Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Thanks for the response, CitizenTS & lsetown,....agree, with both your comments,....don't put the cart before the horse, springs to mind.
BW
It's all in the mix and on the table, I can tell you. How exactly FIG participate in bringing SL phase 1 to completion has yet to be finalised but it won't be on existing stated terms.
Not everyone will benefit, there's the ranting ralphski's of this world, basically busted and shake out higher up.
But all to play for over next few months.
Yeah ok, where can i get my beard trimmed?
Good ideas - I sent FIG a suggestion last year to forgo revenue until a certain level of production was met and then claw it back.
Currently there is a Royalty of 9% on the market value of oil produced and 26% Corporation Tax:
https://www.fig.gov.fk/minerals/regulatory/fiscal-regime
Perhaps email the FIG Tax Office with your suggestion?
Any creative thinking on their side makes it more likely that Sea Lion goes ahead.
Problem is citizen smith, who's listening?
Wraith - on the button there.
The issue with what FIG does as of now is that royalties at 26% are charged before cost break-even.
If it costs X to get the oil out and you sell it for Y then, economically, taxes/royalties are paid out of the Y-X slice of revenue, whatever the tax legislation actually says.
If FIG changed their tax/royalties (call it tax for short) to charge SL on revenue in excess of costs instead of total revenue, at whatever rate they might choose then -
breakeven comes DOWN FROM $40 to COST.
I'd broadly see this working as below:
At the moment it's circa $7.5 capital costs which, with actual interest costs, becomes $10.5
Rkh have, as I remember, said in the past (out-of-date imho) in the region of $15 lifting including lease costs. Let's say they meant $14.5. A best guess might be $13.5 as of now.
Then there's the use of risk discount rates in stated breakeven calcs which are a lot higher than actual interest costs. That project risk vaporises by first oil. Everyone is of course still exposed to oil price movements but we're calculating a cost type price to compare that with theat oil price. In any event the risk element in risk discount rates is not an interest cost, is not an actual cost of any sort, and is not in any prospective p&l.
But what it does do is increase stated breakeven costs by circa $5.
AND THEN there is FIG royalties at 26% of total revenue, call it $10 at a $40 oil price.
So total costs at a $40 price are
10.5+14.5+5+10 = 40 to make that breakeven.
If FIG charged royalties on revenue in excess of $25 then real breakeven is $25, whatever rate they charge!
There's no question that FIG are prepared to notionally forgo some part of their notional income on a project that doesn't happen in exchange for actual income on a real project, and all the job and infrastructure benefits of the capital spend which is all they ever would get in the early years anyway.
I'm sure the answer to Wraith's question is that the breakeven price could come down to $35 or less and financing/sanction would then slide out at a $45 (or less) oil price.
That's what they should do!
Setting aside, sufficient land for hydrocarbons development projects, is good to see,.....it has been pointed out, in the past, on this RKH posting board, Norway has made tax changes ;-
Extract :
"E&P companies can now deduct costs faster, resulting in on average 40% lower breakeven prices for yet-to-be sanctioned projects. This should lead some to fasttrack new projects on the Norwegian continental shelf over the next two years."
Source : https://www.offshore-mag.com/field-development/article/14178602/norway-set-for-further-boost-to-offshore-oil-and-gas-development-following-tax-changes
How much could Sealion, average break even, be lowered by, with Tax changes?
BW
What a pity big sam is on his camel, Lawrence of the gondolas
Thanks for link Mogger ( https://fig.gov.fk/assembly/public-papers/executive-council-papers/send/441-24-june-2020/2738-75-20p-sea-lion-development-land-set-aside-gordon-lines-stanley ),....
Extract;-
"4.7 It is therefore recommended that Executive Council suspends further allocation of
land in the Gordon Lines area and imposes a moratorium of the 2014 Gordon
Lines Interim Land Policy, to reserve this area for future use directly supporting
the Sea Lion development. Applications for such land will only be considered
subsequent to a successful contract award to support the Sea Lion development
and referred to Executive Council for approval as to the terms & conditions of
release. Land disposals within the area identified will not be conducted under the
existing Land Disposal Policy for the Gordon Lines area.
5. Significant Risks
5.1 Failure to set aside sufficient land for hydrocarbons development projects might disable
the Sea Lion project with detrimental impacts on the economy of the Falkland Islands."
BW
Load of nonsense as usual. FIG have been committed for over a decade. It doesn't matter if they are "committed" they don't have any money and neither do RKH, PMO and Naff all tas.
Thanks for posting Mogger.
Anyone who reads the paper will plainly see that the FIG are still committed and want Sea Lion to proceed. Land space is limited in the FI especially around Stanley, so 'reserving' this for our project is positive in my view.
All talk until the money is there. No benefit for them to talking it down, they have to stay positive and keep regurgitating the "progress" line.
Thanks Mogger....
Quote from from paper 75-20
4.4 The Sea Lion development is of critical strategic importance to the Falkland Islands. It
is likely that in the short to medium term, the development will be serviced from the
existing TDF port facility.
So looks like FIG still think Sealion will go ahead......
Talk is cheap mogger.
All,
News from the Islands. More wasted effort from the FIG.
https://fig.gov.fk/assembly/public-papers/executive-council-papers/send/441-24-june-2020/2738-75-20p-sea-lion-development-land-set-aside-gordon-lines-stanley
Mogger