Transocean Leader now in new position at WW
Interesting, we know HUR will eventually need two more FPSO`s, but the assumption was that the first would be for a fast track GWA FFD with Spirit. The above article is suggesting HUR want their own 2nd FPSO for a partial GLA FFD.
I still think we will have news soon of a three well GWA campaign for 2020 with the locations still to be decided pending outcome of WW drill.
Lots of news to come before the end of 2019.
Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces that the 204/30b-A (“Warwick West”) well was spudded on 24 September 2019 using the Transocean Leader rig.
Warwick West is the third and final well of the 2019 Greater Warwick Area drilling programme on Hurricane’s Lincoln and Warwick assets. A further update will be made following completion of drilling and testing operations.
Hurricane has a 50% interest in the Greater Warwick Area following Spirit Energy’s farm-in to the P1368 South and P2294 licences in September 2018.
It is being suggested on other bb that HUR and Spirit may use the spare capacity at the Solan field processing facility to tie back some GWA production wells. However some think the Warwick wells will be too far away to tie back, so we may see greater emphasis on Lincoln drilling next year perhaps two out of three on Lincoln.
Hi There Folks,
As a fairly long term holder of this company now I am struggling to put a valuation on it. What assets do we actually have? How did WD affect us? What will the next drilling campaign add if its good news? Does anyone at all on this forum have the technical/mathematical ability to quantify value in monetary terms of Hurricane Energy?? Could someone give me an idea as I am losing faith!!!
I’m sorry I can’t answer your questions but the following post from Tournesol over on Adfvn may be of interest.
Tournesol: I understand the frustration which is coming out as concern that the market either does not understand the overall value/potential here or is a sceptical about it or is just unwilling to even think about it. But do remember that ultimately the exit route which is envisaged by Hurricane, Dr T and a good number of us, is not really market dependent. The expectation is that a larger company will come along and either: a) buy the whole company, lock, stock and barrel(s) b) buy a large piece of the company c) buy some or all of the assets d) buy a stake in the co and/or its assets, set up some form of joint venture and take over operatorship of relevant assets. When one of these alternatives is eventually realised, the price being paid may be influenced by the current share price, but it won’t be simply a read across. A bid today would not succeed at less than 100p in my opinion and might be significantly more. Of course that is not the full extent of the long term value embedded here, but much of that will inevitably pass into the hands of an acquirer - and that was always going to be the case. My own position is that the market price of the shares is not strongly connected to the underlying value. I am very comfortable maintaining an extremely oversized holding and expect as a minimum to double my money over the next 12 months. If it takes longer for a deal to materialise, it just means it will be at a higher price, so there is nothing to worry about there. I am not suggesting there is no downside risk here. It remains possible for the EPS which has been outperforming everybody’s expectations to suddenly go wrong. It remains possible for the imminent exploration well and the 3 lined up for next year, all to disappoint. But it seems to me much more likely that the HUR team and their assets are likely to continue to perform well whilst there is a real possibility of dazzling out-performance in line with their track record to-date.
what level of knowledge are we starting from?
Have you read all the presentations on the company website, there’s a whole section on exactly what our assets are, the two CPR documents, the quarterly corporate presentation, and the Half Year Results which have just been published?
I have read most of it, but extrapolating from that an even vague value for me is proving difficult. Not entirely sure what to make of it!
At present the SP is either following the PoO or being dominated by PI’s trading the news, as can be seen from the lack of real volume. This has lead to every small spike sold into and general moaning, groaning and depression on theses boards, with PI’s complaining about everything as the share price has not met their expectations. ii’s do not think like this.
Present valuation: I have read a couple of notes recently that say the SP only reflects the 2P of the 6 year EPS on Lancaster. I find it hard to argue against, even if you ascribe some value to the 2C it is so tiny it can effectively be ignored.
Drilling campaign: The notes also suggest a value of 1p on the SP for a successful WW drill. If the market is not valuing the present 2C what the hell difference will WW actual make? None seems about correct.
WD drill: The effect of the WD drill was to cast doubt on the amount of 2C hurricane have or is producible. The market seems to assume that anything below structural closures is no good.
Taking the markets assumptions as correct and casting my mind back before the 2016 drilling campaign, Hurricane stated, without knowing that the oil extended below structural closer; that Lancaster was approx’ 250m barrels, Lincoln was approx’ 250m barrels, Warwick about the same and gave no figures for Halifax. I think it would be fair for a rough calculation that Hurricane have about 1bn barrels of oil above structural closure. (including Warwick which clearly has oil.) Yet this 1bn of 2C has no real value according to the market.
I think the above is a reasonable summation of where we are, but other opinions are welcome.
As to creating value:
An explanation to just what happened at WD or better still a further drill would help the market see the full 2bn + barrels of 2C within the CPR’s.
For the market to value the 2C they need confirmation that the Lancaster EPS is a success, this is what it was designed to do. The CMD in Jan 2020 will be some 7 months after first oil, or 8 months after the introduction of hydrocarbons. At this stage I think the EPS will be proven.
As to future value: As a very rough figure, Faroe Petroleum was sold at about $3.00 per barrel of 2P+2C. This would value Hurricane in the 1bn barrel case at $1.50 per share or, $3.00 per share in the 2bn barrel case. While I completely accept that this is vary approx’ and you can discount it as you like, but is does go to show the potential of Hurricane in the short term.
As a LTH it is just over 3 months to the CMD, not a partially long term wait.
As an aside I see that, Japanese eyes are smiling.
From Foxtrot Delta on FB.
You’ve got to laugh.
Old story. Premier need the rig to work over the wells at Solan.
rr, Old story but a viable proposition for oil from the GWA especially the Lincoln field. The Solan platform can it appears process 28,000 bopd and 35,000 barrels including liquids. The oil is stored in a 300,000 barrel subsea tank, and offloaded by shuttle tanker. Premier appear to only be producing around 4000 bpd currently from two producing wells, but there appear to be drilling operations planned in 2020. So it looks as if there is a 20,000 + bpd facility within “easy” reach. If the price is right two or three wells should be tied back to the Solan platform.
Edit: Just thinking whether the recent survey ships have been checking if subsea conditions support such a plan.
Any cost sharing must be a good thing and be welcomed by the authorities.
What the hell is happening to this share price folks???
I guess short sellers & traders taking advantage of a share that could be a good few weeks from significant news again, all while the price of oil is taking a beating.
The price is what it is, the fundamentals have not altered and hopefully the day will come when all comes good for us.
But it is mildly annoying that after being a holder for 5 years, through the past ups and downs.
For how far things have come now, for the share price to be still under my original buy in?
We were (and are still) simply ahead of the game. Not everyone had/has our foresight or the courage to back an unknown geologist’s crazy idea when the big boys with all their resources had turned up their noses. Dr T and us fellow investors were right; FB was an enormous untapped source of energy that will help power the UK for us, our children, grandchildren and even great grandchildren.
Initially it was a big risk and we knew that big risks and big rewards are frequent bed-fellows; what we did not know (or expect) was that although the risk is now far far less then when many of us invested, the SP has failed to reflect the far better deal that is now available for anyone with money to spare.
In our innocence, we thought that once the many problems had been overcome and the oil was finally flowing the SP would immediately take
Anyone know the reason for the sudden dip folks?? When is our next update??? My o my long term holding is hard work indeed…
Going to be a gap before the next well is in production… sp will drift till news imo
Floss and others are far more knowledgable on HUR than me though
The dip could well be the blind leading the blind i.e. none of us can predict the future (or we would not need to gamble our savings on AIM). We are all human and as both greed and impatience are very human
qualities' it is not surprising that the SP is inunstable equilibrium’ between the occasional steadying effects of news.
News either gives the SP a boost or dampens enthusiasm but once that temporary effect wears off, all punters have to go on is the way the SP is trending. i.e. if it happens to go down, it frightens people into selling and vice versa.
Hence the SP tends to diverge from what we might consider to be our
reasonable expectations' until the divergence becomes so extreme that the bolder adventurers amongst us decide that they will buck the trend. Once enough have the same view and take action, the SP turns and process repeats with the trend going in the opposite direction reinforced by the sheep who likesafety in numbers’.
However, the vast bulk of punters (including me) could be missing from the above description because they either don’t have the time or interest to constantly monitor the SP or because they are long term investors who, having taken a position, expect fluctuations to occur en route to what they judge will be the ultimate pay-out. Which means is that a very small number of investors can have a totally disproportionate effect on the SP.
So much for generalities, but what about the SP of HUR in its present position? We can only hope that nobody invents a brilliant new battery technology that charges as fast as a capacitor but carries as much energy as a tank of fuel! The laws of chemistry and physics and the limitations of nanotechnology would seem to make such an invention extremely unlikely, but you never know for sure.
Another possible hazard for our SP would be an enormous oil source that is big enough to dominate the market owned by an entity that is willing to forego profits in pursuit of some greater objective e.g. Iran undercutting KSA. This could reduce the price until the shale guys can no longer stand the pain and drop out, but then greed would persuade Iran and the KSA that they could make more money by allowing the POO to drift upwards until shale comes back on stream and the cycle repeats.
However, none of the above requires much knowledge of HUR, similar cycles probably exist for all