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R1234,
It doesn’t say much of anything except that he has been rehired to head up a different organisation based in Geneva, Switzerland.
Nothing about relaxing Argentina’s stance on the Falklands I’m afraid.
LTT
Does this mean that those assisting in FI hydrocarbons will no longer face sanctions? I suspect the threat of sanctions was what made Harbour Energy pull out.
It’s a good sign, but a little misleading as the ambassador has been brought on to do a new roll, nothing to do with the Falklands. They are just rehashing the controversy surrounding the previous deal that was torn up.
LTT
Very good news!
“In a positive spirit, both sides agreed to set up a dialogue to improve cooperation on South Atlantic issues of mutual interest. Both governments agreed that the formula on sovereignty in paragraph 2 of the Joint Statement of 19 October 1989 applies to this Joint Communique and to its consequences. In this context it was agreed to take the appropriate measures to remove all obstacles limiting the economic growth and sustainable development of the Falkland Islands, including in trade, fishing, shipping and hydrocarbons. Both parties emphasised the benefits of cooperation and positive engagement for all concerned.
"Macri administration wanted improved political, trade, culture relations with UK and Point 10 referred to the South Atlantic and the Falkland Islands, which made the Kirchnerites furious and were prepared to ignore it, particularly mentions of helping promote and develop the Islands economy."
https://en.mercopress.com/2024/04/22/milei-reinstates-ambassador-foradori-who-signed-the-falklands-2016-joint-communique
Surely the agreement to settle any tax due later (IF of course there is any) included Rkh trading normally in the meantime and was all TO ENABLE Sea Lion to happen. FIG need to keep to that agreement, not renege on Rkh trading normally in the meantime, and accept clarification of the wording to reflect the "meeting of minds" at the time of the agreement. That meeting of minds IS the contract that's actually in place. It presumably could be one interpretation of the existing wording. Simply needs clarification. All, as before, to enable SL including Rkh funding its equity share.
That's my tuppence worth for now!
After the farm out to Premier, there were a few wells drilled. Did RKH use some of the carry or did they pay their share completely themselves ?
Rkh no longer owe FIG any tax as the tax was owed on the free carry that they never received.
So it's zero tax owed on a free carry of zero !
The free carry went in 2021 when the new deal was struck with Navitas but FIG have not yet accepted the ammendment.
Its difficult to understand why FIG still haven't accepted this seemingly simple amnendment after 3 years as it seems relatively clear cut,being,No Free Carry = No Free Carry Tax.Simples !
RKH can't afford to pay FIG anything until Sealion is in production regardless of the OM payment. You can't have a situation where we pay a tax we don't even owe only to find Sealion doesn't get approval and RKH go bust due to lack if cash.
BlooBird, both equally good. It's as good an explanation as we can get get to from the information we have. Just need FIG to stop hindering their own O & G industry !
SpaceHoppa
It looks like we were both typing at the same time ... but you explained it slightly better than I did.
I'm probably wrong but this is how I see the situation.
I seem to remember that, after Premier walked away, the £64 million CGT was negotiated down to about £32 million ... to be paid after first oil.
RKH are negotiating with a 3rd party who want to purchase the OM claim but the 3rd party are worried that if/when ROI pay the money over to RKH then FIG will try and grab a prior claim to some of the money.
Buzz, this is how I understand it.
Rock has agreed with funder that funder has the right to pursue ROI for award amount and that Rock will transfer to funder the agreed % that they recover from ROI.
FIG though have a claim to Rock assets, so if ROI pay up the award money to Rock, FIG in theory then have a claim on that money and in theory could stop Rock paying funder their %.
FIG I think, just need to agree not to do that.
Yes, 42 days for public consultation and 28 days or so for internal debate within the govt. I guess there will be some questions raised in the public consultation period which will take a bit of time to resolve/answer so this should be approved in 3-4 months at the latest
"CAPITAL GAINS TAX
In December 2013, Rockhopper announced that it had reached
an agreement in principle with the Falkland Islands
Government (“FIG”) regarding the timing and quantum of the
Capital Gains Tax (“CGT”) liability due as a result of its farm out
to Premier Oil of a 60% equity interest in its Sea Lion discovery.
The parties agreed in principle that the total CGT payable is
£90 million with payment split into two tranches. The first
payment, equating to £26 million (approximately $41 million),
has now been satisfied. The second payment equates to
£64 million (approximately $107 million) and will now be paid
at the same time as the first royalty payment to FIG from oil
production at Sea Lion.
Constructive discussions continue with FIG to document the
above agreement in principle."
Gosh, they were talking about reaching project sanction in 2015 !!!!!!
LTT
Rpoodle, the voice of reason.. Good to have you posting again Sir!
I've read all the comments but I'm not sure I really understand why RKH requested FIG approval. The OM award has nothing to do with FIG regardless of the tax position. You could argue the other way that RKH niw have skin in the game to say we will only pay tax if RKH Navitas get the green light on Sealion.
Does anyone know when the EIS is out in the public domain for public consultation?
I am pretty sure Mogger will be on this when it drops, but can’t recall how long between submission and being put out for public consultation. I think from memory there was 42 days for any feedback!
LTT
That's Great Rpoodle, thanks for posting 👍
Regarding the comment: “ suspect FIG may be seeking tax on the $231mln carry that rkh did receive but that's speculation on my part and may or may not be the case.”
You may be aware, but RKH paid tax on that portion many years ago. I’ve followed this company for years and years, so cannot recall the exact document that info is contained in, but I can assure you that tax has already been fully paid.
JEBR, I do not believe the monetisation award is up for negotiation until after the deadline that FIG have to approve.
If the award is upheld in full, the specialist funder stand to gain $150m or more.
If the appeal is upheld, they stand to lose $45m.
The chances favour the former significantly more than the latter.
As I said, FIG will look after FIG and they are unsurprisingly playing hardball with rkh as, for them, its Navitas,not Rkh developing & funding Sea Lion, rkh are pretty much just being carried, So whilst FIG be eagerly licking Nav ass, they certainly ain't gonna do the Rock any favours.
Sam & the team will have to use all the guile,diplomacy & negotiation skills they can to resolve these issues and hopefully get FIG to authorise the OM transaction & agree the tax ammendment.
We don't want another arbitration and I expect they will iron things out between them. Rkhs case on the €674mln carry they never received is stonewall but I suspect FIG may be seeking tax on the $231mln carry that rkh did receive but that's speculation on my part and may or may not be the case.
Navitas may even lean on FIG if they continue being uncooperative & stubborn as they will want things to keep moving and the OM cash will be needed to go towards rkh's share of the funding, so FIG, whilst seemingly holding all power over rkh, do not hold all the cards. Navitas do and Rkh being their partner, Nav will not want to see FIG holding back Rkh and thus, potentially holding back SL development, so thankfully we have a powerful allie in Navitas on the matter !
Hopefully Sam will return from his trip to the FIs with FIGs approval 🤞
I wonder what will happen in the unlikely event that the Annulment procedure reached it's end already next week and RKH is awarded everything. Will that mean that the cash deal will be renegotiated in such a way that RKH gets more out of it?
As PaulDrayton says, it’s a clever situation which benefits both RKH and FIG.
This “deemed Capital Gains Tax” from 2012 was valid at the time, but everyone knows that it is no longer payable including FIG. It has been written down to zero in the Company’ s accounts and the auditors approved that. The liability no longer exists under status quo. But there is a useful clause in the tax deed where it becomes immediately payable if the Company were to be taken over. It’s a poison pill to prevent a takeover and anyone in the know, knows it, so it’s useful to keep it.
When Odey tried to grab the cash element of the Premier farmout in 2013, via a court action to convert the share premium to distributable reserves, FIG used the CGT liability to take a security over “all” of the Company’s assets to prevent that happening. Odey was thwarted and left with his tail between his legs. That security is now the apparent clash with the OM award funder, as the potential cash assets increase.
It is a clash that can easily be resolved through a legal agreement for the ranking of securities, viz. who gets what first, if it all goes belly up. Banking consortia do this every day.
Maybe that’s why Sam is going to meet FIG next week?
I think the poison pill will remain even after the clash is resolved.
“London Calling” …..remember The Clash?
HI ii my broker hasnt converted my 100k shares in to the new co ?
any one else have this issue ?
Thanks Digitalboy1 for sharing SM's reply, and CitizenTS 08:38 post.
I personally feel FIG are total Pen1sHeads if they prioritise the ludicrous idea that Rock owe FIG £59.6 million from a 'irrecoverable carry of approximately US$ 670 million' that Rock did not receive from Premier.
Financially blackmailing Rock, if that is what they are doing, over Rocks monetising the OM award, instead of helping Rock to create their O&G industry, which Sea Lion alone will benefit them with $6Billion, is moronic at best !!
It's good to know why FIG now have a say in the OM award, however it leaves me with the impression FIG are way out of their depth, petty and incredibly short sighted.