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Yes, HENC certainly didn't see it coming. They happily took-in TGC thinking that they had a compliant partner willing to do what it takes and cough up the $$ for drilling efforts. The tide was turned on HENC and they were left wondering what the F happened. Well, I'll tell you what the F happened...
When you draw up a contract, you have to run all the permutations of possible outcomes and revise it to make it less risky. TGC had that BIG loophole that they just easily walked through and shafted the unsuspecting HENC leadership.
Now, and hear me well, HENC, knowing that TGC bleeds money every month, will not move quickly to drill. Period. We must wait until the deadline. That's HENC's passive-aggressive style of getting back at TGC.
so far, all we see are posts within a vacuum of info....
nobody knows squat. TGC did an end-around on HENC and forced HENC to put up a greater share to drill than they originally planned. Now we have an embedded partner with no real hope of shaking them loose.
oil is trying to show signs of life, but it might be a false signal. hedges/short positions could be the catalyst right now, but that will eventually fade. supply is up; consumption down (i think)....not a good formula for a sustained price increase.
Henc has been deliberate in the past and no reason to believe they will move any faster this time. everyone has to realize that oil prices will remain in a narrow band for 18-24 months; if oil continues on its path to $60bbl, with each dollar increase, the frackers get more and more anxious to start pumping again. thus putting a cap on any serious increases.
Currently, with relatively low drilling costs, Henc needs to realize that this is the oil environment and determine if it's to their advantage to drill now,or to wait until the 11th hour (per usual) and scramble to drill just before the deadline regardless of [anticipated] drilling costs.
GLTA
hi Trident, I see you're trying to liven things up here. Given the paucity of activity and info, I didn't think I would be saying this, but..... I welcome your input - no matter what you say!!! Thanks!
any other insight as to possible plans for TGC HENC and Co.?
it doesn't mean that I'm sitting idly by....I've been nibbling, not feasting, though.
My curiosity was about how we've come to just about parity with TGC. And I think that's worth bitchin' about.
Interesting, and lamented (by me, at least), that HENC and TGC stock are basically on par with each other. I believe that Trident was calling for that a long time ago. Another failure in HENC's protection of shareholder value?
Price can be dragged any which way.
Yes, highly prospective. I'm beginning to believe that the blips on the 3D, you know, the "anomalies", are just pools of water......
yes, makes total sense....which is why I'm TOTALLY confused.
It looks and smells like they're going to ride it out until the next deadline. Hope I'm wrong.
Doing something for the shareholders is certainly a highly-charged issue, especially when a company has to juggle its financings, deal with a not-so-compliant partner, etc. It's a difficult task to balance everything and make everyone happy. I don't envy HENC mgmt in that regard. However, when you place common sense into the equation, things should play-out a bit differently. Common sense dictates that if you have a sudden low cost of operation (drilling costs), you should act accordingly and swiftly. Anyone in any business knows that you have to act and react to what's in front of you. So far, we've had an ostrich-like reaction to the biggest gift that any O&G explorer would want. "Oh, drilling costs are down, you say? Let's sit on it for a while and try to figure something out" WTF!?!? They need to be decisive and make it clear as to their intentions.
Personally, I would very much welcome hearing from someone who is reliable and impartial and can shed some light on why a company such as HENC sees a benefit in not drilling at an otherwise seemingly opportune time? Is there a cost-benefit analysis somewhere that shows extraction costs vs. anticipated price of oil? Is that the sticking point?
I've nibbled, as well. bought some at .05
With respect to the 400k+ sell the other day....the only logical possibilities are: a) forced sale through a divorce proceeding b) forced sale through a margin call. Why? because it makes no sense to sell early in the year and only recoup $20k or so. There is always the remote possibility of drilling in 2016 which would have floated the boat. Had they sold before the end of the year, then they would have at least gotten some tax benefit.
Tc - that's a very positive spin, thanks for your perspective.
However, where I come from, money talks. you make it seem like oil crews scattered to the four corners of the earth. Have the ENTIRE drilling crews in Australia vanished? I say, flash some money in front of the drillers and someone will bite. Idle equipment = lost revenue.
Simple plan....HENC and TGC pore through the 3D, agree on which target to drill, send out RFP's or whatever the oil jargon is, contract with the lowest cost driller and get it done.
there's a price for everything. however, HENC has been in the game too long and invested too much to not see it through. IMO
Besides, the company is hardly worth anything right now. Hard to imagine giving up the company for next to nothing.
if they wait for the price of oil to go up....drilling costs will rise (more drilling, higher demand for rigs, hence, etc.)..AND cost of borrowing money will go up (that's if they hit oil and want to develop the property further...)
Rigs have to be pretty much a dime a dozen right now. If you're in it to drill...then DRILL!!!!
Just read HENC's update....basically dead-money for quite a while. oh well.
it would be a complete shock (and most welcome, of course) if they drilled before 2018.
Interesting little tidbit from the PR - they plan on having more involvement in operational activities. As opposed to sitting back? was that what they were doing all along? maybe TChauncy has more info?
<<Further assessment and interpretation of the seismic data to rank the potential targets that have been identified and an increased involvement in operational activities will help reduce uncertainty and will enable us to be prepared when the oil markets become more favorable.>>
Overall, I give them a "B". Fairly informative; pretty good amount of detail that we normally don't hear about....but, the "going forward" part is kinda weak. I get the sense that this was more an appeasement piece wherein they know full well that they have to throw a bone to the minions and then side-step the question of - when do we drill?
Again, very decent detail, but a schedule or even a hint as to the next drilling step would have gone a long way. Yes, you want to "...reduce risk and maximize value..." but just give us an idea of what timeframe you have in mind.
Guess we have to sweat this out for a while....
It makes sense to drill and cap right now - it's certainly a buyer's market if you want to drill.
Probably one of the least expensive times to drill in recent history.
BTW...don't look now, but TGC closed higher than HENC! Bizarro world.
partly agree, however, moving forward into the foreseeable future, price of oil will remain relatively low (Iran will dump millions and millions of barrels into the market), which will translate into less demand for drilling...thus drill costs might not be as big a factor.
oil is in the crapper...
Chanos shorted the majors
saudi pumping like crazy
US shale break even is $20bbl...so we'll see if it goes down there.
other than that, everything is peachy
anything is possible. we're in tax-loss season....
hence our .07 price tag.
question....
what if by some crazy quirk HENC decides to drill 5 wells on their own?
and, what if TGC cannot participate? effect?
also, what if TGC inherits a nice tidy sum of US20 million and decides to go nuts in the oil patch and drill-baby-drill....they target 20 locations....what are the obligations of each partner? and any other ramifications?
trying to fill the time until the 3rd well is drilled (which may be a long time from now, so I'll have to come up with a lot more questions)
usually what makes sense to you, me and everyone else, does not make sense to HENC/TGC.
too many variables here. what if TGC or Henc decide to wait it out and see if the price of oil goes up and maybe find a buyer for their interest?
whatever we think of will NOT happen. That's how the HENC/TGC saga has played out and will continue to play.....
I love that fairy tale of the large short position...total BS.
I guess we fill the gap to .16 at some point and then drift down to find the right level.....and then here we are in the year 2018...Zzzzzz
so...basically means dead-money for a few years.
is there anything to compel any of the parties to drill sooner?
Oil price is in the crapper; drilling costs are low (at least that's one good thing).
maybe 3-4 years from now oil goes back up to 60, 80 max....drilling costs, of course will go up.
odds against drilling in 2016 might be 95-98%
GLTA
Hamil -
what do you make of HENC's statement in yesterday's PR?
"The management of the Joint Venture partners plans to hold discussions in the upcoming weeks to determine the next steps to take pertaining to the Company's Petroleum Exploration Licenses in Australia."
Whereas, TGC's statement:
"Although there were no hydrocarbon shows, the well proved the existence of the Mid-Birkhead channel system in PEL 444.These results will be included to improve our exploration model. The experience in the Cooper Eromanga basin has shown both wet and Hydrocarbon filled channels can exist in close proximity to each other. We have plans, once this model is updated, to review other targets in the existing 3D covered area, which is only a fraction of PEL 444. Terra Nova has the necessary finance to continue to fund its share of a future exploration program. With this well we have fulfilled our obligations on PEL 444 and enter a new five year licence period."
TGC very much appears to say, "damn the torpedeos, full speed ahead".....HENC is playing their cards a bit close to the vest.
PEL's are huge, but from the looks of the supposed "oil fairway", it appears that most of the northern property is barren.
neophyte question.....
do the 3D people ever have "skin" in the game? we pay for the 3D, that's all well and good, but what about the 3D people getting paid based on the outcome? make it more contingent, rather than already paid for.
further neophyte question....
will someone please tell me WTF was in the targeted zone after coming up craps? what material, object, substance can cause otherwise brilliant 3D tea-leaf readers to say this is the best target?
yes. funny how we really had no price action this time around.
bargain basement prices tomorrow
back to the drawing board..............
hate to be so condescending.....security interest is Eco 101.
i'm sure you know what it means. they didn't say "equity interest"
your innuendo, though, was not lost on me.
price of oil is one factor, especially to a producer - which we are not.
BIGGEST factor holding back the PPS is lack of demand. Does anyone want shares? For goodness sake, we're drilling, about to find out what's what, and there is no volume.
we are so off the radar it's ridiculous.
that would be nice.
I'm curious, though, where the deep pocket investors are hiding who are buddy-buddy with genstock?
this board is sometimes so full of malarkey, you don't know which end is up. I haven't checked and compared to the prior spud event, but the trading, pre and post-spudding, does not appear to be up to snuff (might even be an understatement).
today is 5 days since spud....did they reach total depth?
can't shake the feeling that this is not trading right.....GLTA
good to know, thanks.
Yes.
Side note ---- maybe things get done a great deal sooner when you have antagonistic partners!
1 day = 629 meters
target is 2050 meters
basically 2 more days to go..........
keep this in mind whenever anyone tries to interpolate and project forward....
from the 10Q:
On February 17, 2015, the Government of South Australia granted a six month extension on License PEL 444. This extends the drilling commitment from July 11, 2015 to January 11, 2016. Renewal can be made by January 11, 2015 for a further 5-year term over 50% of the current area. A large area to the north of the suggested drilling locations is believed to have no prospects and would be the acreage chosen to relinquish.
in other words, a HUGE area of the PEL is basically worthless, AND, no way in heck will they, or should they, do 3D in that area.
for one thing, at least, it helps keep the costs down when you just cross off a huge chunk of your Pel and therefore don't spend on 3D. on the other hand, projections have to be ratcheted back, thus increasing risk and impacting valuation models.....
IMO, not enough new money will come in until 5-7 days before spud date.
therefore, we'll have a slight price erosion and stabilize at some lower support level. mm's will see to it.
yes.
Question: does Henc have to defer to the operator on whether they cap it or put it into production?
are you still writing here?!?!? have you no shame?
all you've been spewing was: "where will they get the money....they'll lose their PEL"...and on and on....just the same old droning drivel.
enough of your BS already!
you're a blowhard and quite boring. that about sums it up.
besides, spelling kangaroo with a "c" was the absolute final straw!
wow! all that bluster and bravado from Trident, and the ad nauseum drivel and know-it-all pompous attitude....My, my...I wonder what it's like to eat crow? LOL!!!
you assume that HENC and TGC mgmt are on equal footing....therein lies the problem.
Although no one is above reproach, I'd say that Henc, at least, is a bit more trustworthy and less likely to diminish shareholder value in the way that TGC did. Therefore, if you HAD to park some money in either company, Henc is probably the safer bet.
I found that recent PR by TGC to be rather interesting, an unnamed consultant, doing unknown work and getting a bucketful of shares. Very curious. I wonder, aloud, if the consultant is arms length with TGC mgmt, and I wonder, aloud, if the consultant is Trident.........LOL!!!
Enough with the SEC reporting stuff.....
You may want to research compliance regs. We're not BP or Exxon.
I believe, and this is off the top of my head, that small extraction companies have to file payments info no later than 150 days after the end of the fiscal year.
Now....when do we drill???