Member Info for InJamesweTrust

Wellwell The geological analysis is never perfect or majors would invest as soon as this one in and go straight to FFD and not bother with exploration drilling. Hence, there is absolutely proving up to be done and this process can bring surprises but the current analysis dictates risk is low it is still there. Ultimately, the infancy of such understanding about the fields is part of what is tempering the interest of potential bidders. However, as mentioned earlier the company has undertaken detailed analysis of expected field performance and as this model is validated the assumptions of how it extends more widely can be better accepted. Water contact may be significantly below where the wells are drilled to target the basement fractures but geology and nature can do all sorts hence the need to see it perform for many. Allied to the fact initial betting in the industrtwas HUR would not get here and to bid for assets once funded would need a significant premium while Engineering and project risk were still there. We are through much of this now with some proving up still to do.

Think original estimates were 700m barrels so we should (from Gils chat) be talking 2bn or triple that I agree. That will not all be priced in. For me, I wonder if TOTAL would mull a straight bid on CPR - probably for £1 or less. If it gets them a clear road at potentially 300m barrels for 65c a barrel and more control in terms of field exploration and development it is probably tempting. Dare say TOTAL could use balance sheet to drive the proving of reserves more quickly than perhaps Tullow can. Am sure they could agree with Tullow this is done on account where Tullow may be cash constrained (not sure if they are) but looking at the speed with which Exxon has worked in Stabroek field the ability to do likewise must appeal to TOTAL. The French have a reasonable away in the area with French Guiana being close by.

Pijoe Perhaps it is pricing in a 10yr EPS and production above 17,000 bopd average? Not sure the $735m takes account of CapEx essentially being sunk as issued share capital and not 'repayable'. Let's say 20,000 barrels average at $40 free cash per barrel (OpEx being around $20 If oil is $60 from memory). You get nominal revenue of $2.92bn over 10yrs. Discount that back you will be close to the MCAP. That is before you discount the risk of EPS not completing. Figures a bit rough as on holiday and doing with phone calculator in between getting kids ready for breakfast/swimming. The 2C currently has a value but not sure there is much of a bid premium in the stock. As until the oil flows and the analysis of BoD is.proven (at the AGM they mentioned specifically how they have modelled fracture performance for the area the EPS targets and have done similar modelling across the fields I think with review by Schlum - then field performance relative to expectation will be quite clear to demonstrations way or another) I'd be surprised at any meaningful bid activity.

With TOTAL farm in we are down to 15% giving us that as a share of $35m for a well equates to $5.25m per well to ECO. The $12.5m from TOTAL I think takes them to $26.5m. Further detailed seismic in Namibia and G&A probably leaves room for 2 or 3 wells IN Guyana. If successful 1 or 2 is transformative to Market Cap even at $2 per barrel value for oil in ground at 2C. Say there is 2bn barrels and TOTAL pays us $2 per barrel for our 15% share or 300m barrels. That is $600m. It would take TOTAL interest in field to 55% and give them a real say along with Tullow. Very few other places they would get that value. CPR may value this oil at 25-50c on barrel with some.of gap closing as drill nears. Not a prediction as markets do funny things so just an opinion.

YuYus The data rooms are used in most big transactions to ensure deadlines and documents to be reviewed are signposted to all parties. So HUR can use this to inform all of new.documents being posted etc. Access is governed by signing of NDA and may be managed by their advisors to save HUR time. They will just decide what to put there and interested parties may ask for other info - say tweaks to a financial model in many tranx or more particular to this supporting documents for analysis on field. One can obviously not legislate for someone who breaks the NDA and distributes info more widely.

Not sure of BHP break even in Permian etc and I know there has been alot of advancement during low.oil price but had figures they were still at $50-60 break even whereas we'd be $30-35.

Pijoe Much more germane than tax issues. The difference in valuation between them is surely the CapEx and well lifespan which impacts the b/e rate of the relative fields. Also big difference in How one might model respective values. Not withstanding that should advantage HUR (looking at infographic on sheer number of wells ON BP site and what I know about shale break even versus our own possible break even). Perhaps the advantage is discounted due to FB concerns. One thing It is good for us showing the oil price outlook is sufficient for BP (with industry to follow I presume) to go ahead with such multi year payoff deals which probably need a price above $60 to work in the models.

Gary38 That is pish to say living standards have worsened. Some kids at my school had no car or television in the 80s and show me a house without such things now. Schools provide much better meals and parents can get phones and all sorts. They may not have as much as some but They are certainly better off than their 70s counterparts. Do you not remember slum landlords, the cane, kids who got beaten black and blue and their mums too. Brexit may well be a step back initially but as a country we have lived beyond our means for far too long and some reality about the quality of life we can afford now versus on the never never needs to be understood.

Personally think both sides need to step back and consider the relative impacts of WTO. Potential for a Chinese hard landing, US Tarriffs and UK tariffs is enough to make alot of German industry have convulsions. If the above came to pass, be interesting to see what would happen to Euro clearing when German banks started drawing down from the ECB their current huge Target 2 surplus. Scaremongering about medicine shortages etc is a bit beyond the pale. Contents of crates are known so UK can decide what to allow and what to forbid. As for car industry, how easy would it be for UK govt to use part of the 40bn to discount UK made cars by £2-3k while imposing a tariff on EU ones to ensure Nissans and Hondas find a home. Probably almost zero sum cost or net benefit. Use 4bn to inject new tech into hospitals up and down country. Say 15bn to build 200,000 new starter homes for social tennants/key workers and use yield to launch a bind and build same again. All of which creates a demand spike to cater for the drop off from Europe. Like to see the ECB/Germany/Ireland/Netherlands launch a similar splurge. Before it gets to that make a generous final offer along lines of 40bn plus 1.5bn a year as a proportion of UK economy to be paid I return for SM access and financial passporting. Limited free movement but no access to benefits until 10yrs residency. The rest of the agreements are amended to include UK as special partner not 3rd country. We have contributed hugely to EU both as a member to the tune of hundreds of billions in today's money and as lead European NATO partner to the tune of a couple of hundred billion in today's money. To say nothing of writing off French and German debt after two World wars despite only recently paying our own debts from the same. If they cannot be generous in return and for us to remain friends it is a club we want to continue having a £100bn annual deficit with.....?

Dare say this will come when ready. The statement around drilling applications being submitted says a great deal about what is likely in there.

Cairn sold it's Rajasthan interests for around $8bn having at one point been worth just tens of millions (think they originally bought 50% of the licence from Shell for $25M).

However, for HUR to get to those levels with 2.5bn shares in issue is more of a challenge. If they get $7.50 for P2 in LanFax and $1.50-$3.00 that Ricfle suggested earlier on GWA you get close ($15bn for LanFax and $6bn for LinWick which equates to about £7-00 per share). Obviously, this would need a drill on Warwick, another drill in Halifax and possibly a tie back of both Halifax and Lincoln to test production - although one would be sufficient likely with a functioning Lancaster EPS giving acceptable data.

Does that do the inherent value justice if there really is 4bn barrels of oil recoverable - probably not even close but RT has said he does not wish to be a producer. However, the industry sowing doubt about FB will make the true value difficult to unlock.

So how about selling 60%, hiving off the remaining 40% chunk into RR oil to work through to FFD and divi cash leaving HUR free to go and explore elsewhere.

Escargot I hope sense prevails. I'd still vote for a deal to stay in on improved terms. Alas a great deal of the debate can consist of name calling rather than getting down to brass tacks.

Escargot
While I haven't seen the analysis, I wonder how many EU citizens here are second homers and how many UK citizens in the EU are second homers? Out of those UK ones in the EU, the UK pays pensions and they draw down their UK savings to the benefit of EU economy. While I would think the proportion is skewed to the other end of the scale for EU citizens in the UK.
Good luck to those that have come as they have made a big sacrifice to do something in life but I dare say it would be bad news for many French and Spanish towns if the EU made it difficult for UK citizens to remain. However, this is just one more area of debate where we have laid down and allowed the debate to be made for us not by us.
I was a remainer if we could have secured a reasonable deal but the approach of Juncker et al has made me reconsider my view of the EU and what we do for it.

Ricfle Ricfle You're avoiding the point I made. A sale transaction can be structured to ensure he remains for a period - in terms of the VCP and/or he can be incentivised by further involvement. With Bach ho and others of course FB has worked elsewhere, the valedictory moment for RT is proving it can be a mass producer on the UK continental shelf. He will indeed be a wealthy man but there are non financial incentives which can be used also. Anyway, if we get to the stage of worrying about that it won't be a bad day.

The only way Total are walking away is if the CPR is duff. They may have a minimum size but the CEO has guided the CPR beats previous 1bn barrel expectations so pray tell where else will they get 250m-750m barrels for $12.5m? Presuming Gil is not selling us all lemons

Ricfle He doesn't have £50m in the bank. Also, while the money is useful the price for RT may be key input to the decisions around how to develop Rona and prove the FB concept - his valedictory moment. Having a price doesn't necessarily have to be financial.

Ricfle Not really, we all name our price by going to work or carrying out whatever tasks we do to get by. Clearly I stated within certain parameters of decency. RT has the VCP and if this was tweaked to keep him on longer, as a key advisor to transfer knowledge then it is hardly selling atomic secrets to Iran/N Korea is it.

You can buy people it just depends on the price. If a major signs binding heads of terms on an acquisition with so much paid now and the rest at later dates predicated on performance hurdles the VCP would possibly not kick in until a certain level of sale criteria was met or the same expired (2020 from memory). An acquired could also stipulate a change in VCP terms to maintain annorderlybtransition between both executive and drilling/geology teams. Within certain parameters of decency, most people have a price.

It's easy to Get carried away with what may happen, let's wait for the oil to flow and do so consistently as until it does it is fairly unlikely there will be conversations of any sort - unless someone tried to.jump the gun in which case it would likely only be a small percentage sale for a minimal consideration as nobody is going to risk the big money until the data is there. The beauty for the company is EPS data is proprietary until their time of choosing. Most potential bidders if it reaches that situation will want sight of the field performance and what it means for the wider Lancaster/GLA. Dr T thinks it will go a long way to proving up this area. If proven up (add Lancaster and Halifax together) and take a value of $5.00-$7.50 per barrel as finger in the air. The provingof this asset has major.implications for proving up GWA and with a drill on Warwick and perhaps a tie back if funds and time permitted this area is much more copper bottomed also. Take say $2.00 for the GWA assets. This is backed by EPS cashflow. The company can keep the EPS data until they have done further drilling. There is of course the potential to guess what production looks like but funny that the only other company who will know is BP as off taker. There is the potential to monetise the assets quickly for any purchaser and that can have a positive impact on their financial models for value per barrel. Lots of time before that though.

Ricfle
Yes - RT previously stated it (AM) would be on site in Sept. However, the knock on of PBLJ delay may mean they have allowed DP world to reschedule some elements of the work that are less technical (hence not critical path) to keep her in Dry Dock until nearer the time she can be used on site.
Some of these works boulder dump, sub sea etc will have been pushed back as a result of PBLJ delay in completions- hence it makes sense to push back AM sail away.