Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
9) RKH is at the mercy of PMO and the share price. As per previous meeting I detected a lot of hositility from the BoD to PMO and rightly. The open ended agreement to develop is coming back to bite RKH. So long as you think POO will rise then RKH has hope. 10) A disturbing thought was presented to me: had RKH gone it alone to develop Sealion, they would currently be leveraged up to the nines, with the imminent prospect of pumping 50k barrels of oil a day at a cost of 45 dollars a barrel and a sales price of 35 dollars a barrel. Today's meeting may well have been a meeting to petition for company wind up! 11) Main listing will not be happening prior to next year's AGM. RKH fell foul of a number of criteria for a premium listing… Market cap ( I think), being not in control of their own destiny given that PMO are the operator (the FOGL buy out may help here), and lastly they were deemed to not be diverse enough with regard to their asset base. 12) The BoD are very much aware of these forums. I may well have forgotten some pertinent bits. Any questions fe
So I attended the GM. Terrible turnout again. Surely it must be better to attend than pontificate on this forum? I would estimate that just 10 or so PIs, the board, the registrar and a couple of RKH/ clerical staff were in attendance. You can't blame the board if you don't hold them to account / attend such meetings. As one would expect, the meeting was a complete formality. Sam presented a little on the rationale for the deal. Basically, for the project to be viable at 50 dollar oil prices and for a partner to farm in the division of the fields needed to be simplified. Basically farmees are more likely to buy in to a consolidated field. I noted a sense of a lack of confidence re Issy 2 drill. I could well have imagined this especially as they are miles from TD (more below). Issy stands in at 150-200 currently and 500-600 million barrels if the drill is a complete success. The BoD are still confident of a billion barrels in the NFB. Those in attendance completed the entirely pointless show of hands with relation to the resolution which I believe passed unanimously. 97% of the proxy votes were also in favour. The meeting can have lasted no more than 5 minutes. Whilst the formalities were entirely pointless the board did a good job of mingling with those in attendance and I must say that whilst downbeat, they are clearly exceptionally knowledgeable and you can see why they command their high salaries. They would do better providing more in the way of communication. In summary it was a downbeat chat. The following was gleaned from the board via various chats. 1) The ER was widely acknowledged as not being great. There are a number of insurance claims in motion but none are resolved. 2) The rig has encountered BOP issues again (as of yesterday) and it was emphasised that the rig is weeks and weeks away from TD. So the theory that FOGL shareholders will be voting with prior knowledge of Issy 2 results looks to be a fallacy. 3) Obrina Mare may well be dead and buried, RKH need to consult with the Italian authorities with regard to the new legislation passed yesterday. 4)The BoD were keen to stress that OM is not one of the core MOG assets, with Monte Grosso being he important field. They didn’t seem too concerned re OM not being 5) FID was acknowledged as being unlikely for 2017 (no surprise there). 7) FEED to be extended i.e. double the length of time, half the workforce involved in order to reduce burn - 9mths to 18mths. Not sure this makes any sense as it is a fixed cost & you are just spreading it over more time. Sounds to me like a huge scale back to avoid chasms of nothingness into the future. 8)FOGL are in receipt and were kept in the loop with regard to Humpback. RKH have been privy to the high level results and hence the assignation of zero value to the SFB. Basically SFB is deep and only suitable for the big boys of the drilling world. 9) RKH is at the mercy of PMO and the share price. As per previous meetin
Does anyone know whether the RKH merger share-issue was approved by its shareholders this morning??
Eegbvi, in your opinion is this share likely to go to 0? If it does, would RKH be obliged to go forward with the merger nonetheless?
Eegbvi, mission accomplished.
The evidence does so suggest. It appears that in August and September, FOGL saw the 'hand writing on the wall' with regard to ever-increasing drill costs. Perhaps they quietly contacted RKH to initiate merger discussions and assembled the pieces whilst Noble's drill continued. Once ER had left SFB and spudded Isobel under Premier, and after the Argentine election, FOGL 'pulled the trigger'. It was probably a punch in the stomach to Noble - they never saw it coming. And it completely reversed the companies' fortunes: Noble went from standing at the cusp of getting everything (ownership of the entire south, and surrouding Sea Lion with Isobel and Rhea) to being shut out of both provinces. For this reason, expect no competing offers from Noble. They are more likely to attempt to thwart merger approval by FOGL shareholders. If they succeed, Noble will be restored to its former commanding position, and FOGL will go under. All only my opinon, of course.
Will do, and will report any reply.
Eegbvi, I would be willing. Would it require mail correspondence, or is there a means of doing so electronically via either email or the website? I have examined the RNS and found only telephone numbers...
I regret the cutoff at nuymber 2. Here is a revised number 3 including the omitted text. [If Noble had actually undertaken this action, it would help explain why, even today, what Noble learned at Humpback remains completely unknown. Noble’s only truly substantive communication to date has been that Humpback was “noncommercial’. That is not a fact: it is a conclusion. Conclusions are judgments of individuals premised upon facts, and while identical facts frequently result in different judgments from equally qualified persons, facts are uniform and unmalleable. To date, Noble has failed to release even the most elementary facts about Humpback - amount, quality, and quantity – even though its possession of this information, given the extensive drilling and logging performed to date, cannot seriously be questioned.] It must also be noted that some publicly available information flatly contradicts Noble’s conclusion of noncommerciality. No¬ble itself concedes that “oil finds” were made at Humpback, and the September, 2015 price leap, publicly reported by a number of reliable posters, was consistent with such a discovery. While small in volume, this compilation is positively encyclopedic compared to the dearth of information afforded by Noble. It even remains possible that Humpback was, after all, the massive oil strike which investors had been anticipating. Noble has to date neither addressed these concerns, nor released the facts upon which its conclusion of ‘noncommerciality’ was premised, and for which FOGL investors paid so dearly. Noble’s position appears, rather, to remain: “Who you gonna believe, me or your lying eyes?” FOGL investors and regulatory authorities should insist upon Noble’s immediate release and full disclosure of all information pertinent to the Humpback drill in order to allay the foregoing legitimate investor concerns.
It must also be noted that some publicly available information flatly contradicts Noble’s conclusion of noncommerciality. No¬ble itself concedes that “oil finds” were made at Humpback, and the September, 2015 price leap, publicly reported by a number of reliable posters, was consistent with such a discovery. While small in volume, this compilation is positively encyclopedic compared to the dearth of information afforded by Noble. It even remains possible that Humpback was, after all, the massive oil strike which investors had been anticipating. Noble has to date neither addressed these concerns, nor released the facts upon which its conclusion of ‘noncommerciality’ was premised, and for which FOGL investors paid so dearly. Noble’s position appears, rather, to remain: “Who you gonna believe, me or your lying eyes?” FOGL investors and regulatory authorities should insist upon Noble’s immediate release and full disclosure of all information pertinent to the Humpback drill in order to allay the foregoing legitimate investor concerns.
If Noble had desired to eliminate FOGL, it could have done so rather easily by employing the following three-point program: 1. Deliberately and substantially extend the Humpback drill in an effort to increase exponentially total drilling cost. Doing so would deplete FOGL’s cash reserves in short order and, while it would also increase Noble’s costs, Noble’s enormous cash reserves would have rendered its endurance of such increases inconsequential, particularly given the prospect of ultimately acquiring FOGL’s assets for virtually nothing. [If Noble had actually undertaken this action, it would help explain one of the greatest mysteries of the Humpback saga: Why would a sophisticated driller with a record of success have bumbled operations so badly as to require extension of a 65-day drill to almost six months at $570,000.00 per day? And why would it be willing to pay so much to drill a dry hole?] 2. Engage a market maker to sell into any share price increases in order to eliminate market capitalization as an alternative funding source for FOGL. With no cash reserves, FOGL could still have raised required capital by either selling treasury stock or issuing new stock. This option would be foreclosed outright by ensuring that FOGL’s share price never rose. [If Noble had actually undertaken this action, it would help explain the remarkable behavior of FOGL’s share price over the past ten months. In February and early March of 2015, the share price doubled in anticipation of Zebedee, only to be promptly obliterated subsequently without explanation. Thereafter, an oil discovery at Zebedee, a massive oil discovery at Isobel, and the prospect of still greater success at Humpback all yielded no share price response, a phenomenon as uncommon in the annals of oil exploration as it is intuitively absurd: how can a flagrantly substantial increase in a company’s assets not increase that company’s value?] 3. Utilize total control over drilling information to secrete all positive results. Withholding positive drilling information would artificially, but effectively, depress FOGL’s share price while discreetly retaining for Noble invaluable information concerning an asset of extreme value. [If Noble had actually undertaken this action, it would help explain why, even today, what Noble learned at Humpback remains completely unknown. Noble’s only truly substantive communication to date has been that Humpback was “noncommercial’. That is not a fact: it is a conclusion. Conclusions are judgments of individuals premised upon facts, and while identical facts frequently result in different judgments from equally qualified persons, facts are uniform and unmalleable. To date, Noble has failed to release even the most elementary facts about Humpback - amount, quality, and quantity &am
[Author’s Note: All statements which follow are in no way premised upon non-public information, facts, evidence, documents or materials. The author does not have, and has not consulted, any non-public resources, and does not assert as fact any of the statements which follow. All of the statements which follow are, rather, solely and exclusively, statements of surmise, conjecture, hypothesis and opinion. As always, the reader must not rely upon any such statements for any purpose, and must perform his/her/its own research and due diligence.] Let us review the history and data of the past ten months in an attempt to bring some understanding and context, if not closure, to our current FOGL predicament. We do not know the specific terms of the operator agreement between Noble and FOGL, but it may have provided that Noble held exclusive control over drill-related information. If so, FOGL, like its investors, was at all times a pure consumer of drilling and well information. From the start, Noble knew all of the following: a. FOGL had enough cash for the Humpback drill (but only just enough); b. FOGL never intended to be a producer and, as such, was completely dependent upon drilling results for market valuation and continued economic viability; c. Noble was fully funded for the drill, regardless of result; d. Noble was sole operator, but only minority stakeholder, in Humpback; and e. Noble is a well-known operator with record of drilling success which exceeds the industry average. If Humpback had been a success, Noble was to receive only a minority share of the resulting benefits and profits. And if, following such a success, Noble undertook to acquire FOGL or FOGL’s Humpback interest, it would be obliged to pay a premium and, perhaps, find itself in a bidding war with other prospective suitors. In this context, Noble may have viewed its financially weaker, but majority-stakeholder, partner (FOGL) as an obstacle. As an alternative to the course of action delineated above, Noble could have considered the benefits of driving FOGL into insolvency. If FOGL were rendered a debtor of Noble and FOGL’s cash reserves dissipated, Noble would ultimately be positioned to acquire FOGL’s assets virtually free of charge, an outcome: (a) guaranteeing Noble all Humpback benefits and profits; (b) positioning Noble as sole leaseholder and operator in the South Falkland Basin; (c) positioning Noble as the major player in the North Falkland Basin (with Isobel and Rhea surrounding Sea Lion); and (d) foreclosing as impractical competition from all other firms which may otherwise have held interest in the region.
Good morning Gentlemen. Just got on and had the pleasure of reading Supertube's post from Wednesday at 19:18. Literally laughed out loud! Supertube, will print your wisdom poster-size and hang in my office as a constant reminder of my investing prowess!
Well, I'm not confident that the news will be so dramatic ("gusher", "commercial"), but I do think it likely that more information will, in due time, now be forthcoming which reveals an oil discovery of substantial volume.
70% of votes counted: Macri 53%; Scioli 47% CNN reports at : http://www.cnn.com/2015/11/22/americas/argentina-elections/
AP, the election outcome would be significant to the share price if the pendency of the election caused the operator to suppress information from the wellhead. If in fact that occurred, one may reasonably anticipate release of the suppressed information within the near future. It is further reasonable to suppose that the information suppressed was positive in character as there would be no need to suppress negative information. All entirely in my own opinion, of course.
Good morning all. Polls opened in Argentina this morning at 10:30 local time. (Argentine time is GMT - 3 hours, or 11:51 now). My very best efforts have yieled no closure time for the polls. The best I could find was that resuts were 'expected' at 9:00 PM loca (12:00 AM GMT). I am pleased to report that in all of the many news reports examined, not one mentioned either the Falklands or the oil industry. The best synopsis of what's at stake appeafs at the link below. Macri is nowexpected to win, even apparently by the Scioli camp. http://www.theguardian.com/world/2015/oct/23/argentina-elections-2015-a-guide-to-the-parties-polls-and-electoral-system
Speaking of which, 3..... http://www.reuters.com/article/2015/11/13/us-argentina-election-macri-idUSKCN0T223E20151113#I65XQ75h0pheX33A.97
Sorry, wrong link. Speaking of which, 2.... http://www.usnews.com/news/business/articles/2015/11/20/argentina-runoff-election-could-bring-big-changes-in-economy