Member Info for cyan2

Yes NAVITAS have gotten an absolute bargain. About a billion dollars was spent getting SEALION to where it is today.
NAVITAS knew that RKH and PMO had a very weak hand; they desperately needed extra finance to develop SEALION. Its patently evident ; its a buyers market down there and it looks certain no-one else was 'bidding'.

DURRANT had to see SEALION developed .. If it was shelved PMO would have had to show an impairment of around $700m; devastating to his reputation and, imo, it would seriously knock the PMO SP.

RKH gets very cheap finance and , I hope, the certainty of becoming a serious producer making decent money.

I think RKH wanted to keep the Egyptian assets ; they were profitable with growth possibilities and those profits were covering G & A .; but, there were huge SEALION related bills to be paid and they could not bet on a life saving farmin deal .

Its clear; PMO were dropping big bills through RKH's letter box. With circa 60 staff reported working on SEALION I suspect RKH had to pay 40% of the salaries.

They had clearly signalled how important Egypt was , BUT, there was a cash worry; a going concern issue THEY highlighted last April.
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."

======================================================================
", the Group may have insufficient funds to meet its forecast cash requirements.Potential mitigating actions could include non-core asset disposals"

Since the April 19 RNS RKH found it a necessity to sell the Egyptian assets (non-core), and NO talk of buying anything else anymore.
The numbers tell the story; the situation was serious with no end in sight; hence why there WERE big sellers here and our low SP.
The good news is RKH now look in a FAR better shape to reach the finish line. Just a shame we had to sell the Egyptian assets.

RKH are spending circa $5m per annum on general business costs

If we are lucky; first oil in 2024. RKH needs at least $20 million to keep the lights on until then. The 18th September RNS highlighted the year end cash position AFTER selling Egyptian assets; Just enough to hopefully carry us through to first oil.

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 is a very high cash burn until the carry comes into force; 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 estimation $25-$30m

Subtract the Egyptian proceeds and RKH were likely left to be insufficient cash to reach the first oil finish line. They did give plenty of warnings about their going concern position.
The new carry and interest free loan relieves much of the going concern worries as long as we reach FID this year.

I just can not see how we can still be on the hook for the outstanding £59.6 million CGT. That number was based on the free carry values . We now do not have the original carry's.
At the time the deal was drawn up with NAVITAS, I expect all parties had to assume the liability stood UNTIL the FIG deemed it now null and void.
Imo, we will likely see an RNS in the coming weeks announcing the FIG agreeing to the new partnership AND amending the terms; that is to cancel the CGT bill.
I suppose the FIG could argue for a small amount based on the 'new' carry from Premier; 1.1.2020 to 1.3.2020.

As regards the Egyptian asset sale; I think it was a necessity as RKH were running out of cash to pay some big bills ahead of sanction. Would be interesting to know what out new carry saves us. I expect there are some huge legal bills amongst others.

£26 million WAS paid. So is our only liability on the new tiny carry from 1.1.2020 to 1.3.2020

hTTps://rockhopperexploration.co.uk/wp-content/uploads/2016/05/RKH-Annual-Report-2014.pdf
page 7 extract;
"The parties agreed in principle that the total CGT payable is
£90 million with payment split into two tranches. The first
payment, equating to £26 million (approximately $41 million),
has now been satisfied. The second payment equates to
£64 million (approximately $107 million) and will now be paid
at the same time as the first royalty payment to FIG from oil
production at Sea Lion."

Reference the deferred CGT;
Was previously £64.4 million
"The tax liability was revised downwards in the year ended 31December 2017 to
£59.6 million,"
rockhopperexploration.co.uk/wp-content/uploads/2019/04/RKH-Annual-Report-2018.pdf
page 75

hTTps://www.edisongroup.com/publication/sea-lion-funding-outlook-strengthened/25927

This is how PMO describe it today in their RNS;

" Rockhopper will be fully funded for Sea Lion Phase 1 with its share of development costs split pro rata between Premier and Navitas."

We have to remember that PMO would be obliged to promptly RNS market sensitive information that would seriously impact the market. So, I do not expect anything in the update Earth shattering. Of course there's an outside chance we have an RNS before. I think March is going to be pretty interesting. PMO have stated they expect to conclude refinancing in Q1 and RKH have stated they believe the FDP will be submitted before April. We are waiting on others decision making processes and THEIR time lines; no good anyone whinning about our BOD as to lack of news.

Sorry about that tuggy; was I thinking of someone else or was it terrible typing with the G and B being so close on the keyboard. Must proof read more. Sorry to hear you are out. I am sticking. Hopefully by march we should have a better idea if its going to happen; after the PMO refinancing.

Accuracy is essential. Imagine you are a casual small investor reading this post;

"Senior debt refinancing",not "restructure "...Q4 2019...still no word from SAM?

I would think RKH had huge debt issues; they have debt they need to REfinance but have not let the market know if they have had any luck.... a share to avoid perhaps?

Lets just leave MOODY's comments to speak for themselves....There's no "refinancing" of RKH debt involved;

Sam Moody, CEO of Rockhopper, commented:

"The Project continues to build momentum with significant progress being made across key areas, all with the aim of moving into the execution phase post sanction. The PIM submission in late July has kicked off the formal application process for the senior debt financing guarantees for which we expect initial feedback in Q4 2019."

This is what is in the 22 .8 .19 RKH RNS

Sam Moody, CEO of Rockhopper, commented:

"The Project continues to build momentum with significant progress being made across key areas, all with the aim of moving into the execution phase post sanction. The PIM submission in late July has kicked off the formal application process for the senior debt financing guarantees for which we expect initial feedback in Q4 2019."

You quoted this "We expect initial feedback on senior debt restructure Q4 2019"

Very different and frankly misleading because RKH do not need to restructure any debt.

If you use speech marks I respectfully suggest you cut and paste EXACTLY what was published otherwise confusion can be caused.

"Not that hard to find cyan"

Well I can not see ,"We expect initial feedback on senior debt restructure Q4 2019" in either company's RNS. You have put it in speech marks suggesting a direct quote.

Its just not true that RKH are involved in "senior debt restructure" They have no debt that needs 'restructure'

PMO ARE involved in refinancing THEIR large debt.
RKH are passengers in the process to finance SEALION.

The only feedback RKH expected in Q4 was on the PIMS in support of the applications for project finance;
18th September RKH RNS;
hTTps://uk.advfn.com/stock-market/london/rockhopper-exploration-RKH/share-news/Rockhopper-Exploration-plc-Half-year-Report/80749321

"The PIM submission process marked a material milestone in the project financing process for the Sea Lion development. If, as expected, the application is well received, we anticipate moving into a phase of detailed lender due diligence and documentation during Q4 2019."

14th November PMO RNS'd

"Premier's applications for senior debt financing in relation to its operated Sea Lion development in the North Falkland Basin continue to progress through the export credit agencies' due diligence processes. Discussions also continue with several interested parties about farming into the project."

PMO are the in the lead as operator in the applications for project finance . Its not any fault of RKH board if there are delays in others decision making processes. We do not yet know what feedback PMO may, or may not have received yet.

I can not find this line Trop;
"We expect initial feedback on senior debt restructure Q4 2019"
Help me out where it is; I may need new glasses.
Anyway; maybe they have had initial feedback because on 15th december PMO tweeted this;

"Premier notes today’s media speculation that a certain group of its lenders are demanding the further disposal of assets. This is factually incorrect and misleading. Premier continues to expect to conclude refinancing discussions in Q1 2020."

Looks like they will be CONCLUDED soon enough.

"ARG might hire platform" hire? , how? ARG have circa three quarters of a million quid cash. From memory , I believe a NFB drill did cost $50 million a shot. Lets say costs have reduced to $40 million; ARG are worlds away from having the cash to hire a rig..
" I think PMO will find it hard to fund without a partner" I disagree. The evidence is THEY can raise the finance through vendor financing and UKEF support. They do plan on farming down but its been clear for sometime that will only happen after SEALION finance is agreed and the project is given the go ahead. I have never heard DURRANT state that SEALION go ahead was entirely conditional on a new partner .

And , no, Falklandinvestor; I do not hold ARG shares but DO hold RKH in quantity.

Its important to understand what the ARG shareholders actually owns; it does not have a valuable fleet of 4 fishing vessels bringing in income. These are seperate ring fenced companies with their own assets.
ARG shareholders primary asset is the license and a tiny pile of cash. ARG does not have a multi million pound ship or two they can sell.
Look at the accounts for the clues ; Argos resources Ltd has 6 staff; all directors. You can staff four fishing vessels with 6 older men lol. The accounts shows you what income ARG has/had; it was the Noble payments whch ended on 27th December.

It look odds on for a fund raise to me and ARG themselves warned as such;

http://www.argosresources.com/perch/resources/arg-2018-annual-report.pdf
31.12 .18
p11
"Future funding requirements
There is a risk that funds run out before a partner is found.
Mitigation: The Company has sufficient cash reserves to meet the ongoing overhead for a period of more than one year beyond sign-off, during which time the Company could seek to raise further finance if required."

Looks like a fund raise is on the nearer term horizon.

RKH and PMO have until ist May 2021 as RNS'd in an RNS on 4th November; an extension.

Argos Group Ltd are a company involved in fishing around the falklands since 1988

Argos resources Ltd ARG) was created in 1995;; duifferent companies; different businesses

"Can anyone sell the merits of ARG to me?"
Not exactly a rush of supporting comments. The 'merit' is close proximity to SEALION; decent seismic and low price.
Its got a very low price for a reason of course; no partners now and no-one rushing to fill the void.

The downside is the incredibly weak cash position ; circa £750 k cash only. Management have warned that a fund raise may be required; I think its a certainty barring a miracle farmin.

So; I think the next RNS is a fund raise........lets see what happens.

Godders99 Why?
I am expecting 15

Off to vote now; decisions, decisions

We are in the dark Ralph but I do think there is much going on that we are not aware of. By the way; that link to the power station contract was dated 9th May 2016.

On balance; I think the Aberdeen mention suggests a link to our partner and SEALION development.
We have to remember that PMO have had circa 60 staff working on SEALION for a considerable time.