The Lemon Fool

JOG and HUR get their mentions on Malcys bucket list update

https://www.malcysblog.com/2019/02/the- ... st-update/

........Hurricane should not be so lowly priced but the risk is about to be proved so it’s not surprising that those who are believers are sitting tight and the shares have seen a few ‘squeaky bums’ taking profits, I still believe that 2019 will prove Dr Trice and team correct and the area is huge.Jersey Oil & Gas is also about to find out quite how much is in Verbier, Equinor has always thought highly of the asset as do I, no change here ahead of imminent drilling.....

For those with access to AFN the post in the link below will be of interest. This is from a Stifel research note released a day ago after they met with HUR.

https://uk.advfn.com/cmn/fbb/thread.php3?id=31347119&from=41972

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It was actually posted mid February and was all over the various message boards at the time.

Ok... not seen it before, was not on here.

New write up.

https://www.proactiveinvestors.co.uk/co ... 15637.html

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As is usually I provide a copy of Crystal Amber's Interim report as it relates to Hurricane Energy, as I find it a useful overview:

"Over the period, Hurricane reported continued good progress with its Lancaster Early Production System (“Lancaster EPS”) and announced Spirit Energy’s (“Spirit”) farm-in to 50% of the Greater Warwick Area (“Warwick”).

Hurricane’s Lancaster EPS remains on time and on budget for first oil in the first quarter of 2019. Well completion operations concluded in July, the mooring system was installed in August and the subsea infrastructure was completed in September. The infrastructure is now ready to connect with the Aoka Mizu, the floating production storage and offloading vessel. The EPS’s Floating Production and Storage Vessel (“FPSO”) Aoka Mizu sailed from Dubai in October after completing a programme of repair, upgrade and life extension. The FPSO is now at the port of Cromarty, near Inverness, awaiting a favourable weather window to hook up with the buoy and initiate commissioning.

We believe that the deal with Spirit is transformational for Hurricane. As Warwick had only been drilled once by Hurricane in 2016, it was behind Lancaster in the appraisal and development process. Spirit’s commitment of $387 million to a detailed three-year work programme aims to rectify this. It targets an initial development of 500 million barrels of reserves. To achieve this goal, rig contracts have been signed to drill three horizontal wells in 2019, fully funded by Spirit. Long lead items have been ordered so that in 2020 one of those wells will be tied back to the FPSO for production appraisal. As with the Lancaster EPS, this step will enable collection of additional reservoir data ahead of full field development. It is expected to leverage Hurricane’s Lancaster EPS infrastructure, and so generate incremental revenues at little additional cost.

The Fund is pleased that Spirit’s commitments validate Hurricane’s belief that Warwick is analogous to Lancaster, and also contains significant reserves of oil. With this deal, the cash expected to be generated by the Lancaster EPS will be available to further the appraisal of the Greater Lancaster Area, in which Hurricane retains a 100% interest.

Over the period, the Fund reduced its holding in Hurricane by 22% and realised £11.3 million. This reduction takes into account the subsequent reinvestment of £3 million in the company at the end of the period, following share price weakness.

In 2019, the Fund looks forward to the commissioning of the EPS in addition to the three wells that will be drilled by Hurricane and Spirit."

Carcosa wrote:"Hurricane’s Lancaster EPS remains on time and on budget for first oil in the first quarter of 2019. "

I think they mean the first half of 2019. Q1 looked possible at one point, but seems unlikely now.

Obviously the decision to go for it was made on Thursday morning........hence the buying and price rise.

Leaks always happen.

Anyway, the AM is on her way to attempt hook up early next week, fingers crossed this time all goes well and there is success. Then we can move the focus on to First Oil and Warwick drilling.

Looks like Hook Up was achieved.

Expecting an RNS today to confirm this.

08:15:00 +00:00: Operational Update
RNS Number : 2866T
Hurricane Energy PLC
19 March 2019

19 March 2019
Hurricane Energy plc
("Hurricane" or the "Company")
Operational Update:
Hook-up of FPSO at the Lancaster Field
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 development of the Lancaster field.
The Aoka Mizu FPSO arrived at the Lancaster field on 17 March 2019 and successfully hooked-up to the turret mooring system buoy on the morning of 19 March 2019. The vessel is now on station and securely moored.
Work to achieve first oil continues, following which a further announcement will be made. After first oil, Hurricane anticipates a gradual ramp up of production towards its planned average plateau rate of 17,000 bopd, net of operating efficiency.

https://ir.q4europe.com/Solutions/Hurri ... d=14252704

Also I noticed this came direct to my inbox, not via a link alert. It seems that there has been quite a refresh of the HUR website and its underpinnings.
regards, dspp

For someone who wants a more detailed understanding of what the EPS is going to test and the time required, this presentation on the Lancaster reservoir model could be a good place to start:

https://www.hurricaneenergy.com/download_file/force/399/258

Slide 23 shows how the high and low case porosity estimates match the dynamic data from the well tests equally well (this is going to have a large impact on reserves, but I haven't seen much discussion on it online). Slide 39 shows that the difference in flowing bottom-hole pressure between a high and a low case is only expected to be ~40 psi after twelve months production. Maybe the data will be enough to tell which end of the spectrum you're in, but I would think the range on the reserve estimates could still justifiably be +-300 MMstb. One month of production will give very few answers.

FabianBjornseth wrote:For someone who wants a more detailed understanding of what the EPS is going to test and the time required, this presentation on the Lancaster reservoir model could be a good place to start:

https://www.hurricaneenergy.com/download_file/force/399/258

Slide 23 shows how the high and low case porosity estimates match the dynamic data from the well tests equally well (this is going to have a large impact on reserves, but I haven't seen much discussion on it online). Slide 39 shows that the difference in flowing bottom-hole pressure between a high and a low case is only expected to be ~40 psi after twelve months production. Maybe the data will be enough to tell which end of the spectrum you're in, but I would think the range on the reserve estimates could still justifiably be +-300 MMstb. One month of production will give very few answers.

FB,

Thank you very much for this which I don't think has been circulated in the private investor community despite it being dated Sep 2017. That is a real shame because there is some info in this that is helpful re completions and process facilities that I have looked for but not been able to find for sure.

- Your point about (equivalent) porosity is well made.
- Regarding case determination I think one can get a glimpse at about 6m if testing is smooth. I'd certainly like to have an RNS at quarterly intervals to inform my decisions, safe in the knowledge that all investors get equal peeks.
- It is interesting to note that they flag up the gas cap formation possibility. Does anyone know / have to hand or mind the top structure depth for Halifax crest ? Is it within the 30m mentioned in slide 32 ? This likely accounts for the care in mud weight on the Hal well, and that in turn will have contributed to the formation damage and failure to clean up.
- On slide 26+ they talk about aquifer, but if you look they are modelling with a ODT of only 1380m. Given that ODT seems to be more like 1650 or so this is a falsely good simulation of support for the aquifer hypothesis. Personally I agree with the aquifer hypothesis, but I think one needs to set up the simulation to best reflect the facts before saying this is proof.[/list]

Once again thank you. Of course we are all watching with great interest.

regards, dspp

dspp wrote: - Your point about (equivalent) porosity is well made.
- Regarding case determination I think one can get a glimpse at about 6m if testing is smooth. I'd certainly like to have an RNS at quarterly intervals to inform my decisions, safe in the knowledge that all investors get equal peeks.
- It is interesting to note that they flag up the gas cap formation possibility. Does anyone know / have to hand or mind the top structure depth for Halifax crest ? Is it within the 30m mentioned in slide 32 ? This likely accounts for the care in mud weight on the Hal well, and that in turn will have contributed to the formation damage and failure to clean up.
- On slide 26+ they talk about aquifer, but if you look they are modelling with a ODT of only 1380m. Given that ODT seems to be more like 1650 or so this is a falsely good simulation of support for the aquifer hypothesis. Personally I agree with the aquifer hypothesis, but I think one needs to set up the simulation to best reflect the facts before saying this is proof.

Unfortunately, I didn't understand a word of that! No criticism, just that I have no technical knowledge of oil production, so having seen the presentation is what you've discovered good or bad from an investor's point of view?

Clitheroekid wrote:Unfortunately, I didn't understand a word of that! No criticism, just that I have no technical knowledge of oil production, so having seen the presentation is what you've discovered good or bad from an investor's point of view?

Sorry CK, just letting my inner geek out for a moment

Factually this says nothing that was not already in previous presentations for overall assessment of the issues, and the likely risks vs benefits. The key graph of pressure drop vs time (or volume) (slide 39) for the different reservoir cases has been on various other HUR slide decks. So no change.

I do have a niggle that there is stuff going around that is in some public domains, but not being released to retail investors. That ought not to happen. Is it material ?, well that all depends. But I'd like to decide that for myself rather than having someone else make the decision for me, after all it is my money at risk.

regards, dspp

dspp,

That presentation is on the HUR website, in the technical library, which has apparently recently appeared.

To find it go to Presentations and look for the link to the Technical Library at the bottom of the page

In the interests of balance I felt this article from TMF on Friday should be aired - https://www.fool.co.uk/investing/2019/0 ... f-a-cliff/

I note the SP's down by nearly 5% today, so perhaps some people do take notice of TMF articles, which is more than I ever have!

PeterGray wrote:dspp,

That presentation is on the HUR website, in the technical library, which has apparently recently appeared.

To find it go to Presentations and look for the link to the Technical Library at the bottom of the page

Thank you, and there is a 5 Mar 19 one as well:

https://www.hurricaneenergy.com/assets/ ... al-library

and they've finally put all the location info on the one map, dear gods someone listens, thank you thank you (slide 16, and X marks the spot)

ta, dspp

Clitheroekid wrote:In the interests of balance I felt this article from TMF on Friday should be aired -

I note the SP's down by nearly 5% today, so perhaps some people do take notice of TMF articles, which is more than I ever have!

I didn’t think it possible but MF have surpassed their very low bar and published possibly the single worst MF article I have ever read. This is a bit like picking the crappest budget hotel in Manila or the least trustworthy politician: they are all bad but sometimes one really stinks.

I am going to take pity on the amateur scribbler and suggest you don’t normally value a junior oil explo company on a forward PE basis but by assigning value to its various levels of prospective resources and proven reserves, with some view to their their probabilities of commerciality, assuming a certain price of oil.

More jollity - https://www.ii.co.uk/analysis-commentar ... E4NTg3MAS2

At least this particular doom and gloom merchant is basing his predictions on charts, which have always seemed to me akin to predictions based on tea leaves.

But I'm beginning to feel rather brave hanging on to these!

CA have sold down from 5.01% to 4.87%, see https://www.hurricaneenergy.com/investo ... atory-news . I have a vague memory that they went under 5% before then traded back in, and now back down. Have I recollected rightly ?

(CK: If ii's resident chart shill can tell me if a oil & gas reservoir is going to perform as-modelled by looking at a share price chart then I'd like to suggest they are in the wrong job and at the wrong salary)

regards, dspp