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Hurricane Energy Shares Are Down 50% YTD and Are Trading Near Their All-Time Lows

Simon Mugo trader
Updated 1 Jun 2021

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Hurricane Energy

Shares of Hurricane Energy PLC (LON: HUR) are down 50% in 2021 and are currently trading above their all-time lows following the disappointing full-year 2020 financial results. 

The oil company released its earnings results last week, where it recorded a $625.3 million loss primarily driven by impairment charges at its flagship Lancaster oil field.

The Lancaster oil field generated 14,900 barrels of oil equivalent per day in 2020, which was below analysts expectations. The most significant setback was the downgrading of the field’s proven and probable oil reserves.

Hurricane Energy’s Lancaster oil field’s proven, and probable oil reserves were downgraded from 2.6 billion barrels of oil equivalent to 7.1 million barrels slashing the value of the oil field and plunging the company into financial distress.

Crystal Amber, an activist investor who owns 11% of the company’s outstanding shares, recently called for a shareholder meeting to oust the company’s directors whom it deems have not acted in its best interest. 

Hurricane’s shares surged over 100% on Crystal Amber’s actions signalling shareholders dissatisfaction with the company’s running under its current management. 

The current board recently proposed a restructuring plan that would give bondholders control of the company while wiping out other shareholders. 

The company recently received the High Court’s approval to hold a meeting with bondholders on June 11, 2021, to approve the restructuring plan proposed earlier this year. The proposals need to garner at least 75% of the votes cast to become effective. 

A rejection of the proposal could lead to the company becoming insolvent and winding up its operations. As an investor and trader, I would not be buying Hurricane Energy’s shares, given the massive risk of shareholders being wiped out by the bond restructuring plan.

*This is not investment advice. 

Hurricane Energy share price.

IG chart of Hurricane Energy share price 01-06-2021
Source: IG

Hurricane Energy shares are down 50% in 2021 and are trading near their all-time lows after weak FY 2020 results.

Should you invest in Hurricane Energy shares?

Hurricane Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Hurricane Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading