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Rotterdam (Scheveningen!) to FOIL

lse:hur

#41

All,
My, my - a few teddies out the prams here then…

So, perhaps my drafting of my views yesterday could have been a little better, but I hardly think they were drivel or basically inaccurate. Yes the wells have been completed and been flowed but they have lain dormant for some considerable time - 4 years in one case - so to think that you can simply turn on the tap and produce is naive. The flow-lines will be filled with a corrosion-inhibiting medium, most probably treated seawater, which also has to be displaced somewhere - the FPSO. There will most likely be a small clean-up skid onboard to deal with this prior to flowing to the topsides process equipment - Bluewater will look out for their interests in this regard - they own the vessel and equipment.

I never said that the risers and umbilicals were not connected to the buoy - I said they had yet to be connected to the topsides. Whilst to a degree this is plug and play technology, the simple fact is that the risers and umbilicals have to be physically connected to the topsides - they are merely hung-off the buoy at the moment in readiness to connect to the topsides. Pulling up from the buoy is easier than pulling from the sea-bed. Fluids cannot flow to the topsides if the risers stay where they are.

Commissioning is a bit of an unknown - how much was completed in Dubai? How much was completed on the sail? How much is dependent upon hook-up and how much carry-over / remedial work has been identified? It all adds up. The point I was making was that at this stage don’t think that FOIL this year is on the cards. As I said the Catcher FPSO took nearly 70 days from arrival in field to FOIL and Armada Kraken took around 4 months (granted both have more risers etc. than us to connect up). We have only two risers and X? umbilicals, however the bulk of the work - I imagine - is in the commissioning and who knows what issues that may throw up.

I was not trying to p!ss on anyone’s chips - they’re mine as well after all! Just trying to temper expectations at this late stage was all. Unfortunately if some took umbrage at my attempt c’est la vie.

I thought Hurrykane was quite good… :slight_smile:

Cheers
Hurry


#42

Hurricane, as far as I am concerned, anyone with oil knowledge (as you appear to have) is a great asset on the board for those of us who are not experts in the field. So it is great to have you posting even if it generates some

Flopposition!


#43

I quite agree, Flossy, speaking as someone who has been shot down in flames before for daring to see the possible pitfalls ahead not HUR!!)


#44

Glad the AM’s in port at the moment, nasty storms on the way - Storm Diana will come and go around the north, north west and south west of UK between now and the 30th November. Let’s hope we get a nice tranquil gap for a few weeks when she’s ready to leave.


#45

Hi Albi1,

Posted earlier by “Amaja” on the LSE board.

Many thanks to him/her.

All the best.

HTL

“ETA in the Damen Verolme Botlek 2nd werkhaven (at quay 6) is Friday 30/11 at 11.00 hrs (Dutch time). Her ETD is now scheduled for Sunday 16/12 at 07.00.
Apparantly they will need two working weeks do carry out the planned scope of work (but perhaps this may include some sort of cushion).”


#46

Hello HTL,

Thanks for this, that might actually work out perfectly in terms of weather windows for December, maybe miss one nasty storm and catch the calm before the next. Let’s see. Very blustery down here in Kent, true November weather!


#47

Now ETA is 29th @ 15.04


#48

Hi ash,

Many thanks for that.

All the best.

HTL


#49

Hi HTL, I see the Good Ship AM departs for Scottish climes on 16th December. - this happens to be my 29th wedding anniversary and so Mr Millais and I see this as a very good portent ! We shall toast her “Bon voyage” with champagne :champagne::champagne::+1:


#50

Very auspicious and congratulations!:fireworks::flags:


#51

Hi millais,

Many congratulations to you both. I must admit to a bit of envy with the champagne as I have not had a drink now since my problem was flagged up. Still I suppose I could raise a glass of fizzy water and pretend, lol.

Take care.

All the best.

HTL


#52

Hi All,

It’s going to be interesting to see how the hostile bid for Faroe is eventually finalised.

Will DNO increase their bid? It’s worth noting that they already own a substantial amount of Faroe’s issued shares. I wonder if DNO will buy more shares? If so, they will have to be declared.

Will a counter bid be forthcoming?

The offer for Faroe is 152p but the share price has held at 157p. The current market cap of Faroe is c£585 million.

How much a barrel will Faroe’s 2P Reserves and 2C Contingent Resources be valued at? In the current market 2C are valued at very little and it’s the 2P the really count.

Once Lancaster is up and running and the three successful exploration wells are drilled on the GWA there could be a considerable increase in Hurricane’s market cap.

The current market cap of Hurricane is c£831 million and below is a summary of Hurricane’s reserves and contingent resources. If Faroe is eventually taken over it’s going to be interesting to compare the value of the Faroe’s take over with Hurricane’s considerable assets.

https://www.hurricaneenergy.com/investors/competent-persons-report/contingent-resources

It’s going to be interesting to see how this bid pan’s out and how much DNO or another bidder is prepared to pay for Faroe.

Carliol


#53

Thanks H T L and Albi1,

We’ll toast you and all our fellow LTH on the great day, and of course hoping for good news on your chemo treatment H T L, and a return for your voice. Please let us know how you get on,

All the best

Millais


#54

@carliol
Thanks for that post of the link, Carloil. However you play around with the 2.6 billion barrels (gross), if we accept that HUR (or whoever) can get this black gold - or most of it - out of the ground and into the ‘bank’; that’s a massive resource in any language, even discounted for that which may be irrecoverable.

HUR is capitalised at circa 1,959,550,000 Shares (use 1,960 million for ease of calculation). Now further discount the current value - whatever that may be - for 2P and 2C. (Hint: Faroe is suggesting USD 12 and 9 respectively and thumbing up its nose at DNO’s indicated USD 6 and 3). Watch the PoO, though!

Now here is your Homework, my good blogging friends: Calculate the (indicated) value per share of HUR, based on your assigned value/s per barrel. The results you get are interesting, huh?
Or based on flawed logic, lousy arithmetic, wishful thinking or all of the aforementioned?
Kind regards, All. - LLV


#55

Port of Rotterdam showing destination as - Botlek Damen Verlome Kade 6am2


#56

Hello LV2,

Morgan Stanley have done all the necessary calculations to put a value on Hurricane by assuming a best case scenario. I’m sure the M & S calculation will be much more accurate than any back of a fag packet attempt I could make. Also I reckon their abacus will be more up to date than mine!

The M & S results are mind boggling. ( See link below )

“”""Bull case NAV of 381p

It adds that the market is pricing in just 32.7mln bbls of reserves at the moment. If the Lancaster EPS is extended from six to ten years, as Morgan Stanley expects, and the separate Greater Warwick Area EPS program lasts for eight years, that figure rises to 74mln bbls.

“Assuming oil prices in line with our house view, this leads to a net asset value of 68p.”

That’s still a drop in the ocean compared to the 2.3bn bbls of contingent resources for the whole field, which includes 785mln bbls associated with Lancaster and GWA.

Assuming the Lancaster EPS provides the expected sustained production, the analysts believe the “market is likely to assign value to these reserves very quickly.”

“If we assume US$10/bbl value for Lancaster and GWA 2C resources, we arrive at a base case NAV of 292p. Should long-term oil prices increase further to US$80/bbl (real), we see potential for a bull-case NAV of 381p, ~7.0xhigher than current levels.”"""

Whether M & S have got it right with $10.00 a barrel for Lancaster etc remains to be seen. That’s why I’m particularly interested in the outcome of the bid for Faroe and what implications that could have for Hurricane should a bid come in for our company.

Carliol


#57

Back in 2017 BP’s North Sea production costs were $15pb with a target of $12pb.

Hardly worth buying at $10pb.


#58

Hi @lawven2,
"@mallie99
Mallie, humble thanks for your good wishes on an exercise - which though speculative - is not entirely without merit.
I have posted the same scenario - but couched slightly differently - on HUR’s 'Rotterdam … to FOIL’. Again, the answer is your “Holy cow”. Now you can see why some of us LTH are ‘terrified’ that an opportunist predator may come up and snatch it from under our noses, for little more than chicken-feed compared to its realistic/fair value.
Kind regards, All. - LLV"
You’re welcome…
I’m terrified that no one tried to answer this question when I first asked it…(instead of just avoiding it)…


#59

Thanks Lameduck, that’s really helpful ! Let’s hope there’s good webcams in the area


#60

@carliol

Carloil, like HTL (great guy, best of luck on everything, goodfella!), you are a modest human being!! Your ‘…back of a fag packet attempt’ is probably no worse than any. Those with their updated abacus, notwithstanding. So congratulations on your having a credible (in my opinion) ‘go’ at it.

I did make reference to the Morgan Stanley (not by name) Article, although I quoted £3.70 in memory error instead of £3.80 (actually £3.81 as you have refreshed). Like MS, I believe that the Market is way over-discounting for the complexities - including the uncertainties of sustained pressure flows - of the venture, which is indeed complex but not brand new technology. It has worked satisfactorily elsewhere, Just not yet on UKCS. But BP by their own admission are watching to see how it turns out so that they can ‘piggy-back’. I have posted my opinion on that! Nevertheless, you will get no counter argument from me that ‘…The M & S results are mind boggling.’ (on HUR’s great potential).

I agree with you entirely that the outcome of the ‘opportunistic’ bid for Faroe will tell us a lot. So let’s wait and watch with interest on how that one plays out. I had given min (DNO’s) and max (Faroe’s) indicators to set the parameters for our (back of the serviette) calculations.

Whatever is in store for LTHs on this HUR Adventure, I wish us ALL, the very best of luck. We have taken and borne the risks with patience and fortitude and - in my opinion - justly deserve the rich financial rewards which should follow. Please DYOR.
Kind regards, ALL. - LLV