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The problem we have , imo, is that its very challenging to find another credible and capable company interested in financing a decent chunk of SL. Time is short.

I am not convinced that offering any management team a novel new incentive will improve our chances in the market as it stands in O & G assets

I would be very pleasantly surprised if HBR sells their interest to a credible new party.

I think we have only one route to monetizing SL and that is via a smaller (initial) development partnering Navitas who have a proven track record of raising finance of sufficient size.

We need to shuffle HBR at the door ASAP at minimal cost.

Sorry about the duplicate content. Could not see my first attempt to post so had another go. oh dear

Good morning TheMillipede824

That is a very nice Navitas presentation , BUT it dates from October 2020 and a lot of water has passed under the bridge since

I think we have to accept that the chance of UK financial support has long gone as this March 2021 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

I think we need to find a new way forward without any chance of UKEF support.

Good morning TheMillipede824

That's an excellent Navitas presentation , BUT its from October 2020 and a lot of water has passed under the bridge.

I think we have to accept that the chance of UK financial support has long gone as this March 2021 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

I think we will have to move forward without the chance of UKEF support .

The question has been raised regarding the FIG's commitment to potential oil extraction by 'HappyInvestor100' who wrote;

".....very little chance that FIG will wish to sanction a new oil field when the direction of travel is completely against fossil fuels.."

I believe that to be entirely wrong.
The evidence is that they remain keen to receive as much tax revenues as possible.

As recently as June 2021 the FIG published a paper titled;

"Public Consultation Paper
Draft legislation and guidance
for
Schedule 6 withholding tax on
oil contractor companies"

https://www.fig.gov.fk/taxation/downloads?task=download.send&id=108&catid=9&m=0

Good evening SecretBlueprint.

I agree with your view on the CGT liability; its irrecoverable . Its not the critical point here; the critical point is we must not lose the license . The OM award alone will not recover much , if any ,of peoples losses to date.

Everyone needs to take a step back and review the situation dispassionately , coldly and logically. The license is where Rockhopper's value resides; everything else on our books is toxic junk with one critical exception; OM.

A litigation settlement in our favour over OM is RKH's potential 'get out of jail card' .

We HAD $7.1m cash at the end of June; Its almost certainly circa $6m NOW. We have months of capital left, not years.

Is this really the time to go to war with our management which will be a distraction and another draw on the little cash we have left. Its TOO LATE for shareholders to positively impact our position. If the resolutions to cut pay go through what will that result in? It will only preserve cash to give the company a few weeks of extra life.

I profoundly disagree with any view that we could lose the license and could fall back on the OM award. If relations with the FIG break down to the extent we lose the license; they could tie us up in litigation over the deferred tax settlement; there will be no easy route to shareholder pay day via a cash distribution . We must remember that the award will be diminished by our decommissioning liabilities.

Progressing the license to sanction is critical ; that is where the BIG money is and where our hopes remain of real growth in our shares value.

The evidence is clear to all; there were only two bidders for SL in the 'good old days' of $80 to $100 oil. Today, big oil is NOT interested in FI oil and many are divesting. Navitas is everyone's last chance to make SL work for us.

So, whilst I am also have serious reservations about past actions we need to get real and not waste everyone's energy on anything other than getting Navitas on board with their proven record of raising finance.

Good afternoon pauldrayton

You wrote ; "If there is a settlement offer then RKH would need to insist on the money being in the bank, not to be paid at a future date."

Indeed; and that might be far better than our litigators throwing more cash at chasing the Italians through the courts for, maybe several years. Look at other awards still not paid after many years.

Time is not on our side and we would all like to avoid dilution.

Further to my last; It is not impossible that there maybe talks to settle BEFORE the award is announced.

Its an outside chance and it would rely on the Italians lawyers advising them that they are going to lose and maybe lose big. It might be smart , even at this late hour, to make a cheeky offer to settle for a smaller amount; especially as all will be aware of our desperate need for cash.

Tend to think that the Italians are going to fight tooth and nail all the way with the backing of the EU.

Good afternoon triking.

You are right to be cautious. I do think that the announcement of a large award in our favour will lift the SP a significant amount.

The smart thing to do is quickly enter into talks with the Italians with a view to taking a FAST discounted award as I have written before.

That way we might be able to avoid an equity fund raise entirely.

I agree; raising $50m is not a credible ambition.

RKH needs to raise , or be paid by the Italians, enough to last until Navitas and/or another partner sign up to definitely develop Sea Lion.

Enough for 18 to 24 months, maybe. At the point of agreed development RKH shares should , relatively rocket, in theory, and raising FURTHER equity should not be so difficult; that's if we are left to chase the Italians cash..

There are so many possibilities as to the farmin deal. Could it involve an out right carry all the way to first oil?.
Could it involve interest free loan support to be paid out of later production; a very likely scenario as we have seen in a plan before.

IF the Italian award is pretty big and we aggressively pursue settlement then we might start seeing italian cash in the bank in 24 months.

I do expect that after an award there will be talks to agree a discounted fast payment to us to avoid more legal expense and aggravation to ALL.

I do not see an equity fund raise until after the award is announced. When will that be?; maybe 3 months is my guess.

IF the ICSID announce we have won a substantial sum the I expect a fund raise shortly thereafter on the back of an elevated sp.
I do not expect the Italians to rush to write a cheque; BUT if they did, an issuance of equity might be avoided.

IF we lose; RKH are in a VERY bad place. Does not bare thinking about.

The dock issue was also covered in this presentation dated 30th September;

https://rockhopperexploration.co.uk/wp-content/uploads/2021/10/RKH-Retail-investor-presentation-September-2021-Final.pdf

Certain project wind down and decommissioning costs shared between Rockhopper and Harbour on a 40:60 basis
? The main item relates to a temporary dock facility in Stanley installed for the 2014 drilling campaign
? The exact cost and timing of this are yet to be determined

Good afternoon Marunam2

The possible large bill for decom of the dock was raised by Sam in his oral presentation. I previously read the March communication from Sam you reposted.
Maybe events have moved on and retaining the dock has become less likely after the FIG published their ambitious plans ;

hTTps://en.mercopress.com/2021/09/15/new-falklands-port-gets-green-light-to-proceed-as-part-of-ambitious-infrastructure-investment-program

(Merco press also have an article today on Rkh and Sealion that adds nothing new)

Thanks for the links and I note Harbours reassuring words on recovering awards. however; the first words are significant;
" Enforcement against a sovereign State is challenging..."

'Challenging' I think means , amongst other things ; time consuming . Time is not on our side. We really need to avoid a fund raise by issuance of more equity , if at all possible.

An early settlement on the award front might spare us dilution BUT I think we need to negotiate with the Italians an early payout , IF we have won, to that end. May require a bit of give on our part.

Good afternoon Nastynick

You wrote;
"What do we need the “cash now” for?
Surely we just need to keep the lights on?"

Rkh has just $7.1m cash at end of June. That means we may have just $6m NOW.

The very basic 'lights on' costs appear to be circa $4m p.a.

We have a year at most before we need a cash injection; might be much sooner as Sam alluded to a further FIG tax bill and a large decom, bill for the dock.
That's ignoring the ticking time bomb that is CIVITA where decom costs match or exceed what little cash we have left. That MIGHT go 'bang' in 2022. I really hope it can be put off longer.

Then we have the issue of running the business to first oil. My estimation of the most wildly optimistic time scale is 4 years if Navitas gets their skates on AND they carry us for all further SL predevelopment costs.

RKH needs a cash injection ; a big one , PDQ. Nothing less than $50m imo; I would be happier with $75m.

Good afternoon Surfit.

I doubt anyone would loan on the sole basis of an arbitration award. Could the 'debt' be sold on?; would entail a huge discount.

Best option by far is to agree a discounted settlement with the Italians after a 'win'.

Its even crossed my mind ; that , even at this very late hour, that the Italians might make a cheeky offer of cash to settle , before the award is made; before the ICSID actual determines the merits. and publishes their much awaited view.

That could be helpful to all .

Lets' play with the numbers. If our claim was for 275 million Euros PLUS interest and that equates to the elsewhere reported $325 Million USD then 50% would suggest a possible $162.5m USD .

Looks potentially transformational, BUT, the problem will be actually getting to the Italians to pay up and in a relatively prompt way.

RKh and our lawyers can not sit on their laurels IF we have won; they need to aggressively pursue payment.

To be frank; I would be VERY pleasantly surprised if we got paid in time to avoid a fund raise.

It might be a smarter move to pragmatically come to discounted terms with the Italians for an early settlement and avoid potentially years of other legal actions to seize assets..

They need to talk and be sensible.

I liked these comments in the Tethyan article I linked to;

"Conclusion

The High Court’s decision further evidences England’s reputation as an arbitration-friendly jurisdiction, whose courts are reluctant to interfere with arbitral awards or to indulge parties’ attempts to avoid and overturn adverse decisions of arbitral tribunals."

Our claim is for 275 million EUROS PLUS interest. Elsewhere reported as $325 m USD (pretty much the same total)

The case; Tethyan Copper Company Pty Limited v. Islamic Republic of ****stan, ICSID Case No. ARB/12/1 resulted in a gigantic award; $5.9 BILLION.

Some recent comment on proceedings there; hTTps://www.clearygottlieb.com/news-and-insights/publication-listing/corruption-defence-to-challenge-tribunals-jurisdiction-rejected

I tend to think that , if we win, we will win pretty big , with a significant lost profit element as in Tethyan case; fingers crossed!

"How much do Rockhopper need to be awarded.."

Rkh had decommissioning liabilities totalling $13.561 million .

BUT, it is uncertain when the liabilities will become issues.

I have posted before the comments made in 2017 that suggested there was 'five or so years' left if production at CIVITA.

Its possible that neither of our TWO tiny producing assets will require such large decom expense in 2022.

However ;the decom looks very likely to impact in the 4 years (my estimate) to first oil.

At the moment we appear to be spending circa $4 m per annum for basic functions.

The unknowns are the additional FIG tax bill mentioned in the results and the decom of the dock which Sam suggested was potentially significantly big.

I think that $50m ought to cover all costs until first oil IF we have a carry on further SL predevelopment costs.