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Hurricane Energy (HUR)

dspp
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Re: Hurricane Energy (HUR)

#296491

Postby dspp » April 1st, 2020, 12:10 pm

Spark Exploration slideset for Bader prospects etc further up Rona Ridge
https://sparkexploration.com/wp-content ... ration.pdf

OGA DATA
Seems delayed

OFFTAKE
One recently, Stena Natalita coming in soon, I will update when OGA released

CMD
Not impressed that they are sitting on their hands. No reason to not do a webcast by now. Shareholders are owners.

regards, dspp

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Re: Hurricane Energy (HUR)

#296888

Postby dspp » April 2nd, 2020, 10:27 am

OGA data now out. As we knew watercut appears to be rate dependent ... except that HUR say it is not ...

Come on HUR, don't be coy, learn how to do a webcast, it is not that hard. It is just like the morning ops call but with analysts who occasionally talk back.

Image
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regards, dspp

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Re: Hurricane Energy (HUR)

#296935

Postby FabianBjornseth » April 2nd, 2020, 11:44 am

dspp wrote:OGA data now out. As we knew watercut appears to be rate dependent ... except that HUR say it is not ...


From the HUR RNS 29th January 2020:

The Lancaster 6 Well flowed at an average rate of approximately 12,500 barrels of oil per day from the start of individual well flow period on 20 November 2019 until the latest (eighth) lifting on 22 January 2020.

Hurricane intends to complete its individual well flow test on the 6 Well before the end of this month and thereafter intends to flow both the 6 Well and the 7Z Well at a combined rate of approximately 20,000 barrels of oil per day.


From this statement, the December and January data likely reflects the individual performance of the -6 well, not corrected for uptime. The average rate appears stable. The water cut is slowly increasing, although not quite as fast as it did for the -7Z well last year. Details on this is overdue.

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Re: Hurricane Energy (HUR)

#296963

Postby dspp » April 2nd, 2020, 12:39 pm

FabianBjornseth wrote:
dspp wrote:OGA data now out. As we knew watercut appears to be rate dependent ... except that HUR say it is not ...


From the HUR RNS 29th January 2020:

The Lancaster 6 Well flowed at an average rate of approximately 12,500 barrels of oil per day from the start of individual well flow period on 20 November 2019 until the latest (eighth) lifting on 22 January 2020.

Hurricane intends to complete its individual well flow test on the 6 Well before the end of this month and thereafter intends to flow both the 6 Well and the 7Z Well at a combined rate of approximately 20,000 barrels of oil per day.


From this statement, the December and January data likely reflects the individual performance of the -6 well, not corrected for uptime. The average rate appears stable. The water cut is slowly increasing, although not quite as fast as it did for the -7Z well last year. Details on this is overdue.


Yes, it suggests the -6 well is perhaps also cutting water ........ :(

regards, dspp

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Re: Hurricane Energy (HUR)

#297036

Postby PeterGray » April 2nd, 2020, 2:58 pm

OGA data now out. As we knew watercut appears to be rate dependent ... except that HUR say it is not .

You may well be right, dspp, but I really don't think you can say that with any real confidence from the data so far.

Firstly, just taking the crude scatter (which by the way is missing the last, January, point), the slope of the correlation is pretty much flat, though given the scatter that's not far off a useless conclusion.

Secondly, of course we know it's not that simple. There are two wells with different apparent water cuts being flowed at different rates at different times, and we only have a very rough indication of which was flowing when, and almost none of the relative proprotions when both are. I'd say it's imnpossible to tell with what we know. And we have to accept what we are being told by people have vastly more data, and direct control on how it's produced.

I entirely agree that they really need to get some sort of presentation put together, perhaps a Zoom style Q&A for CM people, asap. Their reasons for cancelling the CMD were good ones, but the longer we wait for a clear presentation of the data and its interpretatiion, the more concern there is bound to be.

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Re: Hurricane Energy (HUR)

#297182

Postby dspp » April 2nd, 2020, 11:32 pm

PeterGray wrote:OGA data now out. As we knew watercut appears to be rate dependent ... except that HUR say it is not .

You may well be right, dspp, but I really don't think you can say that with any real confidence from the data so far.

Firstly, just taking the crude scatter (which by the way is missing the last, January, point), the slope of the correlation is pretty much flat, though given the scatter that's not far off a useless conclusion.

Secondly, of course we know it's not that simple. There are two wells with different apparent water cuts being flowed at different rates at different times, and we only have a very rough indication of which was flowing when, and almost none of the relative proprotions when both are. I'd say it's imnpossible to tell with what we know. And we have to accept what we are being told by people have vastly more data, and direct control on how it's produced.

I entirely agree that they really need to get some sort of presentation put together, perhaps a Zoom style Q&A for CM people, asap. Their reasons for cancelling the CMD were good ones, but the longer we wait for a clear presentation of the data and its interpretatiion, the more concern there is bound to be.


PG,
The evidence so far in the public domain tends towards rate dependency, despite HUR's protestations otherwise. If they are now managing the wells to get below critical rate that rather reinforces the point (though it would have the side effect of flattening the aggregate correlation). Yes, of course it is aggregate, but as FB points out the -6 well may also be cutting water now in which case an explanation is even more relevant. They need to 'fess up or risk impairing their reputational value in a fairly permanent way. Or they need to prove otherwise, and en passant explain why they were backwards in coming forwards previously. Investors are not schoolchildren to take it on teacher's say so that the earth is flat (or round). All that coyness re data and conclusions is in itself a shareholder matter in the modern world. As shareholders we are all right to be concerned, for many very valid reasons.
regards,
dspp

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Re: Hurricane Energy (HUR)

#300782

Postby dspp » April 15th, 2020, 9:09 am

Image

Watercut front and centre, now averaging 17% over both wells on a quarterly basis. If however one takes the stated daily production numbers when flowing at the 100% uptime rate of 20k bopd + 6kbwpd, then this gives a most recent 2-well average of 23%. Moreover if you plug 0% in for the -6 well and assume all water is from the -7z well, it gives 43% watercut in the -7z well at the 8kbopd rate. Not a number that HUR wanted to set out in public with a worked calculation.

For the avoidance of doubt, for a well to go from essentially dry to 43% watercut in the space of several months is not desirable.

[edit @ 09:36: ] Also a possible warning sign is HUR's use of the term "approximately 6,000 barrels of water per day, predominantly from the 205/21a-7Z well." which is worrying. Does this mean water is beginning to be cut in the -6 well. If so, then fast forwards 9-months and might there be 40% watercut in the -6 well, and more like 80% in the -7z well. It would be good if HUR were to be very explicit about the amount of water in the -6 well if they wish to allay that concern.

The overall productivity of the entire system is good. No ESPs and 50% choke is good, but still no pressure data so we don't know how fast that is declining (i.e. what have they done with the chokes in the last 6-9 months).

I appreciate that HUR are sitting on better data than we have sight on, but that is a shedload of water. If it is indeed perched, it is a very large perched puddle. Until a better diagram is on the table it seems rather akin to what I sketched out. I'll be very keen to see HUR's diagram.

CMD webcast will be interesting.

regards,
dspp


================
https://ir.q4europe.com/Solutions/Hurri ... d=14665765

RNS Number : 6522J Hurricane Energy PLC 15 April 2020

Operational Update: Q1 2020 Production

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, provides an update on production from the Lancaster Early Production System ("Lancaster EPS").

Lancaster EPS Quarterly Production Update

Q4 2019

Q1 2020

Oil Production

Million barrels

1.1

1.4

Oil Rate

Barrels of oil per day (bopd)

11,800

14,900

Average Water Cut

% total fluids

10%

17%

Hurricane completed a prolonged individual flow test on the 205/21a-6 well at the end of January, then reverted to producing from both wells at progressively increasing rates in February. In March, the combined production rate was increased to approximately 20,000 bopd comprising 12,000 bopd from the 205/21a-6 well and 8,000 bopd from the 205/21a-7Z well, before downtime. This recent oil production rate has been associated with approximately 6,000 barrels of water per day, predominantly from the 205/21a-7Z well. The overall water cut for the quarter was approximately 17%. This level of water production is well within the capacity of the Aoka Mizu FPSO's installed water handling facilities.

These production rates have been achieved without the use of electrical submersible pumps (ESPs) and with the wells choked back to less than 50%, confirming the extraordinary productivity of these wells and the reservoir.

There were three cargo liftings from the Aoka Mizu FPSO during the quarter. On 3 April 2020, the eleventh successful crude lifting took place taking total oil sales from the Lancaster EPS to 4.4 million barrels of oil.

Capital Markets Day 2020


On 24 March 2020, the Company announced its Capital Markets Day had been postponed owing to restrictions on movement implemented in the UK in response to COVID-19. The Capital Markets Day presentation is now planned to take place on 27 April 2020, via webcast. A link to view the presentation will be provided on the Company's website: http://www.hurricaneenergy.com/investors.

Dr Robert Trice, Chief Executive of Hurricane, commented:

"We are very pleased with the performance of the Lancaster EPS in Q1 2020. As at the end of March, the EPS has safely produced approximately 4.4 million barrels of oil since starting up last year. Despite the significant scale of these produced oil volumes, the Lancaster EPS is still very much in a data gathering phase, as we continue to better our understanding of this unique basement reservoir. Further testing at the current rates will be required before any trends can be confirmed and conclusions made about the long-term behaviour of the reservoir. Once trends have been established, it is anticipated that alternative combinations of well rates may be tested in order to establish the optimum long-term production configuration for the two wells.

"Whilst water production rates have materially increased since start-up of the Lancaster EPS, Hurricane's interpretation of water behaviour data has continued to support the Company's perched water model. Although it is not possible to predict future changes in water cut at present, the combination of high productivity wells, potential for currently unused production support from ESPs, and water handling capacity of the Aoka Mizu FPSO give the Company sufficient confidence to maintain its forward guidance at 18,000 bopd, net of 10% assumed downtime."

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Re: Hurricane Energy (HUR)

#300805

Postby Tinderboy » April 15th, 2020, 10:26 am

Many large slices of Humble Pie coming your way DSPP.

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Re: Hurricane Energy (HUR)

#300993

Postby JonnyT » April 16th, 2020, 6:42 am

Reminds me of the dead parrot sketch.

Perched or is it dead?

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Re: Hurricane Energy (HUR)

#301094

Postby feste » April 16th, 2020, 1:32 pm

Hi all,

I 'get' the resting parrot allusion, but not the underlying : when the CEO/chief geologist comments .." Hurricane's interpretation of water behaviour data has continued to support the Company's perched water model. …"is he not at risk of misleading the market - big time - if any conflicting evidence has emerged that even hinted at (a) another perched water model or (b) that water may be coming from the aquifer ?

Trice has not responded like a Swiss banker (in the narrowest possible way to a question), he has made a statement that leaves him pretty much on the hook, it seems to me.

Grateful for any informed comment.

TIA and ATB

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Re: Hurricane Energy (HUR)

#301105

Postby dspp » April 16th, 2020, 2:08 pm

feste wrote:Hi all,

I 'get' the resting parrot allusion, but not the underlying : when the CEO/chief geologist comments .." Hurricane's interpretation of water behaviour data has continued to support the Company's perched water model. …"is he not at risk of misleading the market - big time - if any conflicting evidence has emerged that even hinted at (a) another perched water model or (b) that water may be coming from the aquifer ?

Trice has not responded like a Swiss banker (in the narrowest possible way to a question), he has made a statement that leaves him pretty much on the hook, it seems to me.

Grateful for any informed comment.

TIA and ATB


feste,
I'm afraid we (or at least I) can't make much of an informed comment that we haven't already said. It would be very nice to wake up and discover all this water had gone away and was a bad dream. Until then I am afraid that many folk misunderstand that scribbled drawing I did - they seem to think that is a worst case sketch I did. Unfortunately that was the best case sketch I could come up with that simultaneously explains the observed data, and is aligned with HUR's restated view that this is perched water rather than aquifer water. Many other explanations could be far worse. I will be very interested to see HUR's drawing that explains things, together with the data to support that.
regards,
dspp

Image

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Re: Hurricane Energy (HUR)

#301304

Postby dspp » April 17th, 2020, 11:52 am

ReallyVeryFoolish wrote:RNS this morning to notify that the company annual report is avilable.

RVF.

https://www.hurricaneenergy.com/investo ... nd-reports


Reading through that it seems LinWar oil is consistently different from Lancaster,

"From the perspective of fluids, the Warwick West well encountered oil of 44 – 45° API whereas at Lincoln the oil is 41 – 42° API. Gas oil ratios (GORs) are also different from Lancaster with Warwick GORs estimated at 730 – 740 scf/bbl and Lincoln at 630 – 650 scf/bbl. The Lincoln and Warwick oils show a similar oil ‘fingerprint’ and consequently it is not possible to determine whether the variation in API and GOR is due to reservoir compartmentalisation or another mechanism."

and the reservoir quality is also markedly different,

"While the bulk of faults identified pre-drill were confirmed, providing confidence in the seismic interpretation, drilling data has confirmed that the volume of fault zones associated with seismically identified faults are approximately 50% lower than experienced in both the Lancaster field and the 2016 Lincoln discovery well. This reduction in fault zone properties will need to be accommodated in future resource evaluation. Other components of resource range estimates
such as fracture distribution, fracture characteristics and porosity are within expected ranges."


and really they don't say a great deal about the OWC location(s). Overall I get the feeling that LinWar development is very firmly on the back burner. Whilst they say they must P&A the Lincoln Crestal well.

"Well to be plugged and abandoned by 30 September 2020, since the GWA partners have been unable to obtain the consents required to tie the well back to the Aoka Mizu FPSO"

they maybe also leave the door ajar to tie-ing it back, as opposed to drilling another for tie-back, and they don't give anything away as to what the approvals barriers are,

"Working with partner, Spirit Energy, on options with the objective of securing regulatory approval for a field development area »» Potential single Lincoln well tie back to the Aoka Mizu FPSO"

Throughout the whole report I get the sense that they are incredibly aware of the Lancaster watercut issue, and the bond capital payment issue. It seems to me they will go down least-risk pathways until they can be sure of clearing those hurdles. So minimum regulatory committment capex, and just sit tight on capex until they can be sure that - one way or another - they have the funds irrevocably available to repay the bonds. And in the meantime gather data and assess things. That indicates that WOSPs and 40k debottleneck are not yet sanctioned.

Overall it seems to me that the board is no longer token.

regards, dspp

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Re: Hurricane Energy (HUR)

#301355

Postby Tinderboy » April 17th, 2020, 2:50 pm

Sadly its just another YES! We have no bananas RNS dressed up with some cheap jewellery, they need to stick with the Lancaster field to regain the markets confidence, if its any consolation the Fuhrer and his generals over on the LSE HUR site are firmly locked in their bunker.... ;) Its a marvellous watch at the moment...

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Re: Hurricane Energy (HUR)

#301516

Postby thehaggistrap » April 18th, 2020, 11:20 am

> Myself, I will sit tight. If I can ever get my money back or near to it, I will consider myself lucky.

We can all hypothesis on reservoir performance.
However what is currently hurting the share price here is price of oil.
If that bounces back then so will the share price.

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Re: Hurricane Energy (HUR)

#302313

Postby FabianBjornseth » April 21st, 2020, 7:21 pm

ReallyVeryFoolish wrote:Thank goodness HUR has a relatively strong balance sheet or survival of the company could be in doubt.


I'm afraid it is indeed in doubt. The going concern comments in the 2019 Full Year Results attests to that, and the current share price is a reflection of that reality. At the prices that oil producers are currently able to realize, Hurricane is losing money, not fattening up the Piggy Bank as required to meet the bond maturation.

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Re: Hurricane Energy (HUR)

#302376

Postby thehaggistrap » April 22nd, 2020, 8:06 am

^ right now no one is making money on oil.

the low oil price can't last forever unless we remain permanently in lock-down (in which case the planet has *major* economic issues).
low oil price is clearly the primary concern here : but it can't last forever. If it does the cure for Corona will become worse than the virus itself.

sit tight - for a small oil company HUR are reasonable places to ride the storm.
no debt, cash in bank and low break-even.

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Re: Hurricane Energy (HUR)

#302402

Postby PeterGray » April 22nd, 2020, 9:40 am

I have seen it said that HUR can manage for a year at $20 a barrel Brent price and cover it's liabilities.

I don't think there's much doubt HUR can survive 2020, and even 2021 at current prices, provided there aren't lengthy lockdowns of production. And the OGA is very likely to show some flexibility on commitment capex, so they have some wriggle room there.

The big issue is 2022 and the convert repayment. If the PoO rises back to to anywhere near previous levels by the end of the year then they should be able to negotiate the convert repayment, and if they are clearly profitable, as expected by then refinancing is going to be an option - but it's likely to involve some dilution. But there are clearly risks if the PoO stays low for a long time, the Covid crisis is prlogned, possibly affecting production .....

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Re: Hurricane Energy (HUR)

#302415

Postby dspp » April 22nd, 2020, 10:02 am

PeterGray wrote: I have seen it said that HUR can manage for a year at $20 a barrel Brent price and cover it's liabilities.

I don't think there's much doubt HUR can survive 2020, and even 2021 at current prices, provided there aren't lengthy lockdowns of production. .....


.... and provided that watercut does not increase to a level where it jeopardises oil production. The watercut that has increased from 0% to 40% or so in the space of several months in one well ........

(gulp)

regards, dspp

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Re: Hurricane Energy (HUR)

#302469

Postby dealtn » April 22nd, 2020, 12:22 pm

thehaggistrap wrote:
no debt...


Er, have you actually checked?

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Re: Hurricane Energy (HUR)

#302478

Postby 88V8 » April 22nd, 2020, 12:45 pm

They have a 7.5% convertible bond of $230mio at issue, maturing 2022.

Might be of interest. Haven't looked into seniority or pricing.

V8


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