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Hurricane Energy (HUR)

HaiderAli
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Re: Hurricane Energy (HUR)

#54121

Postby HaiderAli » May 16th, 2017, 8:41 am

dspp I am not so sanguine about getting hold of EPS funds painlessly. If all the funding is in place before June 2017 and there are no cost overruns, we are ok.

But if they expect to get some funding once they have committed (post-June 2017) and can't turn back, then we are at the mercy of whatever terms financiers impose. The warrants issued last week have that smell of desperation about them.

Looking ahead, at best we may see what has happened today all over again, at worst, we get some senior secured debt where the bondholders end up owning the company and shareholders get 0 - as happened with XEL.

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Re: Hurricane Energy (HUR)

#54182

Postby PeterGray » May 16th, 2017, 11:38 am

But if they expect to get some funding once they have committed (post-June 2017) and can't turn back

Well, I'd hope they wouldn't out themselves in that position - and I haven't seen anything yet that suggests they would.

Peter

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Re: Hurricane Energy (HUR)

#54553

Postby HaiderAli » May 17th, 2017, 8:00 pm

Ah ok, I must have misunderstood slide 45.

This shows FID happening by June 2017 and an arrow showing EPS funding ending at June 2017. Going by what you say, they'll have all the money they need for the EPS settled by then.

Where I had become confused was the last arrow showing potential farm-out, which runs all the way through 2017. Going by what you say any monies raised from this would be over and above whatever they need for the EPS, so HUR won't be driven to a poor farm-out deal due to pressures of funding the EPS.

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Re: Hurricane Energy (HUR)

#54561

Postby PeterGray » May 17th, 2017, 9:04 pm

Hi HA,

I did say I hoped they wouldn't put themselves in that position!

However, looking at slide 45 I do still think it shows an intention to sort EPS funding before FID, though it's not crystal.

I'd think regardless of how the EPS is funded, at least initially, it would not be a surprise if they continued to look for a partner - if they don't already have one - or even a bigger or additional one. They will be looking for significant additional funding for appraisal wells etc.

But I do think you raise a valid concern - I would worry if they committed major expenditure without having fully sorted the funding first - at present I'm prepared to accept they won't.

Peter

dspp
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Re: Hurricane Energy (HUR)

#54567

Postby dspp » May 17th, 2017, 9:33 pm

I don't think they can sign a major for an EPS. To do so would require unitising the adjacent fields. And the major would want first option over FFD otherwise they are giving away value. Equally the minors will likely be an obstacle to later signing a major.

I think HUR are slowly being backed into a corner of debt/equity/novel for the EPS. Which probably leaves very little left over for any appraisal wells at the same time. And if EPS is delayed then it basically puts it all back a year. Which the circling wolves will be quite happy to create. Unless one caves in and cozies up to HUR before it commits to go-it-alone. And that I think is what has been underlying the recent warrants. Not good to watch the share price action that has just delivered.

It must be an interesting spreadsheet to assess the different discussions against each other. And fun board meetings. And with the OGA who will be watching the behavior and timing with some concern - basically it is hanging a sign over UKCS saying "X is for majors only" if they let HUR get starved into submission.

regards, dspp

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Re: Hurricane Energy (HUR)

#54576

Postby Rhomboid1 » May 17th, 2017, 10:50 pm

I think it's a game of spoof being played , one crucial factor is Kerogen hold 30% & can fund EPS if required in its entirety so brinksmanship is a 2 way street

mlc2010
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Re: Hurricane Energy (HUR)

#54817

Postby mlc2010 » May 18th, 2017, 10:37 pm

been thinking about investing here, am I too late to the party?

MrX001
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Re: Hurricane Energy (HUR)

#54826

Postby MrX001 » May 18th, 2017, 11:40 pm

Time will tell!

HaiderAli
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Re: Hurricane Energy (HUR)

#56740

Postby HaiderAli » May 30th, 2017, 2:10 pm

Can't say that I am altogether surprised by the recent price action.

Regardless of the cackhanded way the warrants were dealt with, I think there would always be problems with funding (i.e. perceptions of costs, dilution and terms) and that would be a function of HUR's relatively weak bargaining position. Let's face it oilcos are not falling over themselves for a piece of the action.

I didn't have tournesol's conviction to sell out completely, thinking that it surely can't be terminal this early in the story.

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Re: Hurricane Energy (HUR)

#56753

Postby Carcosa » May 30th, 2017, 3:57 pm

As an investor I primarily look at what (any) company is achieving operationally and largely ignore anything about share price activity and certainly ignore the BB conspiracy theorists. I think I have mentioned before my timeline is around 2020 so a share price commensurate with what we had at the start of the year does not really concern me too much.

I found it interesting that CA came in to support the Warrant issue and then today came in with a £3m purchase of the ordinary shares. Given the importance of HUR to CA I have an expectation that they have and will continue to have major influence over the board. Being activist investors they will not hesitate (too much) in forcing major changes at board level or how they want the board to conduct business if they deem it necessary.

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Re: Hurricane Energy (HUR)

#56758

Postby dspp » May 30th, 2017, 4:17 pm

Given the potential upside embedded in these discoveries, even absent farm-in funding solutions, personally I cannot see a situation where Kerogen and Crystal Amber will not participate in an EPS funding road if it comes to that. Ideally with a debt component, vendor financing component, and other shareholder (i.e. existing others) participation on equal terms. What I cannot foresee is what the price CA and KER might demand for that, but I am sure it would be discounted. Even discounted I would see that as fair & reasonable. That is why I am holding.

What I am less chuffed about is the board rewriting the terms of their incentive plan to protect themselves from a discounted round. That's not on. Especially when one of the major beneficiaries (the CFO) has not exactly been covering himself in glory and would essentially have failed if this route were to be taken (caveated slightly by it being a board decision re the min price sought for a farm-in).

regards, dspp

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Re: Hurricane Energy (HUR)

#56762

Postby Carcosa » May 30th, 2017, 4:48 pm

dspp wrote:... I cannot see a situation where Kerogen and Crystal Amber will not participate in an EPS funding


CA do not have any cash for any meaningful participation (?)

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Re: Hurricane Energy (HUR)

#57929

Postby Carcosa » June 5th, 2017, 2:41 pm

Apparent confirmation from BP's North Sea President:

“In the case of Hurricane, I’m taking a wait and see approach. There’s been phenomenal press about its finds but, for us, it’s still too early to tell. “An extended well test would shore up some of the presumptions that have been made around Hurricane and its Lancaster find.”


Hence the critical nature of the EPS.

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Re: Hurricane Energy (HUR)

#58382

Postby Beerpig » June 7th, 2017, 1:24 pm

I have watched the apparent manipulation of this share for the last four weeks, the way it eventually peaked impressively in the mid 60's before crashing like a stone. Now a level sub 40p looking only a matter of time and yet nothing at the bottom of the sea has changed.
Some people, somewhere, clearly in the know have made a great deal of money very quickly in this bubble.
I sold out half way back down.
I remembered ROC and a few others and came to the conclusion that any share fluctuating with such volatility for no obvious reason is not worth the ride.
You pays your money and takes your choice.
Good luck to everyone who remains.

HaiderAli
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Re: Hurricane Energy (HUR)

#58496

Postby HaiderAli » June 7th, 2017, 11:16 pm

beerpig, I agree. I think there are various people having fun and games with what has attracted an army of PIs. There were between 100-120 at the AGM today by my reckoning vs. 5 at the SDX one a few weeks earlier.

I've drawn parallels with XEL earlier in this thread.

OTOH, I think Trice comes across as genuine and when he said at the AGM that there is serious institutional interest in the EPS funding and he's relaxed about it happening, I am willing to believe him. I explicitly raised the issue with him about the problems with the warrants and how I could not square that with his claims of interest in the EPS. He claimed it was because what was on offer for the EPS was much more than when the warrants were issued. I subsequently relayed this to an ex-investment banker who raised an eyebrow.

Reading advfn though, I see that some people came away with the idea that Stobie's days are numbered although Trice had been just as emphatic in his support in a post-meeting chat. Perhaps it was a Prime Ministerial emphatic?

I think it's a coin toss at the moment as to the people who will make more money on this are the PI sentiment traders or those who are waiting for the endgame. I think the pendulum will swing quite a bit in the coming months.

dspp
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Re: Hurricane Energy (HUR)

#62447

Postby dspp » June 24th, 2017, 9:52 am

Fun & games indeed with the share price.

I was getting ready to buy some more at 31p. Then CA went and released their RNS (http://www.lse.co.uk/share-regulatory-n ... hare_price) and its gone up to 37p.

Reserves, recovery, finance appear to be the three things that this one is dependent on. It certainly is not a minor oily that dribbles out newsflow to keep the share price up. CA and Ker both act as a backstop against it being starved into submission. The James Hudleston sell a short while back (http://www.lse.co.uk/share-regulatory-n ... in_Company) eased him below the 3% limit for disclosing more sells - but not buys. They appear to be firming up the FPSO if the rumours about it moving out of Gdansk for the upgrades are correct. So finance must be likewise firming up somehow.

regards, dspp

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Re: Hurricane Energy (HUR)

#63727

Postby dspp » June 29th, 2017, 5:14 pm

http://www.investegate.co.uk/hurricane- ... 06246467J/

US$520 million Proposed Fundraising to Fully Finance the Lancaster Early Production System

Hurricane Energy plc, the UK-based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, is pleased to announce that it is proposing to raise approximately US$520 million (the "Fundraising").

Highlights

· Proposed placing of new Ordinary Shares (the "Placing Shares") to raise gross proceeds of a minimum of US$300 million at a price of 32 pence per Placing Share (the "Placing Price") (the "Placing").

· Convertible Bond Offering to raise US$220million, subject to an additional US$10 million over-allotment option. Further details of the Convertible Bond Offering are contained in a separate announcement issued by the Company at or around the time of this Announcement.

· Structuring the Fundraising as a Placing and Convertible Bond Offering allows the Company to have control over the timing of receipt of funds and thus ensures that the Company is able to meet the schedule towards final investment decision ("FID") on the initial phase of development of Lancaster - an Early Production System ("EPS") - in summer 2017.

· The EPS is expected to produce 17,000 barrels of oil per day and provide data required to plan a full field development of Lancaster ("FFD").

· The Fundraising is expected to allow the Company to maintain its target for First Oil in the first half of 2019.

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Re: Hurricane Energy (HUR)

#63804

Postby HaiderAli » June 30th, 2017, 8:42 am

I'm reasonably reassured by the developments in the last 24 hours. The size of the fund raise also dispels notions of these being another bunch of AIM spivs.

The dilution hurts, but it was expected, albeit it's more than anticipated. The company won't be going cap in hand to anyone in the medium term when capital markets could have dried up and POO suffering. So we can play the long game.

There's also the prospect of news on other fronts before oil flows.

dspp
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Re: Hurricane Energy (HUR)

#63829

Postby dspp » June 30th, 2017, 9:19 am

Agree. I bought some more today. I wish my average was lower but hey ho. I don't have enough practice to navigate shorter term market issues, and this certainly is exposed to some unhealthy market games. The technical side is where I am easiest and that's why this has to be a medium term play for me. I have to say that CA should be standing in front of the FCA facing a fine.

This gives them some additional cash to use for either contingency and/or further appraisal wells to prove up volumes and/or DST/EWT. Slight concern over the bond because that has been known to bite small oilies in the past. However the EPS should be sufficiently cash-generative to service that even if the market slams shut. Wonder how the data room key-holders will respond now : down calculators or sweeten their offers ? I wonder if there is a data room door access deadline that comes in prior to the updated CPRs ?

regards, dspp

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Re: Hurricane Energy (HUR)

#63839

Postby dspp » June 30th, 2017, 9:29 am

FredBloggs wrote:I see the price has dropped today by over 12%. I'm not entirely sure what the fund raising would mean for someone like me who bought in at this kind of level. If I buy in, I'm happy watching and waiting until they get their own FPSO or whatever in there and pumping oil.


My take on it is that in theory the shareprice should stay near 32p until both the main placement ($300m) and the CBO ($220m) and the PI follow-on ($5m) are all confirmed which I am reading as being the Admission date of 24 July. However the bookbuild should be complete by now [edit: it is - see HUR website] so there is potential for the price to go up (or down) as a result of people trading shares (as futures) they have committed to but not yet received. The size of the PI placement is only $5m for this reason. But I am an engineer so hopefully a trader will be along soon to give a more reliable answer. Certainly DYOR and don't rely on my take on it !.

regards, dspp


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