Member Info for Slift

Estimating September 2020 oil production at c. 14k on average.
End of Q3 at september 2020, Hurricane has 9M reserves left (subject to economic limit).

Q4 still looking tough.
Estimating:
October performance to be 13.5k bopd average,
November performance to be 13k bopd average
December performance to be 12k bopd average.

Q4 average production estimate at 12.8k bopd
Forecasting FY average production at 13.9k bopd - At the top end of HUR's guidance.

Hurricane may be able to get through H1 as it stands with oil price recovering. Economic limit being 9k/barrels going forwards into 2021.
Extreme uncertainty regarding remedial actions. If remedial action do not work, game over for Hurricane.

No investment case here until forward plan activity provided. HUR's statement from 8th June:
"Principal among the near-term tasks of the Interim Chief Executive Officer will be to propose a revised forward activity programme in support of those objectives. The forward activity programme will be based on a prudent interpretation of field performance to date, including, for conservatism, the possibility of a shallower oil water contact. The Company will provide an update on the forward activity programme, including scope, objectives, costs and timing, once it is adopted by the Board."

4 months later, interim CEO is no more, and still no proper forward activity programme presented to investors.

GLA.
Slift

Nice on Steve,

Are you planning on selling out PDL too?

Well, if people actually read the RNS with Chrysaor's balance sheet, their portfolio and their operational performance... they'd realise how financially and operationally strong that company is with excellent management.

Combine that with PMO's assets and production, and you have not only a company with strong finances, but also one that can grow immensely.

Obviously it's unlikely that long term holders who invested in the £££'s will see a return or breakeven in the short, medium and maybe even in the long term.

However, at today's prices, it gives everyone an opportunity to buy into the new company, average down so that they are able to see a return, or even sell if they no longer want to be a part of this company going forwards.

JUST IMO.
Slift

Since it's a merger, you could say he is sacrificing his job and role for this deal.

There can only be one CEO. In this case, two due to the structure of the business - CEO of combined group and Europe CEO:
"The Combined Group's Board of directors will comprise 11 directors including six independent non-executive directors and three executive directors including Linda Z. Cook (currently CEO of Harbour) who will be CEO of the Combined Group and Phil Kirk (currently CEO of Chrysaor) who will be President of the Combined Group and CEO Europe; the two other non-executive directors will be appointed by Harbour"

Ofcourse, I believe this also means that every other executive and non-executive director within PMO may get a promotion, demotion within within the Combined Group, or be laid off.

IMO.

antigua18,

A key point you missed from your last post regarding Tony's response:
"In addition, Tony Durrant (currently CEO of Premier) will step down from the Premier Group at year end."

"After all, the BP deal is now not going ahead anyway and that (or the prospect of having to raise the funds for it) is what crashed the sp over the last 3 months."

You mean investors crashed the price due to fear? When in fact it could have saved this company.. Every investor knew that the debt required refinancing/restructuring.
Also, this crash was more or less in line with sector decline.
I don't believe that the company has influence over investor actions.

Just IMO.

Following last Moody's rating, Moodys' had put Tullows' credit facility and bond ratings "on review for further downgrade".
Link: https://www.moodys.com/research/Moodys-downgrades-Tullows-CFR-to-B3-places-ratings-on-review--PR_420645

The credit facility and bond ratings are important for instituitional investors. With B3/Caa2 and CCC+ ratings, Tullow's credit facilities and bonds are described as substanstial risks and extremely speculative to defaulting.
With these ratings, it is highly unlikely for instituitional investors and pension funds to invest into Tullow.

I was expecting Tullow's corporate credit facility and bond ratings to be reviewed and updated by Moodys' following the Half Year Results. --> To date, this has not been reviewed.
This rating is still "on review".

Following an email to IR --> I have been informed that the "under review" statement is pending on completion of the Uganda sale.
Therefore, these ratings by Moodys' will be reviewed following the completion of this sale in this quarter.

I believe that Tullow has met the requirements for an upgrade (see below), however we do not have access to "Moodys' adjusted total debt to EBITDA ratio".
Requirements for upgrade:
(i) confirmation that the production guidance reset by management in December 2019 can be sustained in the medium term;
(ii) material progress on the divestment programme allowing significant deleveraging and resulting in Moody's-adjusted total debt to EBITDA falling below 4.0x and
(iii) restoration of a robust liquidity profile.

GLA.
Slift

Sounds like something SteveE would do :')

Hi Happy,

Apologies, I have got my currency wrong.

Should state:
Chrysaor £2.3b
PMO £300m
Group £2.6b

Also, those are minimum conservative values I have used to value the companies. But ofcourse, since PMO stake is very low at 5.45%, upside is limited in terms of share price of PMO.

But we'll see where market takes us :)

Good luck to all here, and those waiting to get in.
Slift

Apparently observations are considered "attempting to de-ramp" here.

Observation:
"The same people ramping here day in and day out.
Nothing new today."

The same people ramping here day in and day out.

Nothing new today.

Scrodingerscat,
Agree completely!

The difficulty of them hurdles may ease now that we have experienced new management and a new structured business to manage the risks.
The Goliathberg-Voltzberg prospect in Block 47, Suriname has been Tullow's best prospect since Tullow started exploring Suriname in 2010.
I will be very disappointed if Tullow does not strike oil here. I mean, they have had 10 years to explore and work on this block and this prospect. Chance of success of discovery of oil here however is 34%.
Let's hope that Tullow does manage to find oil here, as we really need a low-cost, high margin asset to develop and replace the one we sold (Uganda).

GLA.

RM,
I was just pointing out that Erris was in fact getting a very good deal with Zinnwald.
And I have no doubt that Erris will be able to get funding to develop and complete this project.

I totally agree with you regarding fake news.
Every PI should do their own research and not just invest based on MotleyFool's opinion :')

HappyInvestor100,

I see value in Chrysaor. With PMO's debt being more manageable (i.e. taken over by Chrysaor) and with the required finances for CAPEX (now that merging with Chrysaor), I also see PMO with value.

Chrysaor has an insane cashflow and portfolio. Combine that with a manageable debt and the potential to grow with PMO's assets.

At sub 10p, you're valuing the combined group at c. $1.7b.

I on the other hand value Chrysaor (AT MINIMUM) at $2.3b (based on assets and cashflows), and PMO (AT MINIMUM $300m now that free of debt and development projects can be progressed) --> Giving combined group a minimum value of $2.6b.

So on this minimum basis, I value PMO at 15.4p. That's my rationale for investing into PMO at these prices. Ofcourse, i've only taken a small holding, so i'll accept whatever happens to PMO.

But there's more value in the combined group than it seems - with the fact that the group may pay dividends to shareholders. I mean afterall, Chrysaor are raking it in with their hedged production.
It's also likely that by year end, Chrysaor will have reduced debt from the expected $3200m to below $3b.

Just IMO.
Slift

Thanks HappyInvestor100.

Taking your advice and just added a little more here at PMO :)

https://www.lse.co.uk/ShareChat.asp?ShareTicker=BCN&share=Bacanora-Lithi&thread=DBD2C2B4-9A8A-4202-B9C6-70F463091E78&reply=true

Ouch laidback.
I remember you were here ramping Cine up because of Tenet...

Hope TLW works out for you.

Rookie1,

Chrysaor cash and cash equivalents of $369m at half year.

But Chrysaor are strong financially and their business is cash generative.
I mean.. H1 realised oil prices for Chrysaor was $63.9/barrel.
They must have majority if not all of their production hedged at very high oil prices...

Compare that will other oilies:
PMO: $51.5/barrel
Tullow: $51.8/barrel
Enquest: $43.6/barrel
Cairn: $48.12/barrel
Kosmos: $38.63/barrel

All data at half year 2020 (unless otherwise stated).

PMO:
Revenue: $531m
Half year production rate: 67.3k bopd
Reserves: 127mmboe
Assets (2019): $6092m
Net assets and equity at half year: Estimated $525m
EBITDA: $352m
Net debt at half year: 1974m

Chrysaor:
Revenue: $1230m
Half year production rate: 187k bopd
Reserves: 590 mmboe
Assets: $10212m
Net assets and equity: $3892.4m
EBITDA: $919.8m
Net debt at half year: $1466.3m

Chrysaor+PMO group:
Revenue: $1761m
Half year production rate: 254.3k bopd
Reserves: 717 mmboe
Net assets and equity: Estimated $4400m????
EBITDA: $1271.8m
Net debt: Approx $3200m

Wouldn't be surprised if Chrysaor also pays out dividends next year. Strong finances and operations.

GLA.
Slift