In normal times, I’d expect the share price to go up to...

In normal times, I’d expect the share price to go up to compensate for the de-risking value of the news. Clearly, these are not normal times, with values everywhere in the small cap space seriously affected by multiple negative factors, which are driving capital elsewhere.

Having said all that, it’s hard to see the market ignoring a fully funded project 12 months from production with fcf multiples of less than 1x.

Much will depend on the economics of the project as per their internal forecasts, which we should get post FID. We already have some idea of the Capex from the Dec deal with RR(circa £750 mill) and we know the NBP price. What we don’t know is the toll charge, although BP suggest it will be 17p/therm. I think that’s too high, but we shall see. What we also don’t know is whether HHR will receive an external funding deal that’s better than RR’s offer in order to retain 40%.

And finally, we don’t know yet whether they will be successful in their applications for new leases. If they DO get them, then I think it would be entirely possible that the market will apply some sort of takeover premium.