Member Info for johnniefp

Hello Rex

I don't think it was a *great* deal for us and if GWA doesn't work (there's still risk) then it won't be a great deal for Spirit either. This was all about parallelising the EPS of both GLA & GWA as getting it moving as soon as we possibly could, speed , speed, speed. We ran the risk that if GLA worked a major would have snapped up GLA and probably would have got 100% of GWA for almost nothing.

So, we've now given away 50% to a partner who seems to be eager to prove up the GWA as soon as possible, once this has been proven we have GWA reserves, reserves we wouldn't have had in a monetisation negotiation if the GLA comes good. (and at that point Spirit have a great deal)

The deal was a compromise (remember, nobody is happy in a compromise) that if it comes good will lead to us being richer than we would have been without this deal even if we owned 100% of the GWA.

I'll say that again more succinctly (for me, not you)
50% of a proven GWA is considerably more valuable to us than 100% of an unproven GWA.

This deal allows somebody else to do a lot of the hard work and fund the vast majority and as a side effect they will be upgrading the AM (which the GLA will likely gain from) and building a pipeline to the WOSP. (which the GLA will likely gain from)

I think the deal from HUR perspective was strategy based.
Hope this post was lucid, I feel like I'm rambling once I get past a few sentences.

jfp

Isn't £10 a £20B market cap?
Yeah, as much as we'd like that's not going to happen.

I like that fact that this is not a little side project to Spirit. It appears to be their main focus, just what we need from a partner.

>> And they've made a point of highlighting the proximity of Solan/Strathmore
I always felt that Strathmore would end up in the clutches of PMO at some point.

I never wanted a buyout until close to maximum value could be achieved and that would never have happened without an appraisal of the GWA.

>> I am not at all happy about the privileged investor communications call.
>> That needs to as a minimum have a verbatim transcript posted within minutes of conclusion.
Hear hear.

>> But ...the message needs to go out that a deal at these prices will not be repeated.
Any deal going forward for either GLA or GWA will no longer be for appraisal, which the Spirit deal was.

It's not brilliant, it's not bad.

Thanks wellwell.

Link to tweet.
https://twitter.com/CrystalAmberRB1/status/1036629863342505984

I wonder if Mr Bernstein had a heads up about this deal, he was selling down recently.

Don't quote me but I think some of it may be to do with the Gas Export Solution and AM not having to do anything with gas evacuation anymore. Maybe I should just be quiet.

It hadn't been confirmed but in interviews it was stated we had enough for one, maybe two from production monies. The question was do we go back to Halifax to shore up the GLA or do we satisfy the license for the GWA.

If we had given this amount away at this price on the GLA I'd be seething but on the mostly unknown GWA it's just barely ok.

It's a good compromise and remember that a compromise is a deal where neither party is completely happy. (which usually means it's a fair deal)

Based on the knowledge that suiters previously were only interested in the entire shooting match this may well turn out to be fantastic for us when it comes to a sale as it would (if all goes to plan on GWA) put a higher value on the resources there.

jfp

Anyone know what a years worth of gas sales is worth to us. I don't know if the estimated amount has ever been published. Also the debottlenecking is being done sooner so we may be able to get more into AM sooner than anticipated too.

There seems to be a lot of little sideway wins.

>> Today they have stolen a march on everyone else and provided us with a much
>> faster means of developing the assets and releasing the revenues.

Indeed, a major could have farmed in to the asset(s) and then just sat on them ad infinitum. You only have to look at what PMO did to RKH. This has put a rocket up the backside of the schedule.

Yes, Spirit (Centrica) have got it cheaper than we'd like however they've bought in to prove the asset.

jfp

After listening to this take a look at this relatively recent interview which can now be seen in a different light.
I've linked from 14 minutes in as Dr is talking about monetising strategy.

https://youtu.be/QGF_G-U2qtk?t=14m38s

Based on this page outlining the inception of Spirit Energy:
https://www.centrica.com/news/centrica-and-bayerngas-norge-create-ep-joint-venture
it appears Spirit Energy is funded to the tune of £400-600 million per annum.

Hardly small fry considering their backing. Spirit are certainly one to run the rule over should there be an IPO in the future.

jfp

...the suspense is killing me.

I'm not sure of our cash in bank at the moment but you raise a fair point if the EPS is delayed by any significant time, cash is king. Thankfully all seems good on that front but expect the unexpected they say. (as today's RNS shows)

I don't think this will delay future drilling on GLA though, it may even accelerate it. They've already stated that the deal with Spirit Energy means that monies from the EPS can be spent on the GLA. I see this as us being able to stick a hole back in Halifax pretty soon.

We'll have enough money from Y1 of the EPS to drill a hole, at a push two. It was going to be a juggling act as we needed to drill the GWA to satisfy the licence but we also wanted to get back to Halifax to get past the sludge problem, firm up the reserve numbers and to see if it was connected to Lancaster. (from memory this is not confirmed.)

Today's deal has solved juggling act, at a cost... but solved.

>> The last thing we need is for her to be taken off station for this to be done in a European yard for 6-8 weeks
Perhaps this is the reason she hasn't sailed yet? (probably not)

jfp

>> This will give Hurricane (Dr Trice's company) a load of money, with which
>> they can go and explore other ignored FB plays elsewhere
He was very coy in a recent Malcy interview when asked if there are any other interesting areas HUR may be interested in post Rona Ridge. I wonder if they'll go for part sale and an income?

>> His activist efforts sent the SP crashing a few months ago
That's now how I recall it. In fact he put a stop to the price drop by underwriting all remaining shares from a fiasco caused by Stifle. The money he took out recently (share sale) was at the same price he underwrote so he was only taking money back off the table that he unexpectedly put in.

Rather than predicting share price why not predict market cap instead, it will give a far more realistic view of the future of HUR.

At £10 with the number of shares in circulation being static that would give use a valuation of circa £20 Billion.

I don't think that's going to happen, I'd dearly love you to be correct though.

RB of CA put a floor under this share when the warrant issue was mishandled by Stobie and Stifle. It was CA who bought the rest (unexpectedly) of the holding to stop it going on the open market and dropping further. This was when the price was approx 52p and had dropped suddenly from 60+. I can back this up if you wish.

He/They sold a bunch at roughly this price recently and my guess is they were taking those monies off the table as they'd done their job and they probably had that money slated to be used elsewhere.

CA continues to have a considerable holding and is still a major shareholder. I know RB is an activist shareholder but I think that can be a good think, it keeps the BOD no their toes. I see nothing wrong with CA/RB holding, in fact I welcome it.

jfp