The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen 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.
The news we are waiting for is a deal encompassing a project on proven resources with infrastructure already in place, for assets that are no longer wanted by the current owner, with a FDP designed by MFDevCo, consortium partners already lined up as suppliers and technical and operational support, project finance, seed finance, upfront payment, service contract, equity in the SPV, relative low capex outlay, low operational cost, deals with governmental and company finance decommissioning and security of energy supply problems, is a cleaner energy source which can bridge the transition to cleaner energy and the 2050 government targets, deals in supply of electricity via an existing offshore grid and is an energy source that even the majors are looking to for the future security of their company and will be the first project of its kind leading the way with the GTW initiative.
Assuming this gets announced all together, can anyone give me an example of any AIM deal in history that has gone from nothing to a complete project to this extent? A lot of the successes I can think of are a much more of a step changed process or driven by a large discovery.
The real exciting thing from an investment point of view is that this can repeat over and over again for multiple projects over the next few years.
Sharelock I admire your enthusiasm.
Genuine question how long in the future will it take to put these projects into fruition ?
My investment here is no where near as much as others but it is significant in my world.
I’m concerned that there is monthly cash burn and that we must be running out of funds with no hint of a deal being closed! How can the BOD even consider another placing imho! Who in their right mind would invest new money here?
Just saying it as it is with everything crossed!!!!
GLA
“Who in their right mind would invest new money here” However you mark your opinion as a strong buy! Confusing to say the least.
Infapound - according to half yearly report they had 211k cash left in Dec yet they didn't do a raise until 4 months later at end of March for 250k plus OO money on top.
This tells me their cash burn is vastly reduced otherwise they would have been doing a raise back in Jan imo.
We know there is 500k on the table upon completion of SPV plus this....."MFDevCo will receive up-front payment for projects and will be further paid for managing projects from the point at which any transaction with the SPV is agreed." ..... " MFDevCo would earn three sources of revenue for each project the SPV purchases: the initial sales price; payment for services to manage projects; and project revenues as a result of its proposed 30% equity holding in the entity."
Obviously this is subject to securing a binding deal but all the signs are that the first one could be anyday when you consider all the progress made to date for GTW and the sheer need for it for energy security as well as govt support.
No hint of a deal..... what about the fact they have released an RNS saying they are setting up a project financing facility at the same time as concluding negotiations on 2 priority assets, and now releasing a forum ready to discuss such deals when it completes??? Don’t you think that’s more than a hint???
I asked a question previously that has not been answered or avoided.
I'll elaborate.
According to Mcadder a deal is days from announcement. Where this information coming from I have no idea?. I urge caution as we have seen these confidence levels before, with no deal arriving.
He states MFDEVCO would get upfront payment of 500k and a further payment for management of the project.
What we don't know is the timescales to future revenue.
SBP has pointed out the various red tape surrounding any projects , particularly with the OGA and Environmental approvals.
Any deal signed tommorow could be many years from being revenue ready.
So how does that benefit NUOG and funding requirements. In a nut shell it doesn't initial. Yes the working capital will be significantly reduced. But with only limited funding available at present it doesn't address working capital needs, over the next few years before revenue positive position of any project is achieved.
So with a deal on the table it is a start of a journey. However it's only the beginning of quite a long voyage.....
Wrong.. 500k is seed finance in MFDevCo to tie them over until they get the first upfront payment.... the upfront payment could be an 8 figure sum, certainly a 7 figure amount at least.
In terms of lead time we don’t know yet.... but we know it will be a lot quicker than a conventional play as most of the infrastructure is there and the wells have already been producing. It needs final fdp sign off, closure of the deal, conversion of the platform to a power plant and laying of cables to connect to nearby grid. 12-18m maybe....
But we get the upfront payment on closing the deal that is short term money in the bank... value in our Mcap will come immediately it doesn’t need first production for that.
They will have been working with the OGA along the way. Remember they want this to happen. I am certain they will prioritise resource to make this happen as soon as possible so that other projects follow.
NUOG will benefit from seed finance in MFDevCo and upfront payment in near term which could repay the loan, and they will benefit from greatly increased mcap from acquiring a revenue generating project. It is also extremely likely that further projects will close during the lead time to first electricity bringing further upfront payments in.
Any attempts to play down the significance and the impact a deal will have will soon be put to bed I believe.
So for the record Sherlock and I'll keep this .
On signing of the first project you believe that NUOG will be fully funded?
So it took you till 7.04 to write that post .
The truth is you was expecting some news so was going to wait for rns. Then it didn't come do posted pre drafted response.
Previous question still stands .
Starbuck, you seem more interested in scoring cheap points than answers to your endless questions. I find sharelock's posts consistently too positive to be a normal holder affected by recent share price decimation, however, he goes to the trouble of posting solid arguments and research.....pitted against arguments such as 'you waited until 7.04 to post that' I know whose posts I would rather read.
The trouble is his post are posted as factual. When they are far from that. See how the question is avoided again . 8 figures payment really????
"could be" 8 figures, that in my view is not posting as fact!
Starbuck - why don't you go away and do some research of your own instead of trying to score points off other people just because their replies don't suit your agenda?
The truth is nobody knows how much money will be paid or when .
Mfdevco is a different company.and is not responsible for working capital at NUOG .
But he conveniently forgot to mention that , as that is not part of the agenda.
He would quite easily have investors sucked in to.
A. Sell into any mfdevco rns liquidity.
B. Try to reduce underwater position loss.
You see the same people was telling you, not at these prices.
Not under last placing etc etc etc.
I agree with the first two lines there Starbuck; nobody knows for sure what will flow to Nuog or when. Hopefully official comms will confirm although I suspect they will indulge in some good old glossing over in the midst of any excitement around the first deal, if and when it arrives.
Remind me again, Mintedbyyoulotta, other than public-spiritedness, what brings you here, repetitively posting negatively about the prospects?
65MW project over 10 years
work out what it's worth
you think we are going to sell that project to the spv for nothing? The structure of this will bring forward MFDevCo cash flow from the project significantly.
It certainly would be easier if MFDevCo and NUOG were under common ownership. How many companies out there invest in JVs in a similar way. You think they do so knowing they will never get any benefit... please. especially a company that have common management.
Nobody knows you are right about something, but my view is based on hours of understanding discussing and reading, your view is based on trying to support a negative agenda and is much much looser with the facts.
I don't really care if anyone buys or not. The RNS will do the job. And i wont be selling on one deal. I have an understanding on what this can be worth with multiple deals, and i am only concerned with future prospect and not stuck on a view based on bitterness and losses from the past.
Easy to be critical of past RNS releases, but the SPV RNS couldn't spell it out any clearer.....
MFDevCo will offer investment ready projects, along with commercially viable development plans, to the SPV, which will have the right of first refusal
The SPV will remunerate MFDevCo for any projects accepted
In addition, the SPV will agree a contract with MFDevCo to manage all and any projects accepted by the SPV
MFDevCo will further contract its Consortium and Strategic Alliance Partners to provide resources and technical expertise to develop projects accepted by the SPV
Einar will lead efforts, on MFDevCo's behalf, to raise finance for the SPV which will be used to fund the acquisition and development of gas to wire projects
Einar is seeking additional financing for MFDevCo to support the business as it concludes the terms of the SPV with Marnavi and, in parallel, seeks to agree Heads of Terms for the two GTW opportunities where efforts are being concentrated
Provision of seed capital to MFDevCo will reduce Nu-Oil's general and administration overhead incurred through MFDevCo related costs and staff utilisation
Finally, the Company notes that MFDevCo is concentrating efforts on the two priority GTW opportunities where discussions with operators have advanced quickly so far.
The nature of GTW projects enables them to be 'packaged' as a facility (including export route) and sales contract and financed in a manner analogous to shipping financing
prepare a development plan to justify the investment decision
to advance the significant GTW opportunities we are working to conclude
accelerate the development of the 'project pipeline'
As specific gas to wire opportunities take shape, we are now in a position to formalise discussions with potential investors
Einar is seeking financing for MFDevCo to support the business as it concludes the terms of the SPV with Marnavi and, in parallel, seeks to agree Heads of Terms for the two priority GTW opportunities where efforts are being concentrated and discussions with operators are moving quickly
offers of up to £500,000 for immediate funding, subject to the conclusion of the SPV
Pie in the sky stuff .
OGA and Environmental approvals , legal costs and working capital requirements at MFDEVCO. 500k won't touch the sides.
Instead they make working capital payments to NUOG.
That's on top of the 1.7m they already owe RMRI.
If it sounds to good to be true , it usually is ....
If that is not clear enough, the chairmans statement adds to this
I am excited by the potential of MFDevCo's business model and the pace at which negotiations are progressing with operators. Applying technology and innovation to generate value from fields which can potentially be accessed at a low cost, is appropriate for MFDevCo, the Company and its shareholders, compared to the alternative of buying into a development project or production
MFDevCo is aggressively pursuing its exciting gas to wire ("GTW") venture, which is an ideal solution to a pressing need in the market
the Board believes that GTW will position MFDevCo as a first mover in a market with global opportunities and we anticipate significant support from governments
My confidence is increased by the interest MFDevCo has received from operators and speed at which negotiations have progressed with two priority targets
The proposed structure enables projects to be financed without diluting the Company's equity interest in MFDevCo
MFDevCo would earn three sources of revenue for each project the SPV purchases: the initial sales price; payment for services to manage projects; and project revenues as a result of its proposed 30% equity holding in the entity
Utilising existing infrastructure, such as the platform and power infrastructure installed to transmit power generated by offshore windfarms, further reduces capital investment and lead-time to redevelop fields
GTW directly addresses the twin goals of maximising economic recovery from hydrocarbon resources and supporting energy security
Gas is expected to play an increasingly important role as a primary source in meeting the rising energy demand and complements renewable sources to meet increasing energy demand.
It is the opinion of the Board that the opportunities being pursued by MFDevCo have the greatest potential to deliver value for shareholders and for that reason resources are being allocated accordingly
MFDevCo has been advancing multiple projects for some time,
Under the proposed terms, MFDevCo will receive up-front payment for projects and will be further paid for managing projects from the point at which any transaction with the SPV is agreed
I hope that I have made clear to investors our determination to convert the hard work that has been performed hitherto into tangible results. All efforts are being made to create and acquire investable profitable projects. It is my belief that the Company is positioning itself to deliver on that promise in the year ahead.
The Board is confident that the Company's investment in MFDevCo will be rewarded
BTW one point to note regarding the 3 revenue streams....
1 - Upfront payment
2 - Management services contract
3 - SPV equity
One point to note, as stated in the RNS, the management services contract commences at the moment a transaction completes with the SPV. The services contract is for full lifecycle of the project from implementation to decommissioning.
Therefore revenue for MFDevCo begins as soon as the transaction completes as the revenue is service revenue from the SPV, not from the sale of the electricity. So when we talk about first revenue for MFDevCO, we have what i believe will be a sizeable purchase upfront payment, and we will be getting paid for managing implementation through to production and beyond. Project finance will likely be funding the implementation stage. SO the bulk of our profitability from the project will come from the upfront payment and the service contract which kicks in from day 1 rather than the 30% equity in the SPV. But you guys keep going on about lead time.....
I ask again. What is the motivation for you guys on here and ADVFN endlessly bashing the share? At least there's some rationale for those invested posting positively, though you, with great insight, have no tolerance for this! Please move on if you're not invested... it's more than tedious on both boards.
As is the constant ramping and copy and pasting of irrelevant information... There is actually no need to bash this share... the Bod are doing a good enough job.
Post recommended. Top man Joey. You’re the man.