Member Info for cyan2

An interesting week ahead.

Its really about time we had an RNS outlining the Harbour exit strategy and I would hope that might contain a statement regarding Rkh's financial status; does Rkh need to fund raise or can they hang on in the hope of receiving the cash from a OM award?.

I will stick my neck out and guess there will be a BOR RNS tomorrow.

The recent significant investment by a wealthy individual has rekindled interest in BOR.

The background is the very urgent need for BOR to demonstrate it has the basic funds to ensure a smooth renewal of BOR's licenses.

The licences are due to expire at the end of January 2022

The 30th Sept. 2021 Half-year Report RNS had these extracts;

"..the Company will have to demonstrate that it can meet its financial obligations under the terms of the licences."

"...it is likely that additional funds will be sought before the end of January 2022 in order to meet licence and working capital needs and in order to meet the "going concern" tests of the 2021 year-end audit."

Note 4 makes a more definite statement;

"4 Going concern
...the Company intends to secure additional funds by the end of January 2022 in order to continue operations as normal."

The big question is;

Has BOR now attracted a farm in partner who will inject sufficient cash to avoid a dilutive fund raise?

Has the recent investor just simply gambled. ? Ummmm

Falky writes;

"You are the supper star here matey, 3 years of spouting
*no license, no farming and bankruptcy* and over a sudden pushing Donor Kebab
To be in the Falkland.....Give it a rest, Thank you."

Please stop misreporting my posting history.

Please give it a rest and stop personally attacking me..

Why not engage in a reasoned argument about our prospects and our short term balance sheet issue. The future is looking much brighter than it was BUT there is the question of whether Rkh can await for an OM award to drop into our bank account or will have to, somehow, strengthen our books .
Its rather opaque at the moment.

Good morning DeusExMachina

Delek are the most obvious possible third partner .

Can not give credit to 'Nigoil' for mentioning Delek after another suggested them . That avatar has trashed the ADVFN board his posts are reckless and at times completely wrong as in this ADVFN post;

"Nigoil - 01 Dec 2021 - 10:48:38 - 78599 of 79085 RKH - RKH
If you cared to do your research, you will see that Navitas are part of the Delek group!... :-)"

FALSE; totally WRONG .

Navitas and Delek are SEPERATE companies. Nigoil does NOT properly research; his posts are made up of inaccurate assertions , guesses , and self aggrandizing non-sense .

Delek are an Israeli company . Gideon Tadmor ; the chairman of Navitas Petroleum is a FORMER chairman of Delek Drilling.

Yes, Genel are an outside possibility. They are addicted to cheap drilling, BUT having said that, their recent Qara Dagh drill was expensive and disappointing.

Its the previous managerial connections that makes one wonder ; Genel's chairman ,David McManus was the chairman of Rkh. If anyone will have a good understanding of our assets; he's the man.

What will the next RNS contain? Hopefully an update on how HBR are exiting. Rkh's balance sheet is a concern. IF Rkh find they need to strengthen the balance sheet ; one might expect an announcement fairly soon under the pressure of the audit for ye 2021.

Good evening DeusExMachina

you wrote;

"I am very doubtful that Israel or FIG (or FCO) would be comfortable with Genel as a JV Partner. I can think of a few alternative candidates."

Not sure why you presume that some of the Genel non execs are Kurdish nominees . The Kurdish regional Government does not own a declarable shareholding in Genel to allow such nominations .

Genel has strong Turkish links.

One could describe it as an Anglo Turkish company. The Turkish Energy Group Bilgin is the largest shareholder; 22.5%

Genel Energy was created in 2011 as a result of the reverse acquisition of Turkish Genel Enerji by Tony Hayward-led investment company Vallares.

Some will recognize that name Tony Hayward from his days at BP.

Plenty of others are willing to partner Genel ; like Chevron , DNO and most recently from Taiwan, from where a state-owned enterprise will give Genel an effective free carry in Somaliland; a really exciting prospect to be drilled next year.

Why would the FIG or FCO (what has any decision got to do with the FCO anyway?) object to a London listed company when they are apparently happy to deal with Tel Aviv Stock Exchange listed Navitas?

What possible issue could there be? I am genuinely intrigued as to why, in your opinion Genel would NOT be wanted .

I agree Surfit , now or never. It appears to me that Navitas is a company in a hurry. Committed and recognizing the , now much improved, economic case.

I think things will move relatively fast this year. Although license renewal dates have usually passed without incident with the FIG generously renewing its worth noting that MOODY stated we needed to show progress to the FIG.

The license is up for renewal on 1st November 2022. I think the partners would like to be in a position to sanction by then. Will require fast work, indeed.

If we are otherwise making progress; the FIG WILL renew, imo.

Good morning Surfit.

I think we can rule out any of the well known majors joining us in a SL development. If we do attract other interest its going to be from a company like Genel who have absolutely no interests in the Americas.

For those interested in the FI connections I referred to, here are three Genel executives profiles; most notable being Genel's chairman;

1. David McManus
Chairman
Appointed: 5 February 2020.
Previous relevant experience: David
retired as a Non-Executive Director from
the Board of Rockhopper Exploration plc
in May 2019, where he served as Chairman
from 2016 to 2019.

2. Bill Higgs
Chief Executive Officer
Appointed: As an Executive Director and
Chief Executive Officer on 7 April 2019.
Previous relevant experience:
Between 2012 and 2014 Bill was CEO of
Mediterranean Oil and Gas and oversaw
the successful sale of the company in 2014.

7. Tim Bushell
Independent Non-Executive Director
Appointed: 11 September 2017
Current external appointments: Tim
is a Non-Executive Director and Deputy
Chairman at Wentworth Resources, and
Non-Executive Director at Petro Matad, Sval
Energi AS, and Rockhopper Exploration plc.
--------------------------------------------------------------

Genel's CEO Bill HIGGS was behind the sale of MOG to RKH

Previous to the sale to RKH ,Genel bought into that MOG drilling prospect off Malta that failed; cost Genl $10m in payment to MOG)

Good morning DeusExMachina

An extract from your walk down memory lane;

"High-impact fully carried well in partnership with Genel Energy offshore Malta – contingent consideration
only payable in event of success"

Shame the offshore drill was unsuccessful. I hold Genel. I have previously pointed out that some Genel executives have had previous positions or dealings with FI oil companies .

Genel really needs to up their production. They have a large cash pile and the current POO will grow that substantially.

Could Genel become a third partner in SL?

An outside chance, maybe.

Interesting Link from Mogger on MOG's historic interests and disposals. I note that MOG had to pay towards decommissioning liabilities to offload.

RKH wanted to offload CIVITA in 2017 in a deal where we would pay Northern Petroleum to take off our hand due to the decommissioning liability. The deal collapsed.

RKH lists their current Italian interests here;

hTTps://rockhopperexploration.co.uk/operations/italy/#

Strange that RKH has no comment there on CIVITA and its production.

Good afternoon PortStanley

You asked "Am I right in thinking that RKH owe FIG couple of million in deferred tax?"

I agree with LTT.

The main outstanding tax liability is confirmed at £59.6 million .

This relates to the farm out with PMO all those years ago. Basically its a capital gains bill on the giant 'carries' PMO offered during a development of SL.

Long story short; the terms state that if deemed 'irrecoverable" we would not have to pay it.

As the tax relates to the huge 'carries' that we never benefitted from; its obvious , imo. the sum is 'irrecoverable'; logic is; you can not tax something never actually received.

MOODY stated that they had received legal advice that this huge sum drops away; I agree.
MOODY hints the FIG might want to argue the case.

He mentions this issue here from 9min 46 seconds;

hTTps://secure.emincote.com/client/rockhopper/retail-investor-presentation/index.html

I would not fret over it. Its a possible issue only after 'first oil'

We probably have circa $5m NOW.

There is a real bill to come of unknown size which our management have referred to.

Our management revealed recently that they had to pay a historic FIG tax liability ($1.4m) and stated another bill is expected.
30.9.21 RNS extract;

" During H1 2021, the Group received and subsequently paid a significantly larger than expected tax liability of US$1.4 million associated with the 2015/16 Falklands drilling campaign. Limited further costs related to the period prior to 1 January 2020 are expected."

Lets hope its a very small bill.

We all recognize the potential value of our asset .

We are fortunate that Navitas have indicated their interest with the agreed HOT.

When the transaction is completed , sometime in Q1, Navitas will take on Pre FID Sea Lion costs by way of a loan.

The issue we face is whether RKH can avoid a fund raise until our balance sheet is strengthened by the expected arbitration award proceeds.
Its likely our present cash balance is no more than $5m NOW.

Our company must prepare accounts for the year ending 31.12.21 and be able to therein state that the company is a going concern and that they possess sufficient working capital to last at least 12 months .

IF our management deems it necessary to raise funds , by whatever means, I think we will know pretty soon.

A clue to how soon MIGHT be found in BOR's reports .

Something will be happening there this month according to their RNS half year results dated 30.09.21

"Given the decreasing cash balance, it is likely that additional funds will be sought before the end of January 2022 in order to meet licence and working capital needs and in order to meet the "going concern" tests of the 2021 year-end audit."

Lets hope that our year end audit will be able to state we DO have sufficient working capital to last 12 months.

That should give us the time to await arrival of OM award proceeds. (IF we have won)

Let it not be said that I do not have a sense of humour Falky. A comprehensive list of risks , indeed.

Come on!, what about the 'bull' case.

Rkh does not have to issue ANY new shares because the Italian government concedes they are going to lose the arbitration and offer us $200m next week in an early settlement.

POO reaches $100 next month and $150 early in 2023

Linda COOK apologies for PMO's previous over billing of RKH and gives us a $15m dollar golden goodbye on condition we do not take legal action.

Navitas signs the HOT next week and instantly takes over the Sea Lion bills.

Another oil company wishes to farmin and offers large lump sum , up front payments to Navitas and Rkh and will also offer interest free loans to Rkh.

Argentina apologizes for the Falklands invasion . They also drop all territorial claims AND remove sanctions on oil companies involved in Falkland oil operations.

Our directors give up their 1p options for 50p ones instead.

Gas prices rise another ten fold and our Italian gas assets become nicely profitable allowing decommissioning to be put off for a few more years.

All the directors buy millions more Rkh shares as soon as an open period arrives.

Sam buys a more economic laser printer for the office and dumps the basic printer that was eating expensive cartridges.

Sam wins the euro millions and buys a new car..no more MOT issues

Stewart MacDonald begs for his job back.

Good afternoon Falky

Here is comprehension test for you; What does this mean;

"Rockhopper's share of Sea Lion costs from transaction completion up to Final Investment Decision ("FID") will be funded through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan")"

Does it mean Navitas will loan us money to pay our Italian staff managing our loss making gas assets?

We have not heard about HBR's exit. I only hope they are still paying Sea lion bills, because this section is a worry; "...Sea Lion costs from transaction completion.."

Previous Sea Lion costs were enormous. We need to Navitas to take them on PDQ; Q1 2022 could mean we are having to pay out until end of March at the latest.

To be frank; without Navitas agreeing to cover costs immediately after HBR stops paying; I think Rkh is going to have to fund raise. I just do not see OM arriving in time. Hope I am wrong.

Good afternoon CroftOriginal

you raise important questions;

"I can't find any specific details around amounts or timing for this pre-FID loan but I do think that its existence at least reduces the threat of a near term fund raise via equity issue."

This is the important line from the RNS;

"Rockhopper's share of Sea Lion costs from transaction completion up to Final Investment Decision ("FID") will be funded through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan")"

The loan ONLY covers Sea lions costs; NOT our G & A or our liabilities like possible decommissioning costs.

Its not clear when Navitas would take on those Sealion costs either. Do we have to await "definitive documentation and completion subject to, inter alia, regulatory approval."?

My greatest short term concern remains a dilutive fund raise. Lets hope OM award is announced soon.

Good morning Ovets.

I would love to think that UKEfF support was still a possibility.

Unfortunately the chance of UKEF financial support for SL has long gone as this document makes VERY clear;

hTTps://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975753/Guidance_-_Aligning_UK_international_support_for_the_clean_energy_transition_-_March_2021_.pdf

SL does not qualify for the limited exemptions.

Good morning to Citizen and Henry

Please think before you type. I am sharing the facts; not misleading ;not lies. UKEF support is now off the table . PMO where depending on UKEF's support and guarantees. Lets keep it real.

The work to secure financing starts again.

Just because UKEF support has passed does not mean other routes to financing are not available.

Navitas have proven they could tap funding in the Israeli market.
Rkh makes reference to Navitas and their very recent history of funding projects such as Shenandoah here;

hTTps://rockhopperexploration.co.uk/wp-content/uploads/2021/12/Corporate-presentation-Dec-2021.pdf

"Access to Navitas’ expertise in executing and financing large scale oil field developments"

and here;

"Strong track record in equity and debt capital markets
Highly experienced team with track record of success in offshore
developments
? Recent Shenandoah FID transformational for Navitas
? $900m project financing facility secured in August 2021
? >$300m corporate debt and equity raised"

We have a dynamic partner and are no longer tied to a dead horse that PMO became.

Citizen writes ;

"You'll find there is expected to be project finance available for 65% of the project"

'expected project finance' was when UKEF support was expected. . UKEF is out of the picture now.

An extract from a 2020 PMO RNS . It refers to PIMS submission to UKEF

"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."

Tony Durrant was questioned about finance in conference call on 5th March 2020

Here is a transcript I prepared of the relevant Q & A on the re PIMS submission ;

Anonymous question to 'Robin'

"....SEALION; you mentioned that you needed to get the senior debt piece in place before you take project sanction decision so could you please paint a picture of exactly what needs to happen from here and your timing expectations."

DURRANT interjects ;

"Yes of course, I'll take that, we submitted the PIMS its called; the project information memorandum in the fourth quarter last year to UK export finance; at that point, of course , we did not have the acquired assets to be acquired. Both of these are material events for PREMIER; $500m of new equity; up to $1 billion of cash flow in the relatively near term from the assets; clearly changes our credit position so UKEF asked us to re-submit the documentation; proforma the acquisition. We will do that as we go through the approval process and continue those discussions"

Note the significance of UKEF support ; sadly no longer available.

Keep it civil Citizen

Let me explain Citizen what I was trying to convey about SL development size.

Lets recall a little history and what might be the size of development worth considering.

PMO had been cost cutting the planned SL development over time. They had a plan costing $1.5 billion with a breakeven of $45 USD. PMO's minimum 'go' price was $55 to give them their desired profit margin.

The project was enlarged after discussions where it was advised to improve the developments economics. Someone required improved field economics. I can only speculate they were receiving specific advice MAYBE from UKEF who were still available to support at that time.

A new plan was proposed that upped the recoverable from 220 million barrels to 250 by the addition of 4 more producer wells.
The new development plan would have29 wells (20 producers, eight water injectors and one gas injector. Its cost would be $1.8 billion. Per barrel breakeven would drop to as low as circa $40.

What is clear; the smaller development ; the higher the breakeven costs per barrel

When I refer to a Micro development , I am referring to a handful of wells.

The partners are considering a development smaller than the 29 well plan .

I think anything from 12-16 wells targeting 160 million barrels producing up to 60,000 barrels a day would be very attractive if the cost can be kept to no more than a billion. A smaller development would shorten the time to first oil too.

Financing is the key issue and I think another partner will be required as its a big burden on Navitas practically alone. We have to recall that RKH , according to the HOT , will have to raise a third of their share of development costs. Our share being 35%, two thirds of which Navitas proposes to fund by an interest free loan.
Extract from the RNS.

"In the event of a positive FID, Navitas will provide an interest free loan to Rockhopper to fund two-thirds of Rockhopper's share of development costs ( for any costs not met by third party debt financing)

o Funds drawn under the loans will be repaid from 85% of Rockhopper's working interest share of free cash flow"

So; if a smaller project costs $1 billion ; RKH %35 share of costs would be $350m; two thirds of which Navitas will fund by a loan. That would leave RKh having to contribute circa $117 m if not met by third party funding.

Its all up in the air at the moment as to what size development will be chosen.

Thank you for your reply Charlesw5267.

I have seen too many people get hurt 'investing' in AIM shares. These BB's can become echo chambers for those ramping their positions and anyone highlighting 'issues' can end up being abused and shouted down .

I just think anyone investing needs to know all sides of the investment question; the risks many do not want considered.

I still hold too many of these shares which I once thought was certain to reach FID , the last time being in 2018.

Without going into detailed history; just about everything that could go wrong , did, and our cash resources crashed.

I am sure I have posted on BB's that all scenarios remain possible ; 0p to 50p .

There is no accounting for investors behaviour so , sometimes really silly valuations can be achieved; look at UKOG.

At the top end ,50p a share (WITHOUT further dilution) is possible.

The downside here is RKH collapses after circumstances such as Navitas walking, failure to win OM award, POO collapse and/or and inability to raise finance.

Navitas are pretty new and I had initial concerns about their ability to raise finance . To a large extent I have been reassured by their fund raising for SHENANDOAH.

Looking at the numbers and possible size of a new , smaller, SL development; I do think it more likely than not that a third partner will have to be sought. A micro projects economics may not be very attractive.

Next 3 months will be interesting.

Good afternoon Charlesw5267

If you are going to criticize my posts ; please do me the courtesy of reading them all first before you make personal inaccurate statements like this;

"1859 posts over years focusing on anything negative about this share performance only make sense if you are following an agender.."

I have had plenty to say about shares other than Rkh over the years and not all I have written has been negative.

Rather than address the reasoned points I have made you resort to personal attacks and imaginary motives.

I am a long term investor in RKh but I can not sugar coat our accounts.

I have never shorted in my life.

Good afternoon Much

Without an OM payout RKH is in a dire financial situation. In my posts which some want to characterize as entirely negative ; I have expressed my opinions based on an assumption that we have won. Its really a matter of time to pay day. Time is not something RKH has too much of as we burn through our remaining cash. What we all want to avoid is an equity based fund raise.

If RKh can arrange bridging finance to tide us over; like from Navitas as I had suggested previously it may solve our cash issues.

We are one big cash call from being embarrassed financially. I just hope the award arrives soon and the Italians behave honourably.

Good afternoon buzz
"Cyan would you agree that if RKH sign up with Navitas and win their OM appeal the current share price would be way, way undervalued ?"

Those are two events, I think, that should lift the share price significantly .
How much , Its impossible to say. Really depends on how much we hopefully 'win' .

Falky ;Please stop personally attacking me and mischaracterising my posting history .

An extract of your prose; long on bile , short on facts.

" ..I have no time for those Tad bitter
Twisted posters here or On any other forum.
Cyan spent 3 years of his sad life telling us that the FIG won't extend the
License then the tune had changed to, once PMO has left then it would be the
End of sea lion.....Now, it has changed to Bankruptcy.....etc"

Your reporting of my posting history is false. The truth is there to be read; stick to truthful facts.

Losing the license is, imo, the least of our risks. I have NOT stated for 3 years we will lose our license. The FIG have been generous renewing ALL FIG oil companies licenses. Its , imo , rather low on the risk list; a risk , but low.
Losing a development partner would be very serious for SL's prospects, however with Navitas keen , SL has a chance of development.

I have highlighted some risks evidenced by the company's accounts.

Why not address the financial state of our company and explain how the company is going to pay its way without a cash injection in the near future.

I would like to know how much RKH expects to additionally pay the FIG as per this from RKH;

" During H1 2021, the Group received and subsequently paid a significantly larger than expected tax liability of US$1.4 million associated with the 2015/16 Falklands drilling campaign. Limited further costs related to the period prior to 1 January 2020 are expected."

I highlighted various issues in my Saturday post. The full content is there to read but I will repost my final lines;

"I am sure costs will be kept to a minimum now but $5m will not last long. Remember this too; RKH will want to prepare accounts and state the company IS a going concern and has capital for anticipated costs for the next 12 months.

A cash injection is needed soon.

We have to hope that the OM award is in our favour, in a reasonable sum and not too far away. Prompt settlement is really a must.

The investment case has improved from what it was with POO's strength , the HOT with Navitas and the dismissal of the Italians last throw of the dice jurisdiction argument .

We are not out of the woods yet; lets hope for a favourable OM award very soon."