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Got it wrong farmyard , nah big sam wasn't buying , snout is in the freebies..oink,! Oink!
anyway folks its been a good discussion today while it lasted but with the afternoon emergence of those pesky little green boxes starting to appear on the horizon its time for me to knock it on the head for the day.
see y'all tomorrow ... same time same place ... fingers crossed the lunatics will still be drugged up and sleeping
100% agree fuddstone in that had Moody been a real oilman he might have realised that he was (at the time) buying the wrong assets in Egypt
IMO he's been nothing short of a liability since he got promoted to the big comfy chair
Doubt the falklands ever get oil out at this rate
TGF, a team of around 40 (mostly contractors) made up of all sorts (engineers, logistics, contracts, legal, finance, supervisors, etc) working on SL development for the past number of years doesn't come cheap and although they sit in the PMO buildings, RKH have been paying their % share of those costs.
the past few years the average engineers day rate has been anything between £600+ per day up to and in some instances over £1,000 per day (for a lead) dependent on levels of experience so doesn't take long to burn through the back room costs on a project of this duration and size.
I do agree with what you say in that there is no way Moody and Co should be collecting what they are for delivering what has been an unmitigated disaster from the farm out get go.
the day that farm out deal was announced was the day I sold the last of my shares as I knew from experience PMO weren't ever going to be the company of choice.
I remember back in the day, all the cries of 'this time next year rodders' and 'in Sam we trust'
10 years on and look who's crying now
For me, that's the key. It's all very well saying "but we're just paying our share of the costs which PMO incurs". What on earth could possibly have cost tens of millions of pounds already. There are no rigs, there is no infrastructure, no contract payments, there is no funding, no crews, nothing. All that could possibly have been happening is existing staff having meetings, drawing up documents etc. Yet we have gone, in five years or so, from having hundreds of millions in cash and hundreds of millions in carry, to having £10m left, and that only because we panic sold our Egypt asset, otherwise, we'd have been bust.
How on earth can so much money disappear on so little. I've long been critical of the outrageous, kleptocratic levels of remuneration the board award to themselves. But even I don't think they've personally pocketed hundreds of millions of pounds over the last 5 years. So where has it gone? And how on earth can our board justify their positions when they have overseen such incredible, almost unbelievable, cash drain, with literally nothing substantive to show for it?
Has the OM award announcement been delayed (no explanation provided in RNS) or is it still within the current time frame? Perhaps Mogger could confirm?
Would it be fair to say 4p is the bottom with the caveat that it reduces in line with the cash burn? Therefore the value currently put on SL and OM award equates to circa 2p per share. Outstanding. And you say our leader was a stockbroker??...
Problem with RKH is the guy who is running it, a stockbroker who thinks he is a business man / oil man and he is neither PMO got a ring through his nose and leading him wherever is best for PMO absolutely no safeguards built in whatsoever. IMHO
fecm, I make current cash equivalent circa 4p a share so who knows ?
the markets are a mystery most days and even more so just now but you never know maybe some are still expecting the mass arrival of twitchers and swallows :)
SPlooks about ready to drop
Anybody got any thoughts on why this hasn't tanked today? A couple of pence off the sp wouldn't have looked out of place today. Perhaps it's stored up for tomorrow for a double whammy with OPEC/Russian decision.
site character limitations so to finish the last sentence :
nobody ever went bust banking a profit and a profit is never really a profit until the stock is sold and cash is in your account
our posts crossed over poodle but yes you spotted the same thing as well
fingers crossed for Italy
yes lots of bits and pieces in the RNS one could cherry pick and talk about (future POO, PMO house in order, Funding, etc, etc) but irrespective of how upbeat they try and sound every single one of them points to another lengthy project delay !!!
and here's another niggling example
''during the first quarter of 2020, the Company paid US$3.9 million of Sea Lion costs related to the period prior to 1 January 2020. Whilst timing remains unclear, further such costs, estimated at up to US$10.0 million and included in the balance sheet under current liabilities, could become payable in the next 12 months''
given they had $17 million end of year and sold Egypt for $16 million post period reporting and having only $22 million currently left in the bank today it means they have spent $11 million in the first 3 months of this year.
if you take the $17 million in remaining cash minus up to $10 million of further (albeit potential) SL costs due this year, it doesn't leave a lot of wiggle room when your G&A is steadily burning over $5 million a year.
and so when you read statements like that on the annual report, I'd say as a going concern (past the 12 months from now date) it really does all come down to getting a decent payout from Italy.
don't forget SL licence renewal is due again in May 2021 and IF no FID has been approved by then (which I suspect might not be the case if these markets are to continue for any period length of time) the FIG will be asking questions about PMO/RKH and their ability to fund and push this on and into production as they too would like to see some revenue coming in after 10 years of promise so IMO something might have to give if Italy doesn't pay big this year
as its stands for someone looking in today (as a current investment case) there are cash flow project sanction alarm bells everywhere so its a big risk that's for sure but as is the reality with retail investors once they are in, the majority of them are locked in until they either see a profit where they can sell at or the company goes bust.
it is therefore IMO the 2 single biggest killers of a retail investors portfolio, namely:
1. FOMO (Fear Of Missing Out) as SP is going to the moon tomorrow
2. FOCL (Fear Of Crystallising Loss) just in case it goes to the moon tomorrow or the day after or maybe one day
whereas in market reality there will always be another train tomorrow or the next day or the week after that, OK it might be from a different station but trust me there will always be another one
I always say never be the last to leave, so the golden rule for me nowadays is, NOT the FOMO or the FOCL it is actually FIFO (aka be First In and First Out) and leave the froth and rainbows for others
RKH has been good to me in the past, but the investment case has changed, so I wish you all luck going forward
nobody ever went bust banking a profit and a profit is never really a profit until the stock is sold and cas
Hells bells. Premier has absolutely bled rockhopper dry. No wonder they had to panic sell the Egypt assets. The key figures are in the financial section: Rockhopper had $21.9m at April 1st, BUT they owe some $10m in Sea Lion-related costs built up in 2019. So in reality their cash position is $11.9m (excluding any value that those UOG shares have). Where is all this Falklands spending going??
Notwithstanding the case against Italy, without that deal with Navitas, Rockhopper would have been bust, all ends up, by the end or this year. Surely, surely, surely time to sack the management.
Whilst you've covered off the oil price issue, we are also forced to wait until PMO get their house in order.
"While engagement with senior debt providers has been constructive, feedback received highlights the need for Premier to complete its announced corporate actions and extension of its credit facilities to provide certainty over its medium- to long-term funding position before financial guarantees for the project can be secured. Recovery of the oil price is clearly also critical to securing such funding."
Well on reading the RNS I feel a bit down hearted.
I always believed that Sea Lion/RKH would come good. It's taken forever but I still wanted to believe that if RKH could just hold on long enough the asset had to be developed - it just made logical sense to me.
A few months back we were saying that RKH probably had enough cash to last out 2 to 3 years. Now??
We also have the added uncertainty of how long it will take world demand for oil to pick up and will it ever reach previous levels?. We have massive over supply in the short term. This must cause untold damage to the industry as they go into survival mode and cut back on project expenditure.
On the flip side the next 3 or so years would be a great time for RKH/PMO to capitalise futher on reduced oil services company costs. Then aim to begin producing in 3 to 4 years times when I think we'll be coming into a period of supply short fall. Art Berman on 'MacroVoices.com' yesterday was quite downbeat on oil prices for the next 5 years saying we'll have an average price of between $40 to $50. Will this be high enough to give confidence for Sea Lion to get the go ahead?
The world economy was heading for recession/depression anyway imo. Way toooooooo much debt. The pandemic has just speeded things up a lot not giving time for the world to adjust to a 'new normal'
I look forward to hearing comments from Mogger, Rpoodle an LTT - some of the posters who's opinions I respect.
By the time this all settles and FID is announced RKH will no longer exist right now it is being bought out from under our feet and at a price that is unbelievably cheap, Moody is totally incapable of writing a positive news release. Complete shambles and very high cash burn for very little from this BoD they are a disgrace. IMHO
Keyboard went mad there!! Oh well, what I meant to say is we're stuffed
In fairness it has now gone down slightky!
It really does feel like the last days of Rome now.... SL looking very unlikely and it does appear our only chance is a decent OM layout but I've always thought getting anything from Italy as they do operate in quite the same way as proper first world economies and their awful experience with CoronaVirus will, I believe, make them even less likely to pay up
A whole years work summed up in 16 bullet points.
Surprised the sp has held after that, although I guess much of it was expected. Hopefully once we exit from this virus lockdown, things might start to pick up. A settling down of oil prices will help too. Just got to sit this one out, which is something we should be pretty good at by now!
Never has one company blown so much cash on absolutely nothing, surely?