ReallyVeryFoolish wrote:Dod101 wrote:ReallyVeryFoolish wrote:Dod101, we will never know the truth about Trice and Hurricane Energy. I would love to understand how such a promising project led by a supposed world authority can unravel so catastrophically, so quickly. I doubt Trice will ever work in the industry again. I know from experience how ruthless it is.
RVF
PS - Having said that, my loss on HUR is dwarfed by my losses this year on UK income stocks.
Thanks. I am not trying to be wise after the event (nor even before it!) My comments are intended simply to outline my beliefs when I am picking a share to buy. I strongly believe in company culture and my impression is that for the smaller oil explorers, it is almost bound to be a bit rough and tumble. It seems to be the nature of the beast and I assume that those who invest in those enterprises are well aware of that. Taking risks is of course how to make (and lose!) money.
Dod
Absolutely correct. The HUR story was all about Trice who appeared to have impeccable references from a long career. Hence why it would be extremely interesting to learn what has actually happened. We'll never know. But I am certain Trice won't ever hold a position of responsibility again. What have I learned? Never buy an AIM share with a supposedly fantastic future based on one guys say so, no matter how eminent.
RVF.
In my opinion a great deal of the early HUR story was a good lesson in how to go about data-driven objectively-based exploration, then a rational response to their findings, leading to a rational set of decisions in a particular set of circumstances, that in turn led to the EPS on Lancaster and the farmout to Spirit on Lincoln/Warwick. As with all small E&P companies there is/was a considerable amount of luck involved given the small sample sizes that limited $$$ allows in the exploration game, and as always in early stage reservoir investigation there are more uncertainties and alternative hypotheses than there are knowns. My personal view at the time was that once they had sufficient evidence to proceed with the EPS then it was a reasonable investment with an understandable downside vs upside. For sure there were clearly understood differences of opinion regarding how to assess the data, but there did not seem to be any debate as to the veracity of the data itself and the extent to which it was being presented in a reasonably balanced way. Where I was blindsided was that there was apparently a certain amount of cherry picking of the evidence going on even at that stage, though I have not gone back and done a forensic analysis of this (however I think you will find that Nimrod has a much firmer view on this than I do, and to his credit had even at the time). However that meant that I was not being as alert as I probably should have been, to the possibility that cherry picking might be going on and indeed continue through the early EPS (and LinWar) period. I had mistakenly formed the view that HUR were being absolutely straight with the evidence as it was coming in. In retrospect I now know that was absolutely not the case - they were in fact a) not putting all the evidence through; b) delaying release of evidence; c) alluding to the presence of evidence that did not in fact exist at all, d) possibly (not sure on this) deliberately interpreting evidence in an 'unusual' way. That led - in my opinion - to the situation where anybody with a seat on the board (or access to the information that came via those pathways, or indeed via other pathways) could act in ways that were legal during open periods, even though they could of course not trade on it during closed periods. That information asymmetry, and honesty asymmetry, was something I was insufficiently alert for on this occasion because I had, erroneously, formed a view that they were being straight with the data. I have previously been on the buy-side team of farm-ins to not dissimilar situations, and I have seen (ie. detected, and alerted about) some very tricksy behaviours, so I ought to have been even more twitchy than I was, and regrettably I was not, and that was my own doing and my own error. One can point to both 'technical' subsurface matters in this respect, but also to equity/bond financial/legal matters, and ultimately both have been consequential.
Regarding the cultural debate that Dod raises, I a) don't think that the lower-level people in HUR are/were anything other than good people, and b) I only think that this issue was an issue in some 'departments' of HUR, for example I think that the operations team has executed extremely well. Likewise my opinion is that the finance team have done better than many people think. I would need to do a forensics job to be sure of where exactly the problem I am describing originated from, and frankly I don't think I would ever gain the necessary access to the evidence to be sure, as really one would need to sight the board papers. Therefore whilst I agree with Dod that culture does matter, this may be a case of a few bad apples, as it seems to me that the generality of the HUR culture was pretty good. Unfortunately those bad apples seem to have been located at the wrong place in the barrel.
Messianic apples fixated on a mission can go very badly wrong indeed, especially in organisations/industries that are used to being 'tight' with compartmentalised stovepiped information streams.
regards, dspp