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This is probably the only good piece of news that we have heard over the last year or so, if not more. I was a little surprised by the outcome as its hard to be optimistic with HDY these days. The damage has been done, market cap, drain on cash, employees leaving, and no well drilled. Conditions may be unfavorable for Tullow, but they have stated the main reason they arent drilling is the DOJ investigation into HDY along with the Ebola situation which is far more under control now. Sure they may not want to drill but they have a contractual obligation to do so. Will they follow through?
Not quite sure where the 22 month number is coming from. HDY burned $5 million last quarter if you look at the difference in cash from this quarter and last quarter and subtract the current liabilities they have accrued but not payed off. This is only a slight improvement from the previous burn rate of 6,7, and even $8 million a quarter. At the current burn rate they have 12-14 months left. Raising cash in the equity markets isn't an option right now with the depressed share price so farming out is a must. It will be difficult during this current oil environment.
Per the latest SEC filing, did Blackrock add shares? As of 9/30 they owned 1,844,576 shares but now they own 2,540,810 an increase of nearly 700k. Am I looking at this correctly? Would like to get some thoughts.
I'm not sure why everyone thinks that we are waiting on Tullow to drill this well. From the 10-Q: "Diligent efforts are being made to satisfy the conditions to resuming petroleum operations which include clarification from the government of Guinea that the investigations of Hyperdynamics will not adversely affect operations under the PSC." We are waiting on Guinea and they have been moving at a snails pace.
New history of HDY low at .85 cents (.106 cents presplit) and a market cap of $18.5 million. Still 3 more week of tax loss selling and no drill date in sight. This is truly unbelievable.
The deal with Tullow was 40% for $27 million and a carry up to $100 million on the first well. So with our 37% that's $37 million and lets not count the appraisal carry as that is a wildcard. So it was a $64 million dollar deal for 40% or $1.6 million per each %. If we could farm down 17% and get around $25 million after transaction costs that could keep us alive for another year and a half or so and we would still have 20% which is still substantial if there is a billion barrell find. Had to dumb this down for clarity.
10-Q and 8-K released today. Crickets... anyone?.. anyone out there?
http://online.wsj.com/articles/indias-ongc-videsh-has-been-in-deal-talks-with-uks-tullow-1415119910
Interesting.. wonder if this will have any effect on Guinea exploration.
The lower oil goes and the lower their share price goes down I feel they will be far less eager to drill even though it pretty evident they dont want too at all.
Yea and Tullow having a new 52 week low everday doesn't help either.
I was just about to post that. Things not looking very good....
I would encourage everyone to read the first 2 paragraphs that distiguish "subject" and "target" in a criminal investigation:
http://profs.lp.findlaw.com/collar/index.html
This is all so disastrous. Feelin sick to the stomach.
HDY rising.. ha I dont think so this is pretty much over. Anyway, are companies allowed to release material information in investor presentations like the one HDY has next week?
10K is out
10-K will be most likely be released Friday after-hours. Typical. Stay classy HDY.
Agreed. With the delcining share price it seems like smart money is selling before the 10-K release. Can't expect any good news from the 10-Q's or K's these days, only more neutral to bad news.
10-K coming out next week.
The rest of the institutions reported their holdings of HDY today as of 6/30/14. Institutional ownership has increased to 24.40%. This may have been a postiive sign to some today. I wouldn't buy though, wait till after the 10-K which should come out in a few weeks. HDY has dropped 10-15% after the release of every 10Q.
http://www.nasdaq.com/symbol/hdy/institutional-holdings
Mention of Guinea in the Tullow Conference Call Transcript:
Unidentified Analyst
Yes hello. Just like to ask what is the write-down which would include the exit of [inaudible] and Nigeria. And are there any comments you’d like to make regarding results of that campaign and possibly up to the north, the upcoming Fatala Guinea prospectivity.
Angus McCoss
Mark, I’ll answer the second part of the question and turn to Ian to go through the numbers with you. When I was explaining how our campaign approach is applied to exploration appraisal I referred to these retired campaigns, those are unsuccessful. So this venture falls into that category. So whilst we’re making discoveries we were finding oil in those wells. When we do the asset test on the commercial feasibility of taking those forward and developing them we decided that’s not something we want to focus on. So we retired that campaign.
I would emphasize that’s retiring the campaign means that we are letting those licenses flat. It doesn’t mean necessarily that our country exit and doesn’t necessarily mean a lack of interest in that Jubilee play in West Africa. It’s just that, that particular license that particular venture ran its course. As we move further north to Guinea, we have a large acreage position there and we have some large prospects principally Fatala and Sylli. And they are certainly Jubilee scale prospects they are higher risk with frontier exploration, but they do make it through our very selective screening based on what we have learned about what works and what doesn’t work in the West African transform margin play.
So the Guinea campaign is still very much alive and active and we intent to be drilling there within next the 12 months.
http://seekingalpha.com/article/2374795-tullow-oils-tuwlf-ceo-aidan-heavey-on-q2-2014-results-earnings-call-transcript?page=9&p=qanda&l=last
Hard to believe nobody said anything about the half year report from Tullow yesterday on this MB.
"3D seismic acquired, processed & interpreted over deep water turbiditic Fatala and Sylli prospects. Fatala is estimated to spud between late 2014 and mid 2015, with significant follow-up prospectivity identified. Once the current issues regarding the licence that were detailed in March 2014 have been resolved a more specific spud date will be confirmed."
slide 50.
Kasplat. HDY could tank at anytime. Remember the Force Majeure stunt? Yea.. who knows we might get something very unexpected like an adverse judgement with the DOJ investigation. Some might say thats unlikely, well wasnt the FM unlikely? We are sitting in the middle of a sea-saw. Good news could take it up or bad news straight down.
Looks like HDY is giving out stock options and bonuses from the 8-K today. Good way to increase the already substantial cash burn rate. Employees and lawyers will get rewarded but not shareholders. Tisk Tisk.
From the July 2nd Tullow operational update we should be given a spud date (if there will be one). One would have to think HDY would have a press release considering its a material event. Either way, expect the share price to sink if some ambiguous date in 2015 but it will probably jump if its somehow driled in 2014. Place your bets.
Doesn't mean that HDY won't lose their interest in the concession. We saw what happened to BSGR. Same thing could happen to HDY.
There still has not been any announcement regarding diligent efforts that the investigation will not affect Tullow. Remember it doesn't matter what the DOJ does its what Guinea does. If HDY is found guilty of a infraction then Guinea might pull the PSC from HDY, as stated in their last 10-Q- "loss or delay of the PSC". We have no idea when drilling might be. Could be a 4-5 months from now or 1 year. Alot of unknowns and risks. Might not be a good play yet.
Or selling because there could be bad news on the way. The longer the silence the more the potential for bad news. But its ok, staff and lawyers continue to get paid. Im sure they were really excited with the outcome of the lawsuit because now they can get paid a little longer.
Tomorrow will be the 1 month anniversary of Tullow lifting the FM (HDY released this May 5th). Still no clarification that Tullow will not be adversly affected under the PSC and still no drill date. This is going to drag out. Things not looking so good as of now.
Down. and downn.. and downn slowly. This trend is going to continue without a question unless something very positive happens soon. Not sure if we will get good news in the near future or another huge blow equivalent to a force majuere or worse.
Thats why I think it won't be spud anytime soon. What are we waiting for? A signature on loose leaf paper from Guinea assuring that Tullow won't be affected? Nobody knows, but I do believe Tullow is content with the West Leo working on development wells in Ghana.
Simply waiting for some type of news regarding drilling, if or when that ever happens. Biggest risk here is the DOJ investigation. Contrary to what people say I don't want it to get resolved prior to drilling. If they are found guilty there is a chance they will be stripped of the PSC. Better to have an opportunity to cash out on a predrill runup rather than none
Hm, we are almost at the levels prior to the resolution of the AGR lawsuit. Clearly the market doesn't care too much. What good is any company thats has lots of money but is burning it away on nothing and has no prospects. HDY's prospectivity and value is based on drilling, and if that doesn't happen well then there isnt much value here. Need a spud date to be announced or else this will be a slide down.
Has anyone wondered whether this settlement could be linked to the spud date? Such as being linked to two possible outcomes: 1. HDY settled now instead of going to court because they need funds immediately because the spud date is around the corner (3-4 months) and they don't want to dilute shareholders (or as little as possible). 2. The spud date is a year away and HDY can't afford to have the AGR litigation drag out because they need funds to stay alive and wouldn't be able to raise money to pay for their salaries and legal fees.
$9 million dollars worth of materials are worthless? Makes sense. If the market thought this was a win for HDY it would be up way higher. Hardly a win. Didn't recover the excess materials or cost overuns due blatant mismangement. This was neutral at best.
Uhhh... what about about the $8.8 million in excess materials thats sitting in a warehouse. Does AGR get to keep that? This was a very neutral outcome, was hoping for more. $15.6 million-$4.8 lawyer fees (more by now say $6 million and we netted only $10 million.... yay...
If we don't hear anything within the next month I think many will head for the exits. We may not even get a drill date this year if this keeps dragging out. If they do think about drilling soon my guess would be that it wouldnt be until October-November because they need lead time and rig scheduling. I think its more probable it doesnt get spud till next year, which would dry up whatever cash HDY has. jmo.
Still extremely risky. HDY needs to drill this year or else they will run out of money and will have to "curtail" operations as they put it in the 10-Q. There ability to raise money will depend on drilling the well soon. No institution will give them money so they can pay themselves and their lawyers, rather on the propsectviity of the concession. Need a spud date asap, if we will ever get one.
Well whichever drill ship they use does matter. Is the Stena Drillmax capable of drilling in 9500 feet of water (Fatala)? Also, if they decide right now that they want to drill, how much time will preparations take, 2 motnhs, 5 months, 8 months?
http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=309172
It should say $5 billion but what concerns me is that it states that the West Leo is "secured" for Ghana development wells and that 2 have been drilled thus far and a total of 10 are to be drilled this year. That leaves us with what drillship....?