Member Info for cyan2

I look at the facts; the numbers and the declared statements from the companies. This terrorism 'excuse' for the sale is just unsubstantiated speculation.

There is nothing political forcing us to sell Egyptian assets. There is loads of trade with between Israel and Egypt.
Some recent news;
www.timesofisrael.com/in-milestone-israel-starts-exporting-natural-gas-to-egypt/
15th Jan 2020
"Israel has started pumping natural gas to Egypt from two massive offshore fields, marking a major milestone and a historic cooperation between the countries, according to a joint statement."

Even after the sale of our Egyptian assets our year end cash position was $27 m (source ;EDISON report). With normal admin costs etc of $5.4 m per year with 4 years at least to first oil; its going to be a really close call; cash wise. Yes, we are all hoping for a nice arbitration payout , but RKH could not guarantee one.
Why do you all think PMO found it necessary to 'carry' RKH from 1.1.2020 to 1.3.2020? . 'reading between the lines'; its obvious ; there were big bills RKH could not afford to pay AND leave them enough to see through to first oil.

"This is why you need to read between the lines cyan, and why I believe the Navitas agreement was in place a long time ago."
I look at the numbers and the declared statements .
I am a large holder of these shares so I want this all to come good, BUT, I am not going to sugar coat where we have ended up.
I do not believe RKH management knew of some agreement with NAVITAS many months ago . IF there was already an agreement there would have been no need to sell Egypt; our family silver that was producing the "necessary operating cash flow to fund corporate costs"
UOG got a great deal at a discount; RKH were in such a hurry to sell they couldn't wait for the drill results.
NO, our management panicked when PMO were signalling the size of the next SEALION bills they had to pay 40% of; it looks like there was not enough cash to see us through to sanction.

I do agree that UKEF have given an informal nod a long time ago; just needs formal signing off.

Small clarification Surfit; Moody said this on 23rd July 2019; so the autumn he was referring to ; is 2019's; not this year

"We have a number of potentially transformational catalysts in the coming months including the hugely important submission of the Sea Lion project information memorandum to senior debt lenders, continued progress on Sea Lion financing discussions in the autumn and the outcome of our Ombrina Mare arbitration in Q1 2020."

Good evening Surfit;

Yes; I read what MOODY said and , imo, its covering up their embarrassment. Re-read this;
Aporil 2019
"Our Greater Mediterranean portfolio continues to provide the necessary operating cash flow to fund corporate costs while providing low-risk exploration upside opportunities. On a highly selective basis, the Company will seek to further expand the production base with the aim of generating additional free cash flow to invest in future exploration and value-accretive growth opportunities both in the Falklands and elsewhere."

"necessary operating cash flow to fund corporate costs"

"the Company will seek to further expand the production base with the aim of generating additional free cash flow to invest in future exploration"

In April they were looking to spend and ADD to their cash flows; come July and they are selling EGYPT because they needed the cash!

Smacks of incompetence; not having a real handle on the cash calls to come resulting in a very hurried sale of an important asset.

No bonuses earned this year!

"I wouldn’t be at all surprised if all this was all provisionally agreed a year ago and everything since then has been to iron out the formalities and legalities."

If PMO and RKH had a provisional agreement a year ago; they should/ WOULD have informed the market. What we had announced on 7th January WAS a provisional agreement.

A year ago RKH were spouting how wonderful their greater med assets were (coded language for Egypt as the rest is unsaleable of next to no value)

2nd April statement; "Our Greater Mediterranean portfolio continues to provide the necessary operating cash flow to fund corporate costs while providing low-risk exploration upside opportunities. On a highly selective basis, the Company will seek to further expand the production base with the aim of generating additional free cash flow to invest in future exploration and value-accretive growth opportunities both in the Falklands and elsewhere."

If RKH COULD have held on to Egypt; they would have.
The evidence; the cash in hand numbers and burn rate; tells you that the Egyptian sale was , effectively; a desperate cash raising exercise they had not expected would me necessitated so soon; if at all.

RKHS' hands were forced by PMO ramping up spending in the lead up to the hoped for sanction; RKH had to pay 40% of the costs.

The sale to UOG and the cash receipts were vital to RKH.

Read the 2nd April RNS (results to 31.12.18) for the clue;

2 April 19 RNS results to 31.12.18
Extracts;

"Our Greater Mediterranean portfolio continues to provide the necessary operating cash flow to fund corporate costs while providing low-risk exploration upside opportunities. On a highly selective basis, the Company will seek to further expand the production base with the aim of generating additional free cash flow to invest in future exploration and value-accretive growth opportunities both in the Falklands and elsewhere."

"Under the base case forecast and the downside scenarios run, the Group will have sufficient financial headroom to meet forecast cash requirements for the 12 months from the date of approval of the 2018 financial statements. However, beyond the 12 month going concern assessment depending on the timing of sanction for the Sea Lion development, in the absence of any mitigating actions, the Group may have insufficient funds to meet its forecast cash requirements.Potential mitigating actions could include non-core asset disposals, collection of arbitration award proceeds, deferral of expenditure or raising additional equity."

======================================================================

"Potential mitigating actions could include non-core asset disposals"

Since that time RKH found it necessary to sell the Egyptian assets despite them previously stating how important the revenues were for paying bills.

The reason is/was clear; there was a very large cash burn leading up to SEALION's development and RKH were getting dangerously low on ready cash and they needed extra cash to get them to the moment when the THEN PMO carry came into force; that WAS when the FDP is approved by the FIG which RKH hoped would come in HI 2020.

RKH were forced to sell Egypt because they could not pay the bills PMO were presenting.

The good news is ; PMO came to the rescue with the carry from 1.1.2020 to 1.3. 2020 seeing RKH were in dire straits and would not have enough cash to last 4 years to first oil.

There are excellent relations between Egypt and Israel these days. This terrorism excuse does not hold water; some random terrorist decides to attack an Egyptian oil field because one of the partners has an agreement with an Israeli company the other side of the world; just not credible.

"why should Rkh sale their Egyptian assets, it's doing well there "

RKH were running out of money FAST.
There is no way, last summer,that RKH could have formed an opinion NAVITAS would partner us.
It was all about our serious cash position.

See RNS 18th September 2019;

"Following completion of the announced disposal of Rockhopper Egypt Pty Limited, which is anticipated to close in Q4 2019, year end 2019 cash is estimated to be in the region of US$25-30 million, depending on the final mix of consideration received at closing of the disposal."

Its obvious there was very high cash burn .; about $5 m pa is GA ; most of the rest must be SEALION related.

RKH's cash positions from results RNS's;

End of 2017 $50.7m
End of 2018 $40.4m

End of 2019 figure is $27m (from Edison)

Without the UOG sale RKH were looking at a cash position of around $15m at ye19 with PMO dropping regular big bills on them.
RKH had to sell the Egyptian assets; they were struggling to pay the bills; actually in serious financial trouble.

This coming week COULD have two really significant pieces of news; NAVITAS signing (but still has escape clauses) and the arbitration.
Am hoping for a really large figure ., but, who knows? It could be something of a lifeboat for RKH if things get delayed. An interesting question for anyone attending the AGM to ask is; how much could wind down costs be IF in that "very unlikely" scenario; SEALION gets handed back to us?
One fears that even a large award could be completely swallowed up in costs.
Just have to stick the course and see if NAVITAS can deliver; otherwise............not good long term scenario, imo.

I have to point you to the wording in RKH's RNS dated 7th January 2020 which clearly indicates a risk that NAVITAS might not be able to raise;

"In the event that Navitas' board has failed to take a positive Phase 1 FID by 1 April 2021, or otherwise fails to secure its share of funding, Premier may elect to remove Navitas.

In the event that either Navitas elects to withdraw or Premier elects to remove Navitas, Premier will have the option to step into the Navitas arrangements, or, in the very unlikely event, implement a wind down of the project which could ultimately result in relinquishment of the acreage. In either event, Rockhopper is liable for its share of project wind down costs with no funding support from Premier and/or Navitas and if Premier does opt to wind down the project then Rockhopper has the right to acquire Premier's interest and become 100% working interest licence holder and Operator of licences PL032, PL004a, b and c, subject to all necessary regulatory approvals."

I can not see the reasonable, possible linkage between he sale of the Egyptian assets and NAVITAS signing on here.

All NAVITAS can do to show they can PROBABLY fund their share is to point to their record of fund raising; not sure they can 'prove' at this time.

Good morning pauldrayton.
One hopes NAVITAS is ready to sign next week as hoped for in their 7.1.2020 pdf I translated from Hebrew;
"2.1.3 Signature Deadline - The Parties will act to sign the Transaction Agreements by February 28, 2020, or Until a later date to be agreed by the parties."

It concerns me that PMO gave up so much to get THIS partner on board. I suspect they were the only ones interested in farming in. In dark moments I do wonder if PMO now have a scape goat for failure to reach FID ,IF NAVITAS can not raise their share.? We just have to trust PMO and DURRANT's commitment to get us over the finish line. It will be disastrous for PMO's accounts and DURRANTS's reputation if PMO were ever to write down SEALION .
It will be concerning if we do not hear about the signing next week; I can not see why there would be any need to extend.

Good afternoon LTT
You commented on funding " are they allowed to look elsewhere for funding their share"

EDISON report dated 10th January clearly states no further fund raising is required of RKH. EDISON have been clearly getting information direct from RKH as they are pretty precise on the year end cash figure; $27 m

www.edisongroup.com/publication/sea-lion-funding-outlook-strengthened/25927/
Extract;
"Financials

Rockhopper ended H119 with c $27m of cash on the balance sheet and no debt, in line with our estimates. With the disposal of Abu Sennan, our forecast Italian asset capex and SG&A are covered for the coming years at c $5.4m pa. As a consequence of the Navitas farm-in, Rockhopper is fully funded through to Sea Lion Phase 1 project completion given the newly agreed interest-free loan from Navitas and Premier. We are accounting for this partnership loan in the company’s balance sheet; however, we do not believe Rockhopper will need to access any additional funding for Sea Lion Phase 1 development. Funding for the project to the joint venture is expected to be split into vendor financing, export credit/bank finance and upstream partner equity."

Apologies The-Bear

The criticism should clearly have been directed at the original author.

Good morning The-Bear

You wrote; "This company is well and truly dead and hurried." I suspect you meant 'buried' .

XEL is an example of 'dead & buried'. AFR is an example of 'dead & buried'.
Our present share price has a premium based on the possible arbitration award and SEALION FID. Sentiment and the degree of risk holds the price down.
Imo, the balance of probabilities has swung towards RKH reaching the FID finish line and we are a long way from dead and buried.

I see the old scare story regarding an Argentinian invasion is the topic of the moment.

Oh dear. Anyway, here is fun video from 2017 ; hTTps://www.youtube.com/watch?v=_fg5amio4jU
I have some criticisms of the video; most notably the failure to factor in our submarine capacity which proved devastating in 1982.

I think its inconceivable that they will block UKEF support for SEALION when you look at the other projects they have supported elsewhere. PMO have obviously had feedback for a long time and I think the amended project size to one larger suggests , imo, influence from the UKEF on the economics.

Good morning Godders99

You wrote; "I see nothing to say that FID is any closer than it was 4 years ago."

How about the new farmin partner; NAVITAS, and what they published on 7th January 2020;

"Final Investment Decision (FID) for 1 Phase Development - in accordance with information provided to Partnership by Existing partners, such a final investment decision is expected to be made by the end of 2020.
This is after the financing outline for the development of this phase has been completed."

Paul; IMO the Zama sale has nothing to do with the delay in FID. The Zama proceeds are to be used to pay off debt; PMO and Durrant have so indicated; its there number 1 priority. The delay in FID is down to getting the senior debt agreed with UKEF support. Also needs FIG approval of our new deal with NAVITAS. I repost this which gives timescale indication;

I translated from Hebrew a PDF form Navitas dated 7th January;

"2.1.3 Signature Deadline - The Parties will act to sign the Transaction Agreements by February 28, 2020, or Until a later date to be agreed by the parties."

Our RNS of the same date gives us an estimation of how long FIG approval may take;

"Finalisation of a Sale and Purchase Agreement is expected during Q1 2020 ("SPA Signing") with completion subject to satisfaction of certain conditions including regulatory approval, expected in Q2 2020 ("Farm-in Completion")"

So its April to end of June before we may get FIG approval. That same Navitas document indicated they expect FID by end of 2020.

"Final Investment Decision (FID) for 1 Phase Development - in accordance with information provided to Partnership by Existing partners, such a final investment decision is expected to be made by the end of 2020.
This is after the financing outline for the development of this phase has been completed.""