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Hi NigelH – Thank you for the friendly warning which I appreciate. Rather confirms my own conclusion after an hour skimming through that company’s web site, historic RNS’ and bulletin board. Have filed away your colourful ‘miasma of sliminess’ which is too good not to be recycled one day!

I have certainly always found SM to be totally straightforward – always returns calls and happy to explain and justify actions. Also, most unusually, he is transparently honest (WYSIWYG). Almost too honest for AIM. Broadly speaking, I take the view that if Sam is not too concerned about something, then neither should I be and vice versa. Seems to work quite well.

Sam is neither charismatic nor slick and he probably can’t juggle plates whilst riding a unicycle – but I buy shares to make money, not to be entertained! Sam isn’t perfect and has certainly made mistakes over the years but compared with most AIM CEO’s – particularly in the O&G sector – he is a paragon of virtue.

I certainly do not know any CEOs who possess papal infallibility and neither do I know any investors who have never make a mistake either.

DEM

Morning All

With the Aug 23rd deadline date now only two weeks away, it seems like a good time to post up the following 'OM Crib Sheet' written mainly for my own reference, to try and avoid a 'rabbit in headlights' event immediately after THE RNS suddenly drops into my In Box.

All calculations obviously assume that the Ombrina Mare ICSID Arbitration Tribunal finds in favour of Rockhopper ! The Award may well be broken down into separate parts - Reimbursement of original Drill/Rig costs, Decomm. Costs, Loss of profits, Interest. Whilst this will be interesting, I think it's only the total amount awarded which will be relevant.

Preparation
Open large bottle of wine - pour glass.
Settle in comfy chair with calculator and details of existing holdings!

Calculation Step 1
The award will probably be in dollars - as ICSID is part of the World Bank, based in Washington.
To convert $ to £, multiply $ figure by 0.83 (as of 5th Aug).
So, a $241m award, for example, would be c£200m

Calculation Step 2
Harbour Litigation - no relation to Harbour Energy - agreed a 'No Win - No Fee' arrangement with Rockhopper back in 2016.
Since then, they have funded the entire Ombrina Mare case including paying all Arbitration costs & charges and all K&S legal fees.
In the event of a Win, their fees are on a sliding scale - all figures are approximate, based on conversations with BOD over the years:
Up to £50m their % of Award will be approx. 50%.
Up to £100m their % of Award will be approx. 40%.
Up to £150m their % of Award will be approx. 30%.

So, taking the Gross Award (Step 1) of £200m.
After deduction of Harbour's fee @ 30%, the Net Award will be c £140m.

Calculation Step 3
After the June Placing and Open Offer there are now 580m shares in issue.
If the OM Award was £580m (we should be so lucky) then this would add £1 to the value of each share.
So, an award of £58m would add 10p to the value of each share.
So, an award of £5.8m would add 1p to the value of each share.

So, taking the Net Award (Step 2) of £140m.
Divide 140 by 5.8 = 24p added value to the Share Price.

Calculation Step 4
The Share Price closed yesterday at over 8.5p.
The SP may well rise over the next few days.
But, let us assume that the underlying SP is 7p (ie the Placing / Open Offer figure).
So, value of SP - assuming a £200m award - would be c31p (Base SP of 7p + OM Uplift of 24p).

More notes to follow in due course.

Good Luck
DEM

Morning All

I lean towards SpaceHoppa's suggestion that the 'news of the impending award is out there'. I doubt very much that the parties in the case and their lawyers only get to hear the result the day before the RNS is issued. With the drop dead date only three weeks away I think that K&S probably have a pretty good idea as to the outcome and that this will have been discussed with their Clients RKH. No doubt other Advisers will also be in the loop. My hope would be for a positive outcome in the £150m to £200m range. But, this is just a DEM guesstimate and I have obviously not heard any figures of any description from Salisbury. So, could be badly wrong - in either direction.

Judging by the increase in trading volumes, chatter on the Boards and the reactivation recently of another cohort of the 14 Sleeping Zombie Accounts registered in a 24 hour period in November 2020 - I think we could get an RNS any day announcing both the Award decision and any Quantum.

SecretBluePrint raises the interesting possibility that ICSID may have their own Agenda in this case in dragging their feet to ensure that their Jurisdiction is not successfully challenged. It occurs to me that there may be another party who may also not be unhappy at the delay. Post any decent OM Award, but prior to completing with Navitas - RKH will be rather like the elk called Hal with the bullseye birthmark in the famous Gary Larson Far Side cartoon. In truth, the shorter the period between any ICSID Award and completion of the Navitas Farm In, the better.

Any potential bid would of course have to be voted on by the Share Holders, over 80% of whom are Private Investors. I do know that Desire back in 2013 had over 12,000 private investors (Source: Peel Hunt), so I imagine that RKH have many more. These 12,000 + individuals constitute RKH's best defence against any hostile bid, together with a signed and completed Farm In by Navitas. With their combined support the future is bright !

Finally, totally agree with SpaceHoppas post this morning - why part with your hard earned shares for a trivial profit? RKH has always been a 'High Risk - High Return' share and now is definitely not the time to be selling cheap. With a mid range OM Award the SP could be 25-35p, over 50p once the Navitas deal completes and hopefully 75-100p on FID in 12-18m time. By First Oil a lot more ! So why sell for 8p ? All IMHO and not intended in any way as Guidance.

DEM

Good Morning DonalB

For a full list of Counsel acting for both parties see page 2 of the Jurisdiction Decision.
IC-0273-02 - Rockhopper v. Italy - Decision on the Intra-EU Jurisdictional Objection - C - TD.pdf (investorstatelawguide.com)

Whilst Prof. Malaguti is certainly well qualified - so also are the other Counsel involved in the case - on both sides. Tom Sprange QC, Partner at King & Spalding - described by Peers as '“Mensa-like intellect with a down-to-earth attitude”, “A-star advocate, he just walks in and understands everything", “a superb advocate”, “class act”, “remarkable,” a “super lawyer,” “a real star,” “fantastic”, “a very sharp legal mind”, etc
https://www.kslaw.com/people/thomas-sprange?locale=en

Given your own understanding of the case and well informed arbitration contacts in Geneva, I am surprised that you have waited 6 years before posting on the OM case and puzzled that you mistook a 'Counsel for the Respondent' as an 'Arbitrator' - or was this just an ice breaker ? Your post of July 14th & others on LSE PVR suggests that you might be described as a cosmopolitan Green Activist:

"I agree with the logic of you response 100%, Ireland, the EU & Others need to assure their economic, food, energy, oil, gas & electricity, to guarantee essential commerce, food supplies & vulnerable peoples heating during the coming Winter. However, I completely doubt that Eamon Ryan is the person to enable that, for ideological reasons. While Ryan's reasoning is potentially right in the long term, with 2-3c temperature rises by 2050 & 20-40% animal & plant extinction and future hurricanes from Gort to Granard, we must deal with the immediate & save lives today. New technologies might be developed to allow us to continue our wasteful ways, but it would helpful if everybody did their best to reduce their own consumption now. My view is that a FF & FG directed government collapse is the only honest route to a better future". (I assume that FF is 'Fianna Fáil' and FG is 'Fine Gael' ?)

All good stuff, but if I may be so blunt - are you here as a fellow Rockhopper investor to discuss the company, its projects and future opportunities in the FI and elsewhere. Or, are you a militant climate activist primarily concerned at the effects of a substantial award from OM in creating precedent & case law which might be used to defeat other ECT cases across Europe. If the latter, whilst your desire to topple governments and change the world may be admirable - with an Age Profile which is the envy of Saga, I fear that the revolutionary zeal of most Rockhopper investors fizzled out several decades ago.

Assuming you are here to post about the company - welcome to the RKH Board !

Cheers !
DEM

Definition of Irony:
"A state of affairs or an event that seems deliberately contrary to what one expects and is often wryly amusing as a result".

Old dictionary example:
"A child runs away from someone throwing a water balloon at him and falls into the pool. This is ironic because the child ends up wetter than he would have been, thwarting his expectations of what would happen when he ran away from the water balloon".

Updated example:
"A country defending an ECT ICSID case, procrastinates for several years, in an attempt to minimise compensation through a lower Oil Price - but unfortunately delays the process so long that they end up in the highest sustained oil price period for years".

There have been suggestions for some time that the three Arbiters may have been striving to agree a Unanimous Decision. It is clear from the various technical journals that Majority Decisions are regarded as a failure to reach Consensus and are frowned upon. These can even adversely affect the status of any Arbiters who are perceived as having been too dogmatic.

This may seem odd to many. However, these cases are invariably complex, with intransigent clients and high stakes for all. Unlike a Court of Law, which is required to arrive at a binary decision (Guilty / Not Guilty) – Arbitration by its nature is all about weighing up the pros and cons to arrive at a fair and reasonable compromise which all parties can just about live with. In other words, there are no outright winners or losers and both sides will 'save face' having compromised over different aspects of the case. For example, calculation of the Quantum will depend on numerous variables - life of well, production decline curve, average price of oil, future decline in demand etc. One arbiter may agree to base the calculations on a shorter well life if the other Arbiter will agree to a higher average oil price etc.

But this only works if the Tribunal can find common ground. The fact that the Arbiters appear to be struggling to reach consensus suggests to me that the Award may be both positive for RKH and not trivial in size. The Arbiter nominated by ROI may be finding it impossible to agree common ground, due to even a compromise figure being regarded as totally unacceptable by his Clients. Conversely, a trivial award would surely have been agreed and paid years ago.

DEM

Thanks Ovets. I was curious as to what the Dilution would be in order that I would have a reasonable idea as to how many O/O shares and Excess to apply for. In an ideal world there would never be any Dilutions but all things considered, I regard 21% as a very acceptable trade off to ensure that we get to FID without too many financial concerns. OM will now be something to look forward, knowing that a negative outcome will be disappointing but not a financial crisis.

Anyone who has held Investment Trusts for a few years will probably be aware that Warrants cannot be held in an ISA. SIPPS can hold almost anything, incl Warrants but ISA's have restrictions. Warrants are regarded as Non Qualifying investments for ISAs. This is the Official HMG Rule:

Where the new investments are not qualifying investments, managers must, within 30 calendar days of the date on which they became non-qualifying investments, either: sell them (in which case the proceeds can remain in the stocks and shares ISA) (or) transfer them to the investor to be held outside the ISA.
https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#invchangesssisa

The SM from HL dated 23 June clearly states in the FAQ that:
"The warrants will not be a qualifying ISA investment. Any warrants you receive in the offer will therefore have to be removed from your ISA within 30 calendar days. If you receive warrants, we’ll contact you again to outline your options for removing them from the ISA".

My understanding from HL is that they will simply be transferred to a normal HL Share Trading Account.
I assume that the Units can be split so the O/O shares remain in the ISA and the Warrants get transferred to the Share A/C. The Corporate Actions Team at HL are well aware of the RKH Warrants and will be contacting Clients later in the week.
"Expected date for CREST accounts to be credited with the Open Offer Shares and Open Offer Warrants in uncertificated form - As soon as practicable after 8.00 a.m. on 7 July 2022" (RKN RNS)

DEM

After this mornings RNS, dated 05-07-2022, I have updated the calculations previously posted up on 18th and 27th June.

HEADLINE FIGURES

After the II Placing and PI Open Offer we will have 580m shares in issue, £8.5m raised and dilution of 21.0%.

By 31-12-2023 (drop dead date for Warrants), assuming 100% take up – we will have 641m shares in issue, an additional £5.5m raised (total amount raised £14m) with an overall dilution of 28.5% max. (More likely c25%)

CALCULATIONS

All figures sourced from most recent RKH RNS'. To provide accurate figures IMO one needs to do two separate calculations ie dilution after Placing & Open Offer and then the dilution in 18m post expiry of Warrants. (See Notes at end).

Pre-Placing
458,482,117 shares (Launch doc)
£36,678,569 Mkt Cap @8p

As of First Admission on 20-06-2022
82,182,776 Placing Shares (Results doc)
£5,752,794 Mkt Cap @7p

As of 'Open Offer Record Date'
39,652,160 Open Offer Shares
£2,775,651 Mkt Cap @7p (Launch doc)

Post Placing & Open Offer
580,317,053 (458m+82m+39m) TOTAL SHARES (excl Warrants)
£40,622,194 Mkt Cap @7p
£8,528,445 Capital Raised

Dilution Post Placing & Open Offer
Diluted Shareholding is calculated by dividing the number of existing shares by the sum of the total number of existing shares and the total number of new shares.
458,482,117 divided by 580,317,053 = 79.00% = 21.00% dilution
https://www.equidam.com/dilution-101-calculation-and-examples/

£££££££££££££££££££££££££££££££££££££££££££££££

WARRANT EXERCISE PERIOD EXPIRES ON 31-12-2023
41,091,388 Placing Warrants convert to shares
19,825,849 Open Offer Warrants convert to shares

60,917,237 if all warrants exercised @9p
£5,482,551 Capital will be raised

£££££££££££££££££££££££££££££££££££££££££££££££

Final Totals
641,234,290 (580m+41m+19m) Total Shares (incl converted Warrants)
£14,010,996 Total Capital Raised (gross figure before costs of placing etc)

458,482,117 (original number of shares)
divided by 641,234,290 (original number + new shares & converted warrants)
= 71.5% = 28.5% dilution (This figure does, of course, include the 21% dilution post Placing & Open Offer).

£££££££££££££££££££££££££££££££££££££££££££££££

NOTES:
1. As FID is likely towards the end on 2023, I would expect the majority of holders will delay converting their Warrants until Q4 2023, in the hope of benefiting from the uplift in the SP post FID. As there will be no secondary market in the Warrants (ie they cannot be bought or sold) they will have no value until they are converted into shares.

2. The dilution will only occur when the conversion tales place. Reductio ad absurdum, if none of the Warrants were converted then they would just expire on 31-12-2023 and no dilution will have taken place, apart from the original dilution arising from the Placing & O/O.

3. In practice, dilution will probably be more like 25% as there will inevitably be Warrants which do not get exercise

Bigred7 – I have no axe to grind for or against Market-Dealer who has been around on the Boards in his various incarnations for a lot longer than most. He may be bit of an idiot at times but at least he’s our idiot and poses little risk to most serious investors on this BB who will just smile or groan and move onto the next post. To be fair, more recently, the posts have noticeably improved in depth and content.

His posts are neither abusive nor do they disrupt the flow of the Board – unlike most of yours. I happen to agree with his earlier suggestion that if you ‘Try to post something about Rkh, people here might take you more seriously for a change’.
In your over 250 posts it is hard to find any reference to Rockhopper, Sea Lion, Navitas, Ombrina Mare, O&G etc.

This is a Bulletin Board for Private Investors to discuss Rockhopper and related matters. If this holds no interest for you – why are you here? It is not a branch of Twitter or any other social media platform and yet in almost every post here you are attacking somebody.

If a poster breaks the rules they will usually get banned – no fuss – here today, gone tomorrow. The Forensic Cleaners work through the night mopping up the blood and deleting the posts.

Personal vendettas particularly of the ‘Ya Boo Sucks’ variety, are better left behind in the ‘other place’.

I expect you mean well (cough) but we really don’t need your protection from a poster who has been a semi permanent fixture here for more years than I can remember. Neither do we need you to post up ‘Warnings’ or to ‘Wind Up’ other posters. I think most posters on LSE are quite capable of looking after themselves.

As you commented a few days ago: “I won’t turn this board into the kiddies A*V*N board and will only occasionally toy and play with Noboil as it’s so easy. I too prefer the more thought about and adult content on this board. Anyway time to move on”

Well that didn’t last long !! I repeat – why are you here ??
DEM

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