Hurricane Energy Share Price
The Hurricane Energy share price (LON:HUR) jumped by 16.01% on Wednesday following news that Crystal Amber, the activist fund, raised its holding in the oil company above 25%. At the beginning of July, UK Investor Magazine reported that Crystal Amber had raised its stake by nearly 9% to 23.09%. At that point the Hurricane Energy share price climbed as high as 4.09p per share. However, it has somewhat retreated before today’s surge, which brought the company’s stock value to 3.26p per share. With high levels of debt and a failed financial restructuring, the Hurricane Energy share price appeared to be in a precarious position, however investors will be hoping today’s news provides a sustained boost.
It appears that investors are happy about Crystal Amber’s latest signal of intent as the investor increased its control over Hurricane Energy. Some key changes have already been made to the business by Crystal Amber, which could serve to influence the performance of the Hurricane Energy share price over the coming months. Firstly, it successfully ousted two non-executive directors, replacing them with Crystal Amber’s nominees, John Wright and David Craik. They also stopped Hurricane Energy in its efforts to implement a financial restructuring that could have wiped out its shareholders.
Hurricane Energy’s troubles stem from the downgrade of the company’s reserves at its Lancaster oil field, which poses a significant threat to the company’s future as its output estimates plummeted dramatically. The AIM-listed company is weighing up proposals to drill new wells to boost output at the Lancaster oil field. However, its hands are tied somewhat due to its obligation to pay back a £163m convertible bond in a year’s time.
Crystal Amber’s job, now that it has a 25% holding, is to overcome these obstacles to secure the oil company’s future. Investors with an interest in the Hurricane Energy share price will be keeping a close eye on Crystal Amber’s strategy going forward.