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Can add from that chart of the 408 awards only 20 had some partial or full annulment, so that’s 5%. I can’t find the data to hand but most of the annulments were only partial. So maybe around 1 % was full annulment, a few cases out of 400+. The stats are definitely on our side .
“Where are you getting your information from that back up your statements? “
Go to icsid web page and cases. Select case load statistics report, look at page 16. Provides a chart showing the very small success rate of annulments, I did find some write ups also previously stating most of the successful annulments were just partial ones, so tweaks to the award amount not over turning full awards.
Hope that helps, and is why I am confident Italy will have to pay up.
GLA
Redeployed FPSO sought for Falkland Island project
Navitas Petroleum highlights latest development plan for Sea Lion oil discovery
24 March 2023 16:51 GMT UPDATED 24 March 2023 16:51 GMT
By Iain Esau in London
Israel-listed Navitas Petroleum aims to take sanction the long-dormant Sea Lion project in the Falkland Islands in 2024, after slashing some $500 million off the development cost to first oil in 2027.
The project was originally operated by Premier Oil, which was acquired by Harbour Energy in 2021. Harbour subsequently quit the asset, leaving Navitas in control.
Italy ordered to compensate UK's Rockhopper $190 million over oil ban
Read more
Since then, the new operator has worked hard to cut development to first oil from $1.8 billion to $1.3 billion, with a total cost of $2.2 billion.
Navitas’ development solution remains centred on a 100,000 barrels per day, leased floating production, storage and offloading vessel, but this time around the goal is to get hold of a redeployed vessel rather than opt for a conversion.
The size of the subsea production system for phase one has been cut to 18 wells, which would be beefed up with five extra wells in a second phase.
Navitas takes big bite out of Sea Lion project offshore Falklands
Read more
This initial scheme would exploit 270 million barrels of oil at an overall capital and operating cost of $27.6 per barrel.
In total, Sea Lion could house about 710 million barrels of developable resources, according to reservoir consultancy Netherland Sewell & Associates, which has just completed an independent resource assessment on the Sea Lion area.
This volume is some 200 million barrels more than identified in 2016 by a third-party consultancy commissioned by to London-listed junior Rockhopper Exploration, the only other partner in the asset.
Rockhopper not giving up on Sea Lion development off Falklands
Read more
Navitas continues to optimise the development plan which — as before — calls for output to plateau at 80,000 bpd and peak at 100,000 bpd.
Assuming both finance and an FPSO can be secured, the partners plan to sanction the project next year, targeting first oil 30 months later.
The partners plan to spend some $70 million on front-end engineering an design studies this year to get a detailed handle on costs and technical issues.
Harbour Energy to exit Sea Lion project in Falkland Islands
Read more
Commenting on the Navitas plan, Samuel Moody, chief executive of Rockhopper, said: “To reduce upfront estimated capex by such a significant amount and reduce life of field costs to under $30 per barrel, while increasing recoverable resources and maintaining a peak plateau of 80,000 bpd is hugely encouraging progress.
“We believe the newly reworked Sea Lion project represents an eminently financeable proposition, despite all the well-known political challenges.”
Navitas holds a 65% stake in Sea Lion, with Rockhopper on 35%.
Leo IX,
Where are you getting your information from that back up your statements? I have not seen anything to suggest that :-
1."The vast majority of cases have only been started in the last couple of years and are awaiting a final judgement - only a handful have been completed."
2. "Italy's track record" - a track record of what in particular?
3. Where have you found ICSID's Energy Charter annulment success rates ? To suggest to you that this is a better way to judge success rates.
Any links would be very useful
Mogger
Thanks for that CitizenTS. All readers should note if CitizenTS believes it helps RKH then it is good news and if not then irrespective of its value then whoever posted that information is erroneous, an imbecile, climate activist or anything that pops into his few brain cells. No in between. Feel sorry for those near and dear to you CitizenTS.. go seek help
Serves me right for trying to do this from memory having lost my notes... it's ICSID's Energy Charter cases I'm referring to. Apologies for the confusion but I still think this is a better way to judge annulment success rates.
"...work will now focus on refining the financing plan with a view to reaching FID during 2024...."
If their financing plan is ready to go, then anytime in the next few months, I expect Navitas to announce the institutional stage of an offering of participation units. Financing must be available at least a few months before FID announcement.
Keep an eye on TASE and Globes.co.il
I'm referring strictly to Italy's track record.
Re Leo IX
Folks should watch who exactly is misleading people here.
"Handful" of completed cases??! 121 completed annulment cases, 32 of which were given up on and withdrawn by the party seeking an annulment, makes Leo's hand a very strange creation indeed!
Legal fees re stay are a few hundered k, not viewed them as an issue myself.
At the right point a part of the award could be sold or borrowed against on a non-recourse basis which, on the basis of the rns, should cover rkh's sea lion project equity plus some.
Onwards and upwards so far as I can see!
Nick - very misleading to say that only 1% of annulment claims are successful. The vast majority of cases have only been started in the last couple of years and are awaiting a final judgement - only a handful have been completed.
https://www.bbc.co.uk/news/uk-65061887
I wonder if they'll discuss energy security?
I don’t disagree with your comments or analysis DEM.
I was merely pointing out what I think Italy’s case might include for an extension of the Stay.
Pure guesswork and we will soon find out what the committee decide anyway.
"Rockhopper themselves admitted last year that they now owe money to the lawyers for a successful arbitration outcome, and they do have limited funds despite the placing last year". (PD)
With respect, I don't think this is strictly correct.
1. All legal fees incurred by King & Spalding etc up to the Award, have been paid on a regular basis by Harbour Litigation. Harbour get their share of the Award monies as and when do Rockhopper. To repeat, all legal bills have been paid by Harbour as they fell due. This is how Arbitration Litigation works and is why Harbour get 20% of the gross amount.
2. In the RNS dated 31-10-2022:
"The third-party funding agreement does not cover any costs arising past the date of the Award (23 August 2022). Having anticipated Italy might attempt to annul the Award, Rockhoppper has a non-binding offer in place to fund both fighting the annulment and enforcing the Award if required. The Company will now consider this along with other funding possibilities. A separate success fee of approximately £3 million is due to the Company's legal representatives on establishing liability and an award requiring Italy to pay over €25 million in damages. This amount is not covered by either funding agreement. Given Italy's request for annulment, the Company is in productive discussions with its legal representatives as regards to this payment".
So, almost certainly sorted !
3. In any case, in the 'Blocklisting Interim Update' RNS of 8th Feb had 56,430,551 Ordinary Shares not yet issued out of the original 60,917,237 under the Warrants Scheme. At 9p each that equals £5.1m which RKH should receive by the year end. Not a Kings Ransom but more than enough to pay the K&S bill for the 18m period post Award (24-08-2022) not covered by Harbour Litigation. (Just in case Rockhopper lose the Annulment and get Zilch out of OM - all very unlikely).
4. If necessary, part of the Award might be monetised at a discounted rate eg a sale of say 10% of the Award at a 50% discount would raise £10-12m. RKH was approached by more than one interested party at the time but I'm fairly sure Sam would much prefer to avoid this option if possible.
5. Finally, great RNS yesterday - rather like Budgets, I think certain elements came as no surprise. Nothing not to like and Onward and Upward with both Ombrina Mare and Sea Lion.
Just to clarify one point. The confirmed Phase 1 total capex cost of $1.8bn will mean that Rockhopper's contribution will eventually total $54m. However, on the projected Pre first oil Capex of $1.3bn, Rockhopper will only need $36m. Or, in real money £29.5m pounds sterling - an amount easily covered, I think, by whatever is the eventual OM Award.
DEM
Not so. We have been through this a few days ago.
I posted a long time ago success of annulments is very low around 1% and even then most were only partial annulments. The ISCID is not going to easily annul awards it made itself after going through years of legal protocols. My view is this is just a delay tactic and will come to nothing, meaning award stands and RKH will get the full amount plus interest. It’s just annoying that the delay affects the share price while we await FID.
GLA
Got a hunch the default position would be to stay it.
Currently at 247m Euro. + (1.5m Euro/month)
Running through a compound calculator Italy will owe approx 265m Euro in 12 months when the outcome should be known.
I might be reading too much into it but Rockhopper stated yesterday that the “decision on whether to continue or lift the provisional Stay of Enforcement is unrelated to the merits of Italy's annulment request”.
This is, of course, a simple statement of fact so it might just be to allay shareholder concern if the committee does extend the Stay. But perhaps they feel Italy have a good chance of getting it extended, hence the inclusion. Rockhopper themselves admitted last year that they now owe money to the lawyers for a successful arbitration outcome, and they do have limited funds despite the placing last year. So Italy could theoretically argue that their money would be at risk if the award was enforced prior to the annulment case being heard.
I’m probably overthinking it but it’s likely to be the only material news now for a while!
LTT, I suspect you were tongue in cheek, but does the Ad Hoc Panel have the authority to increase the award?
Perhaps they do, if they have the authority to reduce it.
Yep Nick, can’t believe after that update from Navitas we are still languishing at the 10p mark, Navitas have done more in the past 6months than PMO did in the past 10years.
I know once bitten an all that, PMO promised so many times “Next year, next year!” and a lot can happen between now and FID, but it’s seems if it all comes to nought, it want be through a lack of trying.
Also reading through some of the info posted my DEM and the like I noticed there were a percentage of Annulments that didn’t even make it to a hearing, they were thrown out for time wasting. That could be a possibility too. Either way I hope they went down the quantum route, it would be really funny if the panel said, “ Hhhmmm yes you are right, the production numbers, field life and the oil price used are wrong, you actually owe RKH $375m plus interest!” LOL One can but dream.
LTT
As we have seen over the past 10 years, Oil in the ground is worthless. The extra 200 mio barrels will be hugely significant, but not until the market feels reassured of the plan to extract it. The re-rating of this beaten down share will be a sight to behold when that happens
Did anyone notice the rerating of 2C from 500M barrels to 700M? I mean that’s massive news. Ok we still have to extract but costs reduced by 30% ($500M) and we just added 200M barrels as upside. The words “no brainer” come to mind.
GLA
Here comes the sun
Dancing girls and blue bottles
CitizenTS, the amount Rock have to find, to get to first oil is not actually fixed yet.
At a capex of $1.3B, it can range from $nothing, to $151M
I vaguely have an expectation figure that Navitas are looking at achieving around $1billion in project finance, I have no idea where this idea came from now, plus the remainder from Navitas and Rockhopper funding.
If $300m is left after $1,000m of project finance, and Navita will fund 2/3rds of our share, then Rock need to find $35m.
Other $figurers are available.
Small piece on the Navitas visit in Penguin News, looks word for word lifted from the press release.