Member Info for InJamesweTrust

Biffa
The tone of the 2016 Capital Markets Day was very evident how AS and RT felt about.majors - look how clever we are and stupid you be kind of thing. That isn't forgotten easily and was really quite regrettable. May still be able to view this on website.

The majors may have wanted value 18 months ago but would it have been worse than funding secured who knows. However, RT likes (I think) the idea of seeing through to EPS to prove his point that he was making at Cap Mkts Day.
Hence why Spirit appeals - appearance of an independent and backing of Centrica who haven't snubbed him/FB.
He is single minded and I'd say it is close to point where he stands aside (probably on FOIL) and allows a heavy hitter to come in to steer it home.
Cue howls of derision from the fan club.

Joe
For economy of words I've suggested 3bn barrels will convert closer to 2P
Production through spirit will be valued at NPV.
If the drilling of GWA reads across to GLA drills and EPS performs well from Feb-June 2019 there should be strong read across for all fields and likely upgrades in field size taking us from 2.6bn to 3.0bn barrels or more.
This read across and prodcution success (if attained) should move the value of the assets.
Given where we sit today and the potential upside - it is really anyones guess when sentiment will shift.
Never if we keep thumbing our noses at the majors - these are behaviours I hope MS can keep in check.

Biffa

Response was to you and Wessex - apols for any confusion.

Think some complex Spirit related work was completed in DDW and it makes sense to do so now, hence simplifying work required in 2021 such that a quick outage in the field would be enough to complete on site.

The delays from what they believed and communicated was possible are frustrating - not as much as the absence of acknowledgement but by and large they remain on track to deliver a project that by mid-2019 might turn 3bn barrels of 2C currently valued at c.50cents each into 2P with a $3-5 per barrel value.....hence why I remain invested.

Certainly not slam dunk they will achieve it but am sure it won't be for the wont of trying.

Biffa and Wessex
Are you saying it impossible for HUR to decide late on oh we need this for the Spirit deal. Could we couch it as being useful for EPS and do it in DDW instead of sailing her back here in 2021? May delay sail away a bit but no harm as still within guidance.
Biffa - you seem to reckon Bluewater would prohibit any such action as it is their vessel. Given the cash HUR have spent on the tub it carries enough away.
As for the blame around timing being Bluewater, RT made the on site IN Sept statement after she had been in the yard for 5 months. He then flat denied doing so. Hence, a little white lie about the delay is not a big deal to them.
Ironically it makes some sense in the context of the Spirit deal but in terms of proving up the base case the delay is regrettable.
Think he likes Spirit deal as it is a path to being an operating entity without major involvement and two fingers up.to the.lot of them. This is back to the Capital Markets Day churlishness and is another reason the industry balls at us - he doesn't want to give up hisbtrainset.

The BoD has said the ship could be on site in Sept - they normally like to over deliver, hence the aim was likely August. I'll speak what I have said before I think work was undertaken which nominallyone could say is needed but principally relates to the Spirit transaction as the timing is just too coincidental.
RT flat denied ever saying Sept at the AGM and the Chair said it was a misquote in print. They are as we know not infallible and have missed guidance twice, Sept on station and the statement she would be under way in week at end Sept.
Materiality wise the first is greater than he latter as we would likely have FOIL now.
Not the first mistakes the BoD has made but being aware of failings doesn't necessarily derail ones belief in the investment case merely heightens concern (Not greatly) around delivery being met.
Was interested in Casapinos comment about.not rising much before FOIL - from this level Id be surprised not to see 80p plus by Jan/Feb - Jimo and presuming no.more delays/issues.

The fields (if drilled successfully) would naturally lead to a new CPR but given the time to produce such a document and the possible availability of data in a) the CPR, b) what the company publishes following the drill and c) how the EPS performs.
Such info in the round may give people the confidence to move but not likely until later in year and possibly before any revised CPR ever sees the light of day.

Genghis
Yes indeed that should be the aim, think Blueclyde is perhaps a bit ambitious with $20 a barrel.
Some 2C can be $2 a barrel but think the likelihood is with 2019 drills complete and EPS data (should it all go to plan and corroborate models, show correlation between fields) the portfolio will be valued between $3-5 a barrel. With HUR share likely to be c.3bn barrels.

SiPP
Commercial sensitivity would be one very simple and sensible reason.

SiPP
Think it is fair to take Wellwell at face value on this, just like financial models which are used to predict likelihood of default and where factors such as diversification are deemed to strengthen the portfolio - these assumptions can go out the window and correlations all converge - per LTCM (Black/Scholes model) and Sub-Prime. The models have a predictive capacity but tail risk remains.

Given that similar modelling is undertaken for the assets in the Rona Ridge the potential for a black swan event triggering the tail risk remains. Models give a veneer of reliability but their predictive capacity is not infallible. If one element of it proves to be in the "tail" of the predictive capacity then it may be an issue for HUR. What Wellwell is trying to say is that while he is heavily invested there does remain risk and having all of ones eggs in this basket in the run up to foil is not a guaranteed lottery win/mortgage pay off should the tail risks materialise.

I think Wellwell has also intimated previously that a number of problems which may be encountered might be simple engineering and (if budget is available) easily remedied but you can imagine the market reaction. Hence why H1 is what they are sticking with and why Edison (or other broker) reckon there is c.$50M of contingency built in to the EPS budget.

Note the Tullow CMD will be on livestream. Could make interesting viewing - was tempted to see how to get a pass.

Post the farm in cash at hand is c.$25m (please correct as from memory). On the basis of G&A costing c.$1.2m p.a. (again from memory) and ECO holding 15% of the costs in Guyana and a drill costing c.$30-35m (GROSS 15% of that net for ECO) then ECO could potentially fund 4 or 5 and have enough in hand for seismic etc.
For Namibia is there some sort of carry on one of the blocks? Think mgmt may look to farm out and extend options there while Guyana is drilled.
I dare say (as I have before) Total will want to ramp up Guyana expansion and can do so by paying to play. Exxon may fancy Hammerhead to themselves and seek to exchange this in return for ECO 15% interest across the field.
Lots of potential outcomes ultimately CPR analysis post Hammerhead disclosure and drilling will drive this. Tullow CMD should be interesting as someone mentioned.....

Ricfle
Agree the producer/operator bit has been put to bed.

Also agree given issues with Halifax drill, they possibly need another 2 drills there to convince and don't see the issue spending $70m when Spirit are carrying the GWA work. Schedule it for Q3 if not Q2.
Think the 2P in the ground value will be more in the $5-7 range, with strong 2C being $2-4. If you can prove the lot up to 2P across 2 Halifax drills and 3 more drills on the GWA making add the two operating wells 8 and the benefit derived from read across then it can generate alot of positivity.
Only down side- will the market 're rate to that level without further big action on II/major side.......

Ricfle
The lack of direction on intentions towards Lancaster/GLA is frustrating. However, it may come down to something RT said (I think at the AGM) which was along the lines of during the first 12-months of the EPS there would be no drilling on Lancaster is it could interfere with the results they are trying to determine as a data set. Given the potential for connection, they may be shy about drilling Lancaster also but why not come out and say so.

The cash is there from the EPS to drill and hold a safety balance to prevent the vultures circling. We have an offtake agreement for the oil and PoO would need to drop to below $30 to cause any issues.

The old line of HUR not wanting to be a producer has been somewhat superceded by the involvement of Spirit who would take over operation in time but it is far out into the future. I(n the mean time for investors the bang for buck is in proving up the reserves as quickly as possible and here I think there is room for more action.

However, if EPS proves up the GLA (1.7bn barrels) and we have 2x drills on Warwick and Lincoln by end 2019 (one already done on Lincoln) you get potentially 1.5bn boe. These will be 2P/2C depending on how the data is interpreted so take your view on timing and ultimate value creation given the drilling plan.

Slipanchor - who is Sue and what is special about her....actually never mind!

Hi Biffa,
Recall you saying afterwards he was non committal. Makes sense as am sure there are plenty of pressure tests and seals to confirm to ensure all is correct and in order.

Yep a $200m bid for ECO by Exxon may equate to as little as $1.30 a barrel on or share of Iatuk let alone the remainder of the block.
They will have inside knowledge without necessarily being insiders.

Biffa
Is it not 2hrs of <3m waves or 3hrs of <2m waves for hook up and then commissioning begins. So as you say hopefully easily doable.

Didn't expect to see the 40s here again, unless we built our own version of the pipeline in 3 or 4 years!

Iatuk/Hammerhead-1 has something like 700m barrels in our CPR. If the tertiary is included and comes in at 500m barrels then it is 15% of 1.2bn barrels in that prospect alone - so 180m barrels.
Timing of a revised CPR is something Gil probably does not want to comment on currently, having been bitten previously. However, would be in no doubt the numbers are under discussion among the partners and probably likely to be expanded upon when confirming the first target.

HtL
My father is awaiting a diagnosis on a heightened PSA for prostate cancer (he also has advanced COPD). The doctor mentioned that for cases there is the option of non operrative treatments - depending on individual factors. Hopefully this is an option for you also.

Good luck with whatever treatment is required and hope you get to see FOIL and a great deal beyond. They can do some amazing thing now with treatments - fingers crossed there is help available for you.

Additionally for a lot of majors the work still required in Namibia is a pain so letting ECO move it along the value curve makes sense to the majors so they'd probably be successful in separating the two in event of bid activity.
Crikey with the price right now - Exxon would see value in simply owning all of Hammerhead and must have enough info to make it tempting.....we can't have an MCAP much more than a drill would cost.....