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Hurricane Energy (HUR)

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Re: Hurricane Energy (HUR)

#220993

Postby Nen2319 » May 11th, 2019, 10:33 pm

Looks like a flare above The AM tonight. :D

JoyofBrex8889
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Re: Hurricane Energy (HUR)

#221006

Postby JoyofBrex8889 » May 12th, 2019, 1:29 am

Welcome news: The Lancaster FPSO project is live with hot hydrocarbons: FOIL RNS can be expected in the near future. I will be happy to see some positive cashflow as production ramps up, as HUR funds are not infinite.

I understand Warwick Deep is now progressing also. I hope maybe in a month or two we will have some more news to enjoy.

It has been a long wait but I am hanging in there, things are just getting interesting!

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Re: Hurricane Energy (HUR)

#221157

Postby Clitheroekid » May 12th, 2019, 10:36 pm

There's an interesting contribution from Malcolm Graham-Wood (better known as `Malcy') in this recent interview (about 5:15)

https://www.malcysblog.com/2019/05/igtv ... cket-list/

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Re: Hurricane Energy (HUR)

#221199

Postby dspp » May 13th, 2019, 8:03 am

RNS Number : 7432Y Hurricane Energy PLC 13 May 2019

Operational Update: Introduction of Hydrocarbons to Aoka Mizu FPSO

On 11 May 2019 hydrocarbons were introduced into the Aoka Mizu FPSO's process system. Introduction of hydrocarbons is the final stage of the FPSO's commissioning and marks the commencement of the Lancaster EPS start-up phase. During this phase, each of the two production wells will be individually tested and shut-in for data gathering purposes. Cleaning and testing (pigging) of the flowlines for flow assurance purposes will also take place during these shut-ins. The start-up phase will conclude with simultaneous flow from both wells for 72 consecutive hours, after which a further announcement of 'First Oil' will be made.

https://www.hurricaneenergy.com/investors

JoyofBrex8889
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Re: Hurricane Energy (HUR)

#221247

Postby JoyofBrex8889 » May 13th, 2019, 11:06 am

Sweet. I note someone has been attempting to sabotage Saudi tankers which is a big geopolitical no-no, but great news for share prices in UK oil producers as A risk premium is added to the oil price.

All my tranches of HUR are now in profit, which is a good place to be!

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Re: Hurricane Energy (HUR)

#222248

Postby Clitheroekid » May 16th, 2019, 10:52 pm

JoyofBrex8889 wrote:All my tranches of HUR are now in profit, which is a good place to be!

Likewise, and a pretty positive note from Morgan Stanley to day - https://www.sharecast.com/news/broker-r ... 32926.html

But I have to say it's all a bit nail biting. This started out as a speculative buy at 27p back in 2017, but I've added since then and the holding is now uncomfortably large. I would never normally have such a substantial sum in one share, let alone this type of share, as I've always considered oil exploration shares to be very high risk.

And we're at a very early stage with this - the price is betting on a successful outcome of the first drilling, and while the signs appear promising I know nowt about oil drilling and I'm concerned that I'm just reading the news as I want it to read.

So in theory I should sell some and bank the profits, but I can't help thinking that this may have a lot further to go, and if I were to sell there's no alternative share I particularly want to buy at present.

I don't like the `double the price and sell half for a free ride' advice, as it leaves me feeling I've made the wrong decision whatever happens next.

I suppose the sensible thing would be to set a stop loss, but the price can be so volatile that a temporary dip could trigger a sale that I might very soon regret.

So I suppose I'll just hang on, dreading the moment I spot a headline saying `Hurricane Well Abandoned'!

However, there are worse dilemmas to have ;)

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Re: Hurricane Energy (HUR)

#222260

Postby JoyofBrex8889 » May 17th, 2019, 5:55 am

You must do what lets you sleep at night CK. Take some money off the table if you need to. I have the opposite problem: The more I learn the more HUR shares I want to own.

I have some big advantages now vs 2017. I know more about the project. I know more about the management. I know more about the science and technology. We have reassuring evidence of the company executing their plan effectively.

For me today is a lower risk situation vs 2017. Valuation remains problematic with substantial geological uncertainty remaining. But that is a known unknown, and I feel that the odds are favourable.

Over the last few years I have abandoned much that I previously thought sacred about investing. I have learned that it is better to laser focus on the very best opportunities you understand deeply rather than diworsify into many choices imperfectly researched. Just dabbling is not going to give me outperformance. I need to place big meaningful stakes in shares I understand with a strong chance of positive future news flow and positive growth prospects. These are hard to find!

Buffet teaches us we don’t have to swing for every pitch. Fine, but the flip side of that is that we have to swing for a ball eventually before the inning runs out, and if we see a fair chance of hitting a home run before darkness falls, we really have to take it.

Long ago I watched others hit the jackpot with SOCO when I was too timid to hold on. For me, this is the time to bet big. I will be buying again. When opportunity knocks, if I am prepared and able to spot it, I am going to make the most of it. My price is not met, and the omens are good. Wish me luck.

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Re: Hurricane Energy (HUR)

#223837

Postby JoyofBrex8889 » May 23rd, 2019, 4:09 am

Nice rise in share price as we await RNS for First oil. Looks like I am not the only one who was feeling positive and buying more! I wonder if there has been an opportunity for data/news/rumours to leak from the project....?

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Re: Hurricane Energy (HUR)

#225512

Postby JoyofBrex8889 » May 30th, 2019, 1:48 pm

Significant move up again today, up close to 8% at time of writing. My guess is buyers getting onboard before AGM in anticipation of positive RNS.

(but who can really tell what drives market moves?)

Anyway. I am happy, especially having decided to bet again bigly on this.

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Re: Hurricane Energy (HUR)

#225520

Postby Carcosa » May 30th, 2019, 2:24 pm

Probably more related to Ithaca Energy to buy Chevron's North Sea business in $2bn deal and/or Berenberg initiating coverage of Hurricane Energy Plc with a buy investment rating and price target of 100p or just general positive marker reaction to the oil sector? Expect lower share price tomorrow.

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Re: Hurricane Energy (HUR)

#225690

Postby JoyofBrex8889 » May 31st, 2019, 1:11 am

I note Chevron elected not to sell its interest in Clair, our near neighbour West of Shetland.

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Re: Hurricane Energy (HUR)

#227067

Postby JoyofBrex8889 » June 5th, 2019, 7:19 am

FOIL announced. Well done Hurricane! The end of a long process, and the start of a new chapter as a producer.

https://ir.q4europe.com/Solutionsstagin ... d=14335407

Not long until we get news on the Warwick deep well, and there is the Capital Markets day in July which can only be helpful.

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Re: Hurricane Energy (HUR)

#227163

Postby dspp » June 5th, 2019, 11:22 am

AGM presentations up
https://www.hurricaneenergy.com/investo ... l-meetings

No material surprises. RT video from Spirit rig on Warwick Deep.
- dspp

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Re: Hurricane Energy (HUR)

#227996

Postby dspp » June 8th, 2019, 2:31 pm

Following the AGM, over on LSE Biffadog has posted (http://www.lse.co.uk/ShareChat.asp?ShareTicker=HUR at 10:08 today 08 06 19) a confirmation of "no offers" back then, which puts a bullet in a few old tales. (thank you Biffa) It also confirms my buyers strike hypothesis that I put out a long time ago.

I've been mulling over the likely share price trajectory, which is not the same as the valuation trajectory, and thought I would throw out a few points for wider comment.The post length probably won't fit on LSE so may as well be here on TLF.

Looking forwards, irrespective of what the valuations are (and as you know I have sketched a simplistic val'n pathway on this thread that I update as new information comes in*) there is not as obvious a reason to expect the price pathway to respond in the same manner as the valuation. There can be very prolonged differences between the two.

Long term 'agile' investors are already in. A lot of long term 'inagile' investors can't go in until HUR goes to main market (they have investment mandates that prevent them touching AIM shares), so any delay in moving to LSE main market (or elsewhere) is disappointing. So the upcoming CMD show-and-tell is all very well, but may be a lot of leg being shown to people with no real interest in commitment.

Dividend-driven investors will - I expect - be disappointed for many years to come. HUR should be retaining any & all cashflows to retire the bonds; and to pay for Lin-War staged FFD (over & above the Spirit carry); and to be prepared to go-it-alone on a staged Lan-Hal FFD.

Short term hot money only flows in (and out) of HUR on news flow, and/or expectations of a profitable rerating. Because it is only ever short term it does not 'lift' the shareprice that much. Especially when - for their entirely understandable internal reasons - CA are perennial sellers into any rise. Remaining on LSE AIM is not ideal in this respect as it means HUR is very exposed to hot money volatility.

Given all this, and given the knowledge in the market of all this, one should expect almost everybody to be motivated to hang back.

Very simplistically HUR is currently valued by the market (i.e. priced) at about £1bn mkt cap on the reserves (tiny) + resources (vast) story. Assuming success, by end-year 2019 the EPS production means one should add in £200m/year of free cash flow which is approx what the EPS will deliver, then use a PE of 10 (which is what RDSB is on), the sum is £200m x 10 = £2bn price uplift ascribable to the cashflow; and then the max rerate would be to £1bn reserves/resources +£2bn cashflow =£3bn mkt cap. But FCF is not dividends, and HUR has risks that RDSB does not, so a 5x multiplier would be more appropriate. So on that basis at the end of this year (Q4 2019) one would ordinarily expect £2bn mkt cap, i.e. approx £1/share price. Compare that with my £1.47.share fully diluted Q4 19 valuation to appreciate the discount of price to value. This is what I would expect to be the market's reaction assuming success with the three LinWar appraisal wells, and assuming no nasty surprises in the first 6m of EPS operation. Even in the high case the Warwick Deep well - which may be giving results pre CMD - may show enough to cause a 2C resources upgrade, but is unlikely to cause a 2P reserves upgrade as reserves are driven by the debottlenecked AM EPS constraint of 40kbopd (unless the GOR is low enough to squeeze a bit more out of the flare constraint pre-gas-line-tie-in), and so ought not to cause a huge shot term revaluation.

If you look at my last valuations update (15 09 18) here (* see = viewtopic.php?f=16&t=796&start=140#p166573) you can see in table 1 a history/future price/value correlation. Eyeballing that it suggests a 'normal' price:value ratio of 2:3, i.e. a one third discount would not be unusual, narrowing towards mild overvaluation when folk get carried away. You can see the short-term share trading opportunities inherent in such a situation.

Turning to the future it is normal that on very large fields like these are hoped to be, the farm-in company seeks to force the farm-out company (e.g. HUR) to remain at the table. This is so that the farm-out company continues to shoulder risk and help out with development costs going forwards. It also helps defend against farmout companies deliberately selling out of a dud. However the farmout company typically doesn't have a great deal of cash and so negotiates a free carry in lieu of cash. This is exactly the structure of the HUR/Spirit deal on LinWar.

However if the farm-out company has a very depressed valuation then a full-on acquisition becomes more likely. Essentially the greed of the farm-in company overcomes their fear of the dud, and their treasury department's nervousness about releasing development cash. So in the HUR case if - as the FFD moment for either of the pairs approaches - which is when the relevant derisking information is on the table - the HUR shareprice is low then an opportunistic takeover bid might get mounted. If the cashflow in HUR is not strong enough then an opportunistically priced farm-in might get structured (which is what the Spirit farm-in was, and this reflected the reality in this respect). And if the cashflow in HUR is strong enough, then either no farmin approach will be made at all (another buyers strike), or too low a priced one would be declined, and so HUR needs to keep the go-it-alone pathway on the table for LanHal.

Another piece of information that has come to the table in the last few months is that Kerogen do not have infinite resources availaable for HUR, or their risk appetite is finite, i.e. they sold a few to mop up their convertibles. This indicates that if HUR need (want) more cash over (for LanHal FFD, which will be costly even if staged, as the OGA won't want it to be delayed until LinWar FFD oil is flowing) then they will need to reach out to the wider market and/or wider shareholder pool. And of course calibrate the ambition of each stage of the FFDs accordingly. It also means the approx 22% that Kerogen hold in HUR is considerable, but not perfect, protection against an opportunistic takeover. By now it is clear that CA are not that great a protection in this respect.

Bottom line: a lot of patience is still required, even in the success case. And an interesting eye to keep on the share price - we want it to walk the middle path, not the high or the low one. At least until an interruption happens when we want a buyers fight. Unfortunately the majors don't ordinarily fight with each other, so best value will be obtained if HUR goes and shows some leg at people other than the usual suspects at the right moment.

regards, dspp

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Re: Hurricane Energy (HUR)

#228050

Postby PeterGray » June 8th, 2019, 10:20 pm

Great post dspp,

My main disappointment from the AGM was that the timescale they are suggesting to full listing is slower than I had expected/hoped. I can understand why and I think my, and others expectations in that respect were too optimistic on timing. But, as you suggest, being AIM listed does cut out significant investors, and expose the company to excess volatility.

On the FO/"interruption" issue, I think HUR have handled things very well, and got themselves into a position where they can negotiate with potential suitors from a strong position. Though things have moved more slowly, in that regard (not operationally) than I'd expected, I do now see longer term and greater upside on the cards. Though you are clearly quite correct that self funding all the way to FFD on the GLA is not on the cards - the timescales would just be too long to be sensible for many reasons.

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Re: Hurricane Energy (HUR)

#228058

Postby JoyofBrex8889 » June 9th, 2019, 7:17 am

The current disappointment for me is the lack of news on progress to LSE main market listing. There was a flurry of appointments and corporate governance effort, then pretty much radio silence. The company needs to drag itself off the utter shit-tip that is AIM, and up onto the better quality rungs of business. Staying on AIM for longer than necessary once the cash starts to arrive would be really very negative in my view. Sure it may cost a bit, but the greater marketability of HUR equity if fully listed makes it very desirable as a shareholder.

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Re: Hurricane Energy (HUR)

#230364

Postby dspp » June 18th, 2019, 9:34 am

RNS Number : 5339C Hurricane Energy PLC 18 June 2019

Operational Update:
Lancaster EPS First Lifting and Oil Sales

On 18 June 2019, Hurricane sold its first cargo which was lifted from the Aoka Mizu FPSO by the Amundsen Spirit shuttle tanker. The cargo was marketed by BP Oil International Limited, pursuant to the offtake agreement.

Dr Robert Trice, Chief Executive of Hurricane, commented:
"First lifting from the Lancaster EPS marks the generation of Hurricane's first revenue. We are now building the cash flow necessary to invest in the further appraisal and development of Hurricane's basement assets."


https://www.hurricaneenergy.com/media/news
==

According to Amaja on the LSE board (who is Dutch; dank je Amaja) the port of Rotterdam stated that the cargo was 350,000 bbl oil. This would be consistent with initial production from the wells not being at the disappointing end of the spectrum. So that is another piece of risk off the table, i.e. everything working end to end, oil rates not bad, and cash flowing at least for the time being. Rumours washing around that the productivity (PI) of these wells is very good indeed. We knew that they should be, but it is interesting nonetheless to hear the gossip in this respect.

For the next 6-months at least one should not draw too many conclusions from periodicity of shipments or size of packages as they will need to flow at various rates (drawdowns) and with one or other well shut in for prolonged periods as part of the reservoir testing programme.

Indications are that a DST is underway on WD. Again that is not a bad sign, though too early to say if it is a good sign.

The HUR CMD is due 11 July. The last one was not livestreamed which I think was a mistake. All investors should get an absolutely equal treatment, and from my perspective it is as important to listen to the questions being asked, and who is asking them, and the manner they are being phrased and answered, as just the dry written response. Hopefully HUR have learned and improved in this respect.

regards, dspp

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Re: Hurricane Energy (HUR)

#231002

Postby JoyofBrex8889 » June 20th, 2019, 3:31 pm

Just made my fifth purchase of HUR, yet another top up into a rising price. While management keep executing, I will keep buying.I understand they are targeting 2020 Main Market listing.

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Re: Hurricane Energy (HUR)

#231905

Postby dspp » June 25th, 2019, 10:40 am

I don't usually hang around the second-hand FPSO bazaar, at least not since about twenty years ago, but evidently Google thinks I ought to pay more attention and sent me the headline,

"Teekay’s Varg FPSO charter deal falls through as Alpha Petroleum fails to pay up"
https://www.offshoreenergytoday.com/tee ... to-pay-up/

"Petrojarl Varg is a ship-shaped, turret moored, FPSO delivered in 1998. The FPSO has a storage capacity of 470,000 bbls and accommodation for 77 persons. The Teekay Petrojarl Varg has been laid up since Repsol decided to stop production at the Varg field in Norway in 2016."

Checking https://www.norskpetroleum.no/en/facts/field/varg/ & https://www.offshore-technology.com/pro ... eldnorway/ we can see that it did gas injection & export (tick), and gas lift (not req, but means compression is well provided for), and water injection (not req now, might be ultimately, but means gross liquids capacity for dry oil might be higher) and 60,000 bopd oil nameplate (but ?? could be higher if dry),

It could of course be utterly clapped out, hence needing a refit to get another 7-years to go the distance East of Shetland on the Emerald/Cheviot field (https://www.alphapetroleum.com/assets/cheviot).

"The two companies had in October 2018 entered into a conditional 7-year charter agreement – starting from first oil – for the Petrojarl Varg FPSO unit to be deployed on Alpha’s Cheviot oil field on the UK continental shelf. The charter start was targeted for the second quarter of 2021, after a life extension and upgrade phase for the Petrojarl Varg taking place at Sembcorp Marine’s shipyard in Singapore."

Interesting.

- dspp

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Re: Hurricane Energy (HUR)

#231907

Postby JoyofBrex8889 » June 25th, 2019, 11:01 am

Possible piece of the field development jigsaw if HUR decide to go it alone?


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