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Hurricane Energy (HUR)

NigWit
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Re: Hurricane Energy (HUR)

#115287

Postby NigWit » February 2nd, 2018, 6:20 pm

From today’s Investors Chronicle, for subscribers

https://www.investorschronicle.co.uk/sh ... -for-2018/

Read down to the section concerning Crystal Amber and you will see Simon Thompson, who has a large following, is bullish on Hurricane Energy.

I’ve followed Simon Thompson’s tips for a while now and have noticed that they often precipitate sharp upticks immediately they are published. He has a remarkable track record of picking the winners among small cap stocks. This article was published after the markets closed yesterday and then headlined the daily email shot that the Investors Chronicle issued at 12.30 today. I offer it as a possible explanation for today’s two sudden price peaks, which were correlated with this article.

Whatever, having the Investors Chronicle back onside is highly positive. They downrated Hurricane to ‘hold’ from ‘buy’ (when at 58p) after the fundraise so, if they review this advice and up-rate Hurricane back to ‘buy’ status, many private investors will notice.

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Re: Hurricane Energy (HUR)

#118062

Postby dspp » February 14th, 2018, 9:34 am

HUR RNS with ops update
https://www.hurricaneenergy.com/communi ... ws-service
for
https://otp.tools.investis.com/clients/ ... sid=977595
saying

----

"Operational Update: Successful Trial Fit Testing of Buoy and FPSO Turret

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, is pleased to provide an operational update on activities related to the Early Production System on the Lancaster Field ("Lancaster EPS").

A key project milestone has been achieved, with completion of buoy 'dry' trial fit testing operations by Bluewater Energy Services BV ("Bluewater") and Dubai Drydocks World, LLC ("Drydocks World").

Under the EPC contract with Bluewater, the Aoka Mizu FPSO vessel ("Aoka Mizu") is currently undergoing repair, upgrade and life extension works at the Drydocks World yard, in Dubai. This facility is also carrying out the fabrication of the buoy which will form part of the project's mooring system. A 'dry' trial fit testing operation was carried out between the buoy cone and the turret mooring system ("Turret") of the Aoka Mizu. The final step in the testing sequence involved separation of the Turret from the buoy cone, which occurred on 13 February 2018.

The successful completion of these operations provides a high level of confidence that the newly machined conical ring of the buoy will successfully engage with the machined receptacle of the existing Turret, during the offshore hook-up campaign for the Lancaster EPS. Thanks to careful dimensional control, and appropriate scheduling of the activities, the fit and proper functioning of the Turret locking mechanism has been demonstrated a week ahead of schedule.

As the cost and schedule consequences of an incorrect fit during offshore hook-up were a significant risk to the Lancaster EPS project, Hurricane, Bluewater and Drydocks World are delighted with the positive result. Importantly, this milestone has been achieved with an excellent safety performance.

The buoy cone will now be released for painting and to be connected to the base buoyancy structure, which has been fabricated separately from the cone. Completion and outfitting of the buoy is on schedule; it is expected to be ready to sail away from Dubai during the second quarter of 2018. Handover to the offshore installation contractor will occur on delivery at the port of Lerwick in the UK, in order to be installed during the third quarter of 2018.

The Turret of the Aoka Mizu, which was removed so that certain renovation and upgrade works could be carried out, will be reattached to the vessel as part of its continuing upgrade and life extension works. Vessel sail away from Dubai remains on schedule to take place by the end of the third quarter of 2018.

Dr Robert Trice, Chief Executive of Hurricane, commented:

"I am delighted that the Lancaster EPS development has passed another key milestone with the successful trial fit testing of the buoy in Dubai. I would like to thank Bluewater and Dubai Drydocks World for reaching this milestone ahead of schedule, whilst maintaining safe operations.

"I look forward to the next time that this equipment is connected which will be to secure the FPSO in place for the life of the Lancaster EPS. With other operations continuing as planned, we remain on schedule for target first oil in H1 2019."

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Re: Hurricane Energy (HUR)

#118088

Postby dspp » February 14th, 2018, 10:54 am

and updated corporate presentation
https://www.hurricaneenergy.com/~/media ... 202018.pdf
- dspp

NigWit
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Re: Hurricane Energy (HUR)

#122006

Postby NigWit » March 4th, 2018, 7:49 am

I’ve heard from a previously reliable source that the new chairman has been sorted and will be announced soon.

Sorry to be brief but it’s all I know.

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Re: Hurricane Energy (HUR)

#122590

Postby NigWit » March 6th, 2018, 1:08 pm

http://www.heraldscotland.com/business_ ... are_price/

"The fund noted its concerns over corporate governance at Hurricane Energy, as highlighted by the North Sea-focused company’s former chairman Robert Arnott when he stepped down in November. It had been critical of the Hurricane board’s handling of a fundraising last year. Crystal Amber, which holds an 8% stake in Surrey-based Hurricane, said it is now actively engaging with the Surrey-based company on the recruitment of a “credible” chairman."

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Re: Hurricane Energy (HUR)

#122783

Postby Carcosa » March 7th, 2018, 4:23 am

Thought it worthwhile to use the Crystal Amber Interim Report which included a statement regarding Hurricane as a good review of where we are at.

"In July 2017, Hurricane completed a US$530 million deal to fully fund an early production system for its Lancaster asset. The company proceeded to take the final investment decision and received development and production consent in September 2017. In December 2017, it hosted a site visit to Drydocks World, Dubai where it is upgrading the floating production storage and offloading vessel as well as fabricating a new buoy. The early production system remains on time and on budget for first oil in the first half of 2019.

The early production system is expected to de-risk the company’s assets as it demonstrates that basement reservoirs in the West of Shetland can become commercially productive. In addition, Hurricane estimates that at a US$60 barrel of oil equivalent (“BOE”), the early production system base case of 17,000 BOE produced per day should generate an annual cash flow of US$190 million.

In December 2017, Hurricane published a Competent Person’s Report (“CPR”), increasing its combined resource estimate to 2.6 billion BOE. Together with the previously published CPR for Lancaster, Hurricane now has an updated assessment of its licences that incorporates the results of its exploration efforts since its initial public offering. The December 2017 assessment included the Halifax prospect for the first time, which holds an estimated 1.2 billion BOE. The company believes this is part of the Greater Lancaster structure, which is targeted by the early production system under construction, and could be monetised together with Lancaster.

In November 2017, Robert Arnott resigned as chairman of the board with immediate effect, criticising the company’s corporate governance standards, a concern publicly shared by the Fund. The company instituted a board committee to address these issues and has subsequently been engaging with the Fund."

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Re: Hurricane Energy (HUR)

#122906

Postby dspp » March 7th, 2018, 1:46 pm

Thanks for posting. Aspects of that re governance look pretty self-serving imho, but without having board minutes who really knows.
regards,
dspp

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Re: Hurricane Energy (HUR)

#122909

Postby Carcosa » March 7th, 2018, 1:51 pm

Governance rules are set external to the company. They are also a requirement for a main board listing.

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Re: Hurricane Energy (HUR)

#122955

Postby PeterGray » March 7th, 2018, 5:16 pm

Carcosa wrote:Governance rules are set external to the company. They are also a requirement for a main board listing.


Yes, but no one has suggested HUR has broken governance rules, though clearly they would need updating for a full listing - as the board is clearly well aware.

CA's beef, and the public reason given for the Chair's departure, is about standards - a much more flexible concept!

I do agree with dspp here. I've always felt there was a strong self serving element in CA's complaints about HUR - let's face it they had to justify the significant fall in the NAV to their investors - having chosen to be very overweight.

Clearly HUR has grown fast, and is likely to transform even more in the near future, and governance needs to reflect that. As far as I can see the board know that and are working on it. How much that is response to pressure from the likes of CA, and how much it is what they were working on anyway and CA are using as a justification for where their NAV is I suspect we will never know.

Peter

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Re: Hurricane Energy (HUR)

#122965

Postby NigWit » March 7th, 2018, 5:54 pm

I’m not so sure.

I was at the Crystal Amber conference last June on the day the funding was announced and I spoke with Richard at length about Hurricane and the warrants. I came away with the disctinct impression he was completely baffled by the company’s poor decision and very hurt they had not asked him for the £12 million, which would have saved all shareholders a lot of pain.

The message boards sometimes convey the sense that he is a selfishly motivated monster but I found him to be a socially-aware, caring individual.

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Re: Hurricane Energy (HUR)

#123589

Postby NigWit » March 9th, 2018, 5:33 pm

As I was saying

“This week, Crystal Amber has created and gifted £250,000 of shares to five charities including UNICEF and WWF. Pleased that worthy causes are able to benefit.“

- Tweet from Richard Bernstein

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Re: Hurricane Energy (HUR)

#123747

Postby NigWit » March 10th, 2018, 12:01 pm

http://investors.morningstar.com/owners ... ountry=USA

From this a fund called ishares small cap bought 2,662,902 shares on 8 March. It looks like they also bought smaller holdings for other funds they control. I suspect this explains the sudden uptick.

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Re: Hurricane Energy (HUR)

#123758

Postby Carcosa » March 10th, 2018, 1:05 pm

When I started this thread, I was hoping the relative unpopular Lemon Fool Hurricane board would garner discussion regarding the big/strategic/informed issues surrounding the company and leave ADVFN/LSE etc to mop up the daily tittle-tattle.

Anyway, FWIW I see that there was a change of 436,323 Hurricane shares for the iShares MSCI EAFE Small-Cap fund, apparently resulting in a total holding of 2,662,902 shares. Whether that is an increase or decrease in the share count is debatable. Either way, there were 4m shares traded that day; which is pretty much average to below average in recent times I would say.

If you look at the wider world, most major indices went up that day, including oil related shares (or 'stocks' as Americans like to call them).

So overall I would say share price was just reacting to general market conditions... and we have learnt nothing of value.

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Re: Hurricane Energy (HUR)

#124472

Postby NigWit » March 13th, 2018, 9:41 am

I was attempting to make a serious observation.

Although the underlying share price has been correlated with oil for the last several months we see no overall gain since last May, even though FOIL is 9 months closer. There are four sharp but decayed spikes relative to oil: 1. last September, when Boston bought a large holding, 2. around the time of the CPR, at the beginning of this year, 3. when The VA College Fund bought a stake, and, 3. to a smaller degree, last week when ishare bought.

Currently the share price languishes around the fundraising price when we should expect to be nearer Stifle’s current fully risk-adjusted valuation of 82p.

Obviously, since the share price responds to institutional buying, encouraging more institutions to invest is required to earn a return in this investment. That is what has forced a major investor to speak up and to take active measures concerning corporate governance, which has been woeful in the light of the warrants, the heavily discounted fundraising, the director’s remuneration package and the former chairman’s unexpected resignation and comments to quality newspapers, which they, the newspapers, published.

All this leads me to the conclusion that the stature of the new chairman will be important since it will be a reflection on how seriously the company is about addressing criticisms that, judging by the share price, the market seems to agree with.

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Re: Hurricane Energy (HUR)

#124587

Postby feste » March 13th, 2018, 5:10 pm

Hi NigWit,

I think everyone agrees that the appointment of a (suitably qualified) new Chairman will be a Good Thing. How much the shareprice might move (up) in response , from the present doldrum mid 30's to Stifel's risk-adjusted 82p, is a matter of conjecture.

How much do you think he or she is 'worth' at the moment ?

Surely' this appointment and the connected issues are only part of the picture : you've alluded to a correlation with POO (surely only relevant at the margin, since FOIL is 8-12 months + away...and HUR's 'value' is in production over the next couple of decades.

But what about other macro considerations : a rising interest rate environment; quantitative tightening; geo-politics ( Trump; Europe; Brexit; the M East; N Korea) etc etc ? The FTSE 100 was about 7,200 at your chosen start point and is about the same level today...

I doubt , myself, whether the Chair in isolation is 'worth' more than 5 or 10 p on the shareprice as things stand...and 'other things being equal'

ATB

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Re: Hurricane Energy (HUR)

#124623

Postby NigWit » March 13th, 2018, 7:12 pm

Hello feste

I've had arguments about the relevance of PoO before but the correlation is clear. Except around times when there news or it is predicted or when there is an unusually large transaction the share price generally shadows PoO, sometimes by the hour. It's easy to set up comparison charts on Yahoo or Bloomberg to see this using an oil ETF or similar as a proxy. I put this down to high frequency trading by institutional traders. It doesn't concern me much because I am a long term holder and not very interested in small temporary fluctuations on no news or volume but I do like to understand what factors affect the performance of my investments. All the macro stuff you mention is reflected in PoO, which, so far as I can see, is about the only external factor that effects Hurricane's share price, when there is no other news, as one might expect.

Richard Bernstein has said that he knows many institutions who will buy once the governance concerns they have are resolved. That is why he is activating for a premium listing and a credible chair. I would not want to make a prediction about how much a credible chair might add. It would be best to obtain a copy of Stifel's report if you can and make your own judgement (they also take account of the macro conditions). However, Stifel valued the risked share price at 80p when they published on 14 December 2017. If anything there's slightly less risk now than there was in December so I'd say the discount to today's price is all down to governance concerns and that if a new chair can successfully reassure the city they should buy in and the share price should move much closer to Stifel's valuation.

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Re: Hurricane Energy (HUR)

#124647

Postby feste » March 13th, 2018, 8:45 pm

Hi NigWit,

I must be missing something !

When I look at May 17 vs Mar 18, I see (1) Brent USD 52 / USD 64; (2) FTSE 100 7,200 / 7,200 ; and (3) HUR 50-60p / 34 p.

On the face of it, Brent isn't a proxy (risk) for FTSE, unless 'local factors' eg Brexit and other UK economics/politics weigh on even our most international companies; and , even stripping out the pre-placement froth, HUR s/p has gone sideways ie hasn't - on the face of it - 'shadowed' the POO (+20% over the period) at all.

As to how concerned institutional investors are about HUR's governance, call me a cynic but there's an Italian saying to the effect that ' a fish rots from the head'. I don't see much evidence that II's (or indeed the regulatory authorities) are overly bothered about AV., LTSB or PSON recent management behaviour, so long as there's money in it for them/the City....;-<

ATB

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Re: Hurricane Energy (HUR)

#124659

Postby NigWit » March 13th, 2018, 9:37 pm

Hi Fetse. The correlation between May 17 and now was broken by a number of internal events including the significant dilution. The correlation I’m referring to is most easily seen over shorter timescales. If you use Yahoo finance, for example, you can set up a comparison chart using an oil ETF as a proxy for Brent. Do that for the last three months you’ll see that changes in price direction often shadow each other even when there have been big institutional buys that have temporarily caused large divergences. I’ve done this comparison many times often for periods of a day or a week and it’s striking how the two charts move together even when there’s Hurricane-specific news. The only explanation I have for this is that institutional high frequency traders have a dynamic value calculater that factors PoO.

So far as governance goes. The question I ask why there are so few institutional investors other than those with tiny holdings. The CFO and CEO both promised that the institutions would invest. Indeed Alistair Stobie told me personally that they were mainly concerned with getting their large orders filled but instead they are mainly notable by their absence. Bernstein has said they are concerned about governance. I met him too and found him to be sound so I trust his judgement.

Anyhow, when all’s said and done the company’s assets are fabulous and It probably has the money to start to exploit them so one would expect that a share price rise is inevitable (barring any more banana skins). However, I also hope and believe there is reason to expect that a credible chair will give things a welcome boost sooner rather than later.

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Re: Hurricane Energy (HUR)

#124710

Postby PeterGray » March 14th, 2018, 9:13 am

Nigwit,

I'm sure that you are correct that a credible chair will help with HUR's SP performance. And that a positive outcome to the company's governance review, possibly leading to a full listing, will all help. I doubt anyone inside or outside the company would argue with that.

However, while I think those changes are clearly essential as the company grows (as we hope and assume), and critical for the longer term success of the company, I'm not convinced that the short term impact on the SP will be that large.

My view on why the SP is where it is now has little to do with governance. At the beginning of last year the HUR SP rose sharply (spiked?) on the back of assumptions that a significant farm in was about to happen, and one that would give value to the elevated SP of the time. That never happened, and the company had to go out and find another way of funding the EPS (successfully). I don't see the failure of farm ins as being related to the view of the potential farminees about HUR's governance. But related to the long established and well known scepticism about the potential success of basement production. Was the company overoptimistic about that outcome, or was it mainly the small investors who piled in in late 2016/early 2017? I suspect largely the latter.

The HUR story has always rested on what weight you give the probability of successful maintained production, with good recovery, from the field. I don't think it's any real surprise that in the investment climate of the past few years large E&Ps who have become extremely cautious about where they invest, if at all, have adopted a wait and see position on the HUR and the EPS.

The outstanding achievement of HUR (and their management) in 2017 was to manage in that climate to move forward on a major investment project on a non conventional field. Clearly some have been hurting at the effect of that on the short term SP, particularly those who bought near the top or those like CA who went very overweight. But quite clearly if the EPS works as seems to be expected the perceptions of HUR, both in the industry and the investment community are likely to change significantly, and HUR will be sitting on 100% of a very significant asset, which is an outcome I can live with as a moderately significant (in my portfolio terms) shareholder!

Peter

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Re: Hurricane Energy (HUR)

#124727

Postby dspp » March 14th, 2018, 9:45 am

One item that is changing, and which could conceivably affect HUR, is the attitude & sentiment towards Chinese/Asian investors into Western strategic assets.

I am not saying it will be an issue. I'm just pointing out that it might be an issue.

It is relevant because the more bidders the better the market as a seller. As always HUR do not want to be backed into a corner by a buyers' strike at the key stage gates. That is imho one reason why the DIY pathway towards a staged FFD (i.e. EPS > IFD > FFD) of the cluster should remain in discussion.

regards, dspp


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