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Fingers crossed for a big simple and quick settlement/resolution with India. Could get very messy with asset seizures, finance and risk sharing agreements with repo agents, champerty lawsuits from India in response.
Fantastic post aa, and current macp covered by the money india owes! India will eventually make settlement once assets starting to get sizzed its just matter of time
Kraken and catcher both command a premium to brent I believe. Is that true for these new assets?
Most of the production is Gas - Worth Almost nothing
$1.7billion from India, they will have to pay once assets starts being freezed
The tribunal ruled unanimously that India had breached its obligations to Cairn under the UK-India Bilateral Investment Treaty and it awarded to Cairn damages of US$1.2bn plus interest and costs, which immediately became payable. The total due at the year-end was US$1.7bn.
Cairn has engaged directly with the GoI regarding satisfaction of the Award, which is also enforceable against India-owned assets in over 160 countries that have signed and ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Cairn has already taken steps to have the Award recognised in certain major jurisdictions in which Indian sovereign assets have been identified.
Add in any Indian assets we're effectively forced to take on, and it amounts to a very significant strategic shift.
They Jumped the gun i'm afraid , Jumped ship without looking into the future. Oil prices now make those assets worth double what they have been sold for.
How bloody stupid
Short term this is a terrible deal. Long term it might be good.
If the kraken / catcher effective date is 1st Jan 2020 then all these oil price gains have just been wiped out?
This is a bizarre move. Back to hoping the GOI will save the day...
This should be over 200p a share, market is making a fool of its self, this is a fantastic deal
Transaction Highlights
Ø Adds working interest 2P reserves of 113 mmboe as at 31 December 2020
Ø Adds low-cost 2021 forecast working interest production of between 33,000-38,000 boepd with an opex/bbl of
Ø Two-thirds of production from the Assets is gas weighted, adjusting Cairn's current hydrocarbon split towards gas
Ø Significant Cashflow from Operations (CFFO) contribution: average CFFO[1] for previous three reported years (2017 - 2019) was ~US$140 million net to the interests being acquired by Cairn
Ø Enhances near-term growth opportunities with 2C contingent resources working interest of 49 mmboe as at 31 December 2020 to Cairn and significant exploration potential remaining
Ø Cairn, together with Cheiron, plans to finance the Acquisition with a new joint acquisition reserve-based lending facility of up to US$350 million, joint junior debt facility of US$100 million and existing cash on balance sheet
Ø The economic effective date of the Acquisition is 1 January 2020. Production for the assets being acquired averaged 83,000 boepd (Cairn working interest of 41,500 boepd) in 2020
Simon Thomson, Chief Executive of Cairn said:
"The divestment of our UK producing assets as they move into decline phase, will further strengthen our ability to pursue Cairn's strategic goals and position the company robustly for the decade ahead."
I think news is very good sometimes market is blind and takes time for it to sink in
Brent is $68 - Both fields returning massive profits , The assets return more than the sale price in 2 years at current oil prices
I think it's what they call a mega rns. I'm. Not sure why the market has reacted negatively?
Fair point but in mitigation while fuel/oil consumption is down in Europe because of fewer car commutes and airline travel we all still use gas for part of our domestic energy needs. I agree the detail will be important but the news is a welcome distraction from India and the compensation case.
Madness ! What on Gods earth are they doing
I find it a bit of a strange one...we are moving from oil to gas at just the moment oil finally seems to be entering a bull market. And diversifying by swapping NS for egypt?
Will need to see the detail on this one.
they say no news is good news, but today we are getting bombarded. Fingers crossed this is received well, lots of info here!