RE: Take over19 Dec 2020 17:19
Sailplane,
"The obvious fact for a lot of small oil companies: if no one is forthcoming with investment then they can't move forwards"
It's different with HUR.
Since HUR are a producer and they have a huge debt. HUR has liabilities in the millions (FPSO lease costs, general staff upkeep, operating costs, CAPEX costs, etc.)
Other small O&G simply do placings and dilute shareholders to fund themselves. Their liabilities are not as significant as HUR's.
Ofcourse it's obvious, but the reason for stating or pointing it out is because right now HUR is a going concern. If they cannot secure investment, HUR will not be a going concern with the liabilities.
You could think of it as a going concern statement.
As at interim results the statement was:
"1.2 Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Interim Chief Executive Officer's review and Financial Review above. The financial position of the Group, its cash flows and liquidity position are set out in these Interim Financial Statements.
The directors have performed a robust assessment, including a review of the budget for the year ending 31 December 2020 and longer-term strategic forecasts and plans, including consideration of the principal risks faced by the Company and taking into account the ongoing impact of the global COVID-19 pandemic on the macroeconomic situation and any potential impact to operations. In particular, the directors considered a number of sensitivities on key assumptions which included downside (reverse stress) sensitivities in relation to production rates, oil price, fixed operating costs and foreign exchange rates, which estimated the extent to which the key assumption would need to be adversely impacted in order to eliminate the forecast headroom. Following this review, the directors are satisfied that, taking into consideration reasonably possible downside sensitivities, the Group has adequate resources to continue to operate and meet its liabilities as they fall due for the foreseeable future, a period considered to be twelve months from the date of signing these Interim Financial Statements. For this reason, they continue to adopt the Going Concern Basis for preparing the Interim Financial Statements."
However, this has now changed due to the requirement for additional expenditure with sidetracking of 7z well.
ALL IMO.
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