Good luck happyinvestor100
One small point; you wrote;
"it would be legally barred from making any distribution to shareholders until the FIG deferred tax liability of circa $50m had been settled."
There is an agreed clause on the deferred £59.4million ;; if its deemed 'irrecoverable' it disappears.
The liability was on the benefit value from the old giant carries PMO WERE going to provide and I think that if the giant old carries goes; so does the tax liability.
They can not tax a benefit we did not receive; its irrecoverable .
Its history, whose demise has to be formalised with the new SPA.
On a pedantic point; the FIG might try to claim a small amount of tax for the 1.1. 2020 - 1.3.2020 PMO carry
Good link schlemiel ;highlighting a date for your diary;
"The next several days will be crucial, as we hear statements from Saudi
and Russia, to see what kind of mating-dance they might be going through.
Another meeting of the Joint Technical Committee, that includes
representatives of Russia and Saudi, remains on the books for March 18."
Good evening muzzletoff
You mentioned; "Falkland Islands Govt, who are due a heap of deferred tax.."
Since the new deal with NAVITAS has emerged; our old enormous carries from PMO have gone. It follows; subject to FIG approval of the new deal' that the 'gain' has gone and any tax is irrecoverable as per this passage;
"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 Islands license areas; or
(ii) any element of the Development Carry from
Premier becomes “irrecoverable” "
A decent RNS from PMO today. The commitment to SEALION is there , but the financial guarantees rely on PMO completing its announced corporate actions. One would hope we would be able to move forward after the 17th March court hearing.
Quite a lot on SEALION in the PMO results. This is the important bit;
"The critical path item to sanction remains securing senior debt support for the project. In 2019, Premier completed a Preliminary Information Memorandum supported by a comprehensive set of independent expert reports on the project. These formed the basis for the financing guarantee application process for the senior debt component of the project financing. While engagement with senior debt providers is constructive, feedback received highlights the need for Premier to complete its announced corporate actions and extension of its credit facilities to provide certainty over its medium- to long-term funding position before financial guarantees for the project can be provided."
Earlier in the results there is this passage;
"The Court Schemes of Arrangement (the Schemes) required to implement the announced acquisitions, related funding arrangements and extension of the Group's credit facilities commenced post year-end. The requisite majority of Premier's creditors approved the Schemes in February and the court sanction hearing is scheduled to commence on 17 March 2020."
One must hope that court approval will open the way for the SEALION financial guarantees
Good morning BigBear2
I agree; a sustained period below $50 would likely put the project back ; however the Golmans guess is $53.
"Goldman has doubled down on its bearish oil take and has cut its oil price target by $10 to $53 in Q1 through the end of the year, as a result of what it now estimates is a loss of as much as 4 million barrels per day out of China."
I see POO is now $52.74. Even down at this low price; its still enough, imo, for a SEALION go decision. Of course,the important assessment is what POO will look like in 4 years .
The smaller SEALION project with a break-even of $45 and PMO's project 'go' price was $55; that figure giving them their minimum desired profit margin.
The enlarged SEALION project has a lower break-even of $40. Its not unreasonable to assume that the minimum 'go' number may also have reduced.
Lets see what happens tomorrow with the OPEC decision. I note that some think a million barrel cut would lift POO to $60
Good evening Tuggy.
I sincerely hope there really is serious interest in the NFB again. The evidence is less than convincing and lets not forget that Noble despite being "very excited" walked away from a very sweet deal (for them) with Arg.
Anyone wanting to drill exploratory wells again is going to have to have deep pockets . At circa $35 million a drill (figure extrapolated from recent SEALION costings) its not a cheap game. It does not stop there , for IF a drill is successful many more appraisals would be required. Basically you are looking at a seriously wealthy oil company.
Then I look at the only partner PMO and RKH could attract; NAVITAS who got a great deal but are virtually penniless and we just have to hope they can fund raise. My suspicion is they were the only interested parties for surely PMO would have preferred a rich, bigger partner?
Just have to wait and see if the 'interested ' party statement actually brings forth a partner for ARG.
Logically thinking; IF there was a rich oil company out there looking seriously at the NFB; then why did they not outbid NAVITAS.? For a couple of hundred million dollars they could have snaffled 150 million barrels as their share of a field where $1.1 billion had already been spent on appraisals. Why gamble elsewhere when you have a certainty at a discount price.?
Just have to wait and see what happens and hope OPEC on the 5th march lifts POO , for all our sakes.
Good afternoon Tuggy.
You wrote; "the Chatham and Tyce fields flow into PL001 territory and the Johnson field is one third in that same licence so in effect there is considerable value "
Johnson is, imo, a useless GAS discovery with, imo, absloutely no hope of being monetized; Shell found it and abandoned it in 1998. Am a bit confused by your references to Chatham and Tyce fields.
Argos has a prospect called TYCHE which is given a 18% risk factor on p77 of the ARG CPR here;
Note; Rhea is given a 38% risk factor
Chatham is another prospect refereed to by EDISON in July 2015 as a secondary target in a planned drill on the RKH licence that did not take place due to rig issues;
"Chatham – gas-cap appraisal and deeper exploration
The Chatham well (14/10-10) is primarily an appraisal of the western flank of Sea Lion to determine the presence or absence of a gas cap in the SL20 sands. This is of importance as if no gas is present in the well, around a further 65mmbbl can be added to the Sea Lion resources (if the well does encounter a gas cap, the location (though not the well) could instead be used for gas reinjection during production if required). The well will then continue on to the deeper Chatham exploration prospect (GCoS 17%),..."
Two important points to note; firstly The vast bulk of the Chatham prospect is in RKH license and secondly it was given a low Gcos.
One can not ascribe "considerable value" to either Chatham or Tyche because nothing commercial has been found yet and Johnson is a gas discovery with very little chance of monetization, imo.
p11 of the last Argos annual report spells it out clearly
General exploration risk
Whilst results in the surrounding area are encouraging with respect to the oil and gas potential of the area and interpretation of the seismic data has indicated extensive prospectivity within the Argos Licence area, no commercial volumes of oil or gas have yet been discovered and there is no certainty that such discoveries will ever be made."
Good afternoon Tuggy
"Rhea and the three other prospects are owned by a company who has been in the FI for a long long time and of course have a very successful fishing business and property interests on the island itself,"
For absolute clarity; that statement reads like you were saying Argos Group Ltd OWNS the licenses which Argos Resources Ltd operates. In effect you were saying Argos Group Ltd owns Argos Resources Ltd. That is not correct . They are separate LTD companies ; one AIM listed with shareholders and the other evidently private.
Their respective financial successes or failures are entirely independent of each other. The fact that there are characters in both companies makes no difference.
Argos Resources Ltd has to rely on ether a new partner injecting cash or otherwise raise funds which will be via the issue of new equity.
The mention of fishing fleet and other property assets held by Argos Group Ltd confuses the issue at hand.
Godders99 ;The reason Shell left in 1998 was that POO slumped really badly to $11.91; inflation adjusted to today equals $18.86
As for financing the SEALION project with already have agreed Vendor financing. We will just have to wait and see regarding senior debt.
SEALION is a robustly economic project with a cash break-even of $40
Production costs are really competive ; "$25/bbl life of field opex + lease"
(source; p.14 https://rockhopperexploration.co.uk/wp-content/uploads/2020/01/Investor-Presentation-Navitas-HoT-7-Jan-2020v3-1.pdf )
Read this story from 29.1.2020
"With estimated production costs of US$ 46 per barrel, well below current oil prices, its production is highly competitive with shale and other leading deep-water areas."
These guys should have farmed into SEALION. Our production costs are much lower.
POO is now just above $50
We have to remain conscious of the POO as regards PMO's minimum project 'go' number.
Under the old plans the break-even number was $45 and PMO stated their minimum price to give a satisfactory profit margin was $55.
After advice, the economics of the field was improved by increasing the number of producing wells; adding four to the south of the field. That caused break-even to drop to $40.
I think its fair to assume that PMO's 'go' price will have dropped too; maybe even to $50.
I think that if the Saudi's get their way this Thursday with their reported wish to see a million barrel cut in production; we could see POO back over $55 in a very safe project 'go' place
Hi again Godders99
The BOD gave their best estimate on the information they were given. The arbitration result could be announced this week; lets see.
The virus crisis is grim but for SEALION development the critical event is the OPEC meeting on the 5th.
We are intensely focusing on very short term events when the potential SEALION financiers have to guess what POO looks like in FOUR years when we could be pumping first oil.
What I am saying is ; things can change fast; Look back 20 months to when POO was pushing $80 and TRUMP was moaning that POO was too high?
Good morning Godders99.
Its hard to guess how long the virus crisis will impact. It could cause delays to FID. Near term we have the critical 'extraordinary, OPEC meeting on 5th March to discuss recommended production cuts. IF in the following days POO goes to $55 plus again , we could be back on Schedule for FID by year end.
As for the arbitration; you wrote "Italian case to be delayed for another 6 m plus."
I think the DECISION will come pretty soon BUT ; any award given allows the Italians 240 days to pay up.
Good evening falklandinvestor.
Let me make a few things perfectly clear to you;
1, I have an interest in all Falkland oil and gas activities.
2. I hold RKH shares only
3. Tuggy raised RKH here AND dropped my name here making comments that deserved a response to and clarification
4 This is a discussion board open to all; not just rampers who are trying to encourage people to buy this stock so they can dump it on them and run away.
Hope these links help Tuggy
An "Argos Group Ltd" story;
"The F/V Argos Cies is named after the Argos Company, which has been involved in fishing around the Falkland Islands since 1988"
Argos Resources Ltd...the oil company under discussion here was formed in 1995
Good evening Tuggy
You wrote; "Rhea and the three other prospects are owned by a company who has been in the FI for a long long time and of course have a very successful fishing business and property interests on the island itself,"
I can understand the confusion. Argos Group Ltd are a separate Limited company with a fishing fleet. They are separate from Argos Resources Ltd.
There are characters involved in both companies BUT they are separate LIMITED businesses; Argos resources DO not have an fishing fleet assets.
Have a read of the Argos Resources accounts as to their assets. Note these two extracts;
"Administration expenses were $433,000 in 2019"
"cash in the year decreased from $788,000 to $768,000."
Its clear a fund raise is required in not very distant future.
Thanks for the link luckyman2.
Am not so sure it has much impact on the moving forward of the SEALION development plans as , my understanding is, the ZAMA proceeds will be used to address PMO's debt and are not earmarked for SEALION expenditure.