Shell, Statoil, BP, The Koreans, The Chinese, The Americans, All the Private Equity Firms, all the Directors, all of whom want to make the most money possible aren't buying at these absurd prices. Was the 'absurd price' a kin to the 'market pleasing RAR'? I remember well when the RAR came out finally in May 2011. The article quoted a 'bemused Rupert Cole' at the price drop! Really I think the only people who were bemused were shareholders who were expecting a little more than the RAR stated in P2 reserves! Honestly you have to wonder, Alex Salmond giving this conpany a plug. Has he seen what investing in the North Sea in a strategic asset does for your personal wealth? Steer well clear
Sorry, what don't you understand about China Inc. strategy in assisting in developing international o&g fields where they can determine value in so doing. See the attached WSJ article. 'Chinese made platform designed to withstand typhoons', 'Cnooc has made a push to develop it's offshore drilling expertise' (in part assisted by their 2008, $2.5bn acquisition of Awilco by...COSL, and COSL is... a Cnooc sub). And, 'Cnooc has made a push to develop it's offshore drilling expertise, paying $15.1bn to buy Nexen Inc'. Other comment, 'the 30000t, Chinese designed platform contains enough steel to build 4 Eiffel Towers' and, 'for Liwan Cnooc also used the first deepwater rig and pipelaying ship to be made in China'. And, final significant extract, 'large scale deepwater rigs are our mobile national territory and a strategic weapon' Cnooc Chairman states.
So, if one is a major oilco, which owns an international UK subsidiary with stated intention to expand locally by investing in offshore fields, that happens also to own a rig subsidiary that has located and proposed an ideal rig for one field, would you not think a cash strapped principal partner in said venture could rather easily be persuaded to look favourably on contracting said unit. And would not one, if an employee of said major oilco, quite naturally be pushing for same? COSL is not you normal rig company, such as Seadrill or Rig, it's 100% owned by an agressive oil major.
When one further adds in the fact that one of your oilco partners, Statoil in other parts of the world, who also happens to have several of your rig subsidiary's rigs on charter in their neighbouring home country, who has paid for and approved methodology used by XEL for Bentley, and with whom you have also supported in the past, for example GOM, in 'providing development funding and receive a minority stake', then it's quite possible said co-operation might amicably extend by both parties to Bentley. Let's hope there is more than one jv partner for Bentley, it will ease the financial strain on the company in exploring it's other assets.
Sounds about as complex as possibly could be. I don't imagine the DECC has ever seen this type of proposal before. Good post by the way, refreshing to see a way forward without the useless hype shown on this board, morning to night.
I know it would be just a guess, but could you give an example of a possible contractual commitment between the rig operator and Xcite, assuming the operator picks up the tab ? Thanks
Imo for the major equipment the service companies will pick up and fund the capex for the platform, rig and FSO. Platform is interesting as w/o any apparent tender this thing has not gone out to bid as would normally be the case, so likely it's AMEC or Norwegian money behind who the actual owner will be. The FSO ditto re open tender. But as it's a huge capex few can do, and Teekay are shareholder in Sevan, with a Chinese yard likely to fund construction 80-90%. Thereafter it would revert to normal bank funding say 70-80% over part term of the 35 year contract, which Teekay can also source. So as preferred bidder and supplier of SS before, providing a presumably workable price/charter rate has been agreed, they get the job.
Still hard to work around the COSL proposal for an oversize rig. Presume that normally would come with oversize price, unless they can simplify construction and cost specific to XEL's needs. So supply and cost of rig possibly part of CNOOC's contribution to share in Bentley field, if not also in XEL, until field has positive cash flow. Appears to be some confusion over the timing and availability of this unit.
Whatever, we know no more equity, but XEL are going to require a funding contribution from somewhere in addition to the above, to retire the Bonds, release an RBL if that is the favoured major funding route to support the contractors until cash flow from production is positive. They also need to retain cash in the company sufficient to see it through to first oil, while in the meantime as well providing funds for 27th Round drilling. It needs to be more than the 10% plus costs in whatever form CNOOC may be prepared to put up, so question remains whether Statoil contribute, likely due to synergies and proximity of the field(s), plus possibly even BP yet, to secure their proposed offtake support and supply of crude. Otherwise an outright t/o could be on the cards, but only after the FDP is in place.
i used to work in bonds.........for clarification.......a company wants to borrow £500m.....it offers to pay a coupon (variable and normally paid annually ) for the privilege and pay the £500m back at the end of the term of the loan (terms are variable).....Barclays themselves needed a loan in the banking crisis and issued a 2 billion bond paying a 14% coupon redeemable in 2019 which is currently trading at a 35% premium.....this shows the bigger the risk the bigger the coupon would have to be to attract any investors...........it also shows that if / when XEL comes out of the doldrums and starts to de-risk (2nd part already happening IMO), the bond investors would reap the rewards of that without any extra cost to XEL
worth remembering the members of the Bentley Development Group, - Amec, Arup, Aibel, Teekay, Baker Hughes and the rig provider China Oilfield Services Limited, will all be contributing to the development either in terms of finance, or providing services and equipment etc.
Once the extent of this is known (and it's likely this has all been discussed in detail already) then the amount of reserves based lending required will also be established. Depending on each partner's contribution, it may be relatively small in the wider scheme of things.
An example of this innovative method has already been demonstrated when BP agreed to blend and market the Bentley crude, yet were prepared to offset payment until the crude had been sold. If the crude had not proved marketable, what would have happened then?
Each of the partners will have no doubt looked closely at XEL's plans, and by signing MOU's have shown their willingness to become further involved. If things didn't add up they would have simply walked away.
Otherwise, why would they even bother returning Rupert's phone calls -what's in it for them?
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