The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma 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.
Market seemed to like it. Navitas shares up 4.76%.
I got the words Sea Lion and Game Changer but that was about it. They certainly spoke about it a lot though.
There was presumebly also a question at the end about the poolotical risk as they spoke about the Uk, Falkland Islands and Argentina.
It was in Hebrew and as such I did not understand a word i'm afraid, but I can say that Sea lion was mentioned throughout the 40 mins presentation. I believe that it does play a significant role in their growth plan and therefore I believe they are very motivated to get this project done.
Navitas do seem to be a different league to PMO. I was pleased to see we have gone back to the original FEED of 80,000 barrels a day. Clearly they must have some idea about financing or why push it.
I also think it makes sense for the FI Government to push things. The world has changed. They cannot rely on a future Labour Government not selling them out like we did Hong Kong and Northern Ireland. Navitas are their best hope of remaing independent.
Interesting comments from Navitas on the use of a leased FPSO but what about the drilling first ?
and don't forget, the OM ICSID award almost certainly paid-out + accrued interest - any tax due on the lost profits component.
I also don't agree with the time-scale. Navitas are showing every sign of great urgency about this, which is more than just a bit of impatience.
Oscar. Some interesting points and possible.
However, on the plus side you miss out an Israeli attack on the Iranian nuclear facilities. Could add interest to the Middle East and oil prices.
Interesting projections OIL
Back to £5 by 2030 Christ that was a long wait!
I’d like to see 50p by 2026 as first oil approaches. That will get me back above water for the first time in many years and I should still be alive then to enjoy that milestone!
Revised,
31 Dec 2023. 8p
2024. 12p
2025. 15p
2026. 25p
2027. 75p
2028. £1
2029. £2
2030. £5
2035. £25
2050. £50
1) Big oil trades well below fair value. RKH is not on the radar of any new institutional buyers. US elections in 2024.
2) Low volumes, the big holders will want warrants to expire worthless so that there is no further dilution. They will keep the prices low.
3) Stay on the OM award Enforcement would partially extend. Final decision on the annulment would be 30 months after, and not at the guidance 18-24 months from Q1 2024.
4) FID in 2025 and not in 2024 because of very weak global macro, financial contagion. Navitas will do it but they will struggle with the pricing for the capital raise in Tel Aviv.
5) First oil in 2027 not 2026, because of the delayed FID.
Alternatively, high oil prices and energy mania can also set in to prove all of the above wrong.
Agreed Kong.
What were people expecting? Gideon to stand up and say: "to save wasting time, this announcement is the FID. I've asked my dad and he's going to pay for everything. So now, I'm off to the pub - see you there and the drinks are one me"
Presumably SP will middle around now until Q1-24?
As material updates are aligning for then : Sealion / OM.
Thoughts?
Not nit picking but for the sake of accuracy the value of Sea Lion to rkh is more than their 35% proportion of the project npv10, so more than 1.5bln.
This is because rkh don't pay any interest on the 2/3rds of their capital cost that is funded by an interest free loan from Navitas. The details of a realistic calculation may not be for here, but you might say there's no "10" to the npv10 (that gives the 1.5bln figure) for oil revenues used to repay the navitas loan, at least for the period from the capex to loan repayment.
An interest free loan is obviously worth something; above prices it in.
After what seems a very good RNS, I’m very suprised to see that the share price is pretty static with small numbers of trades
Dem,
Thanks.
I've had a look at the PDF attached to that page. It details all 150 cases filed under the ECT. However, not all of these had arbitration under the ISCID rules.
There is no information regarding annulment and success rates though.
I shall await Leo's reply....
Mogger
Nick, Bluedefenders post got us there in the end I think. Here is a re-post:
"Out of 355 ICSID Awards up to 2021, 156 (44%) are/were subject to Annulment proceedings.
Of those 156 cases, 121 are completed and the remainder pending.
Of the 121 completed cases, 89 decisions were rendered by the ad hoc committee and 32 proceedings were discontinued (ie claimants on ‘fishing’ expeditions).
Of the 89 cases where a decision was rendered, ad hoc committees upheld the underlying award on 70 occasions. Nineteen awards were annulled in part or in full."
So really its 121 cases completed and there were 89 decisions made of which 19 were successful.
Which in my book makes us have a 74% chance of full success or 26% of full or part annuled.
Conclusion I drew from that video is that success of annulments is very low and that EU member state governments are obliged to apply to show “they have done all they can”.
I’m still confident
Dai
I just looked at the first sentence where the word NET to Navitas was used. It actually goes on to state Joint Venture NPV10 so then you are right: 1.5 Billion to RKH.
N
Sorry I think this is more recent than 2019
https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=video&cd=&ved=2ahUKEwi27rfhivf9AhUaQUEAHZyRAd4QtwJ6BAgJEAI&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DBybvHf5L2z4&usg=AOvVaw38bSjZ6wvX3XgEUmkjG7sf
This should link to a study on annulments held in 2019, since then there has only been one further annulment determined.
Someone smarter than me can chew over this?
TheNorseman,
How did you arrive at that? I get 35% to be 1,5 billion to rkh.
Can someone refresh my memory on the reserve estimate terminology… what does NPV10 represent- is that the higher or lower estimate? Cheers
From Malsy: “The NSAI Independent Report contains analysis of cash flows and NPV on the phase 1 and 2 development net to Navitas. Based on the NSAI Independent Report data, the joint venture NPV10 of the development of 269 MMbbls is US$4.3 billion on a post royalty and pre-tax basis, at US$77 Brent.”———For RKH that will be US$2.3billion!!!Plus phase 3 and Ombrina Mare potential award
Nick, you have to take into account the amount of those where an annulment was actually attempted. Partial is still not good.
Mogger
A quick browse through Leo_IX posts has this link from August 2022:
https://www.energychartertreaty.org/cases/list-of-cases/
Assume this is where he compiled the data from ?
I have not attempted any analysis.
DEM
Sealion getting more press-
https://www.oedigital.com/news/503891-sea-lion-offshore-project-in-falkland-islands-could-finally-reach-fid-in-2024