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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
Nasty,
I'm waiting for Leo to post details of his statistics.
I'm fully aware of all the information that I've posted over the years.
Mogger
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