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Fyi I don't see Fernon's piece as disappointing at all. Success is not in the RKH price and there would be a 5-10p sustained rise if the case goes well

Redon
As Fernon said, the $8 is discounted. Not something well understood here but if you only get the dosh on average 12 years away then it ain't worth as much. With all the risks you can uses 12.5 to 15% discount rate. Even with your costs I reckon, all in, Fernon's piece is not a bad illustration. And remember it does 'start' off with a $200m plus claim, co sister t with RKH statements using the $8. It's just previous government actions, tax (could disagree there) etc that get you to a lower figure.

Excellent piece Fernando
If the $8 is after-tax and the award itself is also taxed then it's not value for value, as two tax takes for Italy, and would be a good deal for Italy if it went that way.
That may be how these things are done but if so it's double taxed, surely?
Lawyers should make that argument imho!

nm

Thanks Bear and absolutely right to correct. The risk is simply that we give the Falklands to Argentina as part of a trade deal. I would love to hear Rees Mogg say we'll never do that. Unfortunately he lives in a fantasy world, and has been grotesquely rewarded for it. So the moorings slipped on his grasp of reality a long time ago.
But with a bit of luck another MP can be prevailed upon to say it and I can't see Brexiteers' actually then contradicting that!

Look, PMO's finances are very much a side issue at most, the way this is being done. It's a project finance exercise, so all borrowing is just secured on the project with no recourse to the project owners. 'First oil' cash will go to repay the lenders etc. It's been described as off balance sheet for PMO and that will be accurate. Incidentally, as neither PMO nor RKH would themselves be borrowing anything it does raise the question of what happens to the value of RKH's carry. Most likely there will be some tweak to the terms to salvage some value from it. PMO's present rations refer to £375m 'equity' cost of the project, if I have the number right, which is both the same as their cost for RKH's carry and the only non-borrowing part of the funding.
Also PMO are (hopefully to my mind) doing at least some of Chevron's North Sea sell-off, funded with a rights issue. That also means no borrowing, just more cash flow. So I'm not bothered about PMO's finances if Sea Lion can be project financed.
From different sources, including the article copied to this forum yesterday, the financing is close to done ASSUMING the Export Credit part is ok, which I'd assumed was solid.
Unfortunately Grey Squirrel has worried me that the EC guaranteed funding is in doubt because of Brexit. And the RKH share price has perversely disconnected from the PoO in the last few days, with PoO up and RKH down.

In the lap of the gods, as they say. I think it would probably get done without EC funding (or, to be precise, UK EC funding) but that would take another year.
The only real risk is that the Brexiteers' attempt to 'take back control' of our borders turns out to be a fantasy that takes an axe to our assets by giving away control of Northern Ireland, abandoning Gibraltar to Spain and then giving Falklands back to Argentina as part of a trade deal!

Look, PMO's finances are very much a side issue at most, the way this is being done. It's a project finance exercise, so all borrowing is just secured on the project with no recourse to the project owners. 'First oil' cash will go to repay the lenders etc. It's been described as off balance sheet for PMO and that will be accurate. Incidentally, as neither PMO nor RKH would themselves be borrowing anything it does raise the question of what happens to the value of RKH's carry. Most likely there will be some tweak to the terms to salvage some value from it. PMO's present rations refer to £375m 'equity' cost of the project, if I have the number right, which is both the same as their cost for RKH's carry and the only non-borrowing part of the funding.
Also PMO are (hopefully to my mind) doing at least some of Chevron's North Sea sell-off, funded with a rights issue. That also means no borrowing, just more cash flow. So I'm not bothered about PMO's finances if Sea Lion can be project financed.
From different sources, including the article copied to this forum yesterday, the financing is close to done ASSUMING the Export Credit part is ok, which I'd assumed was solid.
Unfortunately Grey Squirrel has worried me that the EC guaranteed funding is in doubt because of Brexit. And the RKH share price has perversely disconnected from the PoO in the last few days, with PoO up and RKH down.

In the lap of the gods, as they say. I think it would probably get done without EC funding (or, to be precise, UK EC funding) but that would take another year.
The only real risk is that the Brexiteers' attempt to 'take back control' of our borders turns out to be a fantasy that takes an axe to our assets by giving away control of Northern Ireland, abandoning Gibraltar to Spain and then giving Falklands back to Argentina as part of a trade deal!

that was supposed to say 'access to the oil'

IfnGrey Squirrel is right and our export credit lot have been hopelessly blindsided by Brexit, and the Norwegians and Dutch are interested, then let the Norwegian and Dutch have the export credit slug, and any access tobtheboilnthey may want. Surely!

Hopefully we'll at least stay in the customs union. Then all these considerations would go away.

Grey Squirrel - your comment that basically the UK govt export credit is holding things up and to (at least) some degree doubtful is really depressing!

Can someone please tell the Brexiteers how weak we would/will be outside any major trading bloc. All our assets are just chips or enticements to be thrown away in a desperate pursuit of quick trade deals that normally are negotiated over decades. So much for taking back control. Blxxdy lunatics!

Unfortunately the shareprice looks like the partners were ready to submit the EC request in Nov (would make sense) but didn't as they got the wrong vibes on the likely answer.

I had thought they could rely on the EC slug, and that whilst the private 70% for some reason appeared to be viewed by the market as a very difficult hurdle my own analysis was they were finding a way to do it and it would likely be ok. Have to say I'm pleased to hear the rest is now likely to 'fall into place' but I'm having to seriously 'recalibrate' if the EC slug is really in doubt!
Anyway, with a bit of luck ...

Some things that don't seem to get a mention on here -
1. The FEED contract with BW Offshore, awarded by PMO, was only announced in Sept '18. RKH had previously completed FEED, supposedly, with SBM Offshore as the contractor. There has been comment along the lines of it was disappointing for PMO to change contractor, as it would add time, but presumably there wasn't much for BW to do to play themselves in, and all would be well after that with a little shaved off stated capital costs to window dress the whole pointless exercise.
However it seems to me this was a crucial change. BW worked with Premier on Catcher. The Upstream article from early Sept says

“We have been awarded a FEED contract for Sea Lion phase one,” said BW Offshore’s chief executive Carl Arnet.
“A Catcher (FPSO) copy is a very obvious solution to implement and Premier has asked us to spend some time to detail this (solution).”
The operator aims to take a final investment decision on the project next year.
“It’s an interesting use of our Catcher experience and it’s efficient to play that playbook one more time.”
For Sea Lion, BW aims to beef up the Catcher floater’s design, explained Arnet.
“Catcher is a stubby vessel, but it is a design that can be made to stretch if needed. (The) Sea Lion (FPSO) will be slightly larger and involve adding a mid-section to the vessel. That is what we are looking at.”

So a) It's a reheat of the Catcher playbook. With Catcher up and running that's justifies the move all by itself as it becomes 'bankable' with lenders. Smart move, and actually a piece of remarkable good fortune for RKH that their partner has a project which can provide a close 'playbook' to follow. Funny how things turn out!
b) Nevertheless, a 'midsection' is being added etc. That all takes weeks at a minimum. Lenders won't even have got plans of what they are lending against until end of 2018. Anyone who really expected funding news before q2/3 of this year (and plenty on here have sounded disappointed it didn't happen last year) has been adrift of the story since Aug/Sept last year.
But, again, the real story is the derisking of the project, including for the lenders, through using the (now) proven Catcher underlying design. For me at least, that's a big positive.

2. I found the reference to 'funding structures' in PMO's recent update intriguing and my own supposition is it means the introduction of mezzanine funding into the project financing. I may be wrong, but government agency lending seems these days to require that they be made more remote form the credit risk by having first money drawn from other lenders. In any event mezzanine funders usually get a few equity warrants which are worth something if all goes well. In effect it becomes a small farm-out to purely financial players - but a whole lot cheaper than a farm-out to an industry player who might expect to assume other roles and get paid for them with a real chunk of equity. All sounds good to me.

Some things that don't seem to get a mention on here -
1. The FEED contract with BW Offshore, awarded by PMO, was only announced in Sept '18. RKH had previously completed FEED, supposedly, with SBM Offshore as the contractor. There has been comment along the lines of it was disappointing for PMO to change contractor, as it would add time, but presumably there wasn't much for BW to do to play themselves in, and all would be well after that with a little shaved off stated capital costs to window dress the whole pointless exercise.
However it seems to me this was a crucial change. BW worked with Premier on Catcher. The Upstream article from early Sept says

“We have been awarded a FEED contract for Sea Lion phase one,” said BW Offshore’s chief executive Carl Arnet.
“A Catcher (FPSO) copy is a very obvious solution to implement and Premier has asked us to spend some time to detail this (solution).”
The operator aims to take a final investment decision on the project next year.
“It’s an interesting use of our Catcher experience and it’s efficient to play that playbook one more time.”
For Sea Lion, BW aims to beef up the Catcher floater’s design, explained Arnet.
“Catcher is a stubby vessel, but it is a design that can be made to stretch if needed. (The) Sea Lion (FPSO) will be slightly larger and involve adding a mid-section to the vessel. That is what we are looking at.”

So a) It's a reheat of the Catcher playbook. With Catcher up and running that's justifies the move all by itself as it becomes 'bankable' with lenders. Smart move, and actually a piece of remarkable good fortune for RKH that their partner has a project which can provide a close 'playbook' to follow. Funny how things turn out!
b) Nevertheless, a 'midsection' is being added etc. That all takes weeks at a minimum. Lenders won't even have got plans of what they are lending against until end of 2018. Anyone who really expected funding news before q2/3 of this year (and plenty on here have sounded disappointed it didn't happen last year) has been adrift of the story since Aug/Sept last year.
But, again, the real story is the derisking of the project, including for the lenders, through using the (now) proven Catcher underlying design. For me at least, that's a big positive.

2. I found the reference to 'funding structures' in PMO's recent update intriguing and my own supposition is it means the introduction of mezzanine funding into the project financing. I may be wrong, but government agency lending seems these days to require that they be made more remote form the credit risk by having first money drawn from other lenders. In any event mezzanine funders usually get a few equity warrants which are worth something if all goes well. In effect it becomes a small farm-out to purely financial players - but a whole lot cheaper than a farm-out to an industry player who might expect to assume other roles and get paid for them with a real chunk of equity. All sounds good to me.

And there would be no point in averaging down if h had a 10-bagger because he would be out with a lotta dosh. If he didn't get out he didn't have 10 bagger. just a saddo!

Deary me, who is it that said, just today, "This actually has no value " which absolutely is stating opinion as certainty. Oh yes, it was Ralphy!

PoO 62 at the moment

You know about that? Just guessing :)

Re PMO presentation - i rather like the earlier slide headed 'Delivery against 2018 targets' where it says under 'Growth projects'

"Progressing senior funding structures ahead of Sea Lion FID"

Now THAT is worth reading.
Odd no mention elsewhere on here! A few guys on here might want to acquaint themselves with the material (though not all I guess)

Weasel words eh? 'risk of ...' and maybe 'Europe is doomed'. Thanks for the added value

... errr, knows what? What the past looks like! Not always safe to drive looking through the rear view mirror