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Hurricane Energy (HUR)

PeterGray
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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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Re: Hurricane Energy (HUR)

#124776

Postby StepOne » March 14th, 2018, 12:06 pm

NigWit wrote: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.


If Hurricane had multiple independent projects ongoing you might expect the share price to move towards the risked value, but since they only have one the price will stay low until people are satisfied that the oil will flow.

Hopefully that will be worth hanging on for :D

StepOne

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Re: Hurricane Energy (HUR)

#126277

Postby dspp » March 20th, 2018, 9:20 am

RNS re HUR Operational Update

Delivery of Xmas Trees & Other Key Subsea Components for Lancaster EPS


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 in relation to the Early Production System on the Lancaster Field ("Lancaster EPS").

Highlights

· Two horizontal Xmas tree systems delivered by TechnipFMC

· FPSO subsea control system also delivered by TechnipFMC

· Xmas trees and controls were some of the key long lead items for the Lancaster EPS

· Completion of this scope is an important step in enabling Hurricane to maintain schedule for the planned Q2/3 2018 well completions and installation programme

The horizontal Xmas tree systems for the Lancaster EPS, including fishing friendly protective structures, have now been delivered ex-works by TechnipFMC from its facility in Dunfermline. Proserv UK Ltd will now carry out integration and testing with its Intervention Workover Control Systems (IWOCS). Once this and other testing has taken place, the Xmas tree systems will be prepared for loading onto the rig, to be installed during the completion works planned for later this year.

The FPSO subsea control system has also been delivered ex-works by TechnipFMC from its facility in Kongsberg. It is now being shipped to Dubai, ready for installation on the Aoka Mizu FPSO.

Hurricane continues to work closely with TechnipFMC as part of its contracted integrated service offering. Together with its subcontractors, including SBM Offshore Services Inc, TechnipFMC is continuing to work to ensure the safe and timely installation of the turret mooring system (TMS) and the subsea systems (flowlines, risers, umbilical, jumpers and manifold), for the Lancaster EPS. These elements remain on schedule for installation during the Q2/3 2018 weather window.

Dr Robert Trice, Chief Executive of Hurricane, commented:

"I'm pleased to report that the two horizontal Xmas trees and the FPSO subsea control system have now been successfully delivered. The Company ordered the Xmas trees and control system in December 2016 and they were some of the key long lead items that drove the financing schedule in 2017. Their delivery represents a significant milestone in readiness for our 2018 well completion programme.

"I recently visited the Dunfermline facility with our engineering team and was glad that all were impressed by quality of work taking place. We have a fantastic working relationship with TechnipFMC and I'd like to thank them for completing this particularly critical element of the Lancaster EPS development.

"With other operations continuing as planned, we remain on schedule for first oil in H1 2019."

https://otp.tools.investis.com/clients/ ... sid=990414

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Re: Hurricane Energy (HUR)

#126343

Postby dspp » March 20th, 2018, 11:34 am

The key bit from a retrospective perspective is "The Company ordered the Xmas trees and control system in December 2016 and they were some of the key long lead items that drove the financing schedule in 2017. ". That is a pretty good explanation of what we have suspected re the financing, i.e. if they had slipped a few months they'd have lost a whole year. Not to mention the order in Dec 16 probably had a clause about prompt payment at the mid-17 point. Which pretty much puts the corporate governance story to bed as the relevant people should have been raising ructions about the matter in Dec 16 prior to signing, and there is no evidence that they did. Basically this is the remaining board putting a stake through the heart of that story.

Looking forwards it seems to me as if almost everything is either on time or slightly ahead of time. The slight concern is whether the rig will be released in time (from the relief well (or whatever) they got roped in to), and whether they will get slack to do any rig maintenance. On balance I suspect first oil in Oct/Nov 18 unless something goes awry.

regards, dspp

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Re: Hurricane Energy (HUR)

#128834

Postby dspp » March 29th, 2018, 2:45 pm

https://otp.tools.investis.com/clients/ ... sid=994503
RNS Number : 3301J
Hurricane Energy PLC
29 March 2018

Operational Update: Boulder Relocation Works

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, is pleased to provide an update on the requirement for boulder relocation works for the Lancaster Early Production System ("EPS") development.

In order to reduce 2018 installation and execution risk, Hurricane took the opportunity provided by prevailing market rates and vessel availability, to instruct TechnipFMC to accelerate the planned Q2 2018 boulder relocation programme into 2017. Site surveys had identified boulders in the vicinity of the proposed locations for Lancaster EPS subsea infrastructure, which required relocating. To undertake the work programme, TechnipFMC contracted the 'Far Superior' vessel and successfully completed the planned work scope in November 2017.

The results of this programme have now been reviewed by Bluewater Energy Services, as Installation Operator, and DNV GL, in their role as classification society. They have concluded that the extensive boulder relocation campaign has resulted in an acceptable seabed condition for the installation of the mooring system (taking the rocky soil condition into account). They have therefore confirmed that a further dedicated boulder relocation programme is not required prior to commencing subsea installation operations in Q2-Q3 2018. If any additional boulders are encountered during the subsea installation, these will be relocated, as required.

Dr Robert Trice, Chief Executive, commented:

"I am pleased that the boulder relocation works completed in 2017 are sufficient to allow us to continue with our 2018 operations without the requirement for another dedicated boulder relocation programme. This positive news further de-risks our installation programme and brings us closer to our planned first oil date.

"I would like to take this opportunity to thank Bluewater for their timely review and our continued constructive working relationship."

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Re: Hurricane Energy (HUR)

#128876

Postby Carcosa » March 29th, 2018, 5:01 pm

Is it really necessary to copy and paste an RNS? Why not just provide a link to it? Even then I am not sure what purpose that serves. Better still just copy and paste the section of the RNS you find worthy of comment/question/analysis. Anyone on this board will be fully aware of any RNS that is released. It is also pointless to link to a news item that is based on an RNS unless there is additional information not revealed in the RNS itself.

To me, as an investor, this RNS is meaningless... Basically 'so what?'

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Re: Hurricane Energy (HUR)

#128882

Postby PeterGray » March 29th, 2018, 5:50 pm

I don't disagree, Carcosa, that a link, and perhaps a key sentence or two suffices in most cases.

However, you overstate the case to say this RNS is meaningless. Yes, it's only one more incremental bit of progress, but it is also one more bit of incremental progress! It's also slightly more positive than entirely neutral, since there was clearly a potential need for more boulder clearing, which we now know doesn't exist. That saves money and probably time, keeping budgets and timings on track or ahead. It's a small bit of good news, but it is that nonetheless.

Peter

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Re: Hurricane Energy (HUR)

#128885

Postby NigWit » March 29th, 2018, 6:06 pm

I don’t think there’s any point in posting the entire contents of anything that can be linked to instead, especially an RNS, which any serious investor will have read before it appears on any of the various message boards. Personally, I find cutting and pasting excerpts of other posts before replying breaks the flow too.

I think the RNS is helpful. Historically there have been constant complaints of lack of information but the company is now being more talkative and I don’t see how that can be a bad thing so long as it does not begin to look desperate, which, for me, it isn’t so far. As to its substance, I’m pleased that the engineering is going well, the company’s engineering skills are usually reliable, that is why I remain invested. I’m less sanguine about governance and have said so at length before so there’s no point in repeating myself at length on that either. If and when the new chair is announced we will be able to determine if progress has been made because it will be reflected in the interest or otherwise of institutional investors.

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Re: Hurricane Energy (HUR)

#129065

Postby feste » March 30th, 2018, 5:59 pm

Hi NigWit,

A propos the new chair, am I right in thinking you posted a while back that you'd heard/read (RB ?) that we should expect news on that front ere long.

Has your understanding changed and - if so - what do you believe the current position to be ?

TIA and ATB

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Re: Hurricane Energy (HUR)

#129066

Postby NigWit » March 30th, 2018, 6:13 pm

Hi Feste

There were rumors circulating about a month ago from normally reliable people but they have not yet eventuated. That might mean they were wrong in the first place or that something’s changed or been delayed but I don’t know which.

I noticed that a new version of the text concerning Hurricane Energy appeared on Crystal Amber’s website last week. It contains the critical paragraphs near the end that were present last year but disappeared after Christmas. From this text it seems CA remain in discussions with Hurricane. I don’t know what conclusions to draw from this or if there’s a connection. Here’s a link https://crystalamber.com/about/majorholdings

If I hear anything else and if it would not be betraying confidences I’ll post on it again.

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Re: Hurricane Energy (HUR)

#129250

Postby Carcosa » April 1st, 2018, 8:23 am

As we enter Q2/2018 I thought it an appropriate time to revisit this page from the current Hurricane Corporate Presentation

As can be seen, we are now at the cusp of major newsflow from the company regarding the various EPS milestones (which can be both negative and positive for the project). Perhaps an opportunity for those private investors, like myself, to accumulate a few more shares over the coming weeks.

Although FOIL is slated for 2019 there seems to be a feeling from reading other forums that late 2018 is a possibility. Typical over exuberance from the excitable hoards....

Image

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Re: Hurricane Energy (HUR)

#129255

Postby NigWit » April 1st, 2018, 9:33 am

From the Stifel Report of 14 December.

Production in 2018? Still not our base case, but a reasonable chance: Our main takeaway from Dubai is that Hurricane’s published schedule allows for significant contingency and we now see a likelihood of first oil in 2018.

• The current schedule incorporates a significant weather-related period of non- productive time, i.e. winter 2018/19.

• The vessel should arrive in the UK in 2018 and needs only a short window for hookup to the subsea kit. Of course, any major problem could easily push the project back onto the base case schedule.

• 'More cash, sooner' gives an opportunity to organically fund 2019 appraisal drilling, an important catalyst given the appraisal opportunity at Halifax and its role in realising full value for the asset.

Key milestones:

• The critical path item is the fabrication and timely sailaway of the buoy from Dubai. Test fitting of the buoy and turret should occur in Q1. This sub-project is making good progress and was actively being worked when we were on site.

• We think if the vessel leaves Dubai in Q3 there is a good chance of hookup to the subsea kit in 2018, thereafter first production. Mechanical completion could occur in Q2, giving plenty of time for in-yard commissioning.

• Installation of the SURF and well completions is crucial to delivery of first oil. HUR has contracted a rig for the latter of these; the former is a high profile project for contractor TechnipFMC.

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Re: Hurricane Energy (HUR)

#129262

Postby PeterGray » April 1st, 2018, 10:38 am

Like Fred my bubbly is not on ice yet. There's plenty to happen yet between here and FOIL. But it does certainly begin to look as though 2018 is just about possible.

Worth also pointing out that one of the activities on the key milestones chart due for Q2 - boulder clearing - doesn't need doing as enough was done preemptively last year, as informed in HUR's surprisingly controversial RNS last week. It all helps.

Peter

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Re: Hurricane Energy (HUR)

#131095

Postby dspp » April 10th, 2018, 9:22 am

Two communications from HUR today:

RNS Number : 3459K Hurricane Energy PLC 10 April 2018

Final Results for the Year Ended 31 December 2017


Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces its final audited results for the year ended 31 December 2017.

Highlights
· Transformative year which took the Lancaster Early Production System (EPS) into a project execution phase, targeting first oil in H1 2019
· Key EPS achievements included: Final Investment Decision (FID) and approval of the Field Development Plan (FDP) by the Oil and Gas Authority (OGA)
· Published two Competent Person's Reports (CPRs) which independently certified 2.6 billion barrels of oil equivalent of 2P Reserves + 2C Contingent Resources
· $547 million raised in new equity and convertible bonds (before expenses), fully financing the EPS
· 2017 loss after tax of $7.0 million (2016: profit after tax $0.9 million)
· Ended 2017 with $360.0 million in cash and liquid investments (2016: $101.5 million)


https://otp.tools.investis.com/clients/ ... sid=997765

and what may be on or two new/updated presentations (I'm not sure yet):

https://www.hurricaneenergy.com/~/media ... 202018.pdf

https://www.hurricaneenergy.com/~/media ... %20Web.pdf

regards, dspp

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Re: Hurricane Energy (HUR)

#131100

Postby dspp » April 10th, 2018, 9:38 am

This presentation is more informative

https://www.hurricaneenergy.com/~/media ... %20Web.pdf

Key points :
- tightened up AM sailaway window to Q3 18,
- guides to FOIL H1 19, considerable opportunity to come forwards looking at the high level GANT,
- discusses gas flaring constraints (OGA) and longer term options, notes 3yr non-reinjection desire,
- gives step out of 6km from AM, caveated, might be bigger (I'd hazarded a guess 5-10 I think), influences well choices,
- informs re subsurface campaign,
- 6-12m for evidence to become clearish re case

must go now,
regards, dspp

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Re: Hurricane Energy (HUR)

#131110

Postby dspp » April 10th, 2018, 10:02 am

and:

- drilling fluid etc review ongoing (that Hal well skin .......)
- seismic reprocessing
- new field sim model

All looks good to me. Personally I am hopeful they might get a hookup and FOIL this year.

I don't think they'll firm up any funds for other wells/re-entries until they see FOIL derisked sufficiently. The rig should be clear by Q4 18 (and should be there in the next week or so ....) but if I recall correctly it is being shared so may not go straight into another HUR job - I think it has a job for another Ker company. That'll keep HUR fully-focussed on getting the early data assessed pdq. Unless they have additional subsurface resource now so as to be able to run two jobs at once.

regards, dspp

ps. oh, and something about a new chairman, neds, and a main board listing .........

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Re: Hurricane Energy (HUR)

#131336

Postby NigWit » April 11th, 2018, 7:45 am

There’s a new piece in Investors Chronicle who remain on hold

https://www.investorschronicle.co.uk/sh ... -distance/

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Re: Hurricane Energy (HUR)

#131408

Postby dspp » April 11th, 2018, 11:23 am

Going back through the presentation they appear to have tackled all the areas I have noted. That's very nice of them at HUR, thank you to whoever takes the time to address these things. I see that the penny has yet to drop everywhere re GOR; or the likely step-out constraint; or the bean-up plan. Hey ho, all the company can do is set out the info.

regards, dspp

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Re: Hurricane Energy (HUR)

#131440

Postby dspp » April 11th, 2018, 1:13 pm

FredBloggs wrote:
dspp wrote:Going back through the presentation they appear to have tackled all the areas I have noted. That's very nice of them at HUR, thank you to whoever takes the time to address these things. I see that the penny has yet to drop everywhere re GOR; or the likely step-out constraint; or the bean-up plan. Hey ho, all the company can do is set out the info.

regards, dspp

Pure speculation, do you think a bid this side of 2019 is likely? I am certain that in Sunbury and other esteemed high places, this is being taken extremely seriously. It has been suggested elsewhere that once the oil is flowing from Lancaster and revenue is being generated, kicking off further exploratory drilling, we could see reserves of 8 billion barrels within HUR's assets. When you look at the valuation of the company, the fact that the FPSO project is fully funded and there's > $300 million sitting in the bank, the present situation regarding company value is laughable, pitiful even. At $70 a barrel, there are a lot of "0"'s on the end of the revenue figures for the next couple of decades, maybe more.


I don't know re bid timing, or size. All I can do is the sums based on the information available, which I have done in the most basic way possible (there are far more complex ways), so as to inform my own view.

For sure this is un-ignoreable by all the relevant majors, not just the Western ones. Technically one tends to know quite quickly (months) if the wells / reservoir is not performing (assuming the kit is working) whereas upside takes longer to become visible (see slide 13). If what is holding back bids at an acceptable level is fear of technical/reservoir downside risk then bidding could start quite quickly.

However HUR is not some naive virgin. The folk at HUR know what they are sitting on and have been at the other side of the table in the majors in the past. They can pay advisers to run the relevant bid-studies both proactively and reactively, just they are doing with res-eng studies etc. so that they don't get swamped by the detail or railroaded. Therefore they will be very reluctant to be stampeded or wooed into premature sale at too low a price. Then, given the overall scale of the quad of reservoirs here (or quint), it seems likely to me that a few further appraisal wells are need to prove-up the upside; and at the same time to formate the buying coalition. There will be a tension in that period and, ultimately HUR have to be prepared to go it alone so as to be able to extract best price. That essentially is what has happened to get HUR to this point, and well done to the team.

My biggest concern is that HUR shareholders could be lured into a lowball acceptance. For sure many of the PIs are not used to this game at this level as you can see from comments in some places. Therefore the only protection against a lowball bid is the combination of the IIs and the management team. That is why I was so disappointed to see the behaviour of CA as that increased risk of lowball acceptance to my mind, and I think that is purely down to internal issues in CA.

So any time in 2019 - 2022 are equally likely in my opinion and I really don't know. Personally the later and the higher the better, in the mid-success case, as I set out in my updated economic analysis (11 Dec 17) and the risk table (16 Dec 17). You can also see from the topics covered off in this presentation that HUR are paying attention to the issues that are being raised here and in other places - there are some thoughtful folk in all the various places. Watching some of the broker reports etc they too pick up on these things and that helps, basically that's how a market works. (Edison had read my comment about the gas handling, then picked up on it in their note, etc).

That all assumes OGA play this with a straight bat, which they have so far. However all the indications are that this constitutes a significant strategic asset and so one can never be sure as UK politicians are a nightmare. The best defense against anything naughty in that respect is simply sheer professionalism and absolutely rational decision-making, which is quite evident in HUR's work.

regards, dspp


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