Member Info for senseman

If you are with HL look under 'transaction history and you will see both DCI payments are described as 'Return OF Capital'

(note, not Return ON Capital'

Google 'investopaedia return of capital. look for 6th or 7th link down for 'Return Of Capital (ROC) - What It Is And How It Works'. It states that ROC is classed as return of funds originally invested and is NOT taxable. Link & excerpt below

https://www.investopedia.com/terms/r/returnofcapital.asp

'What Is Return of Capital (ROC)?

Return of capital (ROC) is a payment that an investor receives as a portion of their original investment and that is not considered income or capital gains from the investment. Note that a return of capital reduces an investor's adjusted cost basis. Once the stock's adjusted cost basis has been reduced to zero, any subsequent return will be taxable as a capital gain.

KEY TAKEAWAYS

Return of capital (ROC) is a payment, or return, received from an investment that is not considered a taxable event and is not taxed as income.

Capital is returned, for example, on retirement accounts and permanent life insurance policies; regular investment accounts return gains first.

Investments are composed of a principal that should generate a return; this amount is the cost basis. Return of capital is the return of the principal only, and it is not any gain or any loss as a result of the investment'

If 330K smaller offload did occur 24 Feb to capture 'reasonable' oil price, then Prax got it wrong. Brent 24 Feb was $81-$82 and past few days when full offload would have occurred was $87. That's a 330k x $5 = $1.65 mill loss, so $290k DCU loss - not small, circa 0.015 per DCU.

Brent today just hit $89 so everything crossed that rise continues or at least does not retrace before circa 18 May. Full offload at $90 would add circa 0.325p to DCUs

Dive - sadly you'll get more sense talking with a penguin. The fool doesn't realise that with production exceeding projections by a fair margin, Dec 2006 economic end is likely to extend. Also if via a minor miracle Prax buy a producing asset they will use the AM capacity (already being paid for) so that the lesser producing asset P6 can produce economically well beyond 2026 at lower volumes as costs will proportionately be a fraction of current.

He's also forgotten that had HUR not been sold, it would by now have new management which would have bought or done a deal with a producing asset or sunk another producing well, and similarly by using the AM would have rendered P6 proportional costs a fraction of current hence it's extended it's economic life at lower volumes well beyond 2026. In those circs P6 cash would have totalled a healthy chunk more than 14p. Under no circs would new management have left AM underused as it currently is and P6 to remain HURs only producing asset.

Angry permanently discredited one might care to put on his comedian hat and explain to all a shrieking anomaly in his 'reasoning', namely:-

a) If DCUs are guaranteed sure-fire max 12.5p total (according to him), how come b) HUR standalone by end Dec 2026 would have failed to reach 13.5p/ 14p, when as things stand DCU 12.5p will be reached via us receiving only 17.5% of net oil sale funds, less various costs?

The forum awaits explanation of this anomaly, angry discredited one. Please, there is no need to be shy. PS. I stand by my 13.5p/14p HUR P6 standalone projection, first stated clearly at June 2023 sale-time.

NB. So on Jan 1 2027 Prax will cease P6 production, decommission with all it's associated costs, and discard the valuable asset and gateway to riches they were gifted, eh? And also HUR had it stood alone would really have done this, eh? Not on your nelly, sonny boy! I must visit your planet some day

For the sensibles:-

Yet again, I haven't lost serious or even significant money on HUR, I hope I break even and may still do so. What it cost me, esp 2021 effort, was time and energy I should have spent developing another income stream as Covid killed my main athletics income stream cold dead. I won't bore you with the crap not doing so has landed me in, ie risk to my home

Prax/HUR P6 standalone max figure (in court docs) by end of P6 economic life was 8p and bits. With the Jan offload and oil in AM tanks we would already have been at 9.1p p.sh.

In Dec 2026 will be simple maths to calculate an accurate end Dec 2026 cash figure had HUR not been sold and see who is correct. Ignore the ever louder screams of the resident nutter as his pronouncements increasingly show themselves to be absurd and his personal attacks increase

Laser am leaning towards your view more likely was Feb small offload as even with Jan lower production and say March production down to 6500, tanks should now be full even maybe 1-2 days ago on basic maths. Though both important, production exceeding expectations and not falling off a cliff more crucial than high Brent. Even $90 Brent raises full offload only to .325p towards DCU at 6500 daily production.

HUR projected Nov 6.7: Dec 6.3: Jan 5.9: Feb 5.6 for economic life end Dec 26. Dec 6.72 and Feb at .6.59 beginning to confirm trend easily outperforming projections. Jan a clearly company induced reduction for unknown reasons.

6.59mbpd means tanks full every 82 days so still 2024 averaging over 4 full offloads a year and indicating months before reduces to 6mbpd and 90 day offload cycle

Going to help DCUs a little, sadness being Prax to reap most of benefit. Odds increasing of economic life extending beyond Dec 2026

*** packet = cigarette packet

back of a *** packet using old formula of 8% coming off top to aoka mizu owners, brent at $85 and costs say at $45pb (can't see it being higher yet with production holding up well and prax monitoring costs like hawks), each offload nets prax circa £13 mill with £6 mill to us, so £7 mill net to prax. meaning were shs still owning hur, cash would add circa .65p per offload to kitty rather than .3p per offload. put another way - if take brushstroke view we had circa 6p a share cash in bank at sale time (the common viewpoint), current cash in bank would be circa 7.9p a share compared with current 6.95p a share sale incl dcus cash, and shs still own company. add to that .6p for dec/jan offfoad and .6p for current full am tanks offload imminent if no smaller feb offload occurred, and cash in account would be circa 9.1p, compared with circa 7.55p p.sh via dcu route. extrapolate to dec 2026 cut off point and cash in bank would have been circa 13.5p - 14p p.sh with shs still owning company, compared with current projected dcu end figure of 9.5p a share.

Dive - spot on. Mach & I used broad brushstrokes for working a sensible overall total and clean forgot the possible smaller Feb offload, also to take account of Jan's (we think intentionally) temporary lowered production. Either would explain why no offload yet by end March. And no Feb offload and no end March offload by now means no end June offload as the 3 month cycle needs 6000k bpd x 90days = 540k bpd to keep within the 3 months cycle.

For cashflow better there was Feb smaller offload and will be big one in May so we get your 8.0p - 8.8p. in Sept. Brent currently steady strong at $87 with upward pressure so by May could be higher and help us. No offload next 7 days should indicate which way things will pan out and Laser as ever the watchman.

Laser on t'other board makes salient point that:-'last day of (pre-sale) dealings could of sold for 7.77p so far to date received 6.94p break even point maybe on next DCU payment due Sept 2024 .' Which means that taking into account inflation also loss of interest, DCU's won't equal last day of (pre-sale) dealings until least March 25, ie 21 months post sale date. Further evidence that Prax '12.5p' deal was smoke and mirrors. And I tell all the simple reason why Prax have not been a rsed to buy a production asset to make use of hundreds of millions of tax entitlements and zing DCUs to 12.5p (which my cat could have done) - they bought us free with 6p of our own money already banked - and all we get that we did not already have banked is a small proportion of production profit (till end 26) whilst they bank the bulk - so they are already on a massive freebie if they do jack sh.it. Watch them move post Dec 2026 when they are own HUR & producing P6 and we are off their backs, have a shedload of our profits banked, and can buy a distressed producing asset cheaply with (our) cash on the hip

Thanks HANK for being definitive. With what we know now - I concur in spades. Realistic consensus helps all. We now have a template likely 3p to add to current 6.9p, ie: 9.9p total (less tax on DCUs if brokers roll over and HMRC get tough, so circa 9.5p net for most).

To save all from boredom - I suggest anyone diverging from this view provide basis maths to evidence.

In respect of the resident 12.5p nutter - I suggest abject ridicule until and unless lucid argument and basic maths are provided in support

Hi Machin - this excerpt from my 28 March 11.03 post is situation precis:

"GOOD:- .6p via good production & $85 Brent sees all at 6.9p p.sh. Expected .9p end Sept (3 offloads) sees all at 7.8p p.sh, with another offload in AM tanks & another due end Dec (2 offloads). So 8.4p.sh end Dec 24, 1.5yrs post summer 2023 sale, with 2 yrs left till end 2026 cut-off date.

BAD:- 2.4p in 18 months (1.6p annually) = 3.2p due 2yrs 2025/2026. So 11.6p.p.sh total. Assuming no production fall, stable costs & $85 Brent. But production falling & costs rising. So barring lasting dramatic Brent rise to compensate, 11.6p p.sh will not occur, never mind 12.5p p.sh. Barring Prax/HUR buying producing assets, 10p p.sh more realistic - largely dependant on production not falling off a cliff."

Put another way - currently 1 offload circa every 3 months, netting us circa .3p an offload. Meaning we'll get cash from 13 offloads (incl 1 completed late Dec/early Jan) SHOULD production remain constant. But with production dropping, reasonable assumption we will lose 1 more likely 2 offloads, poss even 3 (longer time to fill AM tanks). So .3 x 12 = 3.6p, .3p x 11 = 3.3p, 03p x 10 = 3p. Most likely we'll lose 2, so 6.946' + 3.3p - 10.246p. But costs are rising hence soon we're likely to see each offload DCU payment drop below .3p. So 10p more likely. Even dramatic consistent much higher Brent will see us struggle to get above 10.5p.

It would help the forum if a nutter stopped chirping we will get 12.5,and rather explained his maths how we will get there. The only way we will is if Prax/HUR buy producing assets the profit from which we would be entitled to 17.5% net of. On that issue - we are already 10 months post-sale and since Prax knew it was a done deal 6 months earlier, it means they will have been looking at possible buys for 16 months. Our cut off date Dec 2026 means that 32 months remain. Knock 6 months off that for ANY purchase to be completed in time to produce ANY (small) DCU profit benefit to us, and 26 months remain for a purchase. So 16 months gone, with 26 months remaining. You get my drift. Also, since CA has sold 50% of it's DCUs (albeit at a suspiciously high premium), it is reasonable to assume no Prax/HUR purchase of a producing asset which will raise DCUs to 12.5p is imminent - or 'in the know' CA would not have sold. Prax's business model has always been to never pay fair market value but only purchase distressed companies or those with pliable BoDs and/or major shareholders - as they did with HUR. So far, if Prax have been looking they have not as yet found a producing asset company prepared to roll over as HUR did and sell itself on the cheap. For all these reasons, as well as being told by someone definately in the know that a purchase is unlikely prior to Dec 2026, I doubt a purchase will occur in time to do us any good. I remain hopeful I am wrong.

corry - thanks, and for replies to all. i know the time it takes. this living through the dcu saga has already further cemented my concrete view that the deal agreed with prax by hur and ca was amoral and negligent.

for any entity to hold another's interest funds for 6-9 months and retain such interest thus depriving the another from that interest is fundamentally amoral, and negligent negotiation. how difficult would it have been to negotiate, in a deal already a free gift to prax, that interest on dcu sums was payable from date of oil sale? would prax have refused the free gift of hur for the price of a lollipop? of course not. my cat would have negotiated that.

the other aspect peeing me off is the dcu isa drivel situation pis are presented with - prax statement are titled 'deferred payment calculation' (ie. deferred payment of agreed sale price). yet as you write(of prax promotional & court docs sales drivel):-

' may also now wish to have a read over page 81. the bi-annual payments are described in there as being a part disposal of the dcus for cgt purposes, i.e. no longer a part disposal of the original hurricane shares, and as the dcus themselves can't be held within an isa...taxable outside may yet prove to be correct...'

the reason brokers may be pivoting from paying funds into isas is because it ain't their cash and they can't be a.rsed to have a fight with hmrc. yet the basics are clear - dcus are neither cgt nor dividends, but are part of the original sale price deal. it is ultimately irrelevant what the limitations of hmrc category and/or regulation limitations are. a supreme court has the power to order governments and/or major institutions to amend /improve it's categories./ regulations/ definitions in order to accede and fall in line with basic principles (indeed that is one of it's primary functions). a properly conducted supreme court hearing would order hmrc to amend/improve it's definitions/ regulations to include and allow to remain within isa umbrella any dcu payment made on account of a sale agreed whilst the share was held under isa umbrella. a competent judge would say - this is basic stuff - i don't give a toss what either your regs or your ****pot arguments are - they are crap so change them - dcus are part of a sale price agreed whilst shs held shares under isa protection - no valid argument exists why part of that sale price should be removed from isa protection.

but brokers, hmrc, hur, prax ca are in this instance s cum looking for easy life so as usual it is poor jack-soap left holding the baby with the problem to solve! i won't be declaring anything to hmrc and will let they come after me before bothering to argue with them. the fundamental question remains - why the eff are pis left holding the baby because all the main players (apart from pis) have protected their interests and a rsses?

only positive - brent grinding higher now at $87. i expect and hope it higher to help us a little as least for 1-2 of

Corry - just read again yesterday's March Prax calculation statement, covers the end June 23 + end Sept 23 offloads. The FX for the whole sum was performed in March. Does this mean that Prax held our 17.5% for the end June offload for 8-9 months earning interest on it which they retain, and our 17.5% for the end Dept offload for 5-6 months earning interest which they retain? Put another way - does it mean that if things for right for the, that paying DCU cash every 6 months means they can make & retain interest on our 17.5% for up to 9 months eg they get the cash for the start Jan 24 offload but we don't see it till end Sept and they keep all the interest Jan-Sept on our 17/5%?

Peter - ??? - but still nothing in Hargreaves accounts. so are you just assuming based on what others report their brokers are doing?

Bidds - was hoping you would say previous DCU was paid into trading account as would at least show Inter Invest consistent and different brokers may interpret differently. That they have pivoted from paying into ISA to paying into trading account increases chance of Hargreaves and other brokers doing similar. Questions - did they say whether or not they would be retrospectively re-routing previous ISA payment into trading account? (one would imagine they would need do so for consistency, though rather difficult if folk have already withdrawn ISA cash ). Did you ask them if they intended doing so? Or to explain why they paid previous DCU payment into ISA? Unlikely you had time to think quickly enough in the circs to do so - just my open questions.

PS. As soon as any Hargreaves client (or any other broker) sees where the DCU payment is paid into, please can they post that info

Was the same done with previous dcu paymnent. or was that made to your isa? hargreaves paid previous dcu into isa

Bidds - which broker?

Am Hargreaves - nothing showing there yet

GOOD:- .6p via good production & $85 Brent sees all at 6.9p p.sh. Expected .9p end Sept (3 offloads) sees all at 7.8p p.sh, with another offload in AM tanks & another due end Dec (2 offloads). So 8.4p.sh end Dec 24, 1.5yrs post summer 2023 sale, with 2 yrs left till end 2026 cut-off date.

BAD:- 2.4p in 18 months (1.6p annually) = 3.2p due 2yrs 2025/2026. So 11.6p.p.sh total. Assuming no production fall, stable costs & $85 Brent. But production falling & costs rising. So barring lasting dramatic Brent rise to compensate, 11.6p p.sh will not occur, never mind 12.5p p.sh. Barring Prax/HUR buying producing assets, 10p p.sh more realistic - largely dependant on production not falling off a cliff.

Possible UGLY:- CA half yearly reports almost 50% of it's circa 550 million DCUs sold at significant premium. It was a pre-summer 2023 PI concern that a sweetener private deal may have been agreed that post-sale (after decent interval) Prax would buy CA DCUs at a premium unavailable to other SHs. Has such occurred? Or did CA manage to obtain such premium via clever salesmanship to entity or entities other than Prax. I do not know the answer rather but simply phrase the obvious reasonable man question.

NB. Lest we forget perspective - irrespective of whether DCUs top out at 9p, 10p or miraculously 12.5p p.sh - overwhelming majority of PIs are deeply underwater at much higher SP, with many already drowned

To the nutter - show the forum a single senseman post indicating I have had to consolidate heavy losses and I will sign over to you you the deeds to my home, and my DCUs.