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Hurricane Energy (HUR)

SentimentRules
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Re: Hurricane Energy (HUR)

#236218

Postby SentimentRules » July 12th, 2019, 3:13 pm

Sorry you meant target plan? Well im not giving back 20% again. Il lock it in this time if occurs lol.

But il give market a chance. Find a stop around 20% gain that lets it have a go go for 30/40%.

But if no valid stop near, just take 20% limit

But obviously markets are fluid. If change is called at 7% 14% etc, have to take it.

The real trick is not letting greed override sense. Be target realistic. I make that error a few times a year.

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Re: Hurricane Energy (HUR)

#236249

Postby dspp » July 12th, 2019, 4:33 pm



RT re WD from CMD,

"the formation is demonstrably oil bearing, and provisional pressure analysis is consistent with a light oil gradient"
"oil & gas recovered shows distinct similarities to Lancaster oil"
"importantly the result at WD has no negative read across to Lancaster"

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Re: Hurricane Energy (HUR)

#236470

Postby dspp » July 13th, 2019, 4:28 pm

First my updated post-CMD and post-WD quickie calculations, followed by my CMD notes below. I'll probably come back to this and add in a URL for the presentation slidedeck in due course.
CMD at https://www.hurricaneenergy.com/index.p ... sentations


Table 1. value date, implied value per fully diluted share

date for analysis | shareprice at date | situation at analysis (*retrospective) | Q1 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q4 2017 | Q3 2018 | Q3 2019 | Q4 2019 | Q4 2020 | Q4 2021 | price / value
01 01 16 | £0.10 | (pre 2016 ops)* | £0.29 | | | | | | | | | | 34%
31 12 16 | £0.50 | (after Lincoln well)* | | £0.42 | | | | | | | | | 119%
07 04 17 | £0.56 | (CMD, after Halifax well)* | | | £0.62 | | | | | | | | 90%
02 05 17 | £0.60 | (first CPR)* | | | | £0.46 | | | | | | | 130%
26 10 17 | £0.29 | initial, after convertibles | | | | | £0.37 | | | £1.37 | | £2.86 | 78%
11 12 17 | £0.30 | after all CPR release | | | | | £0.87 | | | £1.98 | | £5.34 | 34%
14 09 18 | £0.54 | after Spirit deal | | | | | | £0.78 | | £1.47 | £1.97 | £4.31 | 69%
13 07 19 | £0.52 | after CMD (+WD +EPS FO) | | | | | | | £0.88 | £1.75 | £2.39 | £4.89 | 59%
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | avge | 77%


Table 2: actual now (earlyQ3 19) - EPS running, WD result, but pre FID on LinWar TB |         |     |         |               |          |              |           |            |                  |                    
value now, after Spirit deal + CPR+CMD | | | | | | | | | |
| STOIIP | RF | MMboe | Cat | $/bbl | $mln (field) | HUR share | $mln (HUR) | comment | £/share alloc (HUR)
Lancaster - FFD vol | 3,580 | 25% | 833 | 2C (50%) | $1.00 | $833 | 100% | $833 | | £0.26
Lancaster - EPS vol | | | 62 | 2P (50%) 10yr | $5.00 | $311 | 100% | $311 | | £0.10
Halifax | | | 1,235 | 2C | $1.00 | $1,235 | 100% | $1,235 | | £0.38
Lincoln | | | 604 | 2C | $1.00 | $604 | 50% | $302 | | £0.09
Warwick | | | 935 | P50 | $0.10 | $94 | 50% | $47 | | £0.01
Whirlwind | | | 179 | 2C | $0.50 | $90 | 100% | $90 | | £0.03
Strathmore | | | 32 | 2C | $0.10 | $3 | 100% | $3 | | £0.00
Tempest/Typhoon | | | 1,307 | P50 | $- | $- | 100% | $- | relinquished | £-
| | | | | | | | | |
Subtotal | | | 5,187 | | $0.61 | $3,169 | | $2,820 | | £0.88
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Table 3: with EPS running, late (Q4) 2019 and Lin TB FID | | | | | | | | | |
after Spirit deal, assuming success at 50/50 levels per CPR+CMD | | | | | | | | | |
| STOIIP | RF | MMboe | Cat | $/bbl | $mln | HUR share | $mln (HUR) | comment | £/share alloc (HUR)
Lancaster - FFD vol | 3,580 | 25% | 833 | 2C (50%) | $3.00 | $2,499 | 100% | $2,499 | | £0.78
Lancaster - EPS vol | | | 62 | 2P (50%) 10yr | $14.65 | $910 | 100% | $910 | | £0.28
Halifax | | | 1,235 | 2C | $1.00 | $1,235 | 100% | $1,235 | | £0.38
Lincoln | | | 580 | 2C | $1.00 | $580 | 50% | $290 | 1 well (carried) | £0.09
GWA tie back (posted to Lincoln) | | | 24 | 2P (50%) 10yr | $5.00 | $120 | 50% | $60 | | £0.02
Warwick | | | 935 | 2C | $1.00 | $935 | 50% | $468 | 2 well (carried) | £0.15
Whirlwind | | | 179 | 2C | $1.00 | $179 | 100% | $179 | | £0.06
Strathmore | | | 32 | 2C-sale | $0.10 | $3 | 100% | $3 | | £0.00
Tempest/Typhoon | | | 1,307 | P50 | $- | $- | 0% | $- | relinquished | £-
| | | | | | | | | |
Subtotal | | | 5,187 | | $1.25 | $6,461 | | $5,643 | | £1.75
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Table 4: with EPS running, late (Q4) 2020 and Lin TB prod with gas | | | | | | | | | |
after Spirit deal, assuming success at 50/50 levels per CPR | | | | | | | | | |
| STOIIP | RF | MMboe | Cat | $/bbl | $mln | HUR share | $mln (HUR) | comment | £/share alloc (HUR)
Lancaster - FFD vol | 3,580 | 25% | 795 | 2C (50%) | $3.00 | $2,385 | 100% | $2,385 | 2 well | £0.74
Lancaster - EPS vol | | | 100.0 | 2P (50%) 10yr | $14.65 | $1,465 | 100% | $1,465 | | £0.45
Halifax | | | 1,235 | 2C | $1.00 | $1,235 | 100% | $1,235 | 1 well | £0.38
Lincoln | | | 580 | 2C | $3.00 | $1,740 | 50% | $870 | | £0.27
GWA tie back vol (posted to Lincoln) | | | 24 | 2P (50%) 10yr | $14.65 | $352 | 50% | $176 | 3 well (carried) | £0.05
Warwick | | | 935 | 2C | $3.00 | $2,805 | 50% | $1,403 | | £0.44
Whirlwind | | | 179 | 2C | $1.00 | $179 | 100% | $179 | | £0.06
Strathmore | | | 32 | 2C-sale | $0.10 | $3 | 100% | $3 | | £0.00
Tempest/Typhoon | | | 1,307 | P50 | $- | $- | 0% | $- | relinquished | £-
| | | | | | | | | |
Subtotal | | | 5,187 | | $1.96 | $10,164 | | $7,716 | | £2.39
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Table 5: Q4 2021, post FID on GWA FFD, and reserves inc on GLA | | | | | | | | | |
after Spirit deal, looking forwards to Q4 2021 | | | | | | | | | |
name | STOIIP | RF | MMboe | Cat | $/bbl | $mln | HUR share | $mln (HUR) | comment | £/share alloc (HUR)
Lancaster - FFD vol | 3,580 | 25% | 795 | 2P - FFD | $5.00 | $3,975 | 100% | $3,975 | 3 well + FID TB | £1.23
Lancaster - EPS vol | | | 100.0 | 2P (50%) 10yr | $14.65 | $1,465 | 100% | $1,465 | | £0.45
Halifax | | | 1,235 | 2P - FFD | $5.00 | $6,175 | 100% | $6,175 | | £1.92
Lincoln | | | 580 | 2P - FFD | $5.00 | $2,900 | 50% | $1,450 | FFD FID | £0.45
GWA tie back vol (posted to Lincoln) | | | 24 | 2P (50%) 10yr | $14.65 | $352 | 50% | $176 | | £0.05
Warwick | | | 935 | 2P - FFD | $5.00 | $4,675 | 50% | $2,338 | FFD FID | £0.73
Whirlwind | | | 179 | 2C | $1.00 | $179 | 100% | $179 | | £0.06
Strathmore | | | 32 | 2C-sale | $0.10 | $3 | 100% | $3 | | £0.00
Tempest/Typhoon | | | 1,307 | P50 | $- | $- | 0% | $- | relinquished | £-
| | | | | | | | | |
Subtotal | | | 5,187 | | $3.80 | $19,724 | | $15,761 | | £4.89


Post CMD thoughts
Excellent CMD presentation, well presented. The odd stumble in the normal way. Needs to be put up as a slide deck as well as a webcast. Good to hear the Q&A in all respects. Next request is that this be livestreamed in the future, and that some pre-submitted PI Q&A be permitted.

Excellent execution by Hurricane. I for one have no problem with them becoming a producer as well as taking these Rona Ridge structures through the complete explore/appraise/develop cycle, either as operator or non-operator. I do not want them to go exploring off the currently-licenced acreage without them coming back to discuss the matter with shareholders.

My notes are not necessarily in the same sequence as the presentation. Some of the content is me talking, not Hur.

Lancaster EPS initial results
The flow rates are good. I have produced sandstone wells at 20k bopd but that was with a PI of 80b/d/psi, so it was a higher drawdown. Similarly I have produced fractured carbonates (with negligible porosity) at 20k bopd but again that was a higher drawdown and lower PIs. These are gobsmacking PIs.
That means clean up is good. So it means they have a viable well solution and mud system provided they always implement it correctly.
Low wax, reduced pigging is good. It probably indicates they can dispense with suppressant or reduce it. Means lower opex, increased uptime, increased production, longer tie backs.
Very very good communication from interference test and shut in transient analysis (mostly the type 2 and type 3 curves on the slide 25 are what we are most likely looking at: radial flow or spherical flow). No barriers, lots of connected volume in Lancaster. So likely very little bypassed areas – think of a granite hill that has been thoroughly shattered but is still in situ because it is contained by everything around it.
The implication is that – if sustained – fewer wells, greater well spacing, longer tiebacks, reduced ESP need & later ESP use are implied. Perhaps fewer hub locations. Reduced drawdown means reduced coning, i.e. flatter OWC under production. That means reduced capex, reduced opex, better reservoir sweep, limited bypass.
Lower 360 scf/bbl GOR means faster ramp to higher volumes before hitting flare limits, either consented or facilities. It also means smaller WOSP export pipeline (cheaper) and maybe earlier fuel gas deficit later in field life so reverse flow down the export line. It also means greater reliance on aquifer & or compaction drive mechanisms rather than on solution gas drive. However so far all the evidence is the aquifer is good.
Trapped/perched water explanation OK by me so far. The lack of rate dependency is crucial, i.e. this is not obviously fingering in from the aquifer. Dry oil from one is good. Are there any compositional differences in water between trapped water and aquifer water ? A 4% rate vs 5-10% assumed in volumetrics may mean higher reserves, but only two data points so far. Over 3bn barrels of STOIIP that approx 5% conservatism could be worth (say) 37 mln bbls of ultimate recovery alone.
Contact determination looking increasingly confident towards high case volumes at Lancaster. The 3C case was 1678m tvdss for 3.3bn STOIIP vs 2C case of 1653m tvdss for 2.3bn. So that is 40-million bbls STOIIP per metre of increased OWC depth (assuming the reservoir has a constant area for simplicity), and the new hi res gauge data yields 1685m tvdss. That is 7m deeper than the 3C case assumes, so approx 3.580 billion barrels STOIIP. I appreciate HUR are not changing their reserve numbers at this stage but I don’t think we as investors should ignore the information either, therefore I have included this.
Pressure drop with time/ cumulative production. They suggest that the pressure drop observed so far after one month of highly intermittent production, due to all the shut in periods, and which is 10 psi in the #7 well, 5psi in the #6 well, is not relevant. The three cases analysed are for 8psi reduction after three months constant flow in the high case, 10psi in the medium case, and 18psi in the low case. The lines are about 3ps thick, so this is crude stuff. They are planning to update the market in 6-months. Personally I think they should be updating the market at 3-month intervals (or even monthly) as there is simply too great a risk of pressure data leaking to the outside world. Better to have faster information in a transparent manner in this situation. As to what is the cause of the pressure changes seen to date I am not sure I fully buy RT’s stated explanation. This for me is the big outstanding issue, and I have seen very rapid production and pressure drops on not so different reservoirs in the past. However all the other indications are excellent so this is my main caveat on the EPS data. Of course they will need to put at least three different cases in front of us on their next occasion, as they ought to zoom in on the remaining uncertainties rather than putting up truly irrelevant straw men.
Overall the facts so far tend to support the deep OWC and 3.3bn + STOIIP, an increase on the 2C case. At least that is what the data presented suggests and so I have revised to match it. I have not changed the RF as there is no firm basis to do so yet, though I think most indicators tend that way. Note the OWC depth for Lancaster is much shallower than LinWar is conceptualised as, so whatever is going on in WD is far less likely to be a geological issue on the shallow end of LanHal (though that does of course depend on the mechanism in play). The Hal end might be a different matter of course as that is thought to be a deeper OWC, but one thing at a time.

Warwick Deep initial results
WD not commercial. 1ltr sample. ESP drawdown. Good fit to Lancaster fluids + Lancaster geology + pipe flow (one joint ?). Limited losses.
Few (?) fractures & not a good correspondence to seismic interpretation. They appear to see them on seismic, but when they drill them they are not getting a porosity or a flow/loss response. To me it is as if the fractures are created, but don’t become permeable, or contain/create much poro-perm. Is it a below-closure issue, or a not-tensile issue, or a paleo-aquifer issue and so all of deep/inner needs to be written off. Or all of the deeper, including the deep flank. Or is it a local to this well only issue. . Hmmmm ... Whatever, it does mean that the previous hypothesis of all the rock being homogenous at a macro level is not a sustainable concept. Hmmmmm ......
Gradient data potentially indicates OWC deeper at approx 2340m tvss. Oil was recovered. So there must be enough fracture connectivity to create this outcome. Hmmmmm .....
However is reservoir quality in the deep structure poor across any/all of the fields ? Big question, see Bach Ho deep. I expect they’ll want to get commercial rates out of shallower wells sufficient to get a FID for staged development before turning their attention to the interesting deep structure issue. Is there commercial amounts of mobile oil below structural close ?
For now I have decided to leave the LinWar volumes & valuations unchanged. On the upside there is evidence towards a deeper OWC and therefore more BRV. On the downside there is evidence towards a produceability issue in the deeper structure. Does this also affect the deep flank, or is this just a deep inner issue ? What is the mechanism that is causing fractures seen on seismic in WD to not be contributing when drilled ? Quite likely a downwards revision to come but not wanting to prejudge as data too uncertain. In any case not too great a % problem for HUR shareholders :)

Forward guidance
Probably a third Lancaster tie-back for appraisal purposes. Look further away towards Halifax, maybe 10-15km tie back given the low wax observed ...
Tease of debottleneck AM FPSO to bring corresponding booked reserves in 10-yr case to above 100mln bbls, which I model as 100mln bbls. For Q4 2020.
Kicking out $200-380 mln/year cashflow in 2020 – 2021.
2020 wells most likely GWA.
Probably two GLA wells in 2021 or so for LanHal appraisal.
Longlead items for LinWar development ordered.
Whirlwind concepts underway. (Rightly so.) (That Teekay Varg second hand FPSO might be useful here – has gas compression – but can it handle whatever is in Whirlwind; indeed what is in Whirlwind ?)
2 x 70k bopd FPSOs for 20yr life, each capable of booking 0.5 bln reserves. One for GLA, one for GWA. These as initial phase of FFD. The FID for GWA in 2021 with Spirit, and in 2022 for GLA with ???.
Some sulphur content in the 38 API oil.
Halifax ridge still looks awfully skinny & steep. Actually that likely means good fracture system !
2021 Q1 CMD similar format.

Q&A
Fracture behaviour in WD. Seismic vs drilled.
Open to f/o and also “financial partners”. Enough cash to derisk solo. Expect to be interrupted.
RTFM on water .....
Lincoln Crest. Big losses in original well suggestive of good fracture etc. Now going into similar area to hopefully tie back.
Transition zone treatment at OWC. Sidewall cores mostly fractured. (Did they get any at WD ?) Min fracture aperture 20u. So on/off not transition zone issue, i.e. flat or tilted contact, not poro-perm dependent.
No flare consent for GWA, must have WOSPS tie in for that.
Deeper Warwick structure not answerable, this is the real issue per Bach Ho. Being studied. Absolutely the right question to ask. Only more wells will answer this.
Only one or two FPSO redeployment opportunities (i.e. used – I’ve previously identified one). However also capacity and appetite for newbuild given the right business model. (Remember 20-year lifetime desirable).

Other thoughts
Acceleration of appraisal desirable in paced manner.
There is a case for going into the suspended Halifax well and perforating it to try and get beyond the skin, trying to further clean it up with acidization and/or N2 lift, flowing it for a while with ESPs on a DST, then suspending it with memory gauges as an observation well. I realise perforating is not a normal technique but it is worth considering.

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Re: Hurricane Energy (HUR)

#236515

Postby Nen2319 » July 13th, 2019, 10:59 pm

Question on the trapped water. If it is actually trapped water and not the aquifer then depending on the volume the water content on the well will fall at some point? Correct?

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Re: Hurricane Energy (HUR)

#236546

Postby FabianBjornseth » July 14th, 2019, 9:30 am

dspp wrote:Pressure drop with time/ cumulative production. They suggest that the pressure drop observed so far after one month of highly intermittent production, due to all the shut in periods, and which is 10 psi in the #7 well, 5psi in the #6 well, is not relevant. The three cases analysed are for 8psi reduction after three months constant flow in the high case, 10psi in the medium case, and 18psi in the low case. The lines are about 3ps thick, so this is crude stuff. They are planning to update the market in 6-months. Personally I think they should be updating the market at 3-month intervals (or even monthly) as there is simply too great a risk of pressure data leaking to the outside world. Better to have faster information in a transparent manner in this situation. As to what is the cause of the pressure changes seen to date I am not sure I fully buy RT’s stated explanation. This for me is the big outstanding issue, and I have seen very rapid production and pressure drops on not so different reservoirs in the past. However all the other indications are excellent so this is my main caveat on the EPS data.


I also thought that explanation was confusing - shouldn't a larger volume being disturbed see less depletion, not more? A simple and less generous interpretation could be that the pressure is depleting faster than even the low case accounted for. That would not be a relevant comparison, as the BHP from a reservoir model reflects how the average reservoir pressure depletes, while the shut-in pressure after 24 hours does not "see" very far into the formation. I just mean to say that you can come away with that idea when examining what was presented. As the wells have not yet contacted any boundaries, the "apparent depletion" from the bottom-hole pressures would be expected to flatten out as the radius of investigation increases over time. There are techniques for extrapolating the average reservoir pressure from shut-in data, but this was not included in the presentation. The same goes for estimates on total connected volume, which was only confirmed to be larger than 250-300 mmbbls. But there could be many valid reasons for not including this - it's hard for anyone who hasn't worked the data set to really know.

dspp wrote:Contact determination looking increasingly confident towards high case volumes at Lancaster. The 3C case was 1678m tvdss for 3.3bn STOIIP vs 2C case of 1653m tvdss for 2.3bn. So that is 40-million bbls STOIIP per metre of increased OWC depth (assuming the reservoir has a constant area for simplicity), and the new hi res gauge data yields 1685m tvdss. That is 7m deeper than the 3C case assumes, so approx 3.580 billion barrels STOIIP. I appreciate HUR are not changing their reserve numbers at this stage but I don’t think we as investors should ignore the information either, therefore I have included this.


I haven't given this much thought earlier, but the STOIIP increase is very dramatic as the OWC gets deeper, compared to the base case reservoir thickness and STOIIP. The lateral area of the uplifted basement must be comparatively wider at these depths (far below structural closure), but it seems that these volumes should be treated more speculatively, given the limited flowing data at these depths so far.

I was very impressed with what the CMD revealed - practically all the data at this stage comes out in line with or above expectations. Still, anything less could have meant serious trouble for the company. It is enough to wash away some of the worst fears post Warwick Deep, but a real re-rating of the company value seems unlikely until the next CMD in Q1 2020.

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Re: Hurricane Energy (HUR)

#236555

Postby dspp » July 14th, 2019, 10:29 am

FabianBjornseth wrote:
dspp wrote:Pressure drop with time/ cumulative production. They suggest that the pressure drop observed so far after one month of highly intermittent production, due to all the shut in periods, and which is 10 psi in the #7 well, 5psi in the #6 well, is not relevant. The three cases analysed are for 8psi reduction after three months constant flow in the high case, 10psi in the medium case, and 18psi in the low case. The lines are about 3ps thick, so this is crude stuff. They are planning to update the market in 6-months. Personally I think they should be updating the market at 3-month intervals (or even monthly) as there is simply too great a risk of pressure data leaking to the outside world. Better to have faster information in a transparent manner in this situation. As to what is the cause of the pressure changes seen to date I am not sure I fully buy RT’s stated explanation. This for me is the big outstanding issue, and I have seen very rapid production and pressure drops on not so different reservoirs in the past. However all the other indications are excellent so this is my main caveat on the EPS data.


I also thought that explanation was confusing - shouldn't a larger volume being disturbed see less depletion, not more? A simple and less generous interpretation could be that the pressure is depleting faster than even the low case accounted for. That would not be a relevant comparison, as the BHP from a reservoir model reflects how the average reservoir pressure depletes, while the shut-in pressure after 24 hours does not "see" very far into the formation. I just mean to say that you can come away with that idea when examining what was presented. As the wells have not yet contacted any boundaries, the "apparent depletion" from the bottom-hole pressures would be expected to flatten out as the radius of investigation increases over time. There are techniques for extrapolating the average reservoir pressure from shut-in data, but this was not included in the presentation. The same goes for estimates on total connected volume, which was only confirmed to be larger than 250-300 mmbbls. But there could be many valid reasons for not including this - it's hard for anyone who hasn't worked the data set to really know.



Like you I haven't seen the dataset, but my personal opinion is that RT's explanation on this was plain wrong. Your explanation - a much smaller connected volume - is the normal "first up" hypothesis that would come to mind, and would be consistent with not dissimilar well results I have seen in two analagous fields. However there are a myriad of other potential explanations. Given they have clearly said that they have 'seen' 250-350mmbbls connected volume to date then this ought to dispel this "first up" theory. But because they are being so coy with the data we cannot be sure ourselves, and so for me this concern remains. Additionally I was disappointed to hear such a weak explanation, which to my mind indicates that as a G&G person RT is more comfortable with geological statics rather than reservoir & production dynamics, and he also fails to appreciate that his words are being considered by people who in their discipline areas are at least his peers. A slight queja would be that we cannot see where the presenter is putting their laser pointer when talking so there is some ambiguity. Anyway I watch with very great interest. On the next set of analysis slides I would like to see the x-axis in terms of cumulative production, not time. And many other things of course.


FabianBjornseth wrote:
dspp wrote:Contact determination looking increasingly confident towards high case volumes at Lancaster. The 3C case was 1678m tvdss for 3.3bn STOIIP vs 2C case of 1653m tvdss for 2.3bn. So that is 40-million bbls STOIIP per metre of increased OWC depth (assuming the reservoir has a constant area for simplicity), and the new hi res gauge data yields 1685m tvdss. That is 7m deeper than the 3C case assumes, so approx 3.580 billion barrels STOIIP. I appreciate HUR are not changing their reserve numbers at this stage but I don’t think we as investors should ignore the information either, therefore I have included this.


I haven't given this much thought earlier, but the STOIIP increase is very dramatic as the OWC gets deeper, compared to the base case reservoir thickness and STOIIP. The lateral area of the uplifted basement must be comparatively wider at these depths (far below structural closure), but it seems that these volumes should be treated more speculatively, given the limited flowing data at these depths so far.


My Lancaster calcs are 13.5 mln bbls of STOIIP per metre between 1597m-1653m, and 40.3 mln bbls of STOIIP per metre between 1653m-1678m. So as you say the reservoir is splaying out and so from a BRV perspective every additional metre is worth a heck of a lot more. However there is now a very clear indication that a) the quality of these reservoirs is heterogenous at a macro scale, and b) the most prominent quality dependency observed so far is with depth. Whether this is on/off switch, or a more gradual thing, we do not know. Whether it is associated with things other than depth is not known. That Bach Ho paper you previously linked (http://www.saltworkconsultants.com/asse ... ren_09.pdf ; muchissima gracias) is going to get a lot of reading by many people I think. Having a lot of additional BRV down to a deeper OWC will not add reserves if the effective permeability, porosity, and connectivity are all trivial in the deeper leg.


FabianBjornseth wrote:I was very impressed with what the CMD revealed - practically all the data at this stage comes out in line with or above expectations. Still, anything less could have meant serious trouble for the company. It is enough to wash away some of the worst fears post Warwick Deep, but a real re-rating of the company value seems unlikely until the next CMD in Q1 2020.


Agree. I fully expect HUR to trade at a considerable shareprice discount to implied value until consistent repeatable results are in. I really think they ought to consider a more frequent running update as otherwise insiders will get snippets of information and have an advantage. It is unrealistic in the extreme to not expect information to spill. There will be at least one hundred people on the shifts on the AM who can pick up FTHP info for starters ...... We already know the rigs leak. Planning to say nothing for 6-months is frankly asking for market mayhem (aka a "false market"). If it were me I would be seriously considering releasing cumulative extracted and FBHP, perhaps even (if they shut in to get it) CIBHP, and doing so strictly on a monthly basis.

I would love to have a read of the Spirit post mortems on the WD well ........ For them they are the pig, and for once HUR is the chicken : LinWar is a much greater business commitment for their development teams than the involved HUR team.

Anyway Sunday awaits.

regards, dspp

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Re: Hurricane Energy (HUR)

#236557

Postby dspp » July 14th, 2019, 10:48 am

Nen2319 wrote:Question on the trapped water. If it is actually trapped water and not the aquifer then depending on the volume the water content on the well will fall at some point? Correct?


Not necessarily.

Let us say it is trapped water and they produce at a constant rate, and for simplicity consider a vertical well. Let us say that 'pockets' of trapped water are relatively small but evenly dispersed. So as the pressure wave is transmitted deeper into the reservoir, then radial inflow will commence from further and further out in the reservoir. To the observer standing at the watercut monitoring instrument (i.e. the test separator or similar) there will be a uniform and constant % watercut, say 4% continually, irrespective of which minute/hour/day/month one looks at the instrument.

If however the pockets of trapped water are relatively large but spaced far apart then the contributions from each one will arrive at the well bore and the measuring instrument as pulses as each one is extracted and depleted. So the observer standing at the instrument might (say) see the watercut oscillating between (say) 2% and 6% over a long enough time period, but with the average still being 4%. You can see from this explanation that it will depend on the arrangement and distribution of these pockets in the reservoir.

You have to think about the way this sort of trapped/perched water ends up where it is. Think of it as water that has little sealing umbrellas underneath it. So as the oil fills the reservoir (in geological time) it cannot escape vertically downwards and so is left behind, perched above the surrounding oil. Just like watery sparrows perched on a nest, hence the name. However when we introduce a well into the reservoir and horizontal flow commences (quickly, in human time) then it can move sideways towards the well bore.

It is different than the irreducible water that RT referred to and, again, imho he was wrong in his explanation of this aspect of what is going on here, though he is likely correct in the practical consequences. See https://www.ihrdc.com/els/ipims-demo/t2 ... /G4108.htm for the microscopic nature of irreducible water. In contrast trapped/perched water can be a relatively macro matter. What is more the trapped/perched water can be (but need not necessarily be) different in composition than any subsequent aquifer water. If so, it is easy to tell the two apart and monitor them separately.

As an aside it seems to me that RT is more of an exploration G&G person than an operations & reservoir person, which is fine provided the team has the overall competences & decision-making processes to arrive at the 'correct' solutions. It is a team game, and I for one am not ascribing any talismanic value to RT as an individual.

regards, dspp

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Re: Hurricane Energy (HUR)

#236594

Postby dspp » July 14th, 2019, 2:50 pm

I wonder if there are any implications from WD for aquifer support ? No good having the world's most perfect aquifer if it is separated from the oil above by a sheet of impermeable stuff. How much would a isolating sheet need to be disrupted to allow sufficient water to enter, in enough places, so as to get uniformly distributed voidage replacement, and hence a good sweep. Hmmm......

Given that the most likely hypothesis for Hal is a tilted OWC due to the S>N flowing aquifer, the reverse implication is that aquifer/oil contact is very good across LanHal. Which in turn implies a good fracture network throughout the majority of the vertical column and across the whole of the area. That is an encouraging thought. We know that LanHal has a significantly shallower 'nominal' OWC than LinWar and so it may be that the oil leg in LanHal simply never reaches down into this ' ?? bad ??' reservoir rock.

"The Company believes that the deeper oil down to ("ODT") at 1,846m true vertical depth subsea ("TVDSS") identified in the Halifax Well, compared with an oil water contact ("OWC") at Lancaster at 1,678m TVDSS, is most likely caused by a tilted OWC." viewtopic.php?f=16&t=796&p=41575&hilit=tilted+contact#p41575 . That is a 168m vertical difference across about 30km or so in LanHal.

Then the corresponding thought for LinWar is why is there not an equally tilted OWC ? The SW-NE dimension for LinWar is maybe one third of the corresponding dimension for LanHal, therefore one would expect a similarly offset OWC (assuming no compartmentalisation) from S to N of 50m or so. That ought to be detectable in the wells. But if the lower part of LinWar is of a very different reservoir quality than LanHal then the effective interface pressure might be much more even and so the OWC might behave differently. It also depends on what forms the lateral bounds of the aquifer 'pipe' as it flows S>N and whether there are any acceleration effects going on.

Hmmmmm........

Pilot holes vertically through the reservoir in both Lincoln Crest and Warwick Crest, prior to plugging back and sidetracking as horizontal appraisal wells would be high on my list of things to consider.

- dspp

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Re: Hurricane Energy (HUR)

#236990

Postby dspp » July 16th, 2019, 1:34 pm

RNS for Alken Fund SICAV and Alken Capital Fund, FCP-FIS establishing a holding of 5.37% being 106,842,835 shares as of 15/07/2019.

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Re: Hurricane Energy (HUR)

#237003

Postby OLTB » July 16th, 2019, 2:44 pm

Hi dspp

I have (in round numbers) 1% of my SIPP in HUR and am hoping for a robust medium-long term performance once oil is fully flowing.

What I have picked up is that Crystal Amber own a significant chunk of HUR (it's their top holding according to their website) and they seem to be content selling a significant amount once the share price gets high enough, seeing the price drop and buying back again over and over again. Undoubtedly they are making lots of money doing this, but is this trading strategy restricting the growth potential of the HUR share price?

Thanks for your expert comments in your detailed posts - I do try to follow matters, but admit I get lost in the jargon sometimes!

Cheers, OLTB.

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Re: Hurricane Energy (HUR)

#237037

Postby dspp » July 16th, 2019, 4:55 pm

OLTB wrote:Hi dspp

I have (in round numbers) 1% of my SIPP in HUR and am hoping for a robust medium-long term performance once oil is fully flowing.

What I have picked up is that Crystal Amber own a significant chunk of HUR (it's their top holding according to their website) and they seem to be content selling a significant amount once the share price gets high enough, seeing the price drop and buying back again over and over again. Undoubtedly they are making lots of money doing this, but is this trading strategy restricting the growth potential of the HUR share price?

Thanks for your expert comments in your detailed posts - I do try to follow matters, but admit I get lost in the jargon sometimes!

Cheers, OLTB.


Thank you OLTB.

As hello31 on ADVFN points out (thanks hello31) (see 16/7/2019 15:17 on https://uk.advfn.com/stock-market/londo ... share-chat) there is only a AIM reporting requirement on CA if they cross the 1% bands. Therefore CA can be tweeting up with one hand whilst selling down with the other. Whether this is allowable, legal, or good practice I do not know. Given it is AIM my opinion is I have to assume these things do happen, irrespective of who or how or why, and I am thoughtful accordingly. Observing the charts on HUR over the years it certainly appears fairly repetitive !

My personal opinion is that it would be in HUR's best interests to move towards a Main Market listing as fast as is reasonably possible, not as slow as is possible.

In the meantime the % shareholdings of significant shareholders appears to be on HUR's website at https://www.hurricaneenergy.com/investors/aim-rule-26 as including AFFM:

Significant shareholder Number of Ordinary Shares Percentage of issued share capital
Kerogen Investments No. 18 Limited 428,531,211 21.53%
Pelham Capital Limited 121,875,000 6.12%
Crystal Amber Fund Limited 109,642,789 5.51%
AFFM S.A. 106,842,835 5.37%
Last updated 16 July 2019


How often that is updated, and what intraday trading can go on by these parties, and what else can go on in the background is not really my core skillset ! However I am glad to see another significant stakeholder in the mix. Roll on more as it has to have an effect on liquidity and in turn on price. That is 38.53% or thereabouts in big chunks in institutional hands which is helpful in a number of respects.

regards, dspp

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Re: Hurricane Energy (HUR)

#237056

Postby OLTB » July 16th, 2019, 5:22 pm

Thanks dspp

I sometimes try to read through the ADVFN HUR share chat, but more often than not, it's full of posters shouting at each other calling one another trolls, and the detailed, useful content can get drowned out or lost!

Cheers, OLTB.

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Re: Hurricane Energy (HUR)

#237074

Postby PeterGray » July 16th, 2019, 6:59 pm

Therefore CA can be tweeting up with one hand whilst selling down with the other. Whether this is allowable, legal, or good practice I do not know.

No idea on legality, but I think we all know it would not be "good practice"!. However, I'd also doubt this is happening.

Someone has placed 5.5% of HUR this afternoon (according to Bloomberg). That coincides with CA's holding, but it's been reported to be part of Kerogen's, which also seems a lot more likely. No doubt we will find out shortly.

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Re: Hurricane Energy (HUR)

#237188

Postby dspp » July 17th, 2019, 9:01 am

It appears Ker have sold about a quarter of their holding taking them down to about 16.5% and giving someone else about 5%.

No RNS yet.

Reported price in excess of 46.5p, not clear as to actual outcome.

Since Ker bought at about 15p then this appears to be fairly sensible derisking by them if they are retaining the 16.5% or so.

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Re: Hurricane Energy (HUR)

#237202

Postby dspp » July 17th, 2019, 9:39 am

RNS Number : 8199F Hurricane Energy PLC 17 July 2019 Director / PDMR Shareholding

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, notes the sale of 110 million ordinary shares in the Company by Kerogen Investments No. 18 Limited ("Kerogen").

On 17 July 2019, Kerogen announced that it had sold 110 million ordinary shares in the Company at a price of 46.5 pence per share. Following settlement, which is expected to take place on 19 July 2019, Kerogen will hold approximately 16.0 per cent of the Company's issued ordinary share capital. This residual holding will be subject to a lock-up period of 120 days, subject to customary exceptions.

Hurricane notes that Kerogen has signalled its continued support for the Company as it continues to be a major shareholder with a 16.0 per cent interest and a nominated representative on Hurricane's board of directors. Kerogen has participated in each of the Company's significant placings since April 2016 and this transaction represents approximately a quarter of its current holding.

Kerogen Investments No. 18 Limited is a Person Closely Associated (PCA) with Roy Kelly, a person discharging managerial responsibility at Hurricane Energy plc (as non-executive director). Accordingly, the below Notification of Dealing Form is provided in accordance with the requirements of EU Market Abuse Regulation (MAR)

https://www.hurricaneenergy.com/investors

======

I have been previously told that there were no shareholder agreements covering CA, Ker, etc. It appears that the new buyer must have requested (or been offered) a 120d lock up period by Ker on its residual (!) 16% holding as a comfort blanket. Fair enough.

It also appears that Ker have pretty much recovered their original stake now, leaving them approximately in a free carry position.

I wonder who the newbies are. All very interesting.

- dspp

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Re: Hurricane Energy (HUR)

#237731

Postby SentimentRules » July 19th, 2019, 11:24 am

Got an alert for HUR price as near 20% target zone from short 53.90. Decided it's time for a review. Be done in 10 mins.

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Re: Hurricane Energy (HUR)

#237733

Postby SentimentRules » July 19th, 2019, 11:47 am

First off , I'm not a doomster. I talk short when price has risen. Not 'After the fact ' falls. So looking at other forums, No need to put me in that class.

So....last week on the rise day, I suggested it doesn't make sense. Something not right. And even asked 'am i missing something'? Turns out i wasn't. It just hadn't occurred until it showed it's hand 3 days later 're keoghan.

Btw if anyone wants to know why I shorted 53.90, just ask.

I'm not an expert in the oil sector or any other. But feel myself an expert in 'fund thoughts'. As for vertical and horizontal drilling etc, many here know more about that than even the CEO. I focus on manipulation, irregularities in price. Distribution and accumulation in stealth mode etc.

I take no joy in price falling or even rising simply because I don't care as long as I'm the right side.

Anyway back to point. Something missing.. .. was the question rise day. Then along comes the big deal for keoghan sale. (Btw any shorters got hands in some of it? Always the analysis in a sale)

We all know that 80% of private investors added to position or entered, at the top 20% zone of the rise. That's the usual. So most added to or bought 53-57 p

Are you not fuming? They give good news, before a deal already made ? Knowing the ramifications for retail?

Let's look at the facts:

1. Price rise last week was a head scratcher. In my view at time, no city interest .

2. They started dumping at the high which allowed shorters like me to take 53.90. And LTHs to exit. But really most were buying.

3. They released news around 44p or whatever. This inexplicably drive price up 25% or so. But retail money. Snowballed each other affect.

4. The deal that they were doing long before that CMD was prepped for days later. Nasty. Sounds to me like all preordained.

5. Why? It would allow the deal to have SP around the agreed price after market reaction. 're 46.5p

The list goes on.

I read around and everyone seems to seek a positive from it. But there is only one fact. They manipulated retail in the points above, and defrauded them... ok it was legal.. let's not call it fraud. Let's call it immoral but legal.

Looking forward.. . Can you now trust the Bod and major shareholder after what they did to you? No. Doesn't mean price cant rise. But does show one thing. Your not a concern. Your a blatant tool of manipulation.

Personally I've locked down 10% now. Will hope to do same to 20% and then review again.

But il tell you this...if Price closes any day below 44.98? Shorters can have an easy go at 39.50

Strangely after im finished this short, my only interest in the future will be a trading buy. But purely based on manipulation. That price is 15.2p alerted. Look to double money and exit very fast.

Whilst I'm happy I got it right last week, im fuming that they can so his to investors so blatantly.. terrible really.

But my view is this... use them. Not them use you. Best strategy. Have a good weekend.

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Re: Hurricane Energy (HUR)

#237736

Postby SentimentRules » July 19th, 2019, 12:01 pm

Oh and lastly, I read something very misleading in other forums 're 'No short increases'

That statement cannot be factually be made.

For all you know 20 new funds shorted 0.4% each undeclared. However that can be sussed out too but no point me saying how. (Il be classed a doomster spiv lol). Anyway there we go. Another classic AIM manoever. Adios

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Re: Hurricane Energy (HUR)

#237739

Postby dspp » July 19th, 2019, 12:08 pm

SR,

I think most of us here on TLF with HUR holdings are very aware that games that go on. It is how to interlace the knowledge of the business fundamentals, with the trading patterns, and the games, that is tricksy.

Ordinarily that is why I avoid AIM, and especially I avoid AIM oil E&P. However the underlying business in HUR is sufficiently interesting to be worth it on a risk/reward spectrum. At least for now.

It is interesting to hear your view on the situation from your perspective. There are many paths to heaven, good luck with yours.

Regards,
dspp

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Re: Hurricane Energy (HUR)

#237747

Postby SentimentRules » July 19th, 2019, 12:23 pm

I agree with you on the whole. I just find that the risk associated above 15.2p is too much.

Needless to say it could go 30p to 300p. We cant know what's what until market shows some of its hand in the game when price is dropping or flat.

I hope it doesn't hit 15.2.

1000's of shares out there. I've no wish to see others suffer to give me an entry one stock.

But at least we agree on one thing....both the fundamentals and trading patterns are paramount. If the market is against current price we need to know. Take buyers last week. Many down over 20% in a few market hours, rather than calling it days.

There is value in both dspp


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