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Where's Bidds when he's needed?
Good evening dflynch.
I note your post this morning where you persist with your incorrect understanding of the bonds, without reflecting on why your view does not accord with the clauses.
Hey ho.
Originally you asked for help:
This CB issue is a bit of a confusing mystery to me.
and
Continuing my simplistic, and possibly wrong interpretation of the issue.
and
Once again am I missing something! If so, what is it? Could the better informed please elucidate?
but clearly you do not require any help, you are only here to see how many punters you can suck in with your posts, and very successful you were too with your idea of HUR tendering @ 5p to get the shares to give to the Bondholders, when of course any shares issued by the company cost the company nothing.
As a former Bondholder, I am sure that CA know whether buying is permitted or not, and the terms at maturity from having access to the full details of the Convertible Bonds.
You asked for help to correct any misunderstanding, I provided that factual information.
You have joined the many ultracrepidarians on this BB.
I wish you luck with your holding here and maybe CA will help.
joe
Good evening dflynch.
re: "I believe you to be incorrect on what you have stated regarding a “forced conversion” clause. The CB holder has NO choice, or right to demand the newly issued shares, or receive the cash alternative, before maturity in July 2022. "
I note that you are sticking with your mistaken belief that the Holder cannot convert at a time of his choosing before the maturity date.
wrt the 'mop up' clause [it was actually called a 'clean-up call' in the RNS of 30June2017], and to force your thinking as correct you choose to dismiss this clause as 'sloppy drafting'; rather than trying to understand how any CBs might have been 'previously converted', and how/why 85% converted might have occurred.
Moreover, if they cannot choose to convert when the CBs approach $300,000, why would they agree to a clause that then just gives them their principal back?
I readily admit I was wrong to use the word shares (a post-prandial moment) when the clause under discussion said CBs, which gave you the opportunity to dodge the question, even though you knew what it was, lol.
I note that you now have used the word 'redeem', whereas previously it was 're-purchase' as per the CA suggestion.
I agree they cannot redeem the CB’s piecemeal, but that does not preclude them buying [or re-purchasing] in the market place.
That is why the phrase includes the word 'purchased', and why your initial assertion was false.
As to the final paragraph, sorry you found it unintelligible. It was simply stating that currently the BoD are saving up so as to be able to return the original principal of $230m when it becomes due on 22 July 2022. The alternative, of course, is to default and let the BHs take all they can, as I wrote in my first helpful reply.
GL
joe
dflynch re :
"• at any time on or after 14 August 2020 at par plus accrued interest if the value (calculated over a specified period) of the Ordinary Shares underlying each Convertible Bond of denomination US$200,000 shall have been at least US$300,000; "
This is a 'forced conversion' clause telling the Bondholder that if he has chosen not to convert his investment into shares when it has appreciated by 50%, then the company can pay him just his original investment [par] and cancel any future expected interest. This would need a share price to be in excess of 48p. All reluctant bondholders are to be treated the same at the same time.
re:
" • at any time, if 85 per cent. or more of the aggregate principal amount of the Convertible Bonds originally issued shall have been previously converted, redeemed or purchased and cancelled."
This is a 'mop-up' clause that enables the company to close out all the reluctant bondholder(s) when 85% have already chosen to redeem the Bond and take up the Ordinary shares, irrespective of the prevailing SP.
wrt your assertion "I trust this clarifies and deals with the incorrect speculative suggestion currently circulating that Hurricane can re-purchase the CB’s piece-meal. It clearly cannot!"
It is quite simply false.
If it were the case, kindly explain how shares may be "purchased and cancelled" as distinct to those " previously converted, redeemed".
Your whole understanding and meaningless calculations are based on the false premise that the Bonds must be converted at 0.52cents.
"The Convertible Bond was issued at par [ie no discount or fees applied] and carries a coupon of 7.5% payable quarterly in arrears. The Convertible Bond is convertible into fully paid Ordinary Shares with the initial conversion price set at $0.52, representing a 25% premium above the placing price of the concurrent equity placement, being £0.32 (converted into US Dollars at USD/GBP 1.30). The number of potential Ordinary Shares that could be issued if all the Convertible Bonds were converted is 442,307,692 (assuming conversion at the initial conversion price of $0.52). Unless previously converted, redeemed or purchased and cancelled, the Convertible Bond will be redeemed at par on 24 July 2022." from the 2018 AR Borrowings pg91.
'At par' means the full $230M (as none have been converted, redeemed or purchased and cancelled to our certain knowledge), ie return of the principal originally invested is currently expected and has to be budgeted for July 2022.
GL
joe
dflynch your post is not dissimilar to that from Mistakable @ 15:17 yesterday, so this is my understanding.
It was increased to $230m, and the number of shares would increase in proportion.
BUT the problem is that the field has not lived upto the projections [20,000b/d, and no water] and oil did not stay at c$60 with the consequence that the planned activities could not be funded and following on from the failures at Warwick and Lincoln, the commerciality is/was no longer assured leading to the collapse in the SP.
Therefore the $0.52 per share price conversion will not occur, and the alternative is that the Bonds are repaid in cash at par [$230m]. Problem is they might not have that amount of cash and they would default, meaning that the Bondholders take all the cash and assets that they can carry leaving the equity holder [you] with nothing.
Yes, in the success case, they would have received just under 20% of the company, but who would care if the SP was so high?
As they may not have sufficient cash, the Bonds fell to 25-30% of face value. They have now jumped to c50% because they can see half their cash in the Bank [the POO factor] and they will still get the interest.
But the company has to pay for the P&A of the Lincoln well this year and has no discretionary spend available without agreement from the Bondholders, who want their side of the deal honoured.
Until that $230 is sitting in the bank, the Bondholders are in control. The idea of paying the Bonds early is that they may be prepared to take slightly less for not going full term, which would then allow a risky equity raise to fund Well 8 which could wipe out existing holders but would see the company survive to extract the 2C oil in the CPR, if the remedies should prove successful.
With the proviso that OGA say yes to the amendment to the licence and Well 6 does not water out and the pumps do not fail in the meantime.
jimo
joe
Captain,
"I am also puzzled how halifax is now classified as zero. downgraded from 2017 i could see but nothing?"
It's gone in a trice.
No Easter egg hunt here, at and around the Lincoln wellhead. A basket of goodies is still to be found though. Full details from Kingfisher Bulletin, 'Snagging Hazard - Dropped Object Weight 115kg' or from laserdisc on Advfn BB.
It seems that the general impression today is that the dividend reflects the performance in Q1, because of the wording "....planned Q1 2021 dividend."
However, this has long been talked about [mentioned in the 2019YE Report and detailed in the August Re-Admission Document and videos] and notification was expected in January with payment in Q1 2021, before slipping to payment in early Q2.
Now for a company to [plan] to pay out a dividend within the active Q has to be unusual, if not trangressing some rule or other.
Therefore it would seem to be for the end of 2020. Whether that is quarterly or half-yearly remains to be seen, but unlikely to be for results of 2021 Q1. The 2020YE Results are awaited.
jimo
joe
To keep the "unconventional" story running and keep Spirit on-side.
Until they twigged and had the terms reset...
It's an interesting question BM.
Especially so when one holder already has just shy of 30%.
And has warrants available that would take him over 30%, and that would ordinarily trigger a take-over situation, where he would have to offer at least his highest purchase price over the last year to all holders. That would be the 5p placing price.
Not forgetting, of course, that the said holder was recently taken over by a bigger company with unknown aspirations, but with even more funds at its disposal.
Still wearing the RTG JA?
Today 09:35
"I think that's a little unfair, how can the RNS be overdue, they have until the end of this quarter to deliver the Divi decision and until the end of the next quarter to pay it. They have also already stated they will update operationally in the second week of April, thus we may want a sooner RNS but I wouldn't say its overdue based on previous and most recent guidance."
If we are to believe the 'forward looking' statements that the company issues, then the ensuing actions have to be somewhat aligned to their projections.
That the anticipated divi announcement in January has been missed is a fact.
The payment of same divi 'early in Q2' [Feb RNS] is also away with the fairies if the 'couple of months' lead time previously suggested is to be believed for the necessary agreements.
Then the Noel well surprise: guess that used some cash not previously anticipated by the PI in the fcf available for the divi.
Finally, the RNS said "The Company intends to provide regular quarterly updates starting
with a summary of Q1 to be released in the second half of April 2021." not 2nd week.
Hey ho....
Re: 'good progress with Spirit'
Perhaps the clue is to be found in the Centrica 2000 YE report:
" Similarly, there is significant uncertainty around future investment by the Group in the Greater Warwick Area exploration and evaluation asset. As a result impairment charges have been booked.
&
The charge also includes a £135m write down of the Greater Warwick Area assets, reflecting significant uncertainty over field development."
And as for the use of Paul B. Loyd by April 1st ....
did I read that another ROV boat was booked??
Perhaps 'worth remembering' you mean the 'options'.
These will vest 100% upon ..... and the recent ones will cost 6.1p each if taken up.
Whereas the warrants are available now at par, £0.0001, all 54.5M.
(There are some at >40p: it's debatable whether these will ever be cashed in, imo.)
HTH
Daltry,
6. He lives just around the corner....
HTH
Goldenbadger,
K went on the board when they took just shy of 30% in the placing, well before the Production funding which introduced the Bonds.
ttbomk K never declared taking Bonds although CA did and also said when they sold them.
jimo
joe
Tony, you may well be right re people may have too high an expectation what this [divi] may do for the SP: the SP has seen over 100% since they suggested a 10% rate,iirc.
And have you allowed for i3eNS in your FCF? (JOG have the begging bowl out, again, for their assets.)
BUT just how does the Doc qualify for an interview when we can't get an email reply?
Just asking.
PS omj thinks the management is perfidious....
CONTD
At Lancaster, we are left with the Review data and expectations for sandstone fields. But without any further development drills, it will surely remain as 2C.
Some have suggested that the Reserves will be exhausted, but that is not necessarily the case if a greater recovery factor is employed in the calculation, perhaps not unreasonable for sandstone.
However, we know 7z dipped down and is closer to the aquifer and is the suggested reason for the water cut. Well 6 is around 20m higher yet with an increasing water cut, and if this is also coming from the aquifer , it could water out and become economically unviable. We know no more than the water cut is rising and the downhole pressure is falling. Rates are not given.
It is suggested that the oil is coming from the sandstones and could offer an increase in recoverable oil, but no immediate drilling is planned so any new interpretation has to be based on the existing infrastructure. Looking at the U-shaped profile of #6, I am not convinced oil will flow from the [uphill] toe in preference to the water already in the well, which is increasing as extraction continues.
In summary,
Halifax will not have any Reserves and Resources will be downgraded due to adopting normal closure, awaiting development and reduced field area.
Lincoln will be similarly treated, and Warwick no less severe.
Lancaster, could have an increased 2C and Reserves depend on the interpretation proferred by HUR and that accepted by Equipoise for the CPR. The reserves will need to be commercial and include detail of OPEX and the live Bluewater contract otherwise they will also be just Resources.
jimo
joe
Even during Dr T's tenure, HUR had suggested the possibility of needing a shallower well in Lincoln for future development testing, following the catastrophic results of the GWA 3 well exploration programme funded by Spirit Energy, in exchange for 50% of the field(s).
The gung ho spending on the Lincoln tie-back in advance of OGA approval resulted in an amended Agreement with HUR holding all the invoices, and 50% of the laid-up rig charge, money which may have been very useful now, but the activity was necessry to hold the very ambitious timeline for the next year, whilst engaging with the OGA for permission to extract and gas disposal agreement.
I note that there is still an expectation of a better than expected CPR providing an uplift to the SP. I had earlier asked what this may look like,but was disappointed that no-one was able to quantify the 'better than expected' scenario, especially given the number expecting it.
My view is that a better one is unlikely, but wanted to know what I'd overlooked.
HUR website says Halifax - To be updated following completion of ongoing Technical Review and/or updated Competent Person’s Report. We await. Few patiently!
HUR website says 'Warwick/Lincoln - The joint venture undertook a three well drilling program on the GWA during 2019 and is currently evaluating the results.' and 'To be updated following completion of ongoing Technical Review and/or updated Competent Person’s Report.'
Meanwhile Centrica have just said 'The charge also includes a £135m write down of the Greater Warwick Area assets, reflecting significant uncertainty over field development.'
Spirit Energy Resources Limited acquired Spirit Energy WOS Limited for £119,742,000 in 2019, and also disclosed the company had recognised an [unspecified] impairment charge during the year.
Even after adding on-going spend, the current book value must be de minimus, and still a P&A to do.
Will HUR treat their 50% of the asset the same, pending a new appraisal well?
TBC...
RNSTranslator - Your recent posts here are to be applauded and convey the reality faced by the BOD amidst a sea of posts from those whose comprehension is sadly lacking.
wrt the RNS, might I suggest that this is the response, having been told by CA that they will be making comments in their imminent Report?
It may not have helped change CA's view, but they did tell us how much they invested, and previously they have told us that they have 'realised profits of £43M', and therefore it was not a disaster for them, even if they have to write off the December c5% of the fund [6.6/129] valuation; just a lesson that they were sucked in, like the PI and K.
The use of Ad-hoc suggests that they had not used the Trustee to convene any Bond Holder meeting. And the stakeholders would likely include Bluewater and OGA, ie plural.
Imagine the outcry on here if CA had been given exclusive price sensitive information in advance of the humble PI!
The CPR could well turn up with the Full Year results, in the same way that the TR came with the H1, and the viabilty of the company will then be laid bare.
jimo
joe