RE: RNS8 Apr 2020 14:03
yes lots of bits and pieces in the RNS one could cherry pick and talk about (future POO, PMO house in order, Funding, etc, etc) but irrespective of how upbeat they try and sound every single one of them points to another lengthy project delay !!!
and here's another niggling example
''during the first quarter of 2020, the Company paid US$3.9 million of Sea Lion costs related to the period prior to 1 January 2020. Whilst timing remains unclear, further such costs, estimated at up to US$10.0 million and included in the balance sheet under current liabilities, could become payable in the next 12 months''
given they had $17 million end of year and sold Egypt for $16 million post period reporting and having only $22 million currently left in the bank today it means they have spent $11 million in the first 3 months of this year.
if you take the $17 million in remaining cash minus up to $10 million of further (albeit potential) SL costs due this year, it doesn't leave a lot of wiggle room when your G&A is steadily burning over $5 million a year.
and so when you read statements like that on the annual report, I'd say as a going concern (past the 12 months from now date) it really does all come down to getting a decent payout from Italy.
don't forget SL licence renewal is due again in May 2021 and IF no FID has been approved by then (which I suspect might not be the case if these markets are to continue for any period length of time) the FIG will be asking questions about PMO/RKH and their ability to fund and push this on and into production as they too would like to see some revenue coming in after 10 years of promise so IMO something might have to give if Italy doesn't pay big this year
as its stands for someone looking in today (as a current investment case) there are cash flow project sanction alarm bells everywhere so its a big risk that's for sure but as is the reality with retail investors once they are in, the majority of them are locked in until they either see a profit where they can sell at or the company goes bust.
it is therefore IMO the 2 single biggest killers of a retail investors portfolio, namely:
1. FOMO (Fear Of Missing Out) as SP is going to the moon tomorrow
and
2. FOCL (Fear Of Crystallising Loss) just in case it goes to the moon tomorrow or the day after or maybe one day
whereas in market reality there will always be another train tomorrow or the next day or the week after that, OK it might be from a different station but trust me there will always be another one
I always say never be the last to leave, so the golden rule for me nowadays is, NOT the FOMO or the FOCL it is actually FIFO (aka be First In and First Out) and leave the froth and rainbows for others
RKH has been good to me in the past, but the investment case has changed, so I wish you all luck going forward
just remember:
nobody ever went bust banking a profit and a profit is never really a profit until the stock is sold and cas
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