Rotterdam to FOIL - PART II



No signs of movement from the AM so I assume we can forget about this weekend.

Next opportunity - some time way off in the future.


Agreed. We don’t really know what happened on the previous attempts except that the rope first snagged and then broke. But both these failures may both be down to the fact that this massive bouy is being wound into an even more massive ship whilst both are being affected by the ocean swell. The complication is that they are not affected equally; the ship is relatively free to move, but the buoy is anchored to the seabed by both its moorings and the umbilicals.

This means that the relatively delicate thread connecting the two has to either stretch to accommodate the mismatch in movement or exert enough force to lock these two giants together.

Wire rope will stretch to some extent but as the length of rope reduces, so does the amount of stretch available to accommodate the mismatch. Consequently as the buoy is wound in the load increases as the moorings and umbilicals are lifted from the seabed, but the transient loads due to the relative movement also increase.

The solution to this engineering challenge is to build into the system some flexibility so that at least the transient loads are smoothed out. The ideal is for the winching mechanism to be able to wind and unwind so as to maintain enough tension to hoist the buoy in, but no more.

Another way is to incorporate a spring' which will accommodate the difference in movement without exceeding the breaking stress of the rope, but thisspring’ will absorb a lot of energy as it compresses and this could be dangerous if it is accidentally released.

But both the above will result in relative movement between boat and buoy and this increases the chance of damage as the two are almost mated, so the third approach is probably the best:

Wait until it really is flat calm and only then make the attempt. Even then, it will be well worth having some flexibility in the system, this is the North Atlantic after all, so there may always be some long wavelength movement which, although not apparent to the eye, is exactly the sort of wavelength to which the AM will



Agreed. Flexibility is king.


The term you are looking for is active heave compensation.


Something I get most mornings!


"it will be well worth having some flexibility in the system " (Floss) “…Agreed. Flexibility is king.” (Ash)

Congrats Floss/Ash, you both have ‘eureka-ed’ - or whatever is the appropriate Greek inflectional form in/of its conjugation! Let’s hope that HUR/Bluewater/subcontractors also do, before too long!! Kr,A. - LLV


"The term you are looking for is active heave compensation." (at Floss?)

Thanks, Riverside. I, too, can take that. A rose by its proper name? - Kr,A. - LLV


Summertime and the hook-up is easy
Investors are smilin’ and ocean is flat
The winter’s a bad time, we messed it up twice
But this share’s good un jus ask Doctor Trice

One of these mornin’s you gonna rise up singin’
Spead your wings and you’ll take to the sky
Until that mornin’ there’s a nothin’ can harm you
With Lawven and Flossy both standin’ by.

(Porgy and Floss)




That was a great rhyme
And it wasn’t even mine,
But here’s to the day
When the AM sails away,
To hook up, not to muck up,
To get the oil flowing,
And we loyal holders
Will be rewarded in quick time.


“(Porgy and Floss)”

Without Prejudice
All Royalty Payments, please to Lyricist/Poet Flossoffa as abovementioned. After accounting for tax with-holding to HMRC and also copyright payments to Mr George Gershwin, he will distribute the net proceeds 35% Floss, 10% Lawven (LLV) and the remaining 55% equally among all readers and contributors to this excellent HUR site. Kr,A. - LLV


Roses are red
Violets are blue
Oil is black
And coming into view…


Oil is black
And coming into view…

I like that… Broken hoist Rope permitting! Kr,A. - LLV


Hi Everyone,

Interesting first and second post from “PC01” on the LSE board. Was asked if he was able to elaborate on his first post, hence second post reply. Many thanks to him/her.

Particularly like the 130p Stifel target price.

All the best.


1st post.

“New to posting on here - just fyi Stifel who did the convert deal have sent some research out this evening…all positive stuff expecting hook up subject to weather end of Feb…px tgt still 1.30…interestingly they also suggest Hur more than just a 1 truck pony touching as they do on the new drilling starting in April. Think perhaps we are all guilty sometimes of worrying too much about every penny move (if down!)…we have no idea if a big seller is purely hedging a convertible position? GLA”

2nd post.

"No, the new MIFID rules that exist make sharing of research a tough gig - but the opening paragraph says :
‘Our unchanged thesis on HUR is that technical de-risking during the first six to nine months of production, i.e. by around ~YE19, should close the 66% discount to NAV (vs sector 27%) implied by our unchanged 130p target price. Today Stifel hosted a desk presentation from FD Alistair Stobie. The next attempt to hook up the production vessel, a precursor to first oil, should be around the end of February (weather permitting) while exploration drilling will recommence in April. No impact on valuation (Figure 1) or financial estimates.’
'Hookup possible from ~month end: HUR is waiting on replacement kit for a third attempt to hook up oil production vessel the FPSO Aoka Mizu to existing subsea infrastructure installed over the Lancaster oilfield (UK West of Shetland).

The spare should be available from around the end of February with a hookup attempt possible thereafter depending on the weather. As a reminder, a period of ~24 hrs with swell < 3 metres is required to attempt the operation.
We come away with more comfort the failure mode of the first and second attempts will not be repeated, i.e. was chance rather than evidencing systematic engineering failure.’
Hope this helps…"


Engineering design includes envisaging what could go wrong and ensuring that this can be handled without failure, but where there is inadequate prior experience, some failures may not be anticipated. That is not a fault, merely a fact of life; predicting the future is never easy.

I am surprised that they are setting the wave/swell limit as high as 3m when there are plenty of occasions when the seas are far lower.

The 2 day window seems pretty wide, I would have though that there will be only a small part of that time where the swell height is critically important, perhaps the wide window includes a delay



Hi Floss,

Baring in mind that information I believe was given by AS, I tend to take anything coming from that direction with a pinch of salt.

Not a big fan I am afraid.

All the best.



"Particularly like the 130p Stifel target price. All the best. HTL "

Thanks for that Post, HTL. Greetings to you and All others.

Not going back too deeply into the HUR S/P dialogue, except to observe that an (estimated)£1.30/share, values HUR’s 2C & 2P resource at an average of <1.75 USD/barrel (<£1.35/barrel). Even at the ‘coup’ which DNO was able to pull off on Faroe, the former had to pay >3.00USD/barrel (>£2.32/barrel) average 2C & 2P. But then I read one Blogger to say that he/she is now frustrated enough to accept a 75p - 80p Bid. Good Grief! Even if my numbers were subject to minor adjustment, what has deteriorated so badly since? The broken hoisting rope? Surely not!!
But then - on many occasions - the more faint-hearted among us d.i.y. L/T Investors tend to panic and Sell, most often, prematurely. I continue to caution against this - unless you have no other option.

As I said, not too deeply into it this time because it is all conjecture, anyway. Some more informed than others, but all conjecture, nonetheless. And to exacerbate the difficulties, we are firmly in a Buyers’ Market for most!
All my personal views. PDYOR. Kr,A. - LLV


That 75-80p post seemed ridiculously negative frankly, especially as we were at 60p already. I know there are precedents for oilies being sold off cheaply (Faroe for one as you say) but frankly anyone selling at 80p when we’re on the cusp of major derisking and success would be making a huge mistake imho. we may not get to the dizzy heights of £5 but we should certainly be well north of here - and once hook up is achieved, we should be well north of 50p even before they start the pumps running.

I don’t think the 75-80p poster was a deramper (not sure who it was but a known and genuine name on here I think). however there will be people appearing to rubbish our investment and try to get people to sell cheaply. Happens in every case when someone wants to force a cheap takeover.


I copied and pasted (from Flod knows where, can anyone help here?):

`Hurricane’s Rona Ridge discoveries, West of Shetland on the UK Continental Shelf, contain independently certified 2P Reserves plus 2C Contingent Resources of 2.6 billion1 barrels of oil equivalent’

But the HUR website says:

`Hurricane has around 728 million barrels of 2P Reserves and 2C Contingent Resources on its acreage (gross)’

There are 1,960M shares in issue so, depending on which of the above is correct, each share has title to either 0.37 of a barrel or 1.3 barrels @ 3.00USD/barrel (>£2.32/barrel).

So the SP for a similar TO to DNO = either $1.11 (86p) or $3.9 (£3) i.e depending which version above is correct;

i.e. somewhere between twice and seven times the current share price.

Either way, the EPS will of course have a dramatic affect on the risk and hence the value of our



“we may not get to the dizzy heights of £5 but we should certainly be well north of here - and once hook up is achieved, we should be well north of 50p even before they start the pumps running.”

Thanks for your post, Alibi. I agree with most of what you say, and certainly with your premise that HUR’s may not reach the ‘dizzy’ heights of £5. You are right, because one never quite knows for sure. But let me hasten to point out that we must compare like with like.

The HUR’s £3.81 (Bull Market), £4.64 and circa £5 each represents a 'fully unrisked (de-risked, if you prefer) state, i.e. a theoretical all 2P reserves at the indicated asset resource - a ‘future price’. This may take another year or two per the continuing Drilling Programmes. So hold on. It may yet come, good fortune and technology permitting.

The circa £2.30 to circa £2.80 (and the £1.30 from Stifel to which HTL has kindly alerted us) are all based on a ‘present price’ i.e. today’s value. (I shall reply to Floss on this, presently). I accuse neither the ‘futures’ of ramping nor the ‘presents’ of de-ramping. I think each can make his/her justification for a stated point of view. Also, I do not know one’s individual circumstances. And I shall not guess.
Kr,A. - LLV