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.
Or not. About a month or so away from drilling and still no predrill runup, and no, bouncing off a 52 week low isnt a runup. Tower Resources, who has a 30% stake in offshore Namibia is drilling in mid-April as we are (operated by Repsol) and they have had a nice runup while we continue to hang out in the gutter. We really need to be thrown a bone in the form of a good PR.
I don't think that offsets the fact that HDY is being investigated by the DOJ and is burning millions of dollars on the investigation. $3 million was spent from end of September to December 31. Disgusting. There are additional lawyer expenses to the other lawsuits. What bugs me the most is that HDY is still burning aproxx $1 million a month, pitifull for a company that is a non-operator. The only good thing right now is that Tullow is operator and will be drilling a large prospect in a little over a month. Let's just pray there arent any major cost overuns as this will exacerbate HDY's liquidity contstraint. For this reason, HDY should farm down further to hedge against this and avoid an equity offering if there is a predrill runup.
Or Fatala can be a duster and send this to $2 a share. I'm just saying there is no guarantees. If you think that a predrill runup is an absolute than put every last cent in your name on it if its guaranteed.
Too overly optimistic I would say. There is no guarantee that this will go to even $8. If this were to go "easily" to $15 or $20 predrill, then every investor should buy this stock because its guaranteed its gonna go up. No, sorry, if that were the case everyone would be buying this stock right now and catapulting the share price.
I believe if it reaches $10 that will be a good exit price if you don't want to risk holding onto shares before drilling results. I really believe it won't go higher than $10 obviously unless there is a discovery. If it goes any higher it will be a good opportunity for HDY to do an offering and I believe the market recognizes that. I think it would be wise for HDY to farm down some more, increase their cash position to provide a safety net for bad drilling results or major cost overuns.
You are wrong. Listen to the year end call. Tullow said they have the data room open and there are interested parties. They said there equity position in Guinea is not "static". Do your homework.
The fact that Tullow is leaving the data room open to other interested parties doesn't change anything. Tullow is currently under fire for high operational expenses and high drilling costs. To drill this well, Tullow will have to spend a minimum of $80 million ($37 HDY Share $40 Tullow Share + costs over $100 millon 40% of that). Also, Tullow gave HDY $27 million cash putting a total investment of approx $110 million. They are trying to leverage their position, respectively. I think HDY should consider farming down as well, to ensure they can cover their share if there are high drilling costs, which is certainly possible. Hopefully whoever purchases some of Tullows % pays a pretty penny to boost HDY's valuation.
I doubt HDY will recover that amount. That's only the best case scenario. HDY submitted a amdended particulars claim in December 2013 and the hearing to consider the amended claims was yesterday, or at least started yesterday Friday, February 14th. I'm pretty convinced its going to go to court in June 2014.
Or if HDY defaults on its share of expenses after 30 days Dana and Tullow have the right to purchase HDY's particpating interest at appraisal value, or fair market value determined by an expert less the expenses that HDY failed to pay.
The DOJ ivestigation is putting a serious strain on liquidity, costing HDY approximately $1 million a month. Lets do some calculations: end of December 31 HDY had $33 million in cash/equivalents. Last quarter they burned $8 million so end of March we will have +- $25 million. Lets say they drill end of April and finish end of June,expensing another $8 million putting us at $17 million. We have no idea how much the well will cost but lets say it costs $120 million (cost overuns are not uncommon) $20x.37= $7.5 so lets say after the well is completed we will have $10 million in cash left and I still haven't considered an adverse judgment from the DOJ or the AGR lawsuit. So basically if this well isn't succcesful HDY will be pretty much finished imo. If they hit pay dirt, then well much of this doesn't even matter. I think we just need confirmation that the West Leo is enroute to Guinea, cause then I think investors will wake up that this is finally happening.
(2) new things. We recieved a subpeona from the SEC in January 2014 and it looks like the DOJ investigation is costing us $1 milllion a month (started end of September into December 31st cost us $3million). Otherwise, this doesnt change the West Leo will be headed to Guinea in a couple of months. This is sill a one trick pony with the upcoming well, that hasnt changed.
I have been really impressed with the volume and share price appreciation. I would still caution on getting involved with this stock. Still a lot of unknowns out there with the DOJ investigation, lawsuits, and possible further dilution. As I'm concerned this is a one trick pony with this well, all or nothing. Don't expect any news that will knock our socks off either (from past experiences). This is such high risk you should only play with money that you dont need. My price target is still $10 ($1.20) presplit $200 million market cap.
I have to agree with you on that one. I don't think the AGR suit will be settled out of court and will most likely go to trial June 2014. That being said, I think most people are waiting for confirmation of the West Leo to be on its way. Obviously, without a doubt this will prove the well is going to be drilled. I think some people are speculating that DOJ investigation might halt the drilling and want to be assured it wont. Ray said it MOST LIKELY wont affect drilling. This doesn't mean 100% that it won't, that is why if its moving to Guinea it will clear up any doubts.
I agree with you, and $10 is my price target. Sahg, why did you delete my comments? My accusation may not have been warranted, however, I don't think its right to keep saying this stock is going to go multiples higher and constantly saying positive things with this stock when there are more negatives. Nothing justifies a valuation greater than $200 million, and that in itself is already very high. Then again, I've been watching a stock called Medbox. Its stock reached a high of $80 a week ago or so and its valuation was over $1 billion on revenues of $500,000 and cash on hand of only a couple million. Talk about a house of cards.... Its currently valued at $600 million, because of all the hype around marijuana legalization. We have $35 million in cash around now and drilling a billion barrel prospect so if we do go higher I could see why. Just not counting on it, that's why I say sell around $10.
Its been really interesting watching this stock trade the last three days on high volume with no news. I disagree with all the pumpers on every message board who think this stock will go "magnitudes higher" pre-drilling or that its grossly undervalued. Look, the market cap is $130 million for a company with 0 revenue, under investigation by the DOJ, and multiple lawsuits. There is always the potential for major cost over runs during drilling also. Sure, they are drilling a massive prospect with Tullow aboard, but look at how many promising exploration wells come up dry. This is a very, very risky bet. Don't think this will break the run-up when we were in exclusive negotiations with Tullow $1.20 presplit $200 million market cap. My price target is $10 post-split.
Thank you for adding that additional point. When/if there is a run up longs will try to liquidate their positions. My $9.50 estimate stems from the market cap and we saw a similar price ($1.20 pre-split) when HDY announced they were in exclusive negotiations with Tullow. That being said, $1.20 is more of a number that stretches beyond what I think we will actually hit. Its a mountain top number. I think something more realistic should be something between $6-$8 (.75-.90ish pre-split). Still a lot of uncertainties with all of the litigations and investigation. This is a wacky stock so anything can happen.
I honestly don't think we will get the pre-drill run up that everyone is hoping for. I don't think we will go any higher then 9.50 ish (1.20) pre-split putting the market cap around $200 million. I believe anything higher would be an opportunity for HDY to do a small offering and I believe people will try to keep it down for that reason.
You are incorrect. As of the beginning of October they had $38 million in cash. Assuming a burn rate back to $1million a month because of legal fees, and assuming they start the well in March and finish in May, that would be roughly $30 mil left. Lets say cost overruns cost their share $6mil, we are now at $24mil. To be conservative, lets say the legal fees put us at $20 million after its all set and done (excluding a DOJ fine, if imposed). Unless they plan to drill another well when the West Leo is on site, they will not need to do a secondary offering or farm down.
From the 10-Q:
"The Consortium currently estimates the well will cost approximately $115 million, which estimate is subject to change."
Great......
"the operating committee meeting on October 25 in London will maintain and decide on location and at which point we'll notify the Guinea government and the well will be spudded in the first quarter of 2014."
From the transcript of the IPAA presentation. I wonder if we will get some kind of update on this or if we will have to wait until the shareholders meeting?
http://www.foxnews.com/world/2013/10/21/sierra-leone-lukoil-completes-its-1st-oil-exploration-well-off-country-coast/
Would like more details on this well. Drilled in the middle of Sierra Leone, along the same trend as Sylli/EOS and close to the same water depth.
The more I think about it, the more I'm convinced that someone or a superpower wants HDY to fail. I mean, first we had the intentional mismanagement of the Jasper where the crew abandoned ship, lawsuits after that and now the subpoena from the DOJ and law firms coming in to sabotage it once more. But why?
Does anyone know when the next institutional holdings report is supposed to come out? Last one was 6/30/13 so it should be fairly soon?
Even if nothing comes from the DOJ subpoena HDY is going to have expense even more legal fees on top of the lawsuits that they already have on their plate. There will certainly not be enough money for a second well unless they find a way to raise cash or have a favorable outcome from the AGR lawsuit but I'm not optimistic about it. How come Guinea hasn't awarded their open offshore blocks to anyone else? Does anyone know?
As of the end of June Hdy had $41.7 million in cash. So now we probably have around $38.5. After the first well is completed, lets say they start in March and finish in May, we will have $33-$31 million in cash. Even if there are no cost overuns on the first well, we may not have enough for another exploratory well.
Earnings release tomorrow? Hopefully we will get more insight on the AGR mediation.
We are now at 34% institutional ownership. This is what I like to see... Easy to say now but we needed the R/S to get the share above a dollar to get the institutions back in the game. We are practically at the same ownership % before the Sabu-1 was drilled.
HDY claimed there was going to be a mediation of the AGR lawsuit in the 3rd quarter. We are at the halfway point. Very intrigued on how its going to be played out. A positive outcome could give this stock a serious rally.
Hyperdynamics finally updated their website with some minor adjustments. Click on the Guinea project tab.
From the presentation slides:
"Sylli and Eos prospects competing for wildcat well drilling by early 2014"
Hmmmmm I have an idea, why not.... DRILL BOTH!
Ladies and Gents, we are about to find out in the next 12+ hours if this is going to be a multi well campaign and may even be updated with a drilling schedule. Anyone else excited or anxious?
After looking at many farmout deals in Africa, I have to say I do not understand why people are complaining. I haven't seen a deal yet where a company has received as much cash in proportion to a % in the concession or such a carry on a well, mainly because many have been shallow water. The companies that farmed out had 2-5 billion in unrisked, less than what HDY has though. This doesn't guarantee anything, all these wells can have oil shows but no commercial oil. That being said, I would like to see HDY farmout another 12%, retaining 25% which is more than plenty and have 2 shots instead of one. Hope this will be addressed one week from now.
Verjamb you are wrong. The R/S is going to happen. They will be booted off the NYSE if they don't. They are currently in non-compliance by being under $1 for a specified period. Ray has stated that he wants to maintain the NYSE listing. The only way to do this is with a R/S.
From the presentation today it was interesting how Ray said given the fact that this concession has so many play types and almost 10 billion barrels of oil having even a 19% interest in the concession would be sufficient. I'm not exactly sure how he worded or came up with that number but did say 19%.
Wow, seems like the area is becoming a hot spot north and south of Guinea. I think the Tullow farm-in raised a lot of eyebrows amongst other E&P's. Anxious, and patiently waiting as we get closer to drilling.
THis was posted on investor village, very interesting:
“We have made some discoveries along the West African coast but none has been a hub-class kind of discovery; the one comparable to Jubilee.”
“But we are still optimistic of a bigger find because we believe there is a Jubilee-kind of discovery along that line,” Mr Cazenove said.
He spoke to the Daily Graphic after briefing selected journalists on the company's operations for 2012. The new Head of Tullow Ghana’s Head of Media and Investor Relations, Mrs Bernice Natue, joined in the press briefing.
Tullow Oil last year announced new discoveries in the territorial waters of Ghana, Côte d'Ivoire, Guinea and Sierra Leone, all of which are in the West African coastline.
“There are a lot of prospects along that coast and Tullow will continue with explorations there,” Mr Cazenove said, pointing to geological data available to the company."
http://graphic.com.gh/Business-News/tullow-anticipates-bigger-finds-in-offshore-west-africa.html
I have a feeling he is talking about Guinea as being the next big find. I mean, Angus has compared Sylli to Jubilee...
This happened last year:
http://www.rigzone.com/news/article.asp?a_id=120069
The company was called Cove Energy. They had a 8.5% non-working interest in a massive gas find in Mozambique and were bought out for $1.8 billion by royal dutch shell. And I was worried that having a 37% interest was too little... Hell even if we farm down to 25% and hit commercial we could be valued at, well.. thats for you to decide.
Thanks for those calculations. Splittin heirs, but things can always get more complicated. If they produce 5,000-100,000 then the contractor share is 59% which HDY gets 37% of the 59%. The government can also participate in production and reimburse some of the contractor costs. Back to the exploration, I cannot stress how important it is for HDY to win the AGR lawsuit and recover the 19$ million in restricted cash. That would put us just over $70 million in cash and even after the burn rate from now until the Sylli-1 well and thereafter HDY would have plenty of cash to drill another well AND the rig would already be on site reducing costs.
Just to start some conversation and get input. So HDY has a 37% interest in the concession. Is that really a big deal? I feel like 37% doesn't seem like a whole lot, even to a concession this large along with the potential. What if they farm down to 25%? Is having a quarter interest in this concession really going to make this a billion dollar company (market cap) if they hit commercial on the Syll-1 well? Just curious.
Woah... It looks like the West Leo and Sedco Energy will not be available for Guinea. Also from Tullow's annual report:
"In addition, we will be looking to secure extra capacity for commencement in early 2014, both to sustain our active exploration and appraisal drilling programming and for the Guinea and Suriname areas."
page 51.
So they are ahead of planning and scheduling but do not have a secured rig for Guinea... Maybe this is why the stock is tanking today?