Member Info for MaryMullins

With the possibility of a cheap takeover looking as likely as other scenarios could the CEO claim at least one accolade, to be part of a small band of executives to be be hired and replaced without uttering a single word in public.
GLA.

The oil is BP’s responsibility as soon as it is transferred to the shuttle tanker and payment is made to HURRICANE at that time. Pricing in the contract is less straight forward, reference is made to Platts oil price, a fee for BP to turn a profit on the work etc. Recently because of Lancaster being light crude it was being sold at a premium to Brent.
GLA.

I have had the impression that this board is just fulfilling a night watchman role. The closer we get to cash in hand being enough to repay CB’s the more chance there will be for a takeover at a low valuation. I just hope us PI’s at least get some crumbs off the table.
GLA.

When the CB’s were negotiated it was at a fixed exchange rate of 0.78 so the debt at this time is £180M.
GLA.

Thanks laserdisc always a breath of fresh air to read your posts.
GLA.

Very much agree that this BOD has been abysmal and with the exception of the new CEO should all hang their heads in shame. This fiasco happened on their watch and yet none see the need to resign and we know as PI’s there is little we can do about it.
Re. the CB’s and the possibility of dilution, I just cannot see how it would be needed or justified at present A few months ago a possibility certainly. Rough calcs. the debt is due next year with the next lift the company will have a conservative £125 M. cash. To pay back the bonds at present with an increasingly strong £/$ requires £163M. To tick over for just a few more months and the CB’s are not an issue and only the side track needs funding. Surely not quite Armageddon.
GLA.

If there was an award for being asleep at the wheel this board would be worthy winners with the possible exception of the new CEO. Bizarrely if there ever was a time to be asleep at the moment it looks O.K. U.S. dollar predicted to be around 1.50 in the near future so CB’s become a £155 million debt. Cash in bank and with a fair wind for the 6 well to keep producing for another few months make this doable. Just a view but I then expect Chrysaor to step in the form of Harbour Energy to take the assets forward. Kerogen must be running the show ?
GLA.

It will be interesting how the price will react to E.I.A. figures due at 3.30.
GLA.

Lonestag - Thank you for this information.
GLA.

May be worth keeping an eye on the Natalia for 48 hours, down for Captain Field but we know from previous loading at Lancaster the officers like a game of cat and mouse.
GLA.

Hi Dive Centre , keeps cropping up this one and here is the most comprehensive document in the public domain.https://www.hurricaneenergy.com/download_file/force/364/309Post by dflynch below confirms it also.GLA

Silence from the largest shareholder, apart from their CEO saying their stake is for sale at the right price awhile ago. Hurricane cannot do a partial buy back of bonds in the market nothing to stop Keregen doing it though or perhaps they have.
To put things in perspective the CB’s in Sterling are about £168M. Hurricane after the next off load will have roughly £115M in cash. Possible if they can keep producing until July 2021 will also have enough to cover the 7Z work. Are things that dire?
GLA.

From Vermillion budget and production guidance - relevant to PMG. During the budgeting process, close attention was paid to the return and payback period of each individual project under various commodity price scenarios. Given the strong recovery in European and North American natural gas prices throughout the second half of 2020 and into 2021, Vermilion's condensate-rich natural gas projects in Alberta and conventional natural gas projects in the Netherlands provided the strongest return profiles. As a result, the majority of the first half 2021 drilling program will be allocated to these projects. Vermilion's light oil projects in southeast Saskatchewan, Wyoming and France also screened well under strip pricing at the time of evaluation, however the size of the program has been scaled back in 2021. With the recent strengthening of global oil prices, the economics of these oil projects has further improved and additional drilling will be considered during the second half of the year if market conditions remain supportive.
GLA

FroHurricane Energy
Trading and Operational Update: Strong December cash flow generation
Q4 production and water cut in line with guidance
Hurricane’s Q4’20 production averaged 12.7kbbl/d with a 25% water-cut. For the final 4 months of the year, production of 12.5kbbl/d was within the 12- 14kbbl/d guidance range. The current production of 12.1kbbl/d and water cut of ~25% remains steady. The water production level is well within the handling capacity of the FPSO but the well production rate has been choked back to manage the reservoir and avoid water coning issues. In 2021, we expect production of 11kbbl/d, a moderate decline, which may be partially offset by a Q4 bump from the 205/21a-7z well re-entry.
Strong December cashflow generation demonstrates Lancaster’s potential
Hurricane’s 19th cargo of Lancaster oil was lifted at the end of the year. Given the higher oil prices in December (>US$50/bbl Brent) and a much-reduced discount to Brent (US$2/bbl in H2’20 versus US$10/bbl in H1’20), Hurricane was able to increase its free cash flow position by US$19mm over the course of December (>25% of Hurricane’s market capitalisation). This demonstrates Hurricane’s leverage to the oil price and the cash flow generation potential from the asset if it can maintain or grow production in a >US$50/bbl Brent price environment. At US$42/bbl Brent in 2020 (and with a realised price of just US$35/bbl), we estimate that Hurricane was able to generate US$74mm of EBITDA or post-tax cash flow (pre-financing costs) from 14kbbl/d of production.
Lancaster further development and funding options being considered
We continue to see considerable value remaining in the Lancaster asset if funding for further development of the field is forthcoming. Hurricane currently has ~US$105mm in available cash (versus a market capitalisation of US$70mm and outstanding convertible bonds of US$230mm) plus we estimate ~US$50mm in restricted cash. The company is also free cash flow positive at current oil prices and production levels. HUR remains very geared to oil prices: at current production rates of 12kbbl/d, we estimate US$40mm of incremental cash flow if oil prices move up $10/bbl (>50% of the current market cap for just one year’s production). Also, if it can boost production by 5kbbl/d, over the course of a year based on a US$50/bbl realisation, this would add ~US$90mm of revenue with little incremental opex.
Further development plans for Lancaster have been refined
The first development solution is to bring on a new production well through the re-entering and side-tracking of the 205/21a-7z well, to add a significant amount of incremental production starting in Q4’21 and at an estimated cost of US$60mm. This could potentially allow production to return to 20kbbl/d in 2022. The other project mooted is the implementation of a US$75mm water injection scheme in the NW of the field in 2022, which on our estimates could add 10mmbbl of 2P reserves (from 2C resource) and at US$60/b

Report released this morning worth a read.
GLA.

I could not understand what happened to the above stake. No TR1 issued at 4% and 3%. just an RNS from HUR to say they had been informed by Alken that they no longer had ANY interest in HUR equity. If Kerogen/CA are involved it would mean with the 4.9% Alken jointly they now own over 32% in HUR meaning any, (big if) takeover without their consent would have to be hostile.
GLA.

A myriad of reasons for the rise take your pick. Noticed that Pharos Energy looking strong this A.M
GLA.

The comment by Kerogen that they would listen to an offer for their stake is very relevant. Kerogen 16%, Crystal Amber 10.9% and it remains a mystery where the 4.9% went from Alken Asset went only that it was sold in one lump but no company has issued a TR1. Anyway the three total to 31.8% enough to mean that any takeover would only succeed on Kerogen and CA approval.
GLA.

maltrees - Not addressed to me but my understanding is as far as I know licence P2308 Halifax has not been relinquished. Excluding central Lancaster the other acreage on Lancaster has been relinquished. Certainly not a definitive source but O.G.A has P2308 (Halifax) as Hurricane as licence holder. I can find no relinquished reports. Extracts below from the Interims and technical Review.
Greater Lancaster Area
It is Hurricane’s view that Lancaster and Halifax have the potential to be part of a single, large accumulation, the Greater Lancaster Area (GLA). Hurricane owns 100% of the licences covering this accumulation, P1368 Central and P2308.
Halifax
P2308
Blocks: 205/22b, 205/23 and 205/24 Halifax
To date, the Technical Review has not incorporated an updated assessment of Halifax. However, the conclusion of the Technical Review is likely to lead to a significant downgrade of the 2C resources attributed to Halifax in the 2017 WoS CPR.
“In light of the revised interpretation of the OWC, the area of the P1368 Central licence outside the determined Lancaster field area is being voluntarily relinquished and, following relinquishment, the Company will be released of its obligation to drill the Lancaster commitment well.”
GLA.

If anyone reads her papers on Rona Ridge it is very clear that they knew the Victory Sandstones were oil bearing, for the new CEO to mention it as “significant “ in UKCS terms as if it was the technical review that discovered it is unfair.
GLA.