Member Info for DeusExMachina

Big thanks to CantSellNow for posting up Prof Dupuy's 'Opinion'. Prof Dupuy's text is interesting if somewhat challenging to the lay reader - I'm reminded of the comment by the Austrian Emperor to Mozart - 'Quite brilliant but too many notes'.

It reads more as an Apologia in which the good Professor seeks to justify why he very regrettably was forced to cast his vote in favour of the Claimants Rockhopper, despite the RoI occupying the moral high ground and deserving to win.

Further, I do not see any compelling argument proffered which might form the basis of a successful claim for Annulment.
But what do I know as a simple but honest non-Academic layman?

I'm sure Latics or one of his doppelgangers will bring their formidable intellects to bear on interpreting Dupuy's verbiage.

DEM

'Can anybody link to a copy?'
Paul Drayton

As mentioned in GAR, it would seem that the Award Doc + presumably the Minority Report have now been released by ICSID. It would certainly be interesting to see a copy as it should give a good indication as to how strong or weak the arguments might be for the requested Annulment. Still tricky actually getting a copy. Whilst the Arbitration lawyer community has access and probably City firms as well - Private Investors will be at the bottom of the food chain.

My source was the Global Arbitration Review (GAR) - Free Trial available but only if you have a 'Company' website.
https://rb.gy/invsfw

The following legal data bases all carried the 2019 OM Judgement re Jurisdiction, so will almost certainly also carry the 2022 Award docs:

Investor-State LawGuide (ISLG)
https://rb.gy/ibxrz7

italaw:
https://rb.gy/x13ncl

JusMundi :
https://rb.gy/l6wgdh

Also of interest - the JusMundi Annual Review of O&G Arbitration:
https://rb.gy/fs4elk

I assume that those legal firms who follow the OM case and other ECT cases, will publish articles concerning the Award on their own web sites/blogs, in due course. The following have all commented on OM in the past: King & Spalding, Charles River Assoc, Reed Smith, Duane Morris London, Aceris Law, Kluwer Arbitration Blog, Oxford Academic 'ICSID Review' etc.

Good Luck !
DEM

A high-profile Energy Charter Treaty award requiring Italy to pay €190 million plus interest to a UK oil and gas company over a ban on offshore drilling is now publicly available. (Global Arbitration Review)
DEM

Thanks Mr.Scar. Tomax appear to supply quite a range of drilling tools. This is their post. I'll leave it to the drilling experts on this Board to draw any conclusions.

Tomax
10h ·
(CAPE TOWN) Three of our tools on way offshore to operator Eco Atlantic on Island Innovator and the Gazania-1 exploration well. Gazania-1 is being drilled approximately 25 kilometres offshore the Northern Cape in the Orange Basin. The basin straddles the offshore waters of Namibia and South Africa. Our tools have done very well in this basin over a long period of time. (Photo: Afrishore)

https://www.facebook.com/photo?fbid=610110084243201&set=a.558625286058348

DEM

I agree Ovets - but if the naysayers are wrong, as I think we both believe them to be, then the equation changes. Timing is everything.

When AIM listed companies get taken over the buyer rarely seems to pay more than a 40% premium to gain control. With a Mkt Cap of £85m - price might be £120-150m.

However, with an almost certain £200m net within two years, the initial price is fully covered. The 35% interest in a fully appraised 500m barrel field is 'bunce' and the real prize.

However, fairly certain that FIG reserve the right to pull the licenses if there is any change of ownership to RKH and the Tax Settlement Deed would also be tripped. HMG might also take a dim view of any bid. BTW I do not accept that Navitas poses any threat. I would be amazed if the company lawyers have not inserted a 'No hostile bid' clause into the Farm In Agreement.

DEM

QUOTE:
"Well, if any potential investor read the posts on this Board they would think RKH is a POS and would be put off.

Share prices are very much driven by the demand for the stock; people wanting to buy into the company's prospects. This BB has become dominated by a small number of posters most of whom state they are shareholders posting regularly; sometimes several times a day; expressing extreme dissatisfaction. Sometimes colourful abusive descriptive terms are used. Distrust of the management expressed in the most explicit way.

I have been disappointed that progress to development has been very slow. I don't whinge every day about how unhappy I am. What do you guys think possible new investors pick up from the repetitive negative postings?

I see light at the end of the tunnel and, that the balance of probabilities is now into the odds-on side as does EDISON. There are never guarantees and I am here with my eyes wide open. If I am wrong, I will not blame anyone else for my decisions".
END QUOTE

Bravo! Wise words indeed - couldn't have expressed it better myself. Time perhaps for Cyan2 to follow his own advice - particularly as the company is in a much stronger position today than it was in 2019 !

Unless of course Cyan2 has a different Agenda to most ordinary folk who celebrate when their company is on a 'roll'. If you are one of those clever, hard and calculating Hedgies with a brief to keep the SP depressed so a 'topiary' of hedge funds can build a platform to launch a hostile bid - then I urge you to take up residence on the 'other' Board who I'm sure will welcome you with open talons. Just a friendly thought to ponder!

DEM

Mrs M
Hello Sam - you're late getting home - another difficult day at the office?

SM
You could say that - big *******ing from Keith at the Board meeting.

Mrs M.
Oh! That's terrible - why? Did he not like your new hairstyle?

SM
Well - you know that investor who wants to micromanage everything we do and demands to see all the contracts before we sign them and insisted that we buy a cheaper brand of coffee?

Mrs M
Ah yes - nice Mr Cyanide? Wasn't he the investor who challenged Gideon to unarmed combat.

SM
Near enough - anyway, he's now out of hospital and is on the warpath.
You recall that Chantelle was arranging for the office to be painted whilst we were away on holiday.

Mrs M
Yes, I remember.

SM
Would you believe it - she forgot to ask Mr Cyan's permission. And worse, she got confused by my Post it note and the ceiling, walls, floors and furniture are now all painted. Wait for it ....
Cyan !

DEM

Thanks Happy for your positive comments !

"If anything it stops Sam spending it on another stupid acquisition".
Unless of course the acquisition ends up netting the company £200m !

Very much doubt that Sam will be distracted from the main chance.
Plenty to keep the company busy for the next ten years opening up the North Falklands Basin.

DEM

From 1:1 conversations with Pierre Jungels and later with Sam, it has long been established that the legal fees & charges from King & Spalding over the past six years have been paid in full by Harbour Litigation - probably through monthly invoicing at a pre-agreed hourly rate. K&S have been paid for work done - irrespective of the final outcome.

From the RNS dated 31 Oct we know that it was also agreed, presumably by all parties, that RKH would pay K&S a success fee of £3m on 'establishing liability and an award requiring Italy to pay over €25 million in damages'. From the tone of the RNS it sounds like RKH and K&S have come to a mutual agreement that perhaps some or all of the £3m will be deferred until RKH itself receives monies from RoI - all conjecture on my part.

With the wisdom of hindsight it is now clear that RKH struck a cracking deal with Harbour Litigation in agreeing to a sliding scale of fees ranging from 50% for a small win (c£25m) to a very reasonable 20% for a mega Award. Well done Sam !

If ICSID do not agree to the 'provisional stay' of the enforcement of the Award then I'm sure RKH and K&S will waste no time in commencing the legal machinery of distraining (seizing) RoI assets - probably in the UK and USA but obviously not in the EU. There was a suggestion at least 18m ago that King & Spalding already had a list of Italian assets in the USA which could be targeted. I had assumed that they carried out this exercise obo RKH, but on reflection as K&S are the leading global player in arbitration litigation, acting on numerous ICSID cases, they probably maintain an up-to-date list of the Top Twenty US assets belonging to just about every country in the world. As K&S are a major US based firm of lawyers, it would not be a difficult task.

At least if the Tribunal has to be reconvened, all the legal work and submissions have already been done which should save both time and money.

Thanks to the success of the Placing, Open Offer & Warrants RKH has more than enough funds for the next 24 months by which time FID & Sanction should be agreed. I firmly believe that any Italian decom costs will be several years away and the Temporary Dock Facility (TDF), after some minor maintenance work to the footbridge, will likely be used by the Sea Lion construction traffic freeing up FIPASS for all other non-SL related shipping. So, no decom costs there either, at least not until SL is on stream.

If RKH need additional funds at any point - then they still have the option to sell or auction off part of the award - despite what the naysayers might believe, the Award already has real monetary value.

And then of course we have Sea Lion ....

DEM

Anyone familiar with Scott Adams brilliant cartoon strip 'Dilbert' will know that Dogbert is Dilbert's dog. Dogbert reminds me in so many ways of certain posters on this Board. Take a bow Godders, LaticsRule, Kurgan3, hydraides, Mirasol, ralph2010, Michael2021, not forgetting the late and unlamented GlenMcGonagall1879 and his dark legions.

Dilbert's anthropomorphic pet dog is the smartest dog on Earth. Often seen in high-ranking consultant or technical support jobs, he constantly abuses his power and fools the management of Dilbert's company. He also enjoys pulling scams on unsuspecting, and usually dull customers to steal their money.

Here are a couple of recent examples of Dogbert (Godders et al) explaining his posting strategy to Dilbert (Rockhopper's honest Private Investors).

https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA13zCyE.img?w=800&h=415&q=60&m=2&f=jpg

https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA13zCyw.img?w=800&h=415&q=60&m=2&f=jpg

DEM

Thanks for the correction PD
I agree that it seems much more likely it is the Partner at Aedos, who as RKH's largest shareholder already have 6.5%. I wonder if Jon Paul Wood is also on the Register?

Not at all sure precisely what is the status of Aedos - very little recent info online.
DEM

Whackford

The RKH website states that:
'As at 1 October 2022, the Company had been notified of the following shareholdings amounting to 3% or more of the ordinary share capital of the Company, in accordance with the Disclosure and Transparency Rules'.

So, holdings of less than 17.4m shares (3%) will not be reported on the website. Also, like many of the smaller AIM companies, RKH is sometimes rather slow to update their web site.

You may find these websites more informative:
https://markets.ft.com/data/equities/tearsheet/profile?s=RKH:LSE
https://www.marketscreener.com/quote/stock/ROCKHOPPER-EXPLORATION-PL-4005463/company/

There are a number of other Subscription only websites which are updated daily.
Stockopedia is probably one of the best for serious private investors.
https://www.stockopedia.com/
Or, SharePad:
https://www.sharescope.co.uk/sharepad.jsp

I note with interest that Ian Andrew Barclay, based in Vancouver, is an ex President at Royal Bank of Canada.
I seem to remember that BOR also had an investor with a similar background. (ex Cenkos ?)
DEM

In the Mercopress article dated 21 Oct, it states that the Acting Director of Mineral Resources is Dr Andrea Clausen.
https://en.mercopress.com/2022/10/21/falkland-islands-lawmakers-committed-to-enable-oil-production

Dr Andrea Clausen is currently the Director of Natural Resources. Whilst she clearly has lots of senior Admin Experience in the FI incl Chair of the Public Accounts Committee for 8 years, the Chamber of Commerce for 3 years and been a Director of the Board of the Development Corporation for 5 years - not so clear what her O&G credentials are, so presumably only a temporary arrangement until the new DMR is in post.
https://www.falklands.gov.fk/fisheries/about-us/staff/admin-staff/29-dr-andrea-clausen

DEM

Over the past 10 years the Sea Lion team of 60+ full time staff and at a cost to PMO & RKH of c.$300m, have compiled at least two versions of the immensely detailed FEED documentation. ('Front-end engineering and design' is defined as the work required to produce process and engineering documentation of sufficient quality and depth to adequately define the project requirements for detailed engineering, procurement and construction of facilities and to support a ±15% project cost estimate').

The Regulatory interface is also well-advanced, the Environmental Impact Statement public consultation process completed, the Field Development Plan substantially agreed with final update at Sanction and alignment with FIG on key fiscal, commercial and regulatory items. FIG, RKH and NAV have met face2face.

Navitas will wish to read, review and check all docs and this will be carried out by the expert team led by Ian Ramsay. They will also be looking to reduce costs, from the $1.3bn Premier figure (was $1.8bn) to below $1bn. Using a leased FPSO instead of building a new one and seeking to reduce both overall and pre first oil capex. In 2018, Heads of Terms (HOTS) were signed with a number of key contractors with prices fixed, I think, for 5yrs - presumably the JV will be keen to lock in the work at the pre-agreed prices which may otherwise expire in 2023.

Once FEED has been completed and agreed - the JV will progress to 'Final Investment Decision' (FID) which is a firm decision taken by the Board to proceed with the project – subject only to closing the finance and gaining Regulatory Consent. Once these steps are both completed, Project Sanction can also take place.

I'm sure funding is already being actively discussed and once Chanan Wolf (Navitas Deputy CEO) is in London, this will be his main focus. I think CW was responsible for raising all the Shenandoah monies - early and in full. So hopefully no issues there. The larger than expected OM Award will also greatly simplify RKH's share of costs and will probably indirectly make Navitas task slightly easier. I would be surprised if gaining Regulatory Consent from both FIG and HMG is an issue - indeed we are now in the position where all parties want to see Falklands Oil as fast as possible. I think the main 'debating point' with FIG will be over tax rates. (Currently there is a Royalty of 9% on the market value of oil produced and 26% Corporation Tax).

The longstop date for Sea Lion FID and 'Project Sanction' is effectively end 2024 as that is the new end date for the relevant Licences. It is also the date contained in several of the earlier docs submitted to the Tel Aviv Stock Exchange (TASE). However, unlike PMO where unrelated financial issues delayed progress on SL, Navitas are the polar opposite and I will be both surprised and disappointed if FEED, is not completed in the next few months with funding and regulatory consents in place to enable FID and Sanction by the end of 2023 - at long l

Last para suggests FEED at end of this year - should be 2023 of course ! Apologies to anyone who has ordered new car etc.

'The longstop date for Sea Lion FID and 'Project Sanction' is effectively end 2024 as that is the new end date for the relevant Licences. It is also the date contained in several of the earlier docs submitted to the Tel Aviv Stock Exchange (TASE). However, unlike PMO who sought to delay matters at every opportunity, Navitas are the polar opposite and I will be both surprised and disappointed if FEED, is not completed in 2023 with funding and regulatory consents in place to enable FID and Sanction by the end of 2023 - at long last.' DEM

Considerable work has already been undertaken on FEED. Premier & RKH have spent 5+ yrs and over £600m in compiling two sets of FEED documentation - with the Sea Lion team comprising 60 full time specialist staff who wrote and compiled the several thousand pages of immensely detailed text. ('Front-end engineering and design' is defined as the work required to produce process and engineering documentation of sufficient quality and depth to adequately define the project requirements for detailed engineering, procurement and construction of facilities and to support a ±15% project cost estimate').

Navitas will wish to read, review and check all docs and this will be carried out by the expert team led by Ian Ramsay. They will also be looking to reduce costs, from the $1.3bn Premier figure (was $1.8bn) to below $1bn. The RKH in-house team has continued to hone and refine a lower cost FEED. Using a leased FPSO instead of building a new one has been mentioned in Presentations, as has reducing the number of hubs. In 2018, Heads of Terms (HOTS) were signed with a number of key contractors with prices fixed, I think, for 5yrs - presumably the JV will be keen to lock in the work at the pre-agreed prices which may otherwise expire in 2023.

Once FEED has been completed and agreed - the JV will progress to 'Final Investment Decision' (FID) which is a firm decision taken by the Board to proceed with the project – subject only to closing the finance and gaining Regulatory Consent. Once these are both done Project Sanction can also take place.

I'm sure funding is already being actively discussed and once Chanan Wolf (Navitas Deputy CEO) is set up in London, will be his main focus. I think CW was responsible for raising all the Shenandoah monies - early and in full. So hopefully no issues there. The larger than expected OM Award will also greatly simplify RKH's share of costs and will probably indirectly make Navitas task slightly easier. I would be surprised if gaining Regulatory Consent from both FIG and HMG is an issue - indeed we are now in the position where all parties want to see Falklands Oil as fast as possible. I think the main 'debating point' with FIG will be over tax rates. (Currently there is a Royalty of 9% on the market value of oil produced and 26% Corporation Tax).

The longstop date for Sea Lion FID and 'Project Sanction' is effectively end 2024 as that is the new end date for the relevant Licences. It is also the date contained in several of the earlier docs submitted to the Tel Aviv Stock Exchange (TASE). However, unlike PMO who sought to delay matters at every opportunity, Navitas as the polar opposite and I will be both surprised and disappointed if FEED, is not completed later this year with funding and regulatory consents in place by year end to enable FID and Sanction - at long last.

DEM

'Navitas have been privy to the number for 3+ years'.
Presumably 42.

DEM

Do your research - I did sell - I said so and said I thought it would be worth buying in once there is an FDP in place - maybe 12-24 months away. Mirasol 06-10-22
So why are you still posting here?

Stay with the majors is my advice. Mirasol 27-09-22
So why are you still posting here?

I agree - there is a definite risk of being left on the beach - but I can't see much happening soon and the next serious upwards shift will come when the FDP is approved - but that may be a year away -and first oil is even further away. We've been waiting over 10 years to see a decent return here. I reckon there are better stocks, even better oil stocks, for the next year or so. Mirasol 22-09-22 re RKH
So why are you still posting here?

That could be several years away - there si no agreed or approved plan of development with Navitas AFAIK. I'm afraid this stock will languish until they sign a rig contract - occasional spikes on "news" but its probably now a share to sell and come back in 24 months IMHO. Mirasol 21-09-22 re RKH
So why are you still posting here?

DEM

PS – In any case, have you been granted an exemption from the LSE T’s&C’s ? Specifically:
‘You agree that you will: not post, link to or otherwise publish any content with recommendations to buy or not buy a particular share’
https://www.lse.co.uk/terms-and-conditions.html

Thanks Citizen for your helpful comments.

The Award RNS dated 24 August states that ‘The arbitration panel unanimously held that Italy had breached its obligations under the Energy Charter Treaty entitling Rockhopper to compensation. The award is final and binding on the parties’.

As the Award was Unanimous, I assume that the RoI’s nominated Arbiter Dupuy must have accepted the jurisdiction and power of the ICSID Tribunal to issue an Award. This surely wreaks any claim by RoI for an annulment on the grounds that ‘the Tribunal has manifestly exceeded its powers’.

In any case, the Jurisdiction challenge has already been raised and defeated twice before anyway.

IMHO none of the other four grounds (not properly constituted, corruption, serious departure from rule of procedure and failed to state the reasons) seem likely to have been committed. But of course, I have not had sight of the Award itself.

One further point, for which I unfortunately cannot track down the source but think it may have been mentioned at an AGM, is the fact that the Claimant is apparently allowed to simultaneously lodge several Seizure Notices, or whatever the correct legal term is, in different jurisdictions – even if the total claimed is far in excess of the total value of the Award.

So RKH’s lawyers might end up lodging Notices in London, New York, Toronto and Canberra – to seize £250m of Italian assets in each jurisdiction. At this point most Respondents pay the debt to stem the flow of court hearings, legal fees and negative news stories in four countries.

DEM

I particularly like 'Sea Lion alone is capable of producing at over 120,000 barrels of oil per day with significant upside'.
That's a 50% Uplift on previous estimates - 'we're going to need a bigger boat' !
Onward & Upwards
DEM