Hurricane Energy (HUR)

[dspp]

Slarty and Carcosa,

Thank you both. So there is no fixed % and so mechanistically forced seller, simply prudency.

Do you either of you know of a shareholders agreement in respect of any HUR shares or are they all fully independent parties ? If so could make for interesting dynamics in some situations.

regards, dspp

[dspp]

In case nobody noticed HUR have just updated their corporate presentation.

http://www.hurricaneenergy.com/assets/D ... 1485873897

Slide 12 now includes "ODT from Lincoln Well indicates that Lincoln and Warwick are a single field" along with updated graphics.

regards, dspp

[JonnyT]

Yes this hasn't gone unnoticed.

I believe it infers an 1100m column in Warwick, given the areal extent perhaps Lincoln / Warwick is now the UK's 2nd largest discovery ever. It would need to be greater than 2.5b recoverable to exceed the Forties field.

TBH if this was conventional reservoir the press would be full of it.

[dspp]

Yes and they've now done the decent thing and put out an RNS - most odd slipping such an interesting item into a revised presentation - almost as if they were trying to help the private investors !

https://otp.tools.investis.com/clients/ ... sid=842124

Results of Further Technical Analysis of
Lancaster 7, 7Z and Lincoln Wells

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces the results of further technical analysis of its Lancaster, Lincoln and Warwick fractured basement assets following the drilling of the Lancaster 7, 7Z and Lincoln wells in 2016.

Highlights

· Lancaster oil down to of 1,620m TVDSS revised to oil water contact of 1,678m TVDSS
· Lancaster hydrocarbon column height in excess of 670m TVDSS
· Lancaster maximum stable flow rate refined upwards to 15,375 STB/day using an ESP
· Lincoln discovery is a separate hydrocarbon accumulation to Lancaster, separated by the Brynhild fault
· Warwick now believed to be part of large basement feature comprising Lincoln and Warwick

The previously published minimum oil down to from the Lancaster 205/21a-7 well of 1,620m TVDSS has now been revised to a best technical case oil water contact of 1,678m TVDSS, with an associated hydrocarbon column height in excess of 670m TVDSS.

This revised interpretation is based on the integration of wireline sample oil analysis, wireline logs, gas chromatography data, sidewall cores and the integration of Lancaster pressure and fluid data. The revised OWC (1,678m TVDSS) can be correlated with the Company's previously held high case OWC from the 205/21a-4 well (drilled in 2009). Consequently, the Company believes that the revised 205/21a-7 OWC can be treated as a flat OWC for the Lancaster field. As such, the Company believes that its previous management resource guidance for the Lancaster field being in excess of 300 million barrels is conservative; and that the forthcoming CPR on the Lancaster field will result in a material uplift in Contingent Resources as well as the anticipated reserves associated with the planned early production system. The CPR is being prepared based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource Management System.

Hurricane previously reported a flow rate of at least 14,500 STB/day in the Lancaster 205/21a-7Z well which has now been refined to a maximum stable rate of 15,375 STB/day using an ESP, following third party interpretation of the flow meter data.

The ODT in the Lincoln discovery of 2,258m TVDSS demonstrates that it is a separate hydrocarbon accumulation to Lancaster, with the Lancaster field and Lincoln discovery being separated by the Brynhild Fault Zone. The separation of Lancaster from Lincoln has no impact on the Company's resource estimation for Lancaster. Furthermore, the ODT at Lincoln has provided the Company with sufficient evidence to believe that the undrilled Warwick prospect is most likely part of a large basement feature comprising both Lincoln and Warwick. Should these interpretations be confirmed through further drilling and testing it is anticipated that a Lincoln/Warwick accumulation will be assigned a separate field status to Lancaster.

The Company's revised interpretation of the 2016 Lancaster 7 and 7Z wells will contribute to the data currently being evaluated by RPS Group for its CPR on the Lancaster field. The Lancaster CPR is planned to be completed in Q1 2017 and is the first stage in a re-evaluation of Hurricane's assets.

A full resource evaluation will be made available after the data from the Lincoln Well and the ongoing Halifax Well operations have been interpreted and incorporated into Hurricane's regional understanding of the basement play.

Dr Robert Trice, Chief Executive of Hurricane, said:

"The updated data from the Lancaster 7 and 7Z wells reinforce our belief that the Lancaster field is substantial. The Lancaster CPR due at the end of Q1 2017 will quantify the resources ahead of FID for the Early Production System due at the end of H1 2017.

We are delighted by the result of the Lincoln Well and that the Brynhild fault separates the Lincoln/Warwick single accumulation from Lancaster and Halifax.

We now await the results of the Halifax Well which is designed to evaluate our exploration model which describes Lancaster and Halifax as a single hydrocarbon accumulation."

[Haoma]

Hurricane are a delight to watch, with a performance almost like Soco and Encore rolled into one. There is a significant amount of data online, through Dr R. Trice, and that is what got me interested in the company two years ago. No doubt other PIs got involved in the same way. I feel in safe hands. On other BBs there are plenty of people 'analysing' every word of every announcement, today included. Fairly quiet here. Even JohnnyT is turning very positive over on the other side.

Roll on Halifax (bigger and heavier than the Lancaster!).

[Carcosa]

All this news keeps the band of merry shareholders happy... for a few days anyway because most band wagon investors have the memory of the proverbial goldfish...

Until some corporate activity occurs then the share price is unlikely to go anywhere in a meaningful sense

Todays RNS is the company's viewpoint and that is riddled with risk; what if they are 'wrong'?

For sure I see the risk long term with HUR to be relatively low but a 10% sell off can quite easily occur if sentiment changes or indeed if the POO declines substantially.

I certainly believe the HUR 'story' but several technical challenges have to be met first. For those investors with a 3-5 year horizon I am confident the outcome will be positive. Those with a 3-6 month investment horizon might be disappointed

Carcosa
(written whilst drunk in KL)

[PeterGray]

I wouldn't be surprised to see action this year. Whatever the result from Halifax, and without a Warwick drill there is clearly a lot of oil in the basement there. Enough to make majors think about it.

Certainly, it's basement so there's going to be a big discount until there is a lot of production history, data on recovery rates etc. But, if you are a large oil company interested in 500mbbls or so of likely recoverables (and possibly significantly more), do you let HUR scrabble around for funding for an EPS, and put together some production history which may well lead to a big drop in the discount, or do you make what might in many terms be seen as a cheap offer this year (but which could still be comfortably enough above the current price to get it agreed)?

I'm inclined to think the latter. If Halifax disappoints then it's perhaps not so clear cut, but even without it there's looking to be a lot of oil, and some parts of the reservoir, at least, have produced well.

Take out of the company (or the possibly the GLA) for £1-1.50 seems quite possible to me. Will cause ructions from those on ADVFN who won't want to sell for less than £10, but they don't control the company!

Peter

[Haoma]

or do you make what might in many terms be seen as a cheap offer this year

That is something that may very well happen - Ithica Energy style - and if Halifax comes in that may be the end result within weeks

Before Encore were pounced on by PMO they were planning to float off XEO, their exploration arm. That never happened in the end. Hurricane might attempt something similar, except that their technical team would probably be absorbed as part of any deal.

I wonder what Dr Trice is hoping for?

[MrX001]

They may not sell out completely, there are several fields so could be sold in any combination or all. Sure to be something that works.:0)

[dspp]

In considering field-by-field farm-outs etc they'll need to do sufficient appraisal to be sure what the field boundaries are, which faults are sealing, etc, or else there will be quite a mess later. Given the hypothesised area extent of these prospects/fields that could take some time (and several more exploration & appraisal wells, plus at least one EPS) and that will surely be a factor in pondering the different funding options.
regards, dspp

[Beerpig]

I have some of these.
Looking at other MB's this next week could be interesting.
We'll see.

[dspp]

Likewise - watching out for an RNS.

(imho There some posters on the other boards who make more noise than sense. Not Geng of course.)

regards, dspp

[dspp]

Hurricane Energy has asked the UK Government for permission to build an early production system (EPS) on its landmark Lancaster field in the North Sea. Lancaster, which lies about 95kilometres west of the Shetland Islands, will consist of two wells connected to an FPSO via a set of production flowlines. Hurricane has said it is targeting first oil from Lancaster in 2019.

(etc, here: https://www.energyvoice.com/oilandgas/n ... on-system/)

[dspp]

Oh, and as a by-the-way it is being reported that HUR have been in USA talking to Chevron et al re farm-in. The mention of Chevron reminded me that I know from personal experience that some of their senior G&G folk are no strangers to igneous rock as a reservoir material. So Chevron is certainly a open-minded candidate in that respect.

regards, dspp

[dspp]

The HUR Lancaster EPS is here https://www.hurricaneenergy.com/environ ... -statement. (and click on the HUR logo lower right to download the pdf)

[Rhomboid1]

I've read through all 308 pages of that document and it is totally fascinating as an insight into what it takes to get a major offshore project up and running. 30k bopd ramping up from Q4 next year sounds enticing too ..

[thebuffoon]

$18 profit per barrel at $50 oil equals something just under $200m a year profit just for the Lancaster EPS.

We're not wildly overpriced are we.

Buffy

[thebuffoon]

Last week HUR split the assets into several limited companies, as indicated it would in an RNS in November 2015.

Interestingly we now have Hurricane GLA Ltd and Hurricane GWA Ltd.

Buffy

[dspp]

For those interested the anchor handlers appear to have been booked, so the rig will likely be moving next week. This suggests an RNS may be imminent. They were seeking a DST and an OWC/ODT. I wonder what they got ?

All credit to LSE chat http://www.lse.co.uk/ShareChat.asp?ShareTicker=HUR especially lonestag.

regards, dspp

[Carcosa]

The folks from LSE forum have found some interesting news:

Go here: https://itportal.decc.gov.uk/edufox5live/fox/edu/ and filter for "205/23- 3A" under "Wellbore registration number"
Click on the "View Wellbore" link

Note the phrase "Abandoned Phase 2"

From this document: https://itportal.decc.gov.uk/web_files/gis/Documents/OGA_WellboreStandard_2016_005_7.pdf section 2.2.19 describes the phrase as "All intermediate zones with flow potential have been permanently isolated"

Thus generating some excitement as the implication is that oil flowed. The depth data is also consistent with Hurricane's previous well depths.

With this activity occuring two days ago and today's price action I would expect an RNS to be immanent.

Carcosa