Member Info for MCB55

Hur May offer a dividend when they move to the main market in order to attract ii’s to invest! Possible move 3or4Q20.

I think that it is simply that Hur/Spirit have gone gung ho for producers at the expense of delineating each field and the OGA have pulled them back a bit.

I am hoping and presuming that a plan to move to the main market will be made at the CMD! Their previous excuse was that they were all too busy with the day job.......unfortunately that still applies somewhat as witnessed by the RNS change in 2020 work plan. They did intimate previously that it would be 3Q20.....hope that is still the case!

I would have thought that the shorts should be closing very soon, they have made their money already and the downside potential must be very limited from here compared to where they came from (say 30p ish, .....surely)!?

The gas export solution should still go ahead (4Q20/1Q21) as the AM oil production is limited by flaring limits by the OGA. This would allow a higher than 20000 bbls/d oil production rate, within the limits of prudent well/reservoir management. This should be confirmed at the CMD.

"How will the share price react on the next milestone of 20k bopd and the 30k"

Right now, if there is any logic, the market is valuing Hur on the NPV of the EPS or its 2P reserves, both much the same........ca 21p at $15/bbl and 37mboe and 6 year life. No value being attributed to 2c reserves..
However as more 2P reserves are booked up to 100mboe shortly, supposedly in 1H20 according to the Q3 presentation, that is then 57p, and more 2P reserves when FID for WA and Lancaster are made (an revision/reconfirmation of these dates no doubt will be made at the CMD). Also as the FB concept becomes fully proven and accepted then a value can/will be put on the 2c reserves.
The fact that Hur is not valued at a P/E of say 15 is that the 20-30kbbls/d is not accounted for forever only upto 6 years and soon 10 years (presumably soon just by extending the AM contract). When revenue/profit will overtake 2P reserves as a means of valuation is still some time away.
So overall Hur is currently valued as an exploration company not a production company.

3 immediate big milestones are:

1) Update 2020 drill plan/work programme - due imminently
2) Full 2019 results - due 19th March
3) CMD 25th March.

BB,
"as oil is withdrawn. dissolved gas would be released to fill the gap."

No I don't believe that. The oil is withdrawn under pressure, below the bubble point!

Looks like we need the new FA and Broker to get weaving!!

Cranleigh, I admire your confidence!
Lets all keep it going!

Is that 5 seeds for 60+ dollars !?
Seems too good to be true!

Hope you are right.......how do you know?

Having scanned dspp's diatribe I find it quite incomprehensible that he has developed a full blown PhD thesis on the basis of very limited OGA data! Good job he doesn't work for Hur!!

We don't need to "handle the big boys" just yet, we have an mcap of £11m, so a 3 fold increase to say £30+m should not be that difficult.......its the seed success that will drive this with the rest as a back up!

Hur has to have a credible plan to develop their licence areas or have them taken back by the OGA!
The EPS only accesses 10% of the Lancaster reserves, so they need a plan to develop the 90%; even if it is a phased plan of multiple FPSO,s, much as is outlined in the Q3 presentation.

I agree in principle.
I think the profit could be closer to $30-40 per barrel, as open about $20 at higher production levels, depends on oil price though! I which case the figures look even better. The Lancaster FFD phase 1 is probably another larger FPSO as outlined in the Q3 presentation. The timing of the FID for phase 1 could be brought forward a year if the next well to be announced imminently is another Lancaster producer, which would bring forward the booking of more 2p reserves, giving a major boost to NAV and sp!
I think Hur 's preferred approach is farm in or buy out, BUT in the meantime they have to demonstrate to the market, to potential suitors and to the OGA that can move forward with a credible plan including finance. They may have to be creative on finance IF the detailed cash/capex forecast becomes a bit marginal. A bridging loan comes to mind if required. I certainly hope there will be no more placements/share dilution though.

DC,
I agree that Dr T / BOD can put up a rigorous and justified defence against a hostile bid and I for one would back them! However the concern is that the myriad of small PI's maybe desperate for an early out given the shenanigans of late might just swing it, but hopefully they are are too greedy or disorganised to back a hostile bid!

The forward plan outlined in Q3 Corporate presentation, based on a couple of extra FPSO's, is hopefully able to be financed from Hur's income (without doing a strict cash/capex forecast) and so they can demonstrate to both the market and the OGA that they can go it alone through FFD if required (albeit maybe sub optimal). This is quite important because if they cannot be fully self financing then they will be seen as a bit of a lame duck needing a partner rather than preferring a partner or requiring extra funds from a bank loan or a placing (either of which should be forthcoming as by then the cash flow will be very good at £200+m/a. However some of that income will have to be spent on delineating the field.....so the income/capex requirement is likely to be finely balanced. That is why they are desperate for a farm in on Lancaster.......I am sure they are working on this for this year!

Agree that Dr T would not recommend a low ball offer.......however if there was a hostile bid (as I explained the other day) their MO would be to get enough shareholders to back their bid at X and force a vote at an EGM, then it is not the BOD's decision it is the shareholders. Given the shenanigans on the sp of late then many PI's would back a low bid, so not impossible. Hopefully any low bid would then attract other bidders in and a bid war would achieve a fairer value!

I agree......I would have thought that the short attack would be over at this level, they must have had big gains by now and want out surely!?