GreenRoc Accelerates their World Class Project to Production as Early as 2028. Watch the full video 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.
Latest Development:
April 11, 2024 - April 12, 2024 - The ad hoc Committee holds a hearing on annulment in Madrid.
Thanks SH - in line with what LTT reported.
Judging by other cases the outcome could take anything from a few weeks to 12 months but hopefully by the end of the year.
Still no news on the sale of the award being signed off but I’m sure that’s just a formality.
Indeed Paul, LTT was bang on the money.
One would hope in this case, seemingly quite clear cut, that it's more a few months at the most. FIG are the disappointment for me atm though.
@SH re FIG. I'd say (well, already have on here!) that signing off on OM prob involves a good indication of tax status on the deal, a 24/5 year event. May be why it only gets done in next weeks/months.
Would frankly be ridiculous for FIG to get, or even really to ask for, a cut of a settlement that is wholly for net of tax profits taxed elsewhere (Italy). Its restitution for something FIG wouldn't get anything of.
Guess should've said award there rather than settlement!
Hi CitizenTS, I can not think of a single good reason for FIG to delay signing off the OM award monetisation deal.
Their only concern should be ensuring SL gets developed in a safe and environmentally friendly way.
Selling 300M bbls at $85/bbl, nets them over $6billion in tax and royalties and gets the Falklands O&G industry going . P1zzing about over a few million in ICSID award is meaningless in comparison. FIG need to give their heads a sever wobble !
Maybe FIG are working with Navitas and Rockhopper and will sign off on the deal when Navitas and Rockhopper are ready to announce FID.
Maybe FIG are keeping Rockhopper on a short leash so the funds don’t get spent on hobnobs, coffee and Egyptian oil fields.
Who knows? No one that posts on this board that’s for sure. I’m just happy to see the pieces of the puzzle finally coming together. I had written off this whole “investment” but maybe now I’ll at least get my money back.
I'm puzzled as to why FIG have a say in the matter at all??
It is a dispute between Rockhopper and the Italian Gov't.
Monetising the award in the ICSID dispute is a company matter.
Nothing to do with FIG. Seems very odd.
It may not be as odd as it seems SH, Am I right in saying Rkh owe FIG tax money the agreement with FIG posiibly states that if & when Rkh receive any cash (OM) then the tax bill becomes due, so I imagine rkh will be negotiating with FIG - stating that most of this cash will be used to help fund rkh's share of SL and can FIG wait until production for their tax...but on production rkh must pay back Nav loan first, so FIG will be protecting their own interests on this and that's why negotiations are ongoing.
Apparently it "is an issue of the the new funder having security over the award"
Thanks Zinced and Chess, but both ideas don't seem to fly as again
1. The award to Rock from Italy via ICSID award is wholly independent of Rocks licences in Falklands and any disputed tax liabilities.
2. The monetisation afaik is selling to ''the "Specialist Fund" to monetise its ICSID Award (the "Award"), in relation to the arbitration against the Republic of Italy relating to the Ombrina Mare oil field''.
FIG and the SL asset should not come into it.
In theory, assuming the award is upheld, the Specialist Fund get the chance to collect Euro$250m plus, by paying Rock less than halve that. They should not get some 'security' over Sea Lion in case they fail, as that would be heads they win, tails they don't lose. Seems odd if that is the case.
My understanding is that FIG do have a say in any cash rkh receives as we know they are not allowed to do what they want with the OM award,for example, we know FIG have stipulated no dividend or payment to shareholders is allowed and whilst we don't know what else is allowed or not allowed by FIG, they clearly have some prior agreement on any cash Rkh get from OM or anywhere else.
The detailed terms, we don't know but we do know FIG stated that non of the OM award can be paid out to shareholders until the tax issue on the Pmo farm out is resolved and If none of this was applicable then Rkh would not need FIG to sign off OM.
FIG having a say on what Rock do with the cash they have, is one thing.
Having a veto on how Rock obtain cash, from a separate part of Rocks business in the Falklands, seems irregular.
We don't know the detailed agreement rkh have with FIG, we just know FIG have a legal say in any proceeds rkh may come by, to what extent, we can only speculate but rkh owe them tax, how much, we don't know as they've been negotiating the matter for some years now but I have never seen any resolution. Has anyone here ?
Rkh argued that the Premier free carry didn't materialise as agreed but the did nevertheless receive $231mln cash & I believe a $48million exploration carry !
Perhaps FIG are negotiating a possible cut of the OM award from the outstanding tax due 🤔
I suspect the FIG position results from a legacy issue arising from when Crispen Odey tried (unsuccessfully) to extract monies from RKH which FIG (and other shareholders) did not want to see. In the last years accounts (y/e 12/22 pages 65/66) RKH explained, at length, that after taking professional advice regarding the "Tax settlement Deed" that " the most likely amount that the liability will be settled for $nil" They go on to state that "We are currently engaged with FIG in relation to formalising the tax implications of the termination of the 2012 Premier Oil farm down which resulted in an irrecoverable carry amount of approximately $670million. etc etc.
More T's to cross and I's to dot - I am sure that the lawyers will find an agreeable form of words to suit all parties.
It’s not in RKH’s interest to settle the tax issue with the FIG until they are in production. It’s an unknown to potential predators which may deter takeover bids at lowball prices.
Best to keep it complicated for now as a form of protection.
We have to expect that FIG will do whatever is best for FIG- regardless of any considerations for Rkh.
I have corresponded numerous times with Stephen Luxton (ex FIG Director Mineral Resources) and fair play in that he always replied to all my mails in detail,addressing my queries & commenting in on my statements but the overiding impression was 'Its got to be right for FIG' , 'Better No deal than a bad deal for FIG', so I wouldn't expect them to give Rkh any unnecessary quarter.
I have corresponded with Sam on the FIG tax issue a number of times too over the years and as far as I know nothing had been resolved, the outstanding figure is not known and I'm not sure the two parties see eye to eye or get along.
I imagine Navitas will be FIGs favourite now as they are pretty much going it alone anyway.
I'm sure Rkh will be pushing them on the matter and they certainly need that as they don't seem ready for what's about to happen once FID gets the green light as they're struggling just to sign OM off.
Details of tax issue with fig 2015
Falkland Island CGT liability deferment
Released : 09 April 2015 07:00
RNS Number : 6748J
Rockhopper Exploration plc
09 April 2015
9 April 2015
Rockhopper Exploration plc
("Rockhopper" or the "Company")
Confirmation of Falkland Island Capital Gains Tax Liability Deferment
Rockhopper Exploration plc (AIM: RKH), the oil and gas exploration and production company with interests in the North Falkland Basin and the Greater Mediterranean region, is pleased to announce that it has agreed binding documentation with the Falkland Island Government ("FIG") in relation to the tax arising from the Company's 2012 farm-out to Premier Oil plc ("Premier").
The Tax Settlement Deed confirms the quantum and deferment of the outstanding tax liability and reflects the principles agreed between Rockhopper and FIG in December 2013 and is made under Falkland Islands Extra Statutory Concession 16.
Highlights
· Outstanding tax liability confirmed at £64.4 million (approximately $95.7 million) and
payable on the first royalty payment date on Sea Lion (or earlier subject to certain
events)
· First royalty payment date anticipated to occur within six months of first oil production
which itself is estimated to occur in late 2019 (assuming Sea Lion project sanction in
mid 2016)
· Outstanding tax liability amount may be revised downwards if the Falkland Islands'
Commissioner of Taxation is satisfied that either (i) the Exploration Carry from Premier
is used to fund exploration activities in the Falkland Island license areas; or (ii) any
element of the Development Carry from Premier becomes "irrecoverable"
· Rockhopper provides certain "creditor protection" undertakings to FIG while the tax
liability remains outstanding including (i) restriction on dividends or distributions; (ii)
granting of first ranking security over Rockhopper assets; and (iii) while such security
is in place, restrictions, subject to conventional carve outs, on granting further security
· Intention that at the point Rockhopper is able to secure senior debt for the Sea Lion
project, the security provided to FIG will be released and FIG will be provided with a
standby letter of credit to preserve its creditor position
· Rockhopper retains balance sheet strength with cash resources at year end 2015
projected to be approximately $125 million
Sam Moody, CEO of Rockhopper, commented:
"We are delighted to have reached this settlement with FIG under which we now have much greater certainty both on the quantum and timing of the deferred tax liability.
"Under the amended commercial arrangements with Premier we intend to access the full $48 million of Exploration Carry during the 2015 drilling campaign which should allow us to reduce the outstanding tax liability by up to £4.7 million (approximately $7.0 million).
"The security arrangements and unde
At risk of perpetuating this trail, maybe everyone's at least partly right! A funder's security might or would only be effective against amounts actually owed to them. Almost history be that rkh remain the name actually "on the docket" when funder pursues RoI. Rkh then still actually receives the proceeds from seizing and selling assets. How does funder then make sure its all passed on as agreed? Security presumably is only and exclusively for that.
At the same time the tax status of the proceeds from selling the award might also be receiving attention.
Aaaaargh, spell check, "has to" , not history
I had an email reply from SM ref the tax situation:
Please see below:
‘ In fact, when Premier left the Falklands it resulted in some $674 million of carry never being received by us. The tax calculation assumes that money is received. We have therefore reflected a reduction in the deferred tax from £59m to zero in our accounts, based on legal advice. FIG is yet to formally agree to that adjustment from their end.’
The likely next milestone will be putting the revised EIS out to public consultation
Informative posts chaps 👍..So after 4 years, FIG have still yet to agree the tax ammendment made by Rockhopper and they have security over all rkh's assets from the tax settlement deed.
That sounds pretty much exactly like what I was suggesting yesterday in my 23.03 post !
From all of the post I have read it seems FIG are shi**ing in their own nest ! 🤷♂️
As per my post yesterday, it’s a clever situation that suits both FIG and RKH. There is a good reason why it hasn’t been resolved!