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oh, and (c) - whether the fracture model is valid...........(a multi-bn dollar question)
gla
about right, BB: the cmd has a lot of info related to potential oil column heights and is well-worth some time taken to understand. WD has an instument-derived (first-pass, maybe subject to revision) odt in excess of 2300m, you can work-out the possible oil column fairly easily from that. What's of equal/greater interest are (a) whether oil is producible from outside structural closure and (b) whether the seismic-scale fissures at 'WD'-type depths are largely filled with mobile oil or 'crap'. .....better ask some oilies!
gla
Thanks dspp, much appreciated.
My suspicion/feeling is that WD set-back the emotive element of (eps) 'model validation' by +12 months (output of the 'wag' method); LC has recovered 9 months of that, and WW will either further shorten the model validation 'additional suspicion' period back towards +1-2 months or send it out beyond 1 year. (Baseline is +6m of eps validation). Hence, imho, WW has a stupidly over-leveraged say in Hur's value over the medium (3-12 month) period. [ If i were drilling WW and at 1000m horizontal it felt a bit dry, i'd keep going until i got to Lancaster, if necessary! Failing that, shove a 155mm 'special' down the hole and frac the soab....]
Thanks again and regards ,
GLA
GLA
Hi DC; sp premium for a lanfax reservoir acquisition?.......per bbl 2p + 2c......?? Dunno how the p/c value would actually be worked dependant on the PI validation vs eps time, maybe yourself and/or dspp have some thoughts there; avg price paid might be say $2.50/bbl x ~ 1bn = $2.5bn???
Or a co'y acquisition (less likely), possibly ex Whirlywind - less likely due to the relatively unvalidated state of Lincoln & Warwick? So unlikely, following WD, that it's not worth considering, imho.
Any thoughts?
Cheers, and
GLA
DC;
"Will he be HUR friendly?"
Not if he's thinking of an expensive asset buy, he won't!
Lol; maybe one day we will........
GLA
Try £bn, not m, Tardi.
maybe in 25 years before commerciality - and i reckon that's being optimistic.
GLA
Happysurfer's 09.09 is bang-on.
Imo Hur shot one of their own planes down in deciding to drill WD first; the model validity status was trashed and will require substantial effort/time to remedy. Let's see a proper Plan B please, HUR.
GLA
Mals; as WW notes, there are two possibilities there - y or n. Perhaps more importantly is to not consider the timeframes as definitive markers, milesones, or whatever - the eps appraisal is a reservior model assessment and, unless some definitive performance numbers have been put on specific parameters, then the assessment is subjective and may take as long as the relevant potential investors take to be personally convinced. (i.i. a completely sh?t way to make any judgement-call, especially in emotive times like now...). But I haven't seen any allusion from HUR to any specific parameters/criteria, so this aspect is, i suggest, still open to interpretation. Or a buyers strike. Or a fiercely competitive bidding war. But i wouldn't fuss over the six weeks. Or the sIx months. Or twelve months. imho.
GLA
poo vs sp vs hur value: WW; agree generally with your thoughts on the HUR pricing and future. It seems poo is settling - with a bit of shimmying as various swans have a flap - in the $60-$65 range, and as far as i can figure, it will stay there until after I'm dead and probably longer, unless the US onshore Permian suddenly dries-up.
So $35 and up margin for HUR WoS; all we need to do is get the stuff out real quick. So, sell assets next year for £1/share, or get divs of $1/yr for ten years or more from 2023? hmmm.......
GLA
Thanks Jiffy; perhaps the longer-term issue lies with the pussy-grabbing blonde guy....
https://www.cnbc.com/2019/10/01/trump-targets-pathetic-fed-after-worst-manufacturing-reading-in-a-decade.html
no, not that one, Trump!
Only a year to go.
GLA
isn't one of the main issues, AK, that if the likes of you and I are thinking of (or actually are) gradually selling-up, then assuming most other PI's are similarly minded we have a self-fulfilling prophesy. OK, in the new year we might have data-room 'interest' from some potential suitors, and we hope the well data supports a good valuation, but even so, with an sp likely to be sub-40 - which it likely will be before WW initial results are announced, and sub-30 if WW is a dud, any bid for assets is likely to be low-ball, imo. The co'y doesn't have to lie/big-up/boast in its PR, but a bit of tech explanation periodically goes a long way to allaying fears: hur ain't to good at this (although their major tech presentations are quite good). You can look like Robert Redford, but if you've a big zit on the end of yer nose, the ladies won't be so keen.
GLA
agree with your sentiments, ijwt: imo HUR's bod need to get their heads around the current paradigm-shift (i.e. negative sentiment towards fossil-fuels) and start behaving accordingly. I see HUR as a div-paying oil producer; the only issues are (a) funding the field developments & FPSO's , and (b) how carbon-fuels will be taxed in future. BP won't be bidding for hur (imoho), neither will any of the other western supermajors; Cnooc - decent chance. 200k bbl/d @$30 gives approx a dollar per share div. Yep, that'll do me, thanks: Plan B, please, HUR.
WD put a mega-dent in model validity and without repair (via drilling a second 'deep' well?) to provide further validation, will remain a major drag. I've read that K's funding needs were the driver behind their sell, but I wonder if they fully-considered the effect this would have on their remaining hur investment - still 10% below their sale price - and perhaps now wish the timing or funding source could have been rearranged(?)
Oh well, only another month or so before WW kicks the sh?t out the sp.
GLA
realist, when you write comments like that (comparing the Thomas Cook business case vs that of SM), it might be of constructive interest for other bb readers/investors to see your numbers and logic.
gla
Sipp, Biffa: not disagreeing overly with you or AK here, but WW does have some logic to his hypothesis, too. As an aside to those aspects, IF it were possible to have sufficient capacity with the current Lancs buoy physical format, the element of redundancy offers a substantial derisk. i.e. if a ship goes 'down' ( not literally, one hastens to add), the ability to swap ( yeah it would be an ops emergency, but losing 60k bbl/ d is one of them in my book) might be very useful.
Gla
AK; regarding WW's comments regarding second (and third a fourth, for me, bring 'em on) fpso's and their turrets, buoys etc): appreciate where you're coming from with the difficulties involved in build-to-print of large welded structures, but it IS possible - and bl00dy-well should be in 2019, given a fully followed through competent engineering approach. ( And failing that, there's always the big angle-grinder......)
Gla
Notwithstanding any other reservoir or connectivity variables, I'd have thought the column height difference between WD and LC ( nearly 200m) would give some fluid density difference - basic fizzics, given the hydrocarbons have had a few years settling period. Drill high enough in the crest, and the fluid might be, er, gas. Isn't 43 API in the condensate region? I believe the determination of source/ reservoir is done spectrographically, so if the two samples match, they almost certainly come from the same source.
Maybe a reservoir eng could wade in here?
Unconcerned about the API delta, but - like many, I guess, would like to see/hear some form of tech update regarding WD's fissure-finding-failure and it's/ any ramifications and how such will be managed.
Gla
Thanks Reverand. All to drill for on Hal, then....s*d LinWicks measly 1bn.....
Gla
Doubt there'll be too much more other than some confirmatory news regarding the outperformance of the two producers, and maybe a bit more ' forward guidance' re the Lincoln newbie, e.g. ' don't expect this one to clean- up to the degree the ' Lanc pair have'. Anyway, the negative deramper crew posting this-morning might be well-happy (sorry), Wellwell.
Really liked the corp pres update especially the 'forward- guidance', yay, high-five, Hurricomms!
WW, oilies and reservoir engineers: feel free to call me a f***kwit for even suggesting this, but if Local connectivity within the two-well Lancs zone is as good as DrT thinks/ indicates, and this continues throughout LanFax, might it not be feasible that a single guaged well on the Hal end would prove the reservoir concept ( and volume)?
Gla
Feel sure Longwait would agree, it has been. One upside to the two wells current outperformance and inreased revenue is the improved financial support for earliest possible LanFax drilling; a few bucks of extra poo helps, too, obs.
Aware that this is a repetitive bleat, but I'd love to see a 'HurProCo' plan released-to-market outlining two fpso's , twenty wells and 200kboe/d within 30 months. I'd wait for the 10 years of divs, before 'dirty' co'ys are too hot to handle ( i.e. taxed to hell).
GLA.
Isn't the reality, Avo, that as soon as we saw the tunnel doublespend followed by the ever- receding ST2, then the emergence of a package involving JPM, the failure risk became significant and therefore a self-fulfilling prophesy? Could ST2 have been funded by a cash- call at £0.3+, with a 3x dilution? Maybe would have been a better solution; one hit and all done. So Gina will probably get the company after-all!
Gla, sxx needs some.