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Great work thank you so much!!
@Yeast-is-Rising many thanks for taking the time to write that AGM report. The most informative group of posts in a very long while. So many bits that I wasn't aware of. After over a decade of twists and turns may it just be that good things do come to those that wait? Onwards...
Let's just leave it this way, one of us will be right the other won't.
No hard feelings.
Like I said, BS
Fist post
"Italy will not even be thinking about any kind of payments to Rkh at this early stage, they likely have another 3 years before they even begin considering payments, and possibly 4 or 5,"
Next post
"The costly, time consuming enforcement process begins now after 4 years.So my shortest 3 year timeframe for payment looks a pretty good shout on that basis."
It's always easy when you change the goalposts.
My 6-12 months from the end of the ISCID process would allow for plenty of court action, even more so if the stay is lifted in advance of the annulment being rejected, as paperwork can start running in advance of filing court proceedings... also looks like RKH have been advised along thoes lines too as Ovets agm report highlights.
I don't need to back it up any further, and I'm sure there are plenty of ISCID cases v states that are settled post award and annulment proceedings within your lowest 3 year timeframe.
BB3
P.s. Ovets.. the agm report is much appreciated, thank you.
Then some concerns were outted about a cheap takeover. Ofcourse as long term suffering shareholders we would like to reap our well deserved rewards to the fullest. Keith said the board would definitely advice against such an offer. It is up to the shareholders themselves. Some who bought at 6 pence might think 18p is nice, but when you have a 200p average you would think differently. Although this could be seen as a concern, it does tell you the development will take place and there is nothing worse than being ignored. We are in a better place and closer to FID than ever and US companies are coming back from shale to offshore drilling and the offshore industry is on the move again.
Another question was about the amount of shareholders. Rockhopper now has just under 15.000 shareholders, largely because of the 12.000 shareholders that Desire had when we took them over.
Both John Summers and Keith Lough regretted they had to step down after their maximum of 9 years on the BoD. Both told us they would be at next years AGM as shareholders. I can't wait to hear their questions :-)
Looks like 2024 is finally going to be the year of the Rock!
@pauldrayton, I can inform you that next to the plain and chocolate biscuits, there was a large box of delicious Stroopwafles that were freshly brought in from the mainland.
The next question was about Chanan Wolf and in what effect he was involved in maintaining relations with the UK government, since this was mentioned by Navitas. Sam said this was a matter for Navitas, said there was some lobbying going on but this was quite difficult. Wolf oversees the project, is involved, came to the Falkland Islands and loves the project. FIG can make their own decisions but at some point the jigsaw puzzle has to be put together and Whitehall has to sign off. FIG is good at that and it would be very, very difficult for the UK government not to do so, because it would be direct rule and would go against the right of self determination of the FI, which is the main argument in the UN against the Argentinian claim on the islands.
On the subject of the FPSO it was said that they are currently talking to more than one vessel owner. The next step would be an LOI or a period of exclusivity or first right of refusal. Than depending on what vessel you are looking at, you would have to refine your calculations. There's ofcourse a difference if you have a FPSO that can hold 1 million barrels and produce 100k barrel a day, compared to one thats of a smaller size and production capability. The following order is get the vessel, do the calculations, get the finance, the FID and a short time to get the formalities sorted.
On the lifting of the stay of the enforcement it was said that the first thing you have to do is to register that the award exists and is in favor of RKH and against Italy, f.i. in London and New York. This takes about 2 months and is pretty standard. Than you have to serve the award, which takes many months, is quite complicated and something Italy would almost certainly contest. So if you would try to serve the award before the annulment result, even if the stay is lifted by ICSID, Italy could go to the UK court to ask for a stay pending the annulment result. So after you win that argument, you can serve the award and attach the assets. The advice RKH got was that the time between registering the award and seizing the assets would be between 12-18 months. They already ha a list of assets ready. Keith then told that at Cairns, where he's also on the BoD, they went after some assets that caused much embarrassment to India and that shortened the process. Countries often have assets their people don't know about and you will try to make it difficult for them and expose them.
After we win the annulment case, we can then decide if we want to sell off (a part of) the award. Rockhopper already had 3 offers on the table after winning the award, but after winning the annulment we will get better offers, because there is less risk.
End of part 2
Here's a summary of the questions at the AGM and some snippets from the pleasant conversations with the BoD and CEO. I hope this will answer some of your questions and adds to the discussion.
First of all we were a bit dissapointed not to be greeted at the gate again by the group of anti-oil protestors from extinction rebellion. Later we found out that last year they were basically told to F*** off by the lady owner of the venue, and apparently that was enough for them to postpone saving the planet for another year.
Following tradition the question round was kicked off by a very articulate gentleman who carefully formulated his well informed questions at length and in great detail. The BoD was prepared this time and enjoyed a light lunch while taking in all the intricacies off the well formulated questions ;-)
In his answers Sam explained the department of mineral resources was renamed department of natural resources (including fishery) and the former director had handed over the responsibilities to a very knowledgeable lady who was a geologists and they were in a position to hire outside consultants if needed. Navitas has set up 5-6 teams around the main topics of the project and engagement with FIG is very good. It was not something RKH was worried about.
From multiple sources it was made very clear that huge progress is being made. A very, very big difference with the time we were partnered up with PMO. The Navitas team around Ian Ramsay has an office in London and Chanan Wolf oversees the project from Houston and London. The team around Ian Ramsay worked with each other for years at Murphy oil, who already were partcipating in drilling in the Falklands when Shell was over there and had twice seriously considered farming into Sea Lion. Ian Ramsay was the one who did the due diligence for Murphy and was already intimately aquainted with Sea Lion.
Needless to say they had a flying start.
Before the AGM I asked Keith how it was possible that the whole team of Ian Ramsay could come over to Navitas at such short notice. Implying Murphy oil had some advantage because they might be considering farming in later. Keith told us in the US it was much easier for senior personnel to change jobs. By the looks of it Navitas wants to get to FID on their own balance sheet and after FID, farm out to a third party because it would be much easier then. This could also be to Murphy oil, but nobody knows at this time. 3 times lucky?
The next question was about the warrants and if the company couldn't somehow advise shareholders to change them into shares. It was clear the board would like to see all of them converted into shares and getting some more money in the bank to get to FID, but advising as such would not be allowed by their Nomad as it would be seen as financial advice and this is highly prohibited. I have already converted all of my warrants, it helps RKH and at this SP it should be a no-brainer.
End of part 1
It's OK to jabber endlessly here while we sit here waiting for some tangible news, but probably more productive to wait until we hear something worthwhile and in the mean time, get on with something useful.
I think we should have learnt by now that Navitas will only announce something, when they believe it's appropriate.
We know that things are progressing (because of the various posts that have been advertised and filled and then more jobs advertised).
Oil price remains reasonably strong and VERY favourable for SL to go into production.
Putin's war continues
Everyone's looking for energy security. We just can't survive without abundant energy supply, even though we all know that fossil fuels are bad for our health.
There's always a possible banana skin which could crash the project, but at the moment, I really cannot see this one not happening.
Hi OscarIndiaLima - why post STRONG BUY when you expect the sp to have fallen by December ?
Safe to hold this share only as long as Sam is at the helm. Share price to be nearer 9p by December 2023. Allow a 6 to 12 month delay to the estimated timelines of Annulment and Final Investment Decision.
No 2023 Oil & Gas capital markets activity at Tel Aviv. Globes.co.il
Be patient.
"So it doesn't really matter what the annulment panel do with the stay as it will be very difficult to gain asset seizures in courts whilst the annulment appeal is in process".
Agreed up to a point, but there is psychological value in lifting the stay, as that would be just one more step in the right direction for RKH and one less for Italy.
Also, if RKH were to consider monetising even part of the award, lifting the enforcement stay is likely to increase the sale value, even if only by a few percent.
So while unlikely that anyone's going to swoon over the lifting of the stay, RKH management and RKH shareholders should welcome it as yet another step in the right direction.
Remember that only 18 months to 2 years ago, all such issues, plus things like the TDF decommissioning costs, etc., etc., seemed insuperable problems, with RKH probably going bust before they could be resolved.
Respectfully disagree with you Chess, A lot of what you say is just BS.
1. The threat of asset seizure isn't one they currently have to deal with (this changes with the stay being lifted which may change their tactics of "just ignore rkh"). Hence the relevance in RKH arguing for the stay to be lifted and my 2 reasons (which was the question originally about.."what's the point of rkh doing this if they don't chase the assets until after the annulment").
2. Lifting the stay without any preconditions to cover the perceived risk of recuperation in a successful annulment award could have been an outcome and wouldn't have been know unless the stay was challenged.
3. I disagree hugely with your timescales of award money recovery through asset freezing / seizure via the courts. You haven't proved this in any way to deduce the process taking 3-5 years, - your points of "not turning up in court" to defend themselves result, in most parts of the world, in a win to the plaintiff. Refusing to recognise the award is irrelevant as that is why its in front of the court in the first place. Not paying case fees is irrelevant as RKH can settle any court fees and need to anyway being the plaintiff. Claiming sovereign Immunity in court will be part of case law and struck down as quickly as its been objected to... Granted the process wont be quick, but it will be a lot quicker than your 3-5 years.. lol.. my expectation would be closer to 6-12 months.
BB3 -
Buzzthomas - "McCloughry, I don't understand whats the point of arguing the stay if you aren't going to go after the money immediatley."
I would hazard a guess that the only point of doing arguing the stay to be lifted, would be to see if Italy would pay the cash into an escrow account if and when the stay is actually lifted which would prevent the need to chase assets.
Until its lifted Italy don't have to do anything so why would they make it easier for RKH in any shape or form by putting the money aside for easy collection at any stage. The threat of asset freezing by rockhopper becoming a real thing upon a decision to lift the stay may force a change in those actions which would obviously be favourable to RKH.
Assuming RKH were never going to chase assets upon a lifted stay until after the annulment process -Italy would never have known that was the case - it would have been worth the cost for RKH to push for the lifted stay as they may have avoided the need to chase payment through the courts as an outcome (even if it is only accessible post annulment)..
Also the stay may have been lifted with no pre-conditions which would have allowed RKH to go after easy to monetise assets and also to then use those funds etc. etc.
So 2 reasons to fight the stay in my mind. (granted neither may have happened and thus be less than cost effective, but given the choices I would have contested the stay).
BB3
NigelHaemoglobin, thank you for the detailed response. Without wishing to sound like a stalking weirdo, your account is one of the very, very few I keep an eye. I noted a more positive tone with RKH and you are not one for mincing your words. I must admit I thought it was lights out a couple of years ago, but held, picked up the 7p rights issue and have exercised the warrants.
I think you plugged BP anything sub £3 in covid times. Unfortunately, I've been caught with Harbour instead. Such is. Will certain look more into your super major/majors theory.
Best,
Danger_Man.
Danger_
Thank you for asking but I have never pretended to be an O and G professional or having been involved in running businesses, I am bearish on all mini oilers: the safest money to be made is to be found by exercising great patience in accumulating super major or major hydrocarbon shares.
As for Rockhopper the future will be determined by a first rate but moderately sized company. Will they reach FID? Probably but the decision will be made after receiving very complex guidance from economists specialising in natural resources.
Everything else is being very professionally dealt with inc FPSO selection etc.
Shortly after FID resources will be converted to reserves IAW the PRMS of 2018, at that point the PI investment carries risk but greatly mitigated.
After paying royalties and taxes to the FIG, will RKH be liable to pay UK taxes on remaining profit ?
McCloughry, It is the committee considering the annulment which has lifted the stay, so if the committee is happy for the stay to be lifted that would carry huge weight with any court as a counter argument to what you are saying.
It’s a very fair point buzz.
Rockhopper may be unwilling to commit funds to enforcement until the annulment case has been decided, but if that were the case why waste time and money contesting the stay? They’d have may as well agreed with Italy and moved on.
Maybe a question for the company once the committee makes a decision.
That may well be correct but it still doesn't explain what's the point of arguing the stay then.
Even when the Stay is lifted, Italy can say to any court that they should not hand over assets because an annulment hearing is due.
McCloughry, I don't understand whats the point of arguing the stay if you aren't going to go after the money immediatley.
This did come up. Sam said that some clarifications were submitted to the ISCID yesterday (or the day before) and that he expects the Stay to be lifted soon. I got the impression that they wont go after the money until after the annulment hearing in January.
Was there any mention about the OM arbitration and the fact that the 30+10 days have already passed?
Paul, I agree that RKH are likely to sell the award at some point.
Providing Navitas make the progress expected, we should get FID next year. If we do get a bit "short" (of cash) before then I would expect the 8% loan (or a new bank loan) to cover this fairly small sum. I cannot see the need for another equity raise unless there's a protracted delay.
By the way, although Sam is much vilified by some, he seems to me to be doing a sterling job all things considered.
There is nearly £5million of warrants still waiting to be exercised.
Assuming the SP remains above 12p, I would expect nearly all to be exercised.
I have over 50,000 warrants that I haven't yet exercised, but expect to later in the year.