Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
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Cyan, I'm not disputing what you said is factually true.........but then so are the points I made.
Good morning Phil164
I wrote ; "The other issue I think is POO; its not really high enough. BOR never manged to complete a farmin when POO was over $100; so what chance now with POO $40 cheaper?"
POO had an enormous fall. POO, if memory serves me correct; hit $115. As I said BOR could not complete a farmin ;for whatever reasons . Yes, things can change but, one has to look at the evidence of an oil market in surplus with a growing pressure to decarbonize .
The present POO is supported by hard fought agreements by OPEC to cut and manage production. It seems the consensus of opinion is that around $65 is the ballpark producers are content with. I think the days of $100 oil are long gone.
There has been a huge recent discovery with Iran announcing a 50 Billion barrels find adding to their enormous reserves.
www.nytimes.com/2019/11/10/world/middleeast/iran-oil-field.html
Pressure on POO will really grow if the Iranians get to export in quantity again and OPEC can not agree to manage production.
But, as I say, there is empirical evidence of a real lack of interest; those Argentinian wildcat licenses preferred by big oil ahead of BOR's known discovery and the difficulty RKH and PMO had attracting a strong, rich partner.
If SEALION achieves FID there will likely be a lift for BOR shares offering a trading opportunity for the nimble; but will it last.?
Cyan, one could argue that the oil price crash of 2014 could not have come at a worse time for BOR, it is a matter of record on an RNS around that time that they had turned down at least one farm in offer because it did not meet their valuation, no doubt the decision would be different now, they had also agreed commercial terms on another deal before circumstances outside their control changed, so your completely black and white assessment of their story is maybe not entirely fair. Things can change.......as they did late in 2014.
Hello again ivans
The problems BOR has attracting a deep pocketed partner are significant. First the size of the investment; I reckon you are looking at a minimum spend way over a billion dollars; SEALION cost is $1.8 billion.
BOR's asset is in truly DEEP water circa 2000m and the costs of every drill are twice that of in the NFB. Years ago a North Falkland basin drill cost about $50m a shot; the SFB was $110m. Now its said costs have reduced but the differential remains which makes the NFB more attractive for development and exploration; the water depth is about a quarter of BOR's asset. The other problems are linked to politics. Argentina has a tendency to blacklist any oil company investing in the Fi's. That will put off an awful lot. As evidence of 'big' oil's lack of interest in BOR's proven discovery you just have to look at the recent auction off of Argentinian EXPLORATION licenses , off shore. Looks like big oil would rather spend cash gambling on a hit rather than buying into BOR's certainty.Certainly no appetite for ANY more exploration in Falkland waters. The other issue I think is POO; its not really high enough. BOR never manged to complete a farmin when POO was over $100; so what chance now with POO $40 cheaper?. It is looking odds on now for SEALION but its been a close call and still may end up undeveloped if fate throws curve balls at the partners. RKH were lucky to hook PMO with a deal that now looks , and proved, unaffordable. If it not for the enormous amount already spent by PMO and the catastrophic hit on their accounts (SEALION valued at circa $700m in their books); I think they would have walked away. Time is not on BOR's side with climate change the big issue and they really need to do a load more appraisal work anyway.
. BOR will stagger on because it has circa £4m in cash to pay directors who will continue to put a brave face on for investors. I note your line ;
"PMO may still farm in to BOR and then subsequently seek other richer partner and farm down further, like how they did in RKH.
PMO can not afford to play with BOR. The debt holders would likely block any more borrowings.Please research NAVITAS. They are NOT rich they are VERY new with little cash. There remains funding questions. I really wish PMO could have attracted another rich major to turbocharge development, but, it looks like Navitas were the the only interested party.
Good luck
ok , i just gave example. maybe PMO is not suitable but other majors with huge cash will easily be able to farm in to us, especially if they can see PMO project is viable.
or, PMO may still farm in to BOR and then subsequently seek other richer partner and farm down further, like how they did in RKH.
anyhow, thats to show that BOR should benefit greatly and maybe 2020 is our year of multibag!
Good evening ivans
You wrote; "perhaps PMO will be looking at BOR next after RKH."
PMO have debt issues. They could not possibly finance the development of BOR's discovery which needs more appraisal drills anyway. The cost would be huge. BOR say they can breakeven at $40 a barrel; multiply that by the numbers of barrels BOR believe they have ..
Review the SEALION position. PMO could not afford to develop SEALION anymore without bringing in another partner to share the costs. PMO gave up 20% of SEALION for , effectively, a couple of hundred million just to get the project over the line.
For 30% of SEALION NAVITAS are on the hooks for $180 million as their share of the partners $600m commitment to the package which it appears will comprise $400 vendor finance, $800m senior debt and $600 m from the partners. They will also help with a loan to RKH.
PMO are over stretched and the debt holders would baulk at more giant borrowings.
Good article. Personally, I would like to see some reforesting (orvirgin foresting) around the islands as carbon offset. Nevertheless, it looks a UK project and Boris has to engineer an insurance scheme for a fossil fuel company. That's a real sticking point in my view.
if RKH successfull in falklands, BOR oil discovery assets will be very very valuable! remember, BOR and RKH both have oil discovery, not wild cat! and we dont need massive infrastructure which will take long to develop such as pipelines. We will just use floating storage which can be made available relatively quickly (READ below) .
this will be very attractive to major oil company to farm in to us. BOR mcap only 10m . perhaps PMO will be looking at BOR next after RKH.
https://en.mercopress.com/2020/01/23/falklands-oil-company-lays-out-plans-for-production-85.000-bpd-at-peak-output