Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Drilling is on. Lookup Shirel Sanders on Facebook. He's the drilling manager of Pacific Drilling and he posted on FB that he's flying from France to Ivory Coast as of yesterday. Yahoo!
That had to of been the short term bridge financing that Ray Leonard was talking about. Enough to pay the bills for the month. Still wondering if they will be able to do a secondary offering to raise enough to cover their portion.
With the confirmation of Sapetro as a partner does this mean that the 50/50 working interest split with another company will no longer happen? I will still like to see HDY bring that partner in and have more costs covered and have less of a capital raise. HDY 40 % ? 35% and Sapetro 20% would be ideal
Just listened to the CC again. I encourage everyone to listen to minutes 11-14. It sounds like Sapetro was only on board if there was another JV partner that would come on board as well. Also, it sounds like they will be able to secure financing for the well ONLY if there is a farm-in (around minute 14).
In a nutshell:
1. Spud date has been postponed to early May
2. Currently working on bridge financing for the short term (Ray said he is putting up some of his personal money)
3. Still no partners, no comments on the deal with Sapetro (sounds like it fell through)
4. In negotiations with a partner for a 50/50 split interest
Sent an email to info@hyperdynamics.com and received a reply right back directly from Ray Leonard. "I am in Guinea". Nothing else was said. Your guys thoughts?
I think at this point it's pretty obvious HDYN is going to spud the well solo. We are roughly 6 weeks away from projected spud and still no partners (sounds like the deal with Sapetro fell through). I believe we will be getting a announcement of dilution at the shareholders meeting. If that's the case I would sell now. If the cost of the well is 50 million HDYN would have to issue 30 million shares @ 2 = $60 million (to also cover overhead and any possible overuns). That's 150% dilution.....
Starting to get real concerned here. We were getting updates left and right and then all of a sudden everything stopped. 6 weeks away from spudding an offshore ultra deep water well and no idea how it's going to be paid for.. I bought in @ 1.20 so I might just take profits here. HDYN has dropped bad news on us before so I wouldn't be surprised of more of the same.
Seems as if everything was moving along smoothly with operations but financing has come to a screeching halt. Ever since the LOI we haven't heard anything and we are >2 months away from drilling... I wonder if there will be bad news such as being unable to fund this well.
Kinda hard to believe that we have all these contracts signed and are 2 months away from drilling yet have no idea how we are gonna pay for the well... never seen this before
Up until now I've thought that SAPETRO would likely be the only partner. My thinking is if that were the case, then HDYN would have done a share offering shortly after the announcement when the stock was hovering around $2.50 and not now when it's sliding to around 2.10. If sure we will hear of another announcement and within a few days after that possibly a share offering. JMO.
Great confirmation from yesterday's press release that operations are moving forward. I think the price will setttle around $2 until their is a farm out announcement and or dilution. $2 @ 22 million shares = $44 market cap. If they issue 30 million more shares then $2 @ 52 million shares $104 market cap. For that reason I can't see the price being any greater than $3 prior to drilling because that would give HDYN a market cap of $150 million especially in this oil price environment.
Honestly I think the Pacific Bora is a done deal. If you look at HDYN website they have pictures of it up already and Pacific Drilling mentioned the contract with HDYN on their recent quarterly earnings call. Expect news of a partner very soon and or raising funds.
If we don't hear anything by March 1st I think it's time to think about selling. In the lawsuit HDYN has March 15th as a hard deadline to resume petroleum operations in order to spud the well by September or risk losing the concession.
No comments from my last post, has everyone given up on this? I wonder when we will hear/ get any updates from arbitration. Sad that it has come down to this when everything started going our way DOJ/SEC closure and eradication of Ebola
Most important part from the 10-Q today: Our ability to secure any of the relief sought is uncertain and even if relief is secured, it may be awarded too late to allow us to commence drilling operations in the time remaining before the Concession ends.
If petroleum operations resume and Dana refuses to pay its share of the well costs, they would be in default of the JOA and we would be responsible for our proportionate share of their interest. We are unable to predict whether we would be able to secure the necessary financing to cover any such additional proportionate share of Dana’s interest.
So are we in arbitration right now? Slightly confused by these last couple of days. If so I wonder how long it will take.
Tullow wrote off $54 million related to Guinea in 2015 which means they do not intend to explore any further and reallocate funds to development projects.... I'm hate to say this but Tullow is done with Guinea...
Tullow annual report comes out tomorrow. Curious as to how/if Guinea will be mentioned in anyway. In the past it was always mentioned as "ongoing discussions and the status of the Ebola situation in the country". Hope we get something updated at least.
As in my previous post I think that's it's a possibility that it was dropped because of jurisdiction and they will need to file elsewhere. My second thought is some wacky speculation. Maybe HDY told Tullow and Dana to submit a letter of dismissal as a formal process and HDY would drop the suit. After that all the lawyers and management would get together in Houston (yesterday) and hammer out some deal such as signing the PSC amendment and resuming petroleum operations. A little absurd I know.
I'm pretty sure the suit was dropped because it was filed in the wrong jurisdiction. Only makes sense considering where Tullow is incorporated. We will need to refile in England so we just wasted a couple weeks. No agreement has been reached between the partners and this will only continue to drag on.
Found this on the SEC website: Section 102. Rule 101: Definitions
Question 102.01
Question: If an issuer wants to make public disclosure of material nonpublic information under Regulation FD by means of a conference call, what information must the issuer provide in the notice and how far in advance should notice be given?
Answer: An adequate advance notice under Regulation FD must include the date, time, subject matter and call-in information for the conference call. Issuers also should consider the following non-exclusive factors in determining what constitutes adequate advance notice of a conference call:
Timing: Public notice should be provided a reasonable period of time ahead of the conference call. For example, for a quarterly earnings announcement that the issuer makes on a regular basis, notice of several days would be reasonable. We recognize, however, that the period of notice may be shorter when unexpected events occur and the information is critical or time sensitive.
Availability: If a transcript or re-play of the conference call will be available after it has occurred, for instance via the issuer's website, we encourage issuers to indicate in the notice how, and for how long, such a record will be available to the public. [Aug. 14, 2009]
All of the things listed in the answer was provided by HDY's press release on Friday. If HDY Tullow and Dana have resolved their differences and have resumed petroleum operations this could be released in the call. Jmho.
I wouldn't buy in just yet. Geopolitical risk has ballooned in Guinea and civil unrest on a large scale could be a impediment to drilling. Many of us have heard about the political violence in Guinea running up to the election. Although the election in itself was peaceful, the opposition leaders are instigating social unrest:
http://abcnews.go.com/International/wireStory/guinea-opposition-alleges-fraud-widespread-vote-34414757
This last line really stood out to me on slide 16:
"We continue to monitor the Ebola outbreak and its potential impact on operations. Operator now initiating approval processes as precursor to re-starting operations as Ebola epidemic nearly eradicated and is at stage 3 in prevention."
This is great news but we don't know how long these "approval processes" will take. What if they take too long just as the "discussions with the government of Guinea on resuming petroleum operations are ongoing" that we have heard from Tullow and Hyperdynamics over and over again and still no resumption. This is still great news though.
Until we get a press release that the consortium has resumed petroleum operations, there are (2) things that I'm most concerned about:
1. SEC judgment. It's been (4) months since we have received a declination letter from the DOJ. Why hasn't the SEC followed? Any adverse ruling would hurt our already strained liquidity position, not too worried about Tullow not proceeding to drill.
2. Tullow's stock price. Setting 52 week lows everyday in a weak oil environment and many analysts want them to either make a equity offering or exit east Africa. If they exit why would they proceed to drill for a offshore project that is significantly more costly and risky? They have a contract blah blah blah HDY won't have the money by then to file a lawsuit.
The way I see it is that we are at he mercy of Tullow.
Jmho
I think we don't. Tullow's share price keeps hitting a new 52 week low everyday and they are seriously bleeding. They are scrambling to cut costs in anyway possible. With the amount of debt that they have and tumbling oil prices it may not be in their best interest. Unfortunate situation since we were cleared by the DOJ and neighboring Sierra Leone has been declared Ebola free as of yesterday and Guinea has only seen 7 cases in 3 weeks.
http://apps.who.int/ebola/current-situation/ebola-situation-report-12-august-2015
(3) cases of Ebola in guinea in the last 2 weeks. Is this good enough Tullow?
Your right about that, thanks for clarifying. Hopefully we get some sort of news in the meantime but I wouldn't hold my breath. DOJ has been resolved, only 1 case of Ebola last week and hopefully a positive outcome from the SEC investigation. What more does Tullow need in order to drill?
Looking back at the last 2 10q's, it was supposed to be released today and wasn't. They will probably release it tomorrow after close. Cant be too good.
I listened to the Q&A and indeed this question was asked at the 1 hour 30 minute mark. I don't like how Angus Mcross said this is a "solid option we are considering". Shouldn't it be mandatory as they have a signed contract? I might be looking to much into it but I would like him to have more of a firm stance on it. Anyway, February 2016 is still a unofficial deadline to have a resumption of petroleum operations as they need 6 months of lead time for the drill bit to hit the ground as stated by Ray. Time is ticking.
No mention of Guinea anywhere in Tullow's half year results presentation. More importantly, look at slide 24 where Tullow lists deep water exploration as off limits going forward. This well is not going to be drilled whether there is a contract to do so or not.
That's a good breakdown of the current burn rate. Having more cash to last longer will not matter if the drill bit does not hit the ground by September 2016 as they will lose the license. Unlikely the govt of Guinea would give a tiny cashless company like HDY a new lease as they would most likely look for oil giants.
It's still roughly $1 million a month. By looking at March 31st they had $20 mil in cash after subtracting current liabilities. Should now have roughly $17 million. So I guess that would allow them to survive till maybe October/ November. It won't matter if they don't drill by September
To be honest I'm more worried about the oil price collapse along with Tullows share price over Ebola. This will make Tullow even less inclined to drill and use Ebola as an excuse. Some say they have a contractual obligation and HDY should sue if they don't. Well, with what money? At the current burn rate we are going to run out of money by August/September. Nobody will invest in a secondary offering or a farm down if there is no drill date in sight and the PSC expiring in September. If nothing is announced by January/ February giving 6 months lead time for drilling HDY is essentially done. jmo.
Not a single word on Guinea in the operational update. Have a feeling they are going to let the license expire and not drilll.
Wednesday July 1st is Tullows operational update. Should be a good indicator on where they stand in terms of operations in Guinea. Would not be surprised if they don't mention Fatala or Guinea as they have skipped out in doing so in recent presentations.
Roughly 15-20 people in the room, Paolo Amoruso was there as well. What I got out of it is that Ebola seems to be the main impediment. Tullow employees and contractors will have to be comfortable to go to Guinea and that may not happen until cases are at 0 according to Ray. Prospectivy has increased which is good to hear.
Presentation pushed back to 10:30
I will be attending the conference for the morning session on Wednesday and will let you all know what I experience. First time I will see Ray in person.
Mike
My guess is that Ray is presenting because obviously HDY needs to find investors to raise cash and it will most likely have to be through a farm out. Since they have been cleared by the DOJ it will give more confidence to investors with respect to their investments. I would like to see them farm down %17 and hold a 20% stake in the concession.