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Thanks Daiki
Is there an English version or do we have to Google translate?
N
“ I won't be surprised if they wait with the FID until the OM arbitration is finished. ”
That's not for RKH to decide IMO
I won't be surprised if they wait with the FID until the OM arbitration is finished.
A final hearing in relation to Italy's request to annul the Award is scheduled to take place in Q1 2024, which nicely aligns with FID in 2024.
If I remember correctly, there was some kind of arrangement that the award should be used for the development of Sea Lion. One third of Rockhoppers net working interest project costs needs to be paid by RKH and falls outside Navitas loan. With $1.3 billion of pre first oil capex, that means it's roughly $150 million until first oil.
So rare to read a RNS with a plan and realistic timeline. The upside on this share with a development costing less than 30 usd bbl…
This is something that may actually shift this damn share price…let’s see…
GLA…
FID during 2024 and first oil is expected 30 months after that! If it's in the first half of 2024, first oil will be in 2026!
GReat update!Nvaitas seem to be a great partner to get sealion operational.
Sea Lion update out.
Looks promising. Good work Navitas.
All,
The results are out
https://mayafiles.tase.co.il/rpdf/1512001-1513000/P1512728-00.pdf
Mogger
A €190 million awards seems indeed on the small side of we consider what's written in the report. Something halfway 68 million and 1.5 billion would be a lot nicer
"228. The Claimants also present a “pre-tax high case”
valuation of Ombrina Mare, which factors
in 3C resources, an oil price of USD 100/bbl, and his lowest discounting rate, 8%, and that
produces a valuation of no less than EUR 1.5 billion.
229. On the lower end, the Claimants present a valuation using the “least beneficial” factors – 2C
resources, USD 60/bbl, and a high discount rate of 15%. This calculation results in a value
closer to just EUR 68 million.
"
I wonder if Navitas might pencil in first oil in 2026 in their report today .. I know someone who would be pleased!!
"has anyone done a dcf on ombrina mare to see what the total could have been?" (p777)
See pages 87 to 100 in the ICSID Award doc for a detailed description of the various potential ways of calculating the value of Ombrina Mare. Discounted Cash Flow (DCF) was actually Rockhopper's preferred method. Not too surprising when you see the calculations below !
"218. The DCF method values an investment based on the stream of future cash flows that the investment is expected to generate, “discounted” to a present value to account for the time value of money and the riskiness of the forecast cash flows. It is the Claimants’ preferred approach.
219. The Claimants (RKH) primarily advance a claim of EUR 275 million as the value of the loss of their investment, with at least EUR 6,675,391 in decommissioning costs, and interest on both figures at 9%, compounded annually. The interest – calculated to 4 February 2019 – would add another approx. EUR 83.8 million, bringing the total relief requested to approximately EUR 365.4 million."
The additional interest which would have been earned 2019-2023 would have added another c£60m = EUR 425m total.
If RoI challenge the basis of calculation, I do hope the ad hoc committee switches to the DCF methodology.
DEM
Whackford, looking at the TASE website they can submit the reports any time of the day.
https://maya.tase.co.il/en/reports/finance
PennyorPound, i thought he said they were a company that paid out dividends but I will have another listen when I have time.
Following paragraph posted last Monday. Will we here more today?
"The partnership is honored to announce that the expected date for the publication of the periodic report for 2022, including the financial statements for December 31, 2022 (hereinafter: "the periodic report") is March 23, 2023, subject to the approval of the board of directors of the general partner of the partnership."
I thought he said no dividends have been paid to date buzz, but he guessed they would be soon...
has anyone done a dcf on ombrina mare to see what the total could have been?
Agreed, and if loss of 'future profits' is part of the award calculation, then the current oil price would also make the award somewhat 'modest'.
DeM - I fully agree with your post, especially re the arbiter's final comment.
"In practice, where a partial annulment is ordered (which is more common than full annulment), the tribunal’s damages analysis and jurisdictional findings are more likely to be annulled than findings on liability"
Source - page 5 : EMPIRICAL STUDY: ANNULMENT IN ICSID ARBITRATION by Baker Botts
https://www.biicl.org/documents/10899_annulment-in-icsid-arbitration190821.pdf
So, if "the tribunal’s damages analysis" is the Achilles Heel of ICSID judgements, most likely to be to be challenged to obtain a Partial Annulment - it seemed a good idea to re-read Professor Pierre Dupuy's minority report. Fortunately - thanks to Mogger - we have a copy of this six page document buried in the 223 page full Award.
The following quote from the last para of Prof. Dupuy's minority report (INDIVIDUAL OPINION BY PROFESSOR PIERRE-MARIE DUPUY) suggests that RKH might have been awarded far more, if the Tribunal had not opted to use a "rather modest value of the Ombrina Mare field at the time of Rockhopper's investment in 2014, contrary to the proposals put forward in this respect by the Claimant which were in my view inequitable".
"6. With regard to the calculation of the compensation due by Italy to Rockhopper, one could certainly have had some doubts about the appropriateness of using the DCF method insofar as the exploitation of the Ombrina Mare deposit has never begun. There are, however, several precedents in the same direction and the use of the DCF method is still considered, including in the field of oil exploitation, as the reference method. What was most important, however, and allowed me to agree with the solution proposed in the award in terms of compensation was that the baseline used in the award for the calculation of compensation was the actual rather modest value of the Ombrina Mare field at the time of Rockhopper's investment in 2014, contrary to the proposals put forward in this respect by the Claimant which were in my view inequitable".
I find this last para very reassuring. If the RoI's own nominated Arbiter considered the baseline valuation of the Ombrina Mare field to be "rather modest" - it seems very unlikely that the ad hoc Committee will disagree.
I have also attached the link to the full version of the Award. Note that the Award comprises several different documents - each with its own pagination. The 'Individual Opinion' is about 60% of the way through the Award - you will need to slowly scroll through to find it or better still, use the search facility ('Find on page') in the Settings menu ('three dots' icon).
https://files.lbr.cloud/public/2022-11/2022%2008%2023%20%20Rockhopper%20v%20Italy%20-%20Award.pdf?VersionId=jCPV978neEZ9LYnhwgTrt5yBQwzf0NEQ
DEM
BD
Thank you.
We can conclude the odds are in our favour!
Many Israeli energy companies have raised money via non-government bonds listed at the Tel Aviv Stock Exchange. If you see info.tase.co.il/Eng/MarketData/Bonds/Search/Pages/SearchBonds.aspx you will find so many outstanding bonds of size USD 200 million to 1,25 billion from issuers like Isramco, Paz, Tamar, OPC energy, Delek and Energean. You can read more news stories about Israeli energy companies from globes.co.il Yes NVPT can raise the capital that is required for Sea Lion.
I may need to ammend my previous post!
decisions by the ad hoc committee 89
so i think the % are 78.6% in our favour 21.4% full or part annulled.
I hope I have it right this time!
I think the stats are even worst than that.
I am only going by DEM post earlier I am assuming that is correct.
"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.
No Wrath
of the 355, 156 have had annulment attempted.
6 out of 156 = 3.8%
13 out of 156 = 8.3%
combined 19 out of 156 = 12.17%
It would be interesting to see the details from these 19 cases, to be able to compare the strength of the arguments, which resulted in annulment / partial-annulment, with the strength of the arguments that the Italian State has submitted on this occasion.