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Hurricane Energy (HUR)

murraypaul
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Re: Hurricane Energy (HUR)

#414823

Postby murraypaul » May 24th, 2021, 11:02 pm

I don't think this has been posted before, sorry if I missed it:

On 10 May 2021 the FCA's Market Oversight Department requested that the Plan Company
provide information in relation to historic announcements made by the Plan Company and
recent developments in relation to the proposed restructuring. The Plan Company is not
under formal investigation, and is responding to the FCA's enquiries, which are at a
preliminary stage, on a voluntary basis.

murraypaul
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Re: Hurricane Energy (HUR)

#414825

Postby murraypaul » May 24th, 2021, 11:06 pm

They are expecting shareholders to vote against the plan, but the court to sanction it anyway, because shareholders would not receive any return if the plan does not go ahead, and therefore do not have an economic interest.

6.17 The Plan Company has considered, throughout the process, the possibility of using a
company voluntary arrangement to effect the Restructuring. However, the Restructuring Plan
enables the Restructuring to be effected without the approval of the Plan Company's other
creditors and Shareholders. As explained above, the Plan Company considers that
Shareholder support for the Restructuring is unlikely to be forthcoming, and, as such, would
be a serious hurdle to a company voluntary arrangement. Unlike the Restructuring Plan, a
company voluntary arrangement is not sanctioned by the Court and so there would remain a
level of uncertainty after it is approved, arising from any challenges that could be made.


A restructuring plan requires the following to occur in order to become
legally binding:
(a) either:
(i) the approval of a number representing at least 75 per cent. in value of each
class of the relevant creditors (and/or, where relevant, members) of the
company present in person or by proxy and voting at each meeting convened
by the permission of the Court; or
(ii) if the restructuring plan is not approved by a number representing at least 75
per cent. in value of a class of creditors (and/or, where relevant, members) of
the company present in person or by proxy and voting at any plan meeting
(the Dissenting Class):
(A) the Court must be satisfied that, if it were to sanction the restructuring
plan, none of the members of the Dissenting Class would be any
worse off than they would be under the relevant alternative to the
restructuring plan (the relevant alternative being whatever the Court
considers would be most likely to occur in relation to the company if
the restructuring plan were not sanctioned); and
(B) a number representing at least 75 per cent. in value of a class of
creditors (and/or, where relevant, members) present in person or by
proxy and voting at the relevant plan meeting who would receive a
payment, or have a genuine economic interest in the company in the
relevant alternative, must have approved the restructuring plan;

thehaggistrap
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Re: Hurricane Energy (HUR)

#414875

Postby thehaggistrap » May 25th, 2021, 8:41 am

murraypaul wrote:They are expecting shareholders to vote against the plan, but the court to sanction it anyway, because shareholders would not receive any return if the plan does not go ahead, and therefore do not have an economic interest.


The judge appears to be smarter that than that ...
Specifically asking why the seemingly worthless equity has value to the bond holders.

Results are due today. Hurricane have ~£150 million cash in bank.
Bonds of £220 million are not due until 2022.
Assuming a fair wind (11K bopd / oil price stays high) then it seems premature to be handing the keys over to me ?

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Re: Hurricane Energy (HUR)

#414949

Postby murraypaul » May 25th, 2021, 11:34 am

thehaggistrap wrote:Results are due today. Hurricane have ~£150 million cash in bank.


£28 million of that is ring-fenced for decommissioning costs

4.12 As part of the original Lancaster Area development plan approval from the OGA, the Plan
Company was required to provide security for its decommissioning liability on the Lancaster
Area on a post-tax basis. This had been satisfied by way of a decommissioning bond since
February 2019. Following the September 2020 RNS, the decommissioning bond provider has
requested that the Plan Company provide cash collateral for 100 per cent. of the bond's
value. The decommissioning bond was therefore terminated by mutual agreement, and the
Plan Company placed £16.8 million of cash security in trust in order to continue to meet the
obligation to provide post-tax security for the estimated cost of decommissioning the
production wells, subsea infrastructure and related FPSO costs for the Lancaster EPS.

4.13 In April 2021, BEIS-OPRED informed the Plan Company of its intention to issue a notice
under section 38 of the Petroleum Act 1998 to the Plan Company requiring it to provide
additional security for the sum of £11.2 million, as BEIS-OPRED considered security should
be posted on a pre-tax basis. This means that the Plan Company will shortly be required to
place a further £11.2 million of cash in trust. A total of £28 million relating to decommissioning
security will therefore now be held in trust, ring fenced for decommissioning costs, and so not
available to the Plan Company to repay the Bonds in July 2022.


Bonds of £220 million are not due until 2022.
Assuming a fair wind (11K bopd / oil price stays high) then it seems premature to be handing the keys over to me ?


They say not.

At current production levels and oil prices, the Lancaster Area is generating positive cash
flow. However, the reduced estimates of the Lancaster Area reserves announced in
September 2020, and the impact of producing from only one well with effect from May 2020,
have negatively impacted anticipated future cash flows. Furthermore, during the period of
severely depressed oil prices in the first half of 2020, the Lancaster Area was operating at or
around operational break-even levels, meaning that it was not able to materially contribute to
the Group’s liquidity for a period of time. The cumulative effect of this will result, the Plan
Company anticipates, in a liquidity shortfall as against forecasts. As a consequence, whilst
the Plan Company will be able to continue to service interest on the Bonds, it is likely to be
unable to repay the Bonds at the final maturity date in July 2022, based on expected future
cash flows from the Lancaster Area.


But they have been forced to hold a shareholder vote, which was not in their original plan, so things not going entirely the way they would wish.

murraypaul
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Re: Hurricane Energy (HUR)

#414950

Postby murraypaul » May 25th, 2021, 11:36 am

thehaggistrap wrote:Results are due today.


Available now.

https://ir.design-portfolio.co.uk/viewer/6/12784

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Re: Hurricane Energy (HUR)

#415044

Postby thehaggistrap » May 25th, 2021, 3:39 pm

This for me is the standout quote:
"If duly approved and implemented, the proposed financial restructuring is expected to take effect in June 2021. This would deliver a viable balance sheet from which to execute the Company's revised strategy of maximising cash flow from the existing Lancaster wells and infrastructure to pay down debt. In parallel, the Company will continue to develop the technical and commercial case for further development opportunities at Lancaster and, if supported by its Bondholders, execute any further investment as efficiently as possible"

However if the restructuring not approved:
Shareholders and Bondholders are reminded that in the event the Restructuring Plan is not approved at one or more of the plan meetings, or if it is so approved but not sanctioned by the Court, the Restructuring will not be capable of being implemented. In that scenario, it is likely that there would be a controlled wind-down of the Group's operations followed by an insolvent liquidation of the Company.

i.e once share holders are diluted to oblivion then bond holders will fund a forward work programme.
utterly scandalous. they are not even attempting to hide what they are up to.
the most corrupt and self serving board I have ever encountered.

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Re: Hurricane Energy (HUR)

#415053

Postby murraypaul » May 25th, 2021, 3:58 pm

thehaggistrap wrote:i.e once share holders are diluted to oblivion then bond holders will fund a forward work programme.


Yes, the bondholders are only prepared to put more money in if they get more benefits.
Not exactly surprising.

If the financial reports and projections are correct, the company does not have enough money to pay its debts.
So there is no shareholder value.

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Re: Hurricane Energy (HUR)

#415056

Postby thehaggistrap » May 25th, 2021, 4:06 pm

^ no share holder value?
yet the bondholders see value in taking 95% of the equity ? :lol:

one thing is certain. someone is keen to take control of the assets.
: £120 million in bank, 11K bopd, acreage West of Shetland and accumulated tax write offs.

the restructuring is daylight robbery.

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Re: Hurricane Energy (HUR)

#415072

Postby murraypaul » May 25th, 2021, 4:30 pm

thehaggistrap wrote:one thing is certain. someone is keen to take control of the assets.
: £120 million in bank, 11K bopd, acreage West of Shetland and accumulated tax write offs.


$166 million cash is hand, of which $51 million is already committed and not available, leaving ~$115 million.
$230 million in bonds to be redeemed in a bit over a years time.
So they need to make about $9-10 million per month in free cash flow, or refinance their debt.
Do you think they can do that?

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Re: Hurricane Energy (HUR)

#415086

Postby murraypaul » May 25th, 2021, 4:54 pm

The stated aim of the restructuring is to run the company down and pay off the debts:

7.1 If the Restructuring is implemented in accordance with the Restructuring Plan, this will enable
the Plan Company to undertake an extended wind-down for the benefit of all stakeholders,
including the Bondholders (the Extended Wind Down). Without the Restructuring, production
at the P6 Well would conclude in May 2022. The Extended Wind Down would facilitate
production from the P6 Well at the Lancaster Area being continued for an extended period
before reaching its economic limit, the timing of which would depend on oil prices, actual
production levels delivered, the level of cost savings achievable, and the Bluewater FPSO
continuing to be available to GLA under the Bareboat Charter, but is potentially until February
2024. Subject to any further investment, the Lancaster Area would then, at the end of that
period, likely be decommissioned. The decommissioning process (of the P6 Well, subsea
removal and FPSO clean-up) is estimated to take 3 to 4 months (although there is the
potential for unexpected delays in decommissioning). Following decommissioning, the
remainder of the Plan Company's business would be wound down and all third party creditor
Claims would be settled.


People may, of course, think that other plans would suddenly appear if the restructuring went ahead.

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Re: Hurricane Energy (HUR)

#415096

Postby thehaggistrap » May 25th, 2021, 5:29 pm

murraypaul wrote:The stated aim of the restructuring is to run the company down and pay off the debts:.


Not if the first quote above (from todays results) is to believed...

"In parallel, the Company will continue to develop the technical and commercial case for further development opportunities at Lancaster and, if supported by its Bondholders, execute any further investment as efficiently as possible"

No wonder shareholders smell a RAT.

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Re: Hurricane Energy (HUR)

#415214

Postby murraypaul » May 26th, 2021, 8:22 am

The court hearing on the 21st is now available on Bailii.

https://www.bailii.org/ew/cases/EWHC/Ch/2021/1418.html

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Re: Hurricane Energy (HUR)

#416582

Postby Tinderboy » June 1st, 2021, 2:03 pm

D-Day Friday for the FPSO extension, probably end up with a rolling one yearly by the looks of it...

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Re: Hurricane Energy (HUR)

#417228

Postby Tinderboy » June 4th, 2021, 7:47 am

Game Over, time to tidy up and put away the toys.......

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Re: Hurricane Energy (HUR)

#417232

Postby thehaggistrap » June 4th, 2021, 8:05 am

ReallyVeryFoolish wrote:
Tinderboy wrote:Game Over, time to tidy up and put away the toys.......

From today's RNS -

Hurricane Energy plc, the UK based oil and gas company, announces that it has resolved not to exercise its option to extend the bareboat charter of the Aoka Mizu FPSO (the "Bareboat Charter") for a period of three years from June 2022 to June 2025.


How bl**dy tragic.

I do expect that BlueWater will offer something much more suitable to the condition HUR finds itself in. Fat lady hasn't sung quite, just yet.

RVF


High stakes game of bluff...

If you wanted to hand the keys over to the bondholders (as board intend to do) then renewing the contract for Aoka Mizu would raise obvious questions.
However at $70 oil (and rising) the Lancaster reservoir keeps producing at 11K bopd : which is above the median case predicted by the kitchen sinking.

This is far from game over : assuming the current board are voted out by share holders as I believe is imminent.

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Re: Hurricane Energy (HUR)

#417401

Postby Tinderboy » June 4th, 2021, 8:58 pm

Quite a bit of work for offshore trades coming through, don’t think the core team will hang around whilst these idiots barter, word is they are leaving in droves, that’s the silver bullet, not the court room...

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Re: Hurricane Energy (HUR)

#417832

Postby murraypaul » June 7th, 2021, 9:34 am

I don't think this has been posted, sorry if I missed it and this is a duplicate.

Annual report for 2020 posted on the website: https://www.hurricaneenergy.com/downloa ... ce/638/221

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Re: Hurricane Energy (HUR)

#417880

Postby thehaggistrap » June 7th, 2021, 11:47 am

So : between them Kerogen and Crystal Amber own 25% of the shares.
Which would be enough to cancel the restructuring and subsequent dilution of share holders.

The obvious question is why the HUR board has spent £17 million on the restructuring if it could be cancelled so easily?
The answer is clear : Kerogen are almost certainly the bond holder and will acquire remaining company on the cheap.
If there is any justice someone will face prison over this scam.

The board aren't even hiding it : the annual report talks of future work programme on West of Shetland assets, but only if restructuring approved.

P4
"If completed, this restructuring will deliver a viable balance sheet which can support our revised strategy of maximising cash flow from the Lancaster field to repay debt, and in parallel continue to build the justification for future activity on our West of Shetland assets"

P6.
"we will also continue to develop the technical and commercial case for further development opportunities at Lancaster and, if supported by our Bondholders, execute any further investment case effectively. "

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Re: Hurricane Energy (HUR)

#417905

Postby murraypaul » June 7th, 2021, 12:59 pm

thehaggistrap wrote:So : between them Kerogen and Crystal Amber own 25% of the shares.
Which would be enough to cancel the restructuring and subsequent dilution of share holders.

The obvious question is why the HUR board has spent £17 million on the restructuring if it could be cancelled so easily?


Because they are going to ask the court to override the shareholder vote (which I think everyone assumes will be against), and put the restructuring through anyway?

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Re: Hurricane Energy (HUR)

#417925

Postby thehaggistrap » June 7th, 2021, 1:36 pm

^ if it comes to that I am near certain the judge will call this out for what is - a SCAM :lol:


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