Member Info for SouthSeaBreeze

E19 - That is music to my ears. Are any of your mates in the oil industry perchance? SSB

Please forgive me DC. Now it is clear but does not really answer the points set out below in response to LongWait's prior post. The fact that 2 Bods have to decide what common action to take, is clearly relevant both as to how long everything takes and what decisions are taken. There could be an undetermined question about a tie-in so Dr. Trice's elliptic reference to it, and it not appearing in any OGA update as a consent from them, but presumably still an option, could account for this? Clearer than before so thanks. Still however very much an issue.

Oh again I am not sure. Can anyone confirm this? Then obviously Spirit comes into the picture which obviously impacts the whole Lincoln scenario. Anyone know for sure.

Dear me. Misreading things in my old age. Dr. Trice did refer to 2 wells; one to be or already plugged referred to presumably as per the update you refer to but there was another - horizontal well which Dr. Trice says according to my notes might be tied back to FPSO. I had thought a consent had been given for that until 2022 but perhaps not. It is already there and not a commitment well. Lincoln Crestal pumped, again per my notes between 9 and 10 thousand barrels whereas I have 4682 bod for the other already plugged well. It is not clear from the webcast and I found myself listening to it several times. But I had understood that there had been an OGA consent to a tie-in in a later update. The further point to make is the oil discovered is similar to that at Lancaster and here Trice refers to the (a) 2016 well! API 41/42 630/650. 2016 is before the 2 Lincoln wells were drilled, I think? So was there an earlier plugged well? Bizarre! Anyway, we are not at all clear on Lincoln?
1. How many wells were drilled?
2. What are their official reference numbers?
3. Where are they in relation to each other, in terms of distance and co-ordinates?
4. Dr. Trice says one has already been plugged! It flowed 4682 bpod without pumps.
5. Is the well in 4. the 2016 well or is it the same as the semi-vertical well in which case why the need for the extension? If so, why no application to tie-in the remaining presumed to be horizontal well as hinted at by Dr. Trice in the Webcast.

As I say, the above amounts to a lot of confusion and question-marks? Does the calamitous fall in oil prices impact this. I would say: " Sure it does. It must " At the least, Can they get a Crestal Well pumping sufficiently before July 2022 to finance repayment of the Convertible Bonds and at what oil prices per barrel? What will it cost? Does a pure tie-back cost $30m?

Lincoln is nothing to do with Spirit so why the cagey behaviour? HUR is the sole operator. I find it somewhat bizarre: that's why I would welcome someone else looking at it! The webcast contains all this, and each section links to some degree to the other. So it is open offer to anyone interested to shed light on is actually the case.

I wish to apologise to all those who have been replying to my posts, prefacing their comments with SSB which I have been ignoring as possibly urban slang. There are lots of epithets that fit the mnemonic but the most likely is SouthSeaBreeze as I have recently realised, is myself. So apologies for my distant replies.

Those are the updates LW. Clear as mud. Tie-back not cheap. Did Chaffe say £30m? Can't remember!?

It's on the Hurricanenergy website under Investors. You have to login with your e-mail address. A bit clunky but should work.

This has been superceded by successive updates, and the 27th April webcast. I confess to being rather confused about Lincoln and Lincoln Crestal.Dr. Trice indicates in the webcast that there are 2 wells, one to be plugged and abandoned and one possibly to be tied in to the FPSO ( not something to be completed yesterday ) This article states the prior position which mentions only one well which is what I thought was the case. Trice further states in the webcast that the tie-in well is the horizontal well. In fact subsequent OGA updates have now permitted a tie-in option and extended deadlines for that and commitment wells. I would appreciate someone clearing up this confusion if they can by imterpreting the webcast but as I say what I have written I believe to be the case until enlightened or contradicted. The link is definitely out of date but part of the confused output from HUR on Lincoln, about what actually is there and what they are going to do!

https://oilprice.com/Energy/Oil-Prices/Outlook-For-Oil-Remains-Grim-Despite-90-Rally.html

Here is an interesting post from advfn regarding shortfall on the bond at July 2021. Of course, the second well could pump 16500 bpd perhaps more but if it does not, then a cash crunch is looming.

Anyway here is the post:
https://uk.advfn.com/cmn/fbb/thread.php3?id=44648680 for trying to work out the cash position under various rates of production. It will be tight, and the sooner some plan is in place to deal with the shut-in Lancaster well the better. Fingers crossed.

Nothing that was announced in the later updates, except Trice's resignation, new hirings, committee etc, etc, that was not known and presented on the April 27 Webcast. Nor was oil at $40 but believe it or not at $23.

No Wonder Dr. Trice appeared so shaken. And Chaffe seemed somewhat conflicted. Yet the overall message was extremely positive from the Dr. and also Chaffe. The water cut and interference issues were both well-explained. And it was clear then that 20000bpd had not been achieved due to interference.

There is no problem with the data; there is a problem with the second well vis a vis the first and what to do about it.

The near-term fortunes of Hur depend on the price of Brent and some successful intervention on Well 7 and possibly also Well 6. So remarks by Chaffe about reining in capital expenditure for the year seem disheartening if no clear action can be decided upon and undertaken.

We must be all ears for news as to what is to be done.

I fully agree. I have seen a number of companies pay their directors better than well, none of whom took shares in any meaningful way. In all cases, the companies progressively turned into golden geese for directors, and woeful investments for shareholders. Insider contracts, divestment of assets, the lot.

https://www.ft.com/content/87db0723-0bb1-4293-b093-1d1ed35f8938

I hope this works.

Errata: insert this... the free market
... dreadful not dreadline

Sounds a bit non-committal. Who knows? I have had a bad feeling since Spirit came on board! I wish I had acted on it. Anyway since then, I have had the feeling that not only has it taken a month of Sundays for the Company to decide anything but also as though it is in limbo about the water cut for both wells. The phrasing of its updates has been atrocious, never missing an opportunity to imply doubt and uncertainty. The same has been true of decision-making over Lincoln, and what actually is being decided or not. Isn't 10000bpd enough to start with? They need to come out and state this: the remedial action we intend to take on both Lancaster wells, abandonment of 7, and/or whether the data supports any of these options, costs, timing, financing and OGA. Everything seemed so very simple before Spirit arrived. Since then, a cultural shift seems to have occurred. Not sure Trice really thought the Warwiick wells a good prospect. Anyway, how about calling a spade a spade, and just getting on with it. And skip the vague updates. The idea that some opaque legerdemain is at hand to allow a takeover on the cheap or some other fraud on the shareholders frankly disgusts me. Seen it too many times. None of the directors have any shares to speak of, except Trice and he has gone. To be honest the purchase of shares looks almost certainly not likely to be considered at all since there is little point in buying back the bonds early if it is an option to purchase the shares on the confident assumption of their rise in value unless the whole project is now no longer viewed as technically sound, as pointed out by Malcy by implication in his latest bulletin.

Is the free market? A dreadline feeling is creeping in that this carcase is going to be carved up by a pack of jackals.

Replying to my own post, the first I think with Goldenbadger1 who has written to the Company about the Company buying shares for the purpose of redeeming or paying-off the Bonds. Still an eminently good idea in my eyes, to help raise the share price, and possibly also allow for a capital raise to fund GWA and Lancaster drilling commitments, and specifically resolving what to do about the shut-in well. Wins all round if people get behind it.

Free cash at the end of the year will be £96m on the assumption of oil at avg $30 per day from April to December so the $18 bpd or even $26 bpd figures are not specifically relevant to the calculation of free cash at December 31. The amount will, assuming no redefinition, be £96m plus the excess calculated by multiplying the subsequent avg excess daily rate ( revised downward due to the shut-in of the second well ) by 365 less the period to from January to April ( less any downtime ).

Bravo!!

Agree not perhaps a good time for a Buy-Back but that is why the share price is low, so making sense for a Share Buy-Back.

My last comment on this topic. The Company Regulations cover financing by the Company. Insofar as they don't permit financing, financing by the Company falls under section 82 Companies Act 2014 which prohibits financing except as permitted under that part of the Act. Not a hurdle to surmount but certainly a compliance issue in addition what has been said before.

Is anyone going to the AGM who would be willing to raise the issue of a Buy-Back in re the Redemption of the Convertible Bonds for cash or their conversion to Ordinary Shares? There is potentially a heck of a lot of money at stake.

Necessity is the mother of invention, and should be here.

Maybe someone should write to the Company and enlighten them? It seems crass to overlook it. It is a potentially huge saving for them and the shareholders.

Interesting to read the Companies regulations that now relate to Share Buy-Backs.

They flag a number of issues. Hurricane is a PLC so that regime applies. Do the shares when bought, have to be cancelled? If they do, then any share purchase is pointless. The intention and purpose is not to effect a reduction of capital but to hold the shares for sale either to redeem the Bonds or to be sold to repay all or part of the $230 million in July 2022. So obligatory cancellation is the end of interesting possibility.

It is not immediately clear if cancellation is required for PLCs nor if a PLC may opt to hold purchased shares otherwise as Treasury Shares which are undefined in the summary. So these questions need to be answered. If the answer is favourable in that cancellation is not obligatory and ’Treasury Shares’ can be held by PLCs, and broadly include shares held for some lawful purpose of the Company, then prima facie the object of the share purchase is not unlawful by the Companies Regulations, subject always to the formalities.

The Stock Exchange Regulations for PLCs listed on the Aim need to be consulted and a similar verdict delivered as to the lawfulness of the purchases.

Next is feasibility. How are shares to be bought and in such enormous numbers and whether by ’market’ or ’off-market’ purchases or a combination of both? This would be a question for the Company’s Brokers along with other considerations; such as influencing the share price, staging the purchases in the open-market through fiduciaries and so on. Similarly, these and probably other considerations apply also to the disposals; not least Stamp-Duty and Capital Gains Tax. Next or in tandem with Brokers, the Company and its lawyers need to come to a view as to the viability of such a project from all legal commercial and standpoints. As of today, the prize is up to $172m.

Personally, I think it deserves to be considered.