Member Info for WaffenBurret

Unless they have chosen to buy in recently? Or already have a holding and seeking to add?

…..before maybe resizing my current holding in HUR.

Good evening Dickbat.

I think it is looking quite likely that Iranian oil might be flowing soon as it would be mutually beneficial to both the US and Iran right now. (Can’t remember who said America never sleeps with the enemy a few posts back, but still).

As a result I’m not so confident about a tightening of oil supply come Winter:

“ China’s factory and retail activity slowed unexpectedly in July, prompting the central bank to cut key lending rates to shore up demand. In the US, the New York Empire State Manufacturing Index posted its second largest monthly decline ever in August. The prospect of increased Iranian oil exports also weighed on prices as Iran responded to the EU’s proposal for reviving the 2015 nuclear deal, calling on the US to show a “realistic approach and flexibility” to resolve three remaining issues. Elsewhere, Saudi Aramco head Amin Nasser said Sunday that the state-owned firm stands ready to raise crude output to its maximum capacity of 12 million barrels a day if the Saudi Arabian government orders it to do so.”

The difference between world oil supply and demand is on a knife-edge as one can see.
Funny, It reminds me of that Micawber fellow when he considered the finer margins of life: “ Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery. '
I think the same applies to World oil consumption.

However, even at, say, $85/bbl (mid price future 2023), Hurrican Energy will probably be worth around 9+p. The elephant in the room will be BOD’s strategy, which in turn rests upon the future UK Government and it’s ‘election grabbing’ new manifesto. II reckon they will find themselves in a bit of a pickle come Mid-September and will wait until they are installed with a firm plan and set of commitments.

It is for this reason that I have reduced my holding in HUR.

Senseman ~“given EPL importance, hard to see any 'plan' decisions being made/announced before then. Also hard to see, if any commercial deal/partnership/buyout being considered (incl CA share sale), anything being signed before then. Other party would argue EPL exists, HUR and/or CA would argue it may disappear. Values in 2 different scenarios materially different so how could a deal be agreed before clarity”

Absolutely agree Senseman.

I would say your glass half-full involves considerable upside forward thinking and open to a myriad of political events which could seriously skew the situation - a fair assessment if you’re an optimist.
Today’s value based on current situation ( see my previous post) is somewhere between

5.4p low (HUR BOD / ERCE conjecture) which might be a little negative, or:
7.5p mid - 9p high (My valuation (See previous post).

The problem for the immediate new PM is to remain electable, so any noises from Sir Kia Starmer will have to be addressed given the current situation.

There is some solace in todays financial debate BBC Radio4 06.15 around Energy Levy, that small North Sea Oil companies might be spared from more draconian taxes. However we must also assume that the climate debate is going to rage on in the coming weeks and months.

The upshot of all this is that the future of HUR has become utterly marred by politics.

Dickbat, if USA produces more oil, it will require fewer imported barrels and the price of oil will fall.
EIA prediction (and ERCE’s) are drawn from a huge range of quants.
The prices quoted are for Brent oil futures (which are themselves a series of endless predictions, 3mnths, 6mnths etc). The curves are suggesting $80-90 in 2023.

“ I would take no stock of any report quoting the future”

Then how do decide where to invest?

* 7.5p(mid) to 9p (high)

“Fair chance cash 7p a share by end Dec 22” -Senseman

Senseman has

You have similar figures to those I presented
:: current 7.5p(low) to 9p (high) and, as cash in bank increases with each uplift, a corresponding rise in fair value.

They may vary, depending upon the price expectation of oil which I nominally calculated at $110. However:

“The US EIA has forecasted that US crude oil production will rise to a record-high production of 13 MMbbl/d in 2023 as producers increase drilling activities in response to the high oil prices. The EIA forecasts that Brent prices will average US$102/bbl in the second half of 2022, then fall to US$89/bbl in 2023.” March 31.

Still a mighty high oil price when compared to the average (in todays money) 1970 - 1922 = $63bbl. Throughout that period the pendulum has swung - 100% highs and 50% lows but they tend to be brief. It doesn’t stop media headlines with extreme predictions such as $300/bbl but….

So, in a 18months time, if the cash remains in the bank, we could see:

“Fair chance cash 7p a share by end Dec 22 ?Fair chance further 6.5p a share Jan-Dec 23 ?Fair chance further 4-5p a share Jan-Dec 24” ~Senseman.

What would be the share price based on those cash figures + tax credit? (dependent on Government Policy - election in ?).

Also, (Whether AA, or RAC predictions) we are considering from 6 to 18 to 30+ month projections, relying on P2 (50%) and P3 (10%) reserves at P6.

The plan: 2022-24.

Whatever the plan, it may entail new risks.
Therefore, evaluating the cash pile must be multiplied by that risk/reward and will not necessarily see an immediate increase in value.
It might even see a diminution.

You are therefore investing in an unknown plan being devised by a BOD that you are not entirely happy with and one from which a large fund shareholder is seeking to extricate itself from.

Await new PM and new policy; energy security v Carbon Zero - not entirely compatible. (with eye on looming General Election!)

-Look at existing assets - P8.
-Fresh appraisal of Halifax?
-If new CEO, then Lincoln licence, if NTSA willing.
-Invest in going concern. ( Will they be better at choosing where to put your money?).

-Sale to another company - What is HUR worth to another Oil company at present with Lancaster P1 (2MMbbs remaining) P2, P3, Contingency Reserves C1, C2, C3 and Halifax licence?

All the above involve expenditure up front.

Swatay, “ some had suggested to sell it when the SP was 0.7p. some thought that the company wouldn’t exist in July 22. But here we are in August 22, Debt free, good cash and has brighter prospects.”

The recovery occurred against a backdrop of huge QE, coupled with covid recovery the likes of which we we have never seen, and will never see, again, which in turn pumped 25+% demand increase for energy prior to Russian act of aggression. We have come a long way from there (currently up 1000+%). But the HUR double-digit share price (up 1,500+%) was based upon exuberant interpretations underpinned by hopes for another well at Lincoln, and P8 Lancaster. HUR share price re-entered double-digit territory for a moment or two.

I doubt that even one tenth of that performance can be repeated, given where we now are today though, of course, I could be wrong.

“ all they’re doing is selling cheaper oil to India and China it’s still not stopping the demand for oil… ”

I rest my case.

Your last post is yesterday’s news, - suitable for wrapping fish today, or covering up windows to block out the sun during the heatwave - ie: probably already in the price.

“ and I very much doubt America would choose to sleep with the enemy…”
Haha, funny.

We will see. As you know Maris is informed by these chaps for forward guidance:

https://www.erce.energy/graph/global-oil-demand-and-supply/
https://www.erce.energy/graph/brent-futures-curve/

Dickbat, Of course there will be a continued demand for oil. It’s a headache for all right-minded folks. But it is current US policy to try and subdue the price. To that end, there are quantities of oil available to the world that go unmentioned. Iran for example - instances described in the book ‘The World for Sale” (mentioned through Schemiel’s Twitter link yesterday 11.25) since you mention reading, show how American sanctions can be circumnavigated by commodity traders, and States, bringing cheaper oil to market.

As for other investments (I could mention but would have to charge you, lol) I think it is discourteous to discuss other tickers on this board as I would rightly be criticised for ramping.

But I hope and trust that you also have a balanced folio.

Thanks Daltry, will bear that in mind.

And, incidentally, that goes for anyone else who is willing to discuss this in a mature debate.

Flyingpie, there is a chance that your assessment is correct, and mine wrong.

I’m trying to figure out what that chance is.

My concern is that we are at the behest of Government policy - yet to be devised - in reaction to a climate catastrophe, over which we have even less control than we do over Hurricane Energy’s BOD decision-making process, ironically, and which could send this share price south in the blink of an eye.

My reduced holding now reflects that risk.

The pleasure’s all mine eurofil. I am still invested, but with a reduced holding, thanks.

So while a lot of you continue to snipe at the current BOD, it is understandable that they will take their time and hopefully avoid making any rash decisions.

In Dr Thrice’s day, Oil was still, just, in vogue. Not so now.
It is true that Maris can be caricatured as ‘begrudging’ but he and his colleagues have a lot to consider and it will be with increasing restrictions, caveats, regulatory changes that he, the Government, and the West will prove up more fossil resources given the rapidly changing climate and environment.

My ‘15p when you least expect it’ comment will be exactly that! 15p in my view may still fleetingly happen on the back of some further exuberance (and other investors, MMs, et al, willing to take your shares from you at that price(!))

I might not be invested if/when that happens as I am beginning to see other more interesting and lucrative alternatives to invest in but for the HUR social club I sincerely hope it does hit 15p for those of you who have set their sights set on that number, and higher.

These things do tend to happen when you least expect it.

And happy to be your punch bag if, in doing so, I hear further arguments supporting such high valuations in the near term.

—————————————————————
Flying Pie:
In answer to your points:

contingent resources :

• Chance of development difficult to assess and
could be a big range (20% to 80%)”
You have to factor in expenditure for P8 and proving up supposed contingent resources.
Consequently, as with the Lincoln well, it may become commercially unviable in the opinion of the BOD and not return shareholder value.

I also believe that unless the West develops a system for effective carbon capture from the air (DACC) pronto , pressure will increase to shut down further fossil fuel exploration long before any money will be expended on relatively small reservoirs of oil - (notwithstanding national energy security).

Very likely to be reflected in new Government policy long before HUR reach any contingent resources in Lancaster.

Thank you, Flying Pie, for engaging with me in discussing how to arrive at what might be a fair value for HUR and therefore a target price going forward. After all, I think that is one of the main purposes of this board, although inevitably it can become a little cosy and sociable, even tribal, sometimes.

It is true, I have changed my mind, and I thank in part Daltry for his continued gripes and invective toward HUR board members.

Eg:
“SP and faith25 Jul 2022 14:44
If this SP drifts back into the doldrums even after this RNS, then it is sure evidence that the BoD are just not trusted and there is no faith in them…
Badly managed companies are never a good reason to invest….
Sorry to be so pessimistic…Maris leopards don’t change their spots…”

….which I understand since he has stated his LTHolding is avg 45p.
I can only imagine his frustration with HUR.

I read Daltry’s and many other posters on here as I think anyone may provide useful information.

So, I have changed my mind after raking back through the entire history of this company’s efforts as evidenced by their RNS publications. The raising of funds through a bond and from the likes of Crystal Amber on the basis of huge potential resources at Halifax, Lancaster and Greater Warwick/Lincoln. Which seem to have become mirages.

That bond has now been forcibly cancelled, however through 2020/21 bondholders have enjoyed a juicy 7.5% fixed return when US treasury notes could only redeem a paltry avg 1.2% and actually dipped to 0% I believe.

Crystal Amber are seeking a way out and as I understand have an avg of 6.7p but only by increasing their holding as the price slumped, giving them influence and leverage to bring the BOD to account. Their initial holding was in the region of 20p I believe.

Since those dark days of 2021 when the price dropped to 0.65p(?) there has been a good recovery and some more recent investors have made a bit of cash. I only bought in at around 3.6p and decided to sell at around 9p missing the 12p spike.

At that time I expected this share to go to 15p on the basis that bonds would be paid and prospects at GWA, the Lincoln Well were looking hopeful.

I bought in again at an avg of around 8p thinking, as do a few others on this board that 15p is still mightily achievable.
But something was beginning to irk me: Why was the price so stubborn at around 8p? Then with the bond payoff three/four weeks ago and still no upward movement and the relinquishment of GWA licence, I decided to re-assess my position.

I also always have had a general time-frame for fossil fuels.
The recent global weather patterns are likely to force right-minded governments to give-way under pressure to the younger generation who are facing a truly horrendous future and will vote to change it. (Boomers watch out!).

I believe it highly unlikely that HUR’s ‘Contingent Resources’ if they turn out to exist, will see the light of day.

cont…