Member Info for MCB55

Muzza2
"HE exploration team diverting resources to run this time consuming process and then get the Nominated Adviser to support it"

Believe me the HE exploration team will/do have an internal reservoir/geological model and will be updating that on a regular basis as new swathes of data come in. However they will not release that publicly for some considerable time and maybe not at all except to the CPR team. However they may well release the broad conclusions of updates after key events. Also I think that updated model will be made available at the time to the CPR team anyway, as they will not be building their own surely!?

Aduk/the street,

If I remember correctly Dr T in his latest podcast did mention flow testing the well(s) by the TO, which is also part of doing a DST anyway, which obviously requires flaring. He rightly said that all (exploration) drill rigs are flow limited anyway by their on board facilities, so any flow test will be on a restricted choke. However they can still extrapolate quite a bit of info from a DST and restricted choke flow test.

ADUK,
I can't believe that HE will be totally silent on production figures after 2nd FOIL rns for 6 mths!? I would expect them to confirm 20k bd from 2 wells achieved at least, albeit may take 3 mths to get there!?

Muzza2,
Interesting! Yes agree, any formal reserve update will need to be backed by a CPR.
Mind you there will be "pointers / read the tea leaves" before issue of such a CPR and the market will respond accordingly.
For instance, the same document indicates a minimum of info to be released after each drill.
Also I expect there will be almost monthly production updates, if only from ship watchers.

JB,
Based on proven and fully analysed facts then you are right, however there will be lots of information available formally and informally during the next 12 months that will influence the share price (positively hopefully) and the market is always is looking forward, so if all is looking good, then the market will respond accordingly before the full analysis is released so expect £1+ in less than a year.

Ok you may well be right, I was guessing at 3 moths!

oops Drill results

Aduk,
Yes CPR's are costly and take time, but necessary for marketing to II's (as its an independent assessment) and therefore two more factor(s) on timing of such will probably be 6 mths production data and move to main market (plus 2 or 3 well results this year), so next CPR may well not be til 4Q19?

LS,
Edison will have based their valuation on 20k bd for 6 yrs, the market may well have factored in for 10 yrs. However with debottlenecking and adding a third well from WA the production doubles to 40k bd by ca1Q20 and should be for 10++ yrs. having previously proven the reservoir over 6+ mths. So Edison re valuation should then be at least double when revisited in 1Q20! Further value may well be added from drilling results, new CPR, etc, by then!

Muzza2,
Yes I get your point on valuing exploration companies on resources, 2P, 2C, etc and ability to finance FFD, etc, but at some point they can and do become a production company as well, with a stable flow of oil for 10+ years (the AM can easily be replaced after 10 yrs service and so production into the future is guaranteed assuming the reservoir performs)!). So HE in 12 mths time could be producing 40K bbs/d and exporting gas from the AM, that would create a huge cash flow; 40*0.85*365*40/1.3= £380m/a, which if it were valued at PE of 15 = £5.7bn. So why cannot such a valuation be attached to HUR in 12 mths time or even half of that in 6 mths time?

DC,
Totally agree, HE have to show to the world (and the OGA) that they can manage/produce all the resources on their own, albeit maybe with a sub optimal solution of multiple FPSO's. Therefore not to be seen as a lame duck to a predator and can robustly rebuff any cheeky offers and still keep the big II's onside.

Yes the podcast now makes clear that will be 2 RNS's, one for first oil on board/flaring, and the second on provisional acceptance.
The really interesting one with no date yet, is the Capital Markets day, I am guessing in about 3-4mths time!?

aduk,
"Also some different references to FoiL, which has been a topic here. I certainly take 'First Oil FROM the EPS' to mean first offload and oil to shore. So I suspect we'll get two different 'FoiL RNS's'."

On page 9, HE are suggesting only one RNS for FOIL/provisional acceptance, that is after "start up sequence" and "introduction of hydrocarbons", NOT on first tanker offload and oil to shore! I would think that is after couple of weeks of testing after first oil on board (technical FOIL?).

HUR may well be updating their internal reservoir modelling every say 3mths, but question is at what point would they release such information, even if only a simple, but valuable statement that " our current view is that well performance/data currently confirms internal modelling, subject to full CPR analysis".?

I agree that full EPS data and analysis could be 6-12 mths away, BUT I would expect some production data to be released before then, albeit interim data, such as initial production/test rates? A full CPR re-appraisal may not start until 6 mths data available plus 2-3 drill results. However any chance of an interim CPR in the mean time do you think?

aduk,
I think not only is Malcy rowing back on how long it will take to FOIL, but also HUR IR too. HUR have stated that their primary objective is not just to prove all systems, but to test the reservoir/well performance by various means including shut in periods on both wells to see pressure recovery rates and well interaction, etc., like an extended DST. So IF steady state production is the definition of FOIL then it could easily be a couple of months. There might be a 2 stage definition of say initial oil on board after a few weeks and then another at a couple of months when they can state that they have tested close to full rate (albeit for a short period) and producing steadily (again albeit at a reduced rate). They have stated 45% for first 3 months and 65% uptime for next 3 months supposedly due to production efficiency of the plant, but more likely including extended testing/shut in periods. IMHO

IMO they will be super conservative/careful in bringing on the wells and will delay FOIL announcement as long as possible and until beyond doubt that sustained flow has been achieved, but surely cannot deliberately postpone it until the AGM, (unless a major hiccup) there will be too much going on by then, flaring seen, crews reporting in pubs, and they have to report significant events that might effect the share price on time anyway!

YB;
I agree that they need to test the offloading system and procedures early, and consequently predicting initial production from timing of first tanker offload is somewhat erroneous, but of some value nevertheless! However I think FOIL will be declared after say the first 5000 bbl’s into the AM,s tanks......thoughts anyone?

Hurricane are quoted in the OTC market in NY under the symbol HRCXF.

"An often-overlooked requirement is that, to qualify for business property relief, shares listed on the AIM must not be listed on other stock exchanges."
From taxation.co.uk