Back in July, TheShareHub speculated on the possibility of HUR doing another well. Hurricane Energy – Something brewing?
The crystal ball working very well… although, I certainly didn’t see 2 new wells coming!
If Dr Trice and team designed a rollercoaster ride, it would be banned. I’m not sure investors can cope with 2 more Lancaster size exploration projects! It will surely blow the minds of just about everyone in the industry. Today’s news of Hurricane’s planned 34p placing to raise £74million was initially met with the usual knee-jerk reaction by investors as the sp slide from 39p to test 36p levels. I didn’t think it would take long before some savvy investors opened their eyes a little to see what was actually being tabled.
1 x drill on the Lincoln Prospect and 1 x drill on either Warwick prospect or another. Mouth watering stuff.
The success of this summers Lancaster drill and subsequent tests would be enough to please most investors. A move in share price from 10p lows to test 40p is living proof that you can use dilution (share issues/placements) to deliver progress and sp growth. Dr Trice and team have not only done that but they have achieved it against the backdrop of one of the toughest PoO environments in history. A lot can be said for supportive II’s / HNI’s. In Crystal Amber and Kerogen, HUR have found investors that believe in the business and the prospects and are not shy in putting large stakes behind them.
Now, for most film buffs, the idea of a trilogy is fun especially when the first film goes down a treat. The reality is, the wait for the next film is usually 12 months+. And the finale of the series some 2 years away. So when you look at HUR’s planned back to back drills – there’s not much time to get your next bucket of popcorn in! Lincoln is set to spud in 2 to 3 weeks or less and should be done and dusted by the time you sit down for your Christmas lunch. The 3rd and final drill is likely to complete before Valentines day. Thanks Dr Trice.
If HUR was attractive at 38p ranges based on this summers Lancaster success alone, then imagine that x 2. Of course, the market will rate accordingly and it’s worth noting that these are exploration wells. That means the endings are not yet written and you might not like what your hear or see when the final RNS on results break. But if management are confident and Lancaster has derisked some elements of the next 2 drills, then the CoS has to be high on the next two.
What a terrific next couple of months to look forward to for HUR investors. And if that’s not enough, there is farm in talks, CPR’s and much more to come in 2017 as the company seeks to progress Lancaster towards EPS phase 1.
At 38p, the two new wells are priced in for FREE. I have a hunch that won’t stay like that for long. The sharehub raises HUR’s target price up to 65p.
Hurricane Energy is part of thesharehub top ten picks for 2016.