There are a few oil exploration companies out there that are valved ....around cash value. Some around or slightly above book value


But a production company so far below cash value?.. with an increasing cash value?..such a position is unheard of, in my view and experience.


To play devils advocate..there are a multitude of reasons for why HRT is so undervalued...3 dusters to be exact.

But those wells are done and dusted... excuse the pun! They are paid off, and we are now producing in Brazil, HCs in Amazonia and red hot acreage smack bang in the middle of the last frontier; all supported by a strong cash position.


Ooleum-bullish

Motivation behind the reverse split?

Is it just not make it look like a penny share?

Thoughts welcome,

Ooleum

...I dont remember paying any fees last year...?

does this "tax" apply to those with tsx:HRP shares?

Ooleum

Van mate,

is it not consolidating the two stickies:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=89961424

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=95863063

just a thought

Volume in brazil...follow the big money so to speak

topped up again today

Another token 10,000 shares of HRP..

Not on the books

I always thought it was odd selling a stake of Polvo as soon as they had acquired it.

Its understandable selling a stake (farming out) in a high risk exploration acerage, but Polvo is a low risk cash cow!!


...they would be mad to sell any stake it in, especially when its kicking out 13,000bpd and crude is at a 52week high!

Ooleum

back to having no debt...

bloody impressive!!

5th highest Brazilian producer..com'on!

Sorry for the slightly off topic, but tread carefully with TRP if anyone is looking at investing.

There are alot of uncertainties surrounding its finances; if it cant farm out it will have to dilute considerably. Its market cap is circa £120m (overvalued) with only the money to drill its share. If it fails it game over

If you want a [lowerer risk] exposure to TRP's well then have a look (DYOR!) at GBP (global petroleum)

They are trading at cash (5.5p) with a market cap of £10m
It holds 85% of the acreage RIGHT next door to TRP, which it is trying to farm out (at a premium if TRP strike)

If TRP strike, it will rerate considerably; in the buildup alone it could be a bagger. If TRP fails, it should be underpinned by cash.

DYOR. Just a little tip for my fellow HRTers

Ooleum

Good analysis DH, and well presented

Thanks very much


Hmm...an offer of $1.6-2 CAD...who'd accept?

exactly...now what?

Could there be a direct fight between Discovery and JG to get a controlling stake?

JG might might want to accumulate a few more prior to putting in a bid at say $1.0 CAD

Discovery might want to take a controlling stake and therefore isn't in their best interests for a hostile takeover. In for the long game, they are aiming for $4.0 CAD +

JG might wants the entire company, and Discovery want boardroom control
Theres one thing better than a bid..and thats multiple bids!

Remember Shell and PTT fighting over Cove

Agreed, some additional clarity (company presentation soon??) would be nice.

Its very difficult to work out valuations when you only have half of the data

Hopefully your email will be a decent response; cheers for emailing

Its nice to see oil flowing! No doubt this might consolidate down letting the day traders out, but it should inevitably start moving up

Perhaps the manageable issues/uncertainty is providing a bit of resistance at the moment; unfortunately its been shifted back to March

Ooleum

Which Mello and other directors would never allow; you can't collect wages from a company that doesn't exist

Whatever happens they shouldn't spend anymore money in Namibia. Either farm down enough to cover all expenses, or sell completely.

I've heard more than 1 that the seismic in Nam was poor/questionable. Will they need to do another round of 3D? Albeit good enough to find a decent accumulation in Wingat I must add

Ooleum

That is where the concern arises

1) MM wants to find billions of barrels of oil
2) Discovery want to raise the share price

Both scenarios are certainly not mutually inclusive!

ie You can try and achieve (1) without necessary achieving (2)

Unfortunately (1), which is ego and reputation has been valued more than (2), share price

From a shareholders perspective, HRT/MM is better off aiming for millions of barrels of oil instead; by farming out (underpinning share price with capital), and reducing risk/exposure

With the recent boardroom fueds, which has seen a number of directors stepdown/resign/fired, I ask the question as to MMs ongoing involvement.

Is he really looking after the best interests of the company, or simply stringing things out as long as possible to cash his pay check? Taking bonuses for both himself AND his sister towards the $20m mark seems mighty excessive (greedy?) for well...nothing?

I'm just worried that he is merely trying to align things to his own (financial) best interests, with little or no regards to shareholder value.

At this rate any Polvo profits are going into the directors coffers and not HRTs!

At least if the funds take control, you know they have one objective...share price rise

Thoughts?

Likewise, I think it will be a 2-3 yr payback (with exploration drill) compared to 10 yrs

Good man, I'm wanting to get more at 0.14 on HRP. Was hoping for an early pressy from Santa

Merry Xmas everyone

This is a very enjoyable and knowledgeable board to be on

Nearly there, got to wait another month or so. Close though

Glad of the boardroom cutback, it was getting too stuffy in there!

So you are saying it will be be announced the last few days this year, or next year lol

Deals take time, especially when they include a bit of money (hopefully). I'd speculate in January. Not much generally happens around Xmas and New Years.

Interesting that many on HRTs payroll will be transferred to Rosneft. That should lower operating costs a fair bit

Ooleum

thanks Rzbern,

any news on gas monetization, or namibia?

what is Discoverys intention if/when it holds a majority stake?

Any interesting info rzbern?

Another step up at open for HRTP3 on high volume

I think that's a fair valuation drilla, which reaffirms just how undervalued we are

Dryholes typically cause the market to overshoot when being sold off. We are in a "fortunate" scenerio where 3consecutive dry holes has caused the market to lose all faith in HRT. Read another way, always the accumulation of low hanging fruit provided you believe it has long term prospects

Ooleum

Discovery mean business; closer to the elusive 20%

"no intention to take a controlling stake in the company"...yeah right

Ooleum

not bad, bodes well for the last few trading days of the year

glad I topped up in time!

Very exciting phase

Ooleum

If Morgan Stanley are willing to buy a significant stake @ R$0.93 then it should tend towards it...indeed HRTP3 has been climbing slowly all day. Will be interesting to see where it ends up

R$0.93 is ~0.22 CAD

From stockhouse HRT

"SAO PAULO - Shares of HRT Participações ( HRTP3 ) are stalled until 17:00 ( GMT) trading on Monday ( 16 ) , announced the BM & FBovespa . This occurs because of CVM Instruction 168 , which determines the stoppage with a very large supply .

In the case , Morgan Stanley sent a megaoferta purchase of 1.46 % stake in the company , representing 4.35 million shares of oil - which came to play the auction price to R $ 0.93 . However , the theoretical price currently is $ 0.76 due to a great offer of sale of Citigroup and Goldman Sachs ."

A bit broken English, but does this suggest that Morgan Stanley has bought a stake @ R$0.93

Ooleum

Looks like the bottom is in.

People waking up to the value here. Very undersold

Maybe that's what's delayed things.

Being the supplier of the FSPO perhaps it has options to muscle back in requesting 30%. Question is, who gives up their WI % and for how much?

Given that its HRTs only near term production revenue, it would be a shame for them to lose and interest unless it was more than they've paid for.

However, if HRT might be seeing Polvo more as an exploratory play; give away a bit of WI% to derisk drilling that has been pencilled in for next year. The FSPO can handle 90,000bpd, so I'm guessing the original Devon group assumed Polvo to have a high upside potential

ANP having a backlog of things to sign off; they need to pull their finger out

With a yearly revenue slightly under its current market cap, HRTs PE ratio will between 1-2. Couldn't get much lower

Where did you get that final cash position from. Their q3 results says they expect R200 by year end...about $90m, which is the market cap

Ooleum

Strong cash position, largest gas discovery in the Amazon, first recovery of oil in Namibia (the last oil frontier), beneficial tax credits, soon-to-be producing asset....I've just topped up again 15,000 shares

Ooleum

With HRT's H1 ii presentation posted yesterday can anyone estimate current cash levels/cash per share?

Ooleum

Bottom draw for now

On the positive side,

1) Trading under cash
2) Large onshore gas accumulation, high profile parters
3) Polvo field (if true, the only decent thing Mello did)

On the negative

A) Mello's position is untenable @ HRT, whether he is a geo, CEO or just a director. "why arent people buying". I feel ashamed that he came from/was afflitted with Bristol university, which is near where I studied. The only plus side of having him is his GEO knowledge....fat load of good that is
B) The worst IPO in the history of any stock market, ever? The downward trend was relentless that it was difficult to trade; hence sitting on a 0.57CAD average


As pessimistic as A/B sound I believed that 1/2/3 were sound enough reasons to have a punt of Namibia. Hence I am happy to hold

Ooleum

Boy this is getting deep....bit like Moosehead!!

Highly unlikely, but nice thought lol

Lets not forget that given how far the share price has ermm...dropped in the last few months, that 5million trades today is less significant than when we were trading at $1.
We, in general need to adapt to what "high volume" means as share price develops.

10-15million + and we are talking!

Good few posts guys.

Agreed, the share price needs to be underpinned by production. Lets not forget Polvo though..it's near term cashflow is sooner than the gas in the amazon, and they have the option of developing that block further


Ooleum

Well Moosehead is the well in HRT's drilling campaign that is closest to an existing HC reservoir (Kudu field); if I were to expect one well to succeed it would be this one.

I'm going to play devils advocate here, and share my thoughts preparing for the worst...non-commercial
I wont be topping up prior to results, but if Moosehead fails then I will be topping up if it goes sub 0.15-0.2CAD

Reasons:
1) Apparent approaches/interest already on a 2nd (Wingat) drilling campaign
2) At the end of Q2 they had ~R800 in the bank. Even with Moosehead cash burn, (air Amazonia should negate this) they will be trading waaaay under cash. Correct me if I'm wrong??
3) Most importantly, Polvo field. If Mello hadn't got that I would definately reconsider. They might try the long game...use a bit of cash to develop a producing asset...whilst getting free carries in Namibia?
4) HRT-7 and HRT-8 were the largest onshore gas finds in Brazil. If gas has been exported before I find it hard to believe that a record sized find can't or won't be commercialised

Of course I'm keeping them crossed for Moosehead to come in

Ooleum