with 520k bopd makes for pretty chunky cashflows all round!

Really keen to hear about unitisation and Gil to at least hint about talks underway...

So Ph.III is expected to produce 180k bopd from 2023 - that is a fairly quick turnaround and with the power of Exxon/Hess behind it the FPSO is on charter with an option to purchase so the upfront costs are reduced. Total I should think will be capable of similar transaction structures.

The speed with which these assets can be monetised (it has taken HUR 2.5yrs to get close to producing 17k bopd) is a major plus in terms of financial models which may be used to value the assets as the initial investment is recouped incredibly quickly meaning ROI/ROE/ROCE/IRR figures all look better.

AdUK
For all the times you have responded to.posts about the eff up.in shipyard or Spirit deal causing delays to say "relax, the BoD have guided H1." It is.interesting to.now be sounding the klaxon for what may just be a pre planned measure to avoid adverse weather prior to hook up.
The board don't need to RNS what they had for breakfast being a riff.on another.common refrain yet.now you are eager for bad news - any chance you sold 50% on Friday with hope of a dip happening Monday?
Hope they have not had a mishap with the buoy and be interested contractually who is on 'the hook if they have.

Trendz - that's interesting, any source?

Keen to understand from Stabroek operations when they propose to do further work on Hammerhead-1 and what that will entail. Think Exxon/Hess said it was so big it could jump the queue for development, not likely in place of Liza-1 due to come onstream next year but I wonder if instead of Liza-2 which is due to produce in 2022 with a 220k bopd FPSO?

I'm hopeful by mid Q3 there may be 2 drills complete, a 3rd underway and a further appraisal drilled on Hammerhead. HH is complicated, in that will Stabroek consortium seek costs for initial drill or will Orinduik consortium pay for appraisal drill and what ship will they use and when? Given what is on the Orinduik side do they have a complex well to drill targeting Tertiary and Cretaceous with a sidetrack?

If all 3 of the above events are even alluded to in Q1 then we should start to see some SP action. As mentioned, I would like to see Tullow talk to the Hammerhead discussions in their coming updates.

If we are 3bn on CPR before Tertiary is modelled, what are we when modelling is complete.....4-5bn in an area of major prospectivity.

Wellwell
The API factor was the one I was less certain about.
The oil replacement is much more interesting as an imperative to action and as Malcy alludes to today, making such acquisitions in a low price environment lets one do it with much more capital efficiency.

Just been going over Tullow and Hess Capital Markets presentations from Dec'18 and they're well worth a view. Both reckon oil trading in $50-70 range and gearing business to 've cashflow positive at the lower end of this band (HUR cashflow positive at $21).
From an investment perspective, IEA reckons oil replacement requires CapEx of $570bn annually but 2015-2018 is about $600bn shy of this number as an industry. How can a major quickly get up the E&P curve - acquisition of booked reserves is likely 2-3yrs quicker than organically via exploration. Another positive for HUR.
Also, with IMO restrictions on oil coming in to play in 2020 a higher value may be placed on lighter crude - which I think is the stuff HUR has if it flows.
The standard of presentation also was interesting to behold - very polished, including HESS leaders and CEO knowing analysts by name and profusely thanking them for their time. An area for HUR to work on I think.
Both easily available as webcasts on investor section of companyn websites.

Johnpwh
The CEO has already alluded to a potential multi-FPSO strategy which could see 150k bopd (all being well) by 2022 if the Spirit drills are successful. If they can take a vessel on a long term day charter this reduces significantly the upfront cost of such a solution which is likely able to be funded through cashflow and cost-sharing with Spirit.
While the company may never get there (on LanFax particularly) having the diea of near term expansion plays into the financial models for fair market value.

Happy to Learn
The very best of luck for the new year. The imminent hook up will hopefully give you a fillip and even more of tonic from FOIL maybe mid February.
Hope the treatment is doing it's job it is good to hear you dropping in.
Hopefully as FOIL.approaches - harmony can reign on the board as technical arguments and concerns may begin to fall away.

On that PE ratio for Tullow, if Hammerhead is a joint accumulation and moves to front of Exxon queue for development what will that do to Tullow cashflow?
Half share of field means Tullow 30% of 150k bopd onstrea in 2020/2022. 30% of $2bn outlay but cashflow of 45k bopd with $35-40 a barrel at $70 oil. Reckon it takes 14 months to be self funding and an extra $500m to the Tullow bottom line from just one field on Orinduik.

If you go back to pg34 of HUR BB you can see Ricfle posting around 16 Dec. However, you cannot click on his name to see posting history as you can with others so he may have been removed.
If so it is a shame as while some times he was intemperate (understand for some of the brickbats thrown his way) he is undoubtedly knowledgeable and.hope he crops up under another name.
Doubt his banishment if quite as serious as one of the others mentioned by AdUK.

Remember HUR having sunk the CapEx can still make c.$350-400k a day or $120-140m a year at $40 oil. Not many others can say that. Allied to that news of reserves moving up the value curve if all goes well it is a stock that should trump any macro issues.
On a macro basis, how did the world become so polarised so quickly (Russians and Chinese I'd wager). Where are the good centrist candidates to bring everyone together.
A young Paddy Ashdown (Jonny Mercer/Dan Jarvis) for instance to talk a bit more sense.
Happy Xmas all

Check tweets from Robert Palladino in US State Dept. Not subtle and very clear to Venezuela.