Member Info for Slift

Further Info:
https://www.oedigital.com/news/480950-tullow-extends-maersk-drillship-term-after-cancellation-notice

Cluelesstim,

Gonna take a guess out of nowhere and say that this extension has cost Tullow c. $15m. Probably priced in to the forecasted cashflow for the year at breakeven.
This rig was likely extended to finish the Ntomme-9 well. (e.g. Was expected to come online in June --> Came online in August, adds up to 60 days).
Shame they haven't provided the dates of termination in the brief, or the cost.

Tullow owns 47.18% of the TEN fields. Would be nice if this adds circa. 5k+/barrels to Tullow.
Development of the TEN fields is much much needed going forwards.

ALL IMO. GLA.

SpruceGoose2,

Usually i'm more laminar, but I do tend to transition into the moody sort and can be a bit turbulent.
I mean, it's been a bit hot recently here in England, so with the temperature higher than usual, my regime tends towards the turbulent side!

Several RNS' have stated that the technical review will be be expected on "or before" the interim results.
I'm definitely leaning towards "before" since they have mentioned this multiple times. So who knows, we may get this update late August.

Whatever their technical review is, they really need to get some good press out to bring back the investors that this company is now lacking, preferably instituitional investors.

ALL IMO. Slift.

Get that Moody chart out already lol

ngms27,

I agree that well 6 is likely at it's (or near) it's maximum stable flow.
I think we'll 7z is also near it's maximum flow.

Both flows need to be controlled to minimise interferences.
So I also expect a decrease in oil production going forwards.

Slift.

Think there's more than those 2 issues with that. To name a few more:
- CAPEX not accounted for.
- Finance costs not accounted for
- "profit" when there's gonna be a downgrade in reserves? That's a huge hit to depreciation/Impairments

Oil is going to make a move soon.

As at 8th August, stockpiles of crude in the US are at 514m barrels.
Today, there was a 4.5m draw in crude according to the EIA.

That leaves crude stockpiles in the US at c. 510m barrels.

Prior to pandemic, on the 14th February 2020, WTI was at c. $51-52/barrel.
At the same time, crude stockpiles in the US at 443m barrels.

US crude stockpiles is at 67m barrels above what it was prior to the pandemic.

Sooner or later, people will realise the upcoming crisis of shortage in crude, and the longer the prices stay suppressed, the better.

Good luck to all invested here to experience the recovery in TLW.

"Someone is sitting in the shade today because someone planted a tree a long time ago." - Warren Buffett.

Always look at the future prospects.

Slift.

Yes littlened,

Common sense. Something the idiot lacks.
Personally, I think you're wasting your time even replying to his pointless and stupid questions. Because it's not going to go past his thick skull and he'll end up questioning your knowledge and experience for providing your opinion (as he is questioning the newly appointed CFO and CEO without any information).

ALL IMO.
Slift.

ngms27,

Don't get me wrong. I fully understand the risks associated with this and at the current stage, i'm not too hopeful of a full recovery by Hurricane.

Regarding the financial obligations:
- Potential takeover
- Shallower OWC could mean that no longer need to commit to OGA obligation of the Lancaster 8 well
- Convertible isn't due until 2022, I don't think this is something to be worried about at this stage (will worry mid 2021).
- Some CAPEX for OGA obligation have been deferred to 2021 and 2022. So at this stage, this is not a worry.

Longterm, I'm as skeptical as you, Hurricane really need to turn this around and fix issues if they want to survive. But as it stands, most uncertainties have been priced in to the current share price.

Regarding the wells - I doubt that the wells will become so unstable. HUR have ESPs commissioned in both well to control and mitigate any interferences or instabilities.

"Will they sidetrack? Drill another producer?"
Who knows. Could even be another "production enhancement" option that noone else has thought of.

Slift.

ngms27,

Firstly,
" water cut is anticipated to increase quickly after breakthrough due to the high permeability of the fractures and may result in production rates being curtailed or potentially a well watering out completely."
This is unlikely. Sure at the time of CPR this was plausible. But following the recent pressure/production data (CMD 2020), indicate that the reservoir is connected well and therefore has a huge volume. I don't expect watercut to increase that quickly as a result - But that's not to say that the OWC is catching up to well 7z and soon to 6 (therefore the watercut will increase, but not quite exponentially).

Secondly, regarding the recoverable oil:
For the Lancaster EPS, the CPR2017 states that at the structual closure (1380m TVDSS), 1P reserves are 28.1mmboe. This is over the 6 year period of the EPS.

In 2019, 3.2mmboe of oil was produced. Assuming 15k bopd average to the end of this year, we can expect 5.5mmboe being produced in 2020.
With the above assumption for 2020, we can say that in 1.5 years the EPS will have produced 8.7mmboe.

Going forwards to 2021, at the current rates of increasing water cuts (and only production from 6 and 7z), i estimate production to be c. 12-13k average.
In 2021, I'm expecting Hurricane to produce 4.5m barrels.

Going forwards from 2022 to 2025 (again above assumptions), I think it's safe to assume circa 6-8k bopd on average.
That would meant that for 2022-2025, production will be 7.6m barrels.

In total, circa. 21mmboe would be produced with the EPS. That's a 25% reduction in current proven reserves.

Currently, the wells are economical to run until 7k bopd (or 8k if you want to include downtime). Aoka Mizu is economcial to run up to 74% watercut total, or say c. 70% on well 6 or c.85% on well 7z.

I think majority of this is priced in with the reserve downgrade (up to 25%).

Slift.

ngms27,

As a shareholder, I agree with your views.
I think it's important to know how much of it is priced into the current share price.

I'm holding thinking that BOTH perched water AND increasing OWC (and hence aquifer) is at play.
I'm also holding thinking that there is enough oil recoverable at 75% of initial estimates. Or in otherwords, a 25% downgrade in reserves and resources maximum.

And at the above and at the current share price, this stock is hugely undervalued. Especially now that the uncertainties have been rectified with the higher OWC (Markets are expecting the watercut to increase, and the lower rate of recovery of oil is priced in).

What makes you think that the next RNS will make me concede? In your own opinion, do you think that the downgrade will be more than 25%?

Sailplane,

Half a billion barrels of fluids. Not necessary oil.

Strange, were you ****ing oil at 17k barrels a day between 2nd August and 6th August to come up with that calculation?

lol, 375k shares.

Big boy Tommy here has over 10x that number.
Several of us have multiples of that number of shares.

Beverley has 0.

Enough said.

ronok,

Claiming, providng and evidencing a higher OWC and hence a downgrade in reserves and resources - would mean that majority of the uncertainties regarding production would be derisked, obviously at a price (reserves). For example:

- Market won't be "hoping" for the watercut to go down. Because it becomes a certainty due to higher OWC and the wells drawing on the aquifer.
- Market won't expect 20k bopd at this stage because of the higher OWC and hence downgrade reserves and therefore production becomes a certaintly, although a much lower level with increasing watercuts.
- If OWC is high and it can be strongly backed up with evidence and production improvements - it still provides an opportunity to explore and develop these assets (although with reduced reserves) and therefore may still attract JV partners.
- Eliminates the talk of aquifer and perched water. Because right now, it seems like it's both that's affecting the production.

ALL IMO. Slift.

PlantedBHA,
I'm sorry but you're just annoying af. Almost like a child.

All you ever do is question people (or their experience), post false facts, or post irrelevant crap on this board.
I don't believe you have enough experience (or knowledge) to even be asking these questions as the answers will not go through your thick skull.

"I don’t believe it having been in the industry for a long time"
Personally, I think your industry experience is manual labour. AIMHO.

waqas5711,

As with every company, yes at your own risk.
You should only invest with money you're willing to lose.

"I think we are all about to be shocked. IMO."

I'm already shocked that the lunatic is back with his truck.

Released from the mental ward so early???

@JAdam,
Sure, it's up to you whether you want to believe that the glass is half full. But I think it's half as big as it needs to be.

@haggis_trap,
Very nice, you've had 6 years to average down then. Can't complain :)