Things are tough right now @Byron. I don't think anyone saw how...

Things are tough right now @Byron. I don't think anyone saw how dramatically a proposed policy by a party in opposition would affect the UK O&G industry. By that I don't just mean HHR. All UK O&G players have been wrong footed by this including the big guys like Harbour, Ithica etc. (and obviously all of us SH's!)

Until the political situation is resolved, or a capex to opex solution is developed, it will be very difficult to get a new project underway for any operator. HHR can't carry that argument and will need to rely on the bigger players to fight that fight.

So what should HHR do? They could cut costs dramatically and hope the politics resolve, sell their stake to RR and move on or try and get something else going to fill the gap. I think HHR are going for the 3rd option.

The only O&G developments I can see in the immediate future would be low capex, incremental field extensions based off existing production facilities. HHR have secured licenses adjacent to current production, the 44's are adjacent to Wintershall production and the 48 is adjacent to Perenco production. Can HHR and its JV partners negotiate some sort of deal with the current adjacent producers? The possibility is there and IMO that was the reason for HHR's trading halt prior to announcing the new licenses. It's a long shot but "we got what we got".

Tough times for HHR, tough times for UK O&G. At least with these new licenses HHR have something to try and make a deal with and I prefer that to HHR collapsing in on itself waiting for Labour to hopefully come to their senses.