RE: Cash, time and the bubble10 Feb 2021 23:31
Mals1960,
Absolutely.
The only revisions from the CPR on the reserves will be due to any of the following:
- Lincoln tieback (adds c. 4m barrels)
- OWC upgrade from that provided by HUR BOD (highly unlikely + OWC has risen as seen from water cut rises in well 6)
- Water injection (adds approx. 10+m barrels)
The sidetrack well will likely not add much reserves as this is only being implemented to offset the high watercut in well 6, for the going concern basis.
Regarding finances, no not missing much. Following January lifting, I expect cash to be around approx. $113-115m.
There's also a couple other commitments that HUR needs to fund:
- Lincoln P&A of $6m (if they don't tie-back)
- GWA commitment well of $20m June 2022 (or they lose this license, but for the sake of the argument let's ignore this)
- Potential trial of water injection in 2021 - $10m (again for the sake of the argument, let's ignore this)
So in total it would be $230m + $60m + $75m + $6m, with cash in hand at $113-115m.
As for the gas pipeline, unfortunately not in terms of a good revenue stream. The value for gas is much less than for oil, I don't believe that a revenue stream of gas in line with current production would even offset costs for connection of gas export.
The gas export was a project considered to overcome the gas flaring limits at the license (to increase production).
The AM/permit has a flaring limit of 17 MMscf of gas. This is currently not being utilised by the AM due to the lower than expected production. The gas export would have only been beneficial if in excess of 30k bopd was produced.
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