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UKEF has been history with respect to SL for >2 years: plain to see.
Need to ask if the OM award will be free of Italian and EU taxes
Cubane
Cyan:
Definitely agree.
Last roll of the dice and if there's not a clear route to production - don't waste a penny of any OM payout on these no-marks salaries.
In view of the present gas crisis and probable general energy problems that are bound to arise over the next few decades around the world - a country like Israel (although they have good oil reserves in the Med?) wouldn't give a flying fk about the sensibilities of Argentina and would love a secure supply of oil produced by one of their own companies.
Surely even our brain dead CEO has been selling that concept to Navitas?
I agree. We mustn't let Sam squander any OM award nor let him dilute our shares.
Glenrothes proposals of a combined shareholder's group are now vital IMHO.
We have two slim survival hopes now. Firstly ; we must receive a large cash injection before end of 2022, hopefully via an OM award. Secondly; Sea Lion's development really relies on Navitas being VERY keen on the project. I think they are the guys with the know how and connections to possibly secure development; certainly NOT our management.
If Navitas gives up on SL; the games is up, imo. Sam will want to raise funds by dilutions for ever in a hopeless exercise ; holding out hope like ARG and BOR managements have but with no chance of attracting partners with deep pockets . Uselessly paying directors for years; sitting around sending out promotional materials is not on, imo
If Navitas walks and IF RKH has received a LARGE OM award; I think there is a case to wind up the company and distribute the cash.
I reckon you're right - it wouldn't look good.
Good evening Ovets.
Hand on heart i think UKEF is off the table as per the content in the guidance document below. Just thought there was a remote chance that as we were in the door with the process we might be allowed help. Detailed questioning of Sam on finance would be helpful.
hTTps://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975753/Guidance_-_Aligning_UK_international_support_for_the_clean_energy_transition_-_March_2021_.pdf
I'm certainly not that optimistic about the prospects for UKEF, but as COP26 approaches, I've been listening very closely to what Government spokespeople have been saying, including Boris.
They have all been very consistent in referring to the need to stop using coal, but absolutely NO equivalent reference for oil, or gas.
Should read $1.8 BILLION doh!
A lot of effort was made by PMO on securing the financing of Sea Lion.
RKH annual report RNS's 2.4 2019 had the line;
"Vendor financing - contractors have agreed to provide up to US$400 million of funding for the project"
What is the position now?
Has ALL chance of UKEF gone; because I believe we started an application process and we received input about improving the fields economics. I believe that must have come from UKEF and as a result 4 more producing wells were added to the plans upping costs by $300m to $1.8m .
As we started the process is there a remote chance we fall outside the prohibition on new fossil fuel projects applications?. I fear we have lost the chance. Has Sam an answer?
Good afternoon longtermthinker
Could Sam be asked about our gas "assets" please?
First; a miniscule piece of good news; Italian gas prices have shot up too and in Europe are second only to the percentage rise in the UK.
I only have out of date numbers but both our fields have been in serious decline. What is the current production and how much revenues do they produce.
I suspect we are looking at a total about 300 Barrels of oil equivalent .
These assets have circa $13.5 m decommissioning liabilities. When does Sam think they will become an 'issue'
RKH had a deal where we were going to PAY NOP to take CIVITA off our hands ( deal fell through). NOP stated in 2017 they thought production life left was about FIVE years. What is Sam's view?
Good afternoon r1234
you wrote; "Do we still have any interest in Monte Grosso (25% stake operated by ENI) and if so what is happening with it?"
Yes we do but its useless because there's little chance of drilling getting a go ahead and we can not afford the gamble anyway..
RKH have a 23 % interest there and , coincidentally, its COS is estimated at 23% which is not particularly great.
This is a very deep, challenging target; circa 6,800 metres; a previous attempt to reach target depth was abandoned by British Gas years ago. Its not a cheap drill and its estimated would take well over a year to reach the target; (I have seen an estimate of 415 days).
Part 2 of questions;
15. From 8.4.20 Results RNS "Falkland Islands spend of US$19.3 million relates primarily to pre-development activities on Sea Lion." If we were simply being billed by PMO alone for our share of predevelopment costs; then our 40% which was $19.3m USD! suggests that 100% of costs for one year were in total $48.25 MILLION USD .
We were not doing any drilling; where was the money spent?.
"...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."
Also another $10m bill that popped up; what was that cash used for?.
Below is the list of questions for the board so far, please add anything else you want to ask as I will send them through by the end of play today so they have some time to come up with some answers.
Regards LTT
1. From half year results Harbour wrote; "The Group has decided to explore the options to exit the project and its other license
interests in the Falkland Islands". As Harbour has stated, " the development of the project is not deemed a strategic fit for Harbour." then what is there to discuss? They will not develop SL so their license should revert to us. I am concerned that extended discussions will inhibit our moving forward with other interested parties.
2. What costs are involve in Harbours exit, what are our liabilities with this exit?
3. What has happened with UKEF? Presumable it's a non starter now the major player Harbour is walking away.
4. What will you do to preserve current cash until the arbitration result is though, and going forward if Italy drag their feet to pay, how do you plan on keep the company afloat with current cash burn?
5. What will you do with the arbitration money?
6. You may or may not have had an inkling that Harbour would be walking away, but what have you been doing whist Harbour where reviewing the project? Where you preparing a battle plan to pre-empt such a scenario? If so what is it, can you share you plan going forward with share holders.
7. Has there been any discussion with FIG about further tax incentives/breaks to gain more interest in the project, to get it off the ground. Such as royalty payments put on hold until 1 year after first oil, or a sliding royalty system than enables FIG to reap the rewards during the good times of high oil prices, but works of a sliding scale during tougher times, as I see this as a big hurdle for would be investors.
8. Are we still liable for capital gains (£65M?) to FIG and when will it be due?
9. Rockhopper say they have been talking with Navitas - could they outline what options they have been discussing with them?
10. Do the BOD appreciate that a significant amount of shareholders are unhappy with the company's performance to date?
If so, how do they propose to remedy this?
11. Can Harbour sell/offer up for sale their share of Sea Lion?
12. Will any new deal set up with Navitas include an up front payment to cover historic costs?
13. Any new partner coming in, will they have to pay some historic costs to get a share of Sea Lion and the surrounding acreage?
14. Do we still have any interest in Monte Grosso (25% stake operated by ENI) and if so what is happening with it?
15. From 8.4.20 Results RNS "Falkland Islands spend of US$19.3 million relates primarily to pre-development activities on Sea Lion." If we were simply being billed by PMO alone for our share of predevelopment costs; then our 40% which was $19.3m USD! suggests that 100% of costs for one year were in total $48.25 MILLION USD .
We were not doing any drilling; where was
I reckon RKH has about $8m cash left. At end of 2020 it was $11.7m
I am unable to attend the meeting but; there are questions for Sam about where the cash has gone and who is responsible for OTT pre-development costs;
8.4.20 Results RNS
"Falkland Islands spend of US$19.3 million relates primarily to pre-development activities on Sea Lion. Following signature of a Heads of Terms in January 2020, Rockhopper's share of pre-sanction costs from 1 January 2020 (other than licence fees, taxes and project wind down costs) are funded by Premier and/or Navitas. 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."
"Falkland Islands spend of US$19.3 million relates primarily to pre-development activities on Sea Lion."
If we were simply being billed by PMO alone for our share of predevelopment costs; then our 40% which was $19.3m USD! suggests that 100% of costs for one year were in total $48.25 MILLION USD .
That's madness. We were not doing any drilling; where was the money spent?.
Someone needs to account for where that $19.3 m went and what about that kicker; another $10m bill that popped up; what was that cash used for?.
Do we still have any interest in Monte Grosso (25% stake operated by ENI) and if so what is happening with it?
Below is the list of questions for the board so far, please add anything else you want to ask as I will send them through by the end of play today so they have some time to come up with some answers.
Regards LTT
1. From half year results Harbour wrote; "The Group has decided to explore the options to exit the project and its other license
interests in the Falkland Islands". As Harbour has stated, " the development of the project is not deemed a strategic fit for Harbour." then what is there to discuss? They will not develop SL so their license should revert to us. I am concerned that extended discussions will inhibit our moving forward with other interested parties.
2. What costs are involve in Harbours exit, what are our liabilities with this exit?
3. What has happened with UKEF? Presumable it's a non starter now the major player Harbour is walking away.
4. What will you do to preserve current cash until the arbitration result is though, and going forward if Italy drag their feet to pay, how do you plan on keep the company afloat with current cash burn?
5. What will you do with the arbitration money?
6. You may or may not have had an inkling that Harbour would be walking away, but what have you been doing whist Harbour where reviewing the project? Where you preparing a battle plan to pre-empt such a scenario? If so what is it, can you share you plan going forward with share holders.
7. Has there been any discussion with FIG about further tax incentives/breaks to gain more interest in the project, to get it off the ground. Such as royalty payments put on hold until 1 year after first oil, or a sliding royalty system than enables FIG to reap the rewards during the good times of high oil prices, but works of a sliding scale during tougher times, as I see this as a big hurdle for would be investors.
8. Are we still liable for capital gains (£65M?) to FIG and when will it be due?
9. Rockhopper say they have been talking with Navitas - could they outline what options they have been discussing with them?
10. Do the BOD appreciate that a significant amount of shareholders are unhappy with the company's performance to date?
If so, how do they propose to remedy this?
11. Can Harbour sell/offer up for sale their share of Sea Lion?
12. Will any new deal set up with Navitas include an up front payment to cover historic costs?
13. Any new partner coming in, will they have to pay some historic costs to get a share of Sea Lion and the surrounding acreage?
LTT
Your position is very logical and rational, and makes perfect sense if you think Moody is capable of delivering anything of value (other than to his personal bank account).
I would love to be part of the Falklands story in future if it still has any mileage but I can't see myself investing again in a company led by Sam Moody and his useless colleagues. That's probably the dilemma for many supporters of the Falklands story.
I wish you and other shareholders all the best. RKH finally made me realise how much pain hope can inflict! Although not invested currently, nothing would be more happiness than seeing oil produced at SL.
Best
Happy
I would agree, LTT, not the moment to chuck the BoD out (just yet!), but to ask good questions, which ought to be sent in advance of the meeting, so that good answers (hopefully honest) can be provided.
After Sam's AGM presentation on 29/6/21, I posted the following: "I have to say that Sam's AGM presentation sounded more like a sales pitch to me".
Even then it sounded very much as though he could sense (perhaps even knew) which way things were going to go with HBR.
If so, he's had quite a bit of time to get some decent plans together, with a good story to tell.
Even if he didn't anticipate what's just happened, the BoD should still have been planning for everything/anything, considering all the false starts SL has experienced.
So, on 30/9/21, I would like to know what those plans are and how things are progressing.
Happy I get what you are saying and where you are coming from, however this is a good opportunity to get some answers. I don't feel this is a time to ask for resignations en masse, it's a case of better the devil you know. You really want to throw away the good will RKH team have with FIG at this time? A time when we actually have a chance to be in charge of our own destiny? We have been on the back foot for sometime now, covid really changed everything just when we had a chance of getting this thing off the ground.
Let's hear what the board has to say and ask the right questions at the meeting. Yes we could just have a list of questions such as; Why are you paid so much? Why do you give yourselves extravagant share options? Why didn't you cut your wages sooner?Why don't you all resign? etc,etc,etc, which I can imagine they will say, " We paid ourselves and have share options and pension packages in line with other AIM listed companies."
So wouldn't it be better to ask them what they are going to do from NOW to earn those wages and share options, now that they will have the ball well and truly back in their court, because then they will have no excuses, no more "We are waiting of PMO to apply for UKEF", "We can't do anything until Harbour has reviewed SL",etc, etc. They will have to do something, and the last thing I want is to get in a legal battle with directors over pay packages, remuneration packages , over forcing them to resign when they should be concentrating on doing deals and getting Sea Lion to FID and project sanction.
LTT
LTH
That's an excellent list of questions. However, without wishing to be facetious, I would ask only the following questions of this current board (and maybe only Q2):
1) Please could you explain what work each of member of the management board does on a typical day? How can you justify paying yourselves such substantial salaries when evidently there is no work to do - for example, before yesterday's announcement the progress of the Sea Lion project was entirely in the hands of the operator Harbour (previously Premier Oil).
2) Given the failure to deliver first oil more than 10 years after the discovery of the Sea Lion oil field, do you not think it is time for the board to tender its resignations en masse and for new directors to be appointed that can take the company forward and that have the confidence of shareholders and other stakeholders?
I can't see any benefit for shareholders of engaging this board further. If new directors were appointed, then FIG may also be more sympathetic to the Company. Yesterday's announcement will have upset a lot of people and I can't see these directors getting an easy ride from any shareholders / stakeholders. Lord knows what's in the fine print of the agreements they inked. I think they are incompetent and even the detailed answers they give can't be trusted. A new board is needed and a root-and-branch review of current agreements and obligations to find a way forward.
All IMHO DYOR
Happy
Do the BOD appreciate that a significant amount of shareholders are unhappy with the company's performance to date?
If so, how do they propose to remedy this?
Rockhopper say they have been talking with Navitas - could they outline what options they have been discussing with them?
I've added your question to the list. Thanks
LTT
This is a opportunity not to be missed so I though I would start a thread where we can get a concise list of questions that we can ask the board, rather than everyone send individually and they have to trawl through hundreds of emails ask same think, so for anyone interested, as you think of a question, copy and paste it to the list below if you like. To set the ball rolling I have put a couple of questions in no particular order;
1. From half year results Harbour wrote; "The Group has decided to explore the options to exit the project and its other license
interests in the Falkland Islands". As Harbour has stated, " the development of the project is not deemed a strategic fit for Harbour." then what is there to discuss? They will not develop SL so their license should revert to us. I am concerned that extended discussions will inhibit our moving forward with other interested parties.
2. What costs are involve in Harbours exit, what are our liabilities with this exit?
3. What has happened with UKEF? Presumable it's a non starter now the major player Harbour is walking away.
4. What will you do to preserve current cash until the arbitration result is though, and going forward if Italy drag their feet to pay, how do you plan on keep the company afloat with current cash burn?
5. What will you do with the arbitration money?
6. You may or may not have had an inkling that Harbour would be walking away, but what have you been doing whist Harbour where reviewing the project? Where you preparing a battle plan to pre-empt such a scenario? If so what is it, can you share you plan going forward with share holders.
7. Has there been any discussion with FIG about further tax incentives/breaks to gain more interest in the project, to get it off the ground. Such as royalty payments put on hold until 1 year after first oil, or a sliding royalty system than enables FIG to reap the rewards during the good times of high oil prices, but works of a sliding scale during tougher times, as I see this as a big hurdle for would be investors.
8. Are we still liable for capital gains (£65M?) to FIG and when will it be due?