George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
In brief, I’m not happy with the offer . Would much prefer a cash sale.
There are been quite a bit of talk about how the deal will affect shares in ISA’s and tax treatment of distributions for us private investors. To make sense of the deal, in CRS’ case we maybe need to consider the tax treatment for them with regards to dividends/distributions against a straight cash sale assuming they trade as a Ltd Company. Once this is known, maybe we have an answer as to why they endorse the current offer. I would think there is advantage to them for a sale in this structure that as mere mortals can’t take advantage of.
Hahaha. Inc 19/20 £66B, Exp £82B. Inc 20/21 £63B, Exp £99B. Talk about austerity and higher taxes, that’s a given. One pandemic away from, well that scares me. But hey ho, at least we can keep the lights on!
Earlier this week I was talking to a friend about my intention back in the late 90’s to build a new home. I agreed a price for the plot of land but this was on the basis of planning permission being granted. Unfortunately I couldn’t get planning permission from the local Council, despite my local Councillor supporting my case.
This got me thinking. Was there a possibility that HUR had a buyer but on the basis of “planning permission” being granted? It would certainly be easier to sell the company with permits etc for P8 in place and more than likely at a higher price. Without this, where does it leave HUR and us as investors? I sincerely hope my thoughts are maybe just my imagination running away but if not, the BOD need to take the lack of approval consents further and not just lie down and accept it. Regardless of whether there was a potential buyer, they should be pushing harder and take this to a higher level. As I said, easier to sell something if permissions are in place. It should certainly not be for share holders on here to do the donkey work, it should be those running the company to push. To lie down and accept something despite there maybe being a strong argument, is failure in my eyes and shows lack of determination to do a good job.
As an aside, I also remember being on a rig where it was rumoured that the sale of the company who owned the well we were drilling were very
keen for success as a successful drill would impact significantly on the sale and for the buyer going forward The well drilled was very successful and the company sold its assets a few months later.
Taken my time to comment on last weeks RNS which was a damp squib and a very disappointing outcome with NSTA to say the least. Where to now? No apparent Plan B other than the usual promise of increasing share value etc. If liaising with NSTA sending emails, paperwork and attending meetings has been their sole worth for the last 6+months then the salaries paid far outweigh output.
With regards P8, there seems to be a bit of a misconception that drilling the well was a foregone conclusion and that increased production would be a given. I don’t know what the COS would have been but everyone needs to take a pragmatic approach. Despite everyone involved in Offshore Drilling planning for success at the outset, things do not always turn out the way we want.
I must applaud everyone who is taking the time to email JRM et al. It is clear that this method has worked to our advantage in the past. My only concern, how does another well on Lancaster benefit the UK with regards energy security? From reading various posts on here and Industry articles, a high percentage of costs of a new well may be met by Government which would be great if this is correct. My question is how does that reduce the country’s energy deficit, particularly if our offtake agreement with BP results in the oil being delivered to the continent? It’s maybe the case that the NSTA have thought about this, not only in Green terms but also monetary terms to the UK also. Just a thought.
asimpleinvestor - Firstly we haven’t used E225’s Offshore for around 10 years in UKCS and use S92’s. They fly well past 35 knots.
As for a mid water semi, try and find one. If you did, you would be looking at an April to October drilling window to maximise uptime. Hurricane have in the past drilled using larger harsh water semi’s over the winter, Transocean Spitsbergen being the one used. These rigs can drill over the winter in poor weather, the problem comes when you need better conditions to run/pull the stack.
As for the $500k quoted by Transocean/Seadrill in Energy Voice, that was not a definite but a possibility and likely to be for other areas and not UKCS. It’s been a very long time since UKCS have seen those sort of rates. P6 was drilled over the summer of 2014 at a rate of circa $325k per day and that was when oil was above $100 per barrel. The only problem now is the lack of rigs/personnel. If they want to stick with Transocean, have a look at their Fleet Status Report to see if any rigs going out of contract this year or early next year.
Mirasol - Just look back at RNS for 2014 to give you a cost for well 6, our producer. That was just to drill and test and doesn’t include subsea infrastructure. Also we’re is the rig coming from and what lead times for equipment etc. For this year I would say unlikely unless the board have in fact been doing something and are keeping that up their sleeve for AGM to deflect failings. I think not though.
Extrader/Asimpleinvestor - Thanks for supplying the stats and reaffirming my point that us Scots get way more than our fair share of the pie. Thank god there was a political status quo back in 2014 when the majority in Scotland used their common sense to remain part of the UK. I moaned about paying more tax earlier, and maybe rightly so but what has happened in recent years what with covid and the cost of living crisis, I just wonder how Scotland would have faired had we been left to deal with the financial consequences. I am pretty sure I would be paying a lot more like the Norwegians do.
Anti Independence, no common sense. We could obviously debate the fact that us Scots get more than their fair share of the pie.
I think, if a windfall at the rate applied to Oil & Gas sector was applied to financial services, then you might see a move as the rate would be way above say German (15%) and French ( 27%)rates. There were no tax increases in the UK (19%) this year other than dividend tax. Corporation Tax will increase next year(25%). Still laughable not to consider moving out if you add on a windfall tax? I think not.
I don’t pay Corporation Tax, I pay Income Tax and who exactly was responsible for me having to pay more than the rest of the UK since 2018, the current administration in Scotland no less.
You should remember that despite the media stating “tax increases” in April, for the normal working man, a national insurance increase was made and an increase to dividend tax which is not really for the normal working man.
As for debt, I agree we have too much and give away too much to people who may not need it or to people who take the ****. Mind you, not many countries in the world have no debt.
“How about a windfall tax on City revenues ?
We all know why that wont happen....”
Assume if you wanted that then it would include Edinburgh as well as London. With Edinburgh being the 2nd largest financial district in UK and 4th in Europe then would not really assist with your political ambitions for Scotland would it if these companies went overseas.
Divecentre - yeah but maybe just those who know the history and what goes into a drilling campaign will know or understand the process. As for this year, time will tell and it really needs to be soon. Our point exactly, what else would they need finance for and why little commentary. Maybe too many other things going on elsewhere.
For the Transocean rigs you mention, I wouldn’t expect them to be considered for a one or maybe two well contract as the cost of reactivation wouldn’t make it viable for them and that is before they think of crewing them. I don’t know if they have anything suitable warm as they have cut their NS fleet down to maybe 1 rig. Despite HUR’s history being with Transocean, HUR will maybe have to look elsewhere unless Transocean have a rig in Norway. The Status report may give an indication if any rig will be out of contract this year. If Diamond do have warm rigs, then that may be an opportunity but again, Drilling Companies are struggling to crew rigs, just see what recruiters on LinkedIn are saying and a point HairyFuttret touched on today.
Will it be Lincoln or Lancaster? For me as long as they have a successful drilling campaign and can tie back quickly, at this point either would be good for me. Maybe Spirit are looking for a rig?
Quite, BP will not offer finance for no return but on the other hand HUR still has the war chest to fall back on if need be. As I said, if our assumptions are correct, it would be good to see the full terms, in fact, should that not be made available to shareholders or the market anyway?
HairyFuttret - Fit like min. Not many will understand that handle. Not quite in Aberdeenshire but close. No snow just sporadic showers.
Nobody on here considers or even thinks about drilling and it’s potential impact. Was just fed up reading continual drivel about things that are totally out with HUR control and why people are ****ed off with this and that and the share price should be here or there by now. Clearly no clue about the Offshore Oil & Gas industry and what HUR really need to do to get the uplift in share price they beckon for. Not enough coffee shop chat about how HUR is going to get there and only hot air about. I’ll stop there.
Mirasol - For me the benefit for BP is quite simple. If HUR drilled, are successful and able to produce more, BP get more high quality oil. After all they will have contracts to fulfil I would expect.
The only person who has even touched on this is another LTH, Divecentre. Holders need to think or consider what this could mean. We need a bit more information on what the terms of the arrangement is and the actual reason for putting this in place especially as we know full details of the off take agreement with BP.
Hopefully I am correct with my thoughts on this as this will create significant stimulus in moving the share price forward in my opinion. I am hoping that this agreement will be used as a way of funding drilling in the not to distant future. HUR can basically get BP to fund drilling through future production with up front payments in lieu of off take and without the need to tap into the $50m-$80m + war chest at July 22 or share dilution through a placing. A plus point for the board, I think so. After all that is what production companies do, drill, produce, drill some more, produce some more and so on.
Our only producing well cost $37m odd to drill and test. Add on subsea infrastructure and at a guess say $60m for producing well. Any subsea guys still here may say I’m way off on the subsea part but rig rates back in 2014 were a lot higher than today. I think HUR were paying $320k per day for rig hire and today that will be a lot less. Only problem is securing a rig as there isn’t many Semi subs available nowadays. Think how long it would take to recover that cost at todays oil price.
If HUR board aren’t working on a forward plan with drilling in mind then you really can call them, well whatever you want really. It takes a bit of time to do well planning, permits and secure a rig, but for me this has to be being worked on just now, which would be great. Now this forward plan is what you really need to see an RNS for.
Sorry if this is a bit technical for the newbies who won’t know a Dog House from a kennel but after reading a hell of a lot of nothing posts, this may focus your thoughts on what HUR may be doing with the BP financing and why it may be important to the value of your shares.
Many of the “newer” investors on here won’t recall the debate posters had about CNOOC takeover through it’s partner Kerogen Capital. KC’s role as a fund was to invest in worthwhile projects. Kerogen invested big time in HUR but clearly not seen as a goer after they sold on a decent part of their holding in HUR but they are still a significant share holder I believe. Here’s hoping they don’t withdraw from UKCS also unless or course they have a buyer lined up along with CRS……..
Any knock on effect on HUR shareholders? Who did/do CNOOC back and who it turn did they back. The connection is there. Interesting.
Nidgeyr- see your post re Lincoln Crestal received 18 recommends. Pretty good. Wonder if my post telling you that the well was P&A’d last year will receive such a positive response. Come on folks, get to know the company you are invested in by at least reading the RNS’s.
Got to laugh about this thread, I totally agree. Firstly being labeled as bitter by someone who is clearly bitter about revenue fron UKCS shelf going to Westminster for last 50 years!
The real reason for the SNP doing better since 2007 is basically due to the demise of the Labour Party in Scotland under Tony Blair and a switch from one socialist party to another.
There is no real reason for Britain to put Scotland first. There are four countries in the U.K.
Being a born and bred Scot, living in NE Scotland and working in the Oil Industry I could feel very aggrieved that the Revenue take from the North East from Oil, Fishing and Whisky should remain in the North East so at least NHS Grampian gets a fair share. I feel however that would be a silly arguement and concede that it should be spread across all of the UK, so that more deprived areas get the benefit. A bit like how Scotland benefits from SE England. Don't you agree HT?
"The SNP stay in power because 47% of Scots voted for them in May. Understand how democracy works you idiot"
Well that will be 47% of the 63% who voted and not 47% of Scots! Just wish the missing 37% would vote. Think your 47% would be what, 42% or okay, 45% if they did. Where have we seen that % before? Well that will be when 85% voted in a Referendum. Well that too is how democracy works. I would say you idiot but why bother.
Back in 2017? I posted an analogy following "the slug of equity" remark whereby I likened HUR to the guy who started with a Ford Fiesta and to keep up with his neighbours, continually improved his social status by buying new cars on finance and each time he did, he increased his car finance and monthly payment until he got his dream car. HUR were pretty much doing the same by fund raising and offering bonds to improve their standing in the oil game. Taking this analogy further, the guy lost his job, couldn't meet his commitments and handed the keys back (this happened a lot in ABZ during the 2014 oil crash). Based on what the Board are telling us, is my analogy going to follow the same path with HUR handing their "keys" back to the "finance company"?
Having been a LTH since 2014, outwith a 6 month break in 2017, I now fear for the company. I am fortunate in that I only reinvested 50% of 2017 profits but that is still a decent lump to lose, although I have the sense to treat that as not really my money anyway. I can't really see where the company can really go from here given the financial commitments needed to pay debt and procure any future drilling, tie in's or whatever the case may be. Please do not treat this as a deramp or whatever. Posters who know me from the past will understand this is genuine.
I sincerely hope the company does survive in whatever sense but following the departure of Stobie and subsequently RT, I should have known something was clearly not right and should have bailed like I did in 2017. I have never posted my thoughts on RT's departure and will keep my thoughts to myself on that one.
I am to keep my money in here and stay for the ride, wherever that ends up taking me. Who knows I may be wrong.
ATB. Ps 55 and counting!
Re $307m loss. What everyone needs to realise is that this is not physical cash loss. The $238m is a paper transaction in the balance sheet reducing the value of the Lancaster Asset on paper based on the revised level of asset owned.