Member Info for DeusExMachina

Hi Buzz
I just listed the top 5 from 2014 Annual Report, as that was the year II holdings peaked. Left out the Vampire Squid and a certain other 'Odious' holder, as they are not ones we particularly want to see again, I think.

Actually if you go to the RKH website click on the Investors tab and select Reports you will find a complete list of all R&A's back to 2005. A real trip down Memory Lane. Some of the licence maps and graphics may be useful in a year or two.

DEM

LTT - yes all seems very likely.
I also wondered if the 'Last Chance Saloon' for RoI was the scenario where the Placing was a damp squib and motions 7& 8 were rejected at the AGM so there was no Open Offer. They might then have offered an OOC Settlement for costs only (say £25m). However, as Harbour Litigation will obviously wish to make a profit on their investment that would probably have been vetoed. I think the lawyers submit their bills at regular intervals which are paid by Harbour - so they get paid anyway.

If Navitas and/or FIG were all arguing with RKH - then delaying might make sense - but fortunately that's not the case. In fact all parties seem to be pulling together and are eager to make progress. Lots of air miles being racked up as well - I think this is really going to happen.

DEM

Thank you BB3 for an interesting and clearly informed post. However, you make the assumption that ‘the SP would be suppressed to a range around the 7p mark and possibly below for quite some time until placing shares have been distributed from II's hands to PI's hands’. Surely it is the other way round ?

Consider:
The OM Award is only a few weeks away (Aug 23 or Oct 22), when the quantum will be known.
The OM Award – which may be transformative – should be executed in the Courts probably in the next 12m.
FID likely in 12-18m, I am certain that both Navitas and FIG will expedite ASAP.
The successful placing and O/O will provide a reasonable financial buffer until FID.

Whilst First Oil may still be a few years away it is rapidly getting closer as the boxes get ticked. Back in the heady days when the Ocean Guardian was drilling a new discovery well every 30 days – the SP soared. Whilst Private Investors certainly piled in – so did the Institutions.

By June 2014 there were 14 Institutions (incl, Fidelity, Royal London, JP Morgan, UBS & Credit Suisse) with over 3% each, controlling over 73% of the shares in issue. (Today we have 2 funds with c12% total).

And this of course was without a viable JV partner, funding, FEED, the myriad of essential studies and reports, no plans for new FI infrastructure and certainly no aircraft carries and support vessels to defend it all + OM of course. The past decade – whilst intensely frustrating – has not been entirely wasted and much of the boring background ‘stuff’ is now in place or in progress.

I have no doubt that the Hedge Funds, Private Offices and Institutional Funds will wish to rebuild their positions long before first Oil – if only so many of the shares weren’t held by those pesky private investors – made worse by the O/O. But they will not wish to buy RKH shares when they are 50p or 100p or more. Surely, they will be starting to build positions now.

Whilst I’m sure the II were delighted to receive the bonus ball Warrants – I think it is naïve to think that they will not take the opportunity to retain their own shares and hoover up as many of the shares allocated to the PI as possible. Not the other way round and that is why the SP will be depressed until OM.

DEM

PS Your one previous post does not sound like you are a typical PI ?

Thank you Maestro - high praise indeed.
Hope the rubber bands are still elastic !
Happy Days
DEM

Sorry BB3 - started my post earlier, got interrupted, returned to PC and clicked Send. Thanks for full text.
DEM

Was mentioned in ARG RNS of 24th June. See:
http://otp.investis.com/clients/uk/argos_resources_ltd/rns/regulatory-story.aspx?cid=1692&newsid=1598670

I suspect that ARG have always assumed that RKH will buy them out. Their problem is if FIG refuse to renew the PL001 licence yet again, when it expires 31-12-2022 then RKH/NAV may be able to acquire the licence without buying ARG. Whilst it would be nice to acquire the other half of the Johnson gas field - I'm sure Sea Lion will get developed first.

DEM

Thanks Wraith and all others who have posted kind comments earlier.
DEM

Thanks pre2rcd - wasn't aware of that. I'm assuming that the excess shares will come out of any shares not taken up by PI 's and that the total Open Offer will not exceed the £4.1m figure quoted in the RNS, but we shall see.
DEM

(cont)
The Navitas Chairman, Gideon Tadmor is clearly a 'larger than life' character who has a formidable reputation in the International O&G sector for delivering massive projects on time and within budget. He appears to have an excellent relationship with Sam who he has met face to face and speaks to regularly. I think he will push for FID ASAP and would not be surprised to see this happen in 2023. Whilst Channing Wolf, who has taken the Shenandoah project to FID, will be responsible for day to day matters and will be permanently based in London - it is clear that Gideon Tadmor will be very hands on and driving Sea Lion from the very top of Navitas. I don't think I dare share the story Sam told about what GT said when asked about Argentina and Kirchner but it is very clear that we could not hope for a better ally, should the going get rough.

Thanks to Premier and Rockhopper incurring all the early stage seismic, exploration, appraisal and FEED costs - Navitas will have no 'legacy' costs to recover. They have paid no 'premium' to Premier for the Novation of the Farm In contract. The Navitas break even point is therefore much lower than Premier ever enjoyed. Over the next 20+ years - Navitas, Rockhopper, FIG and indirectly the UK Government - are all going to make substantial sums of money out of Falklands Oil. So, why on Earth would all parties not pull out all the stops to 'Make it So' ASAP? We should not underestimate the complexity of the numerous 'moving parts' to get Sea Lion to production but neither should we doubt the motivation or ability of the key players to get the show on the road.

I suspect that once we get a drill rig down to the FI, it may become its new home for several years. Whilst Phase 1 of Sea Lion may still end up with 29 wells - I suspect that FOIL may come much sooner. But this is what will be refined over the next few months as NAV & RKH seek to strip out any non essential project costs to ensure that New Sea Lion (NSL?) is safe, lean and fit for purpose.

It was good to meet up with several RKH friends, both old and new, including Flying Mule, Guy with a bike, Zinced, Yeast, LTT and also chat to others for the first time including the senior ex Army Officer with a most interesting past, present and future. The traditional post AGM glass of lemonade took place at The Kings Head - a splendid establishment - recently refurbished by Wetherspoons. Conversations included Ukraine, Pig Farming in Romania, the problems of property development in the Kyle Of Lochalsh.
https://www.jdwetherspoon.com/pub-histories/england/wiltshire/the-kings-head-inn-salisbury

Bucket of tar not required and goose released into the Market Square. Home by 6.00pm.
DEM

Biggest surprise of the day was when we smartly turned off the Wilton Road to enter the carpark and found that we were in the driveway of the next door private house where the startled owners were busy pruning their roses. Reversed back onto the road and tried again. This time we were greeted by about a dozen Climate Change protestors bearing Energy Charter banners - perhaps they know something about Ombrina Mare we don't ! At least they weren't allowed into the building, unlike at the UKOG AGM, (also on Tuesday) where a group of activists bearing scary upside down banners - forced the cancellation of the meeting.
https://twitter.com/MiaHWatanabe/status/1541735316431806464

The Clubhouse is essentially a pleasant modern cricket pavilion, available for hire to local companies etc at a fraction the cost of a City Livery Hall ! We were greeted by Keith and Sam and by the two Non-Execs, Alison and John, plus Jan (Co Sec), Will (Finance) and several of the RKH team. Plenty of opportunities to informally chat and ask questions both before and after the formal part of the meeting which comprised Sam's PP Presentation, Questions from the floor and then the Vote. In recent weeks we have had a flurry of long and and detailed RNS' with updates on Ombrina Mare, Navitas and Funding, so the Presentation was mostly a summary of existing news. Attendance down a bit on the last 'in person' AGM pre COVID - but still a better turn out than most AGMs I attend. Perhaps a few of the pinstriped CFA Pro's felt the trip to Salisbury too risky but TBH we managed quite well without them and some attendees even visited the Cathedral after.

We know from the subsequent RNS that all Resolutions were passed with 87% to 92%+ of votes - so we will get the Open Offer shares and Warrants. I assume most of the block vote against, were the Institutional Investors (Aedos and RAB) who clearly detested the 'extra' dilution from Private Investors getting O/O shares + Warrants on the same terms. Glen and Saby's two years of chipping away at the LSE coalface, with help from Godders, only delivered another 2%-3% to their Lords & Masters. Must do better !

If you are with Hargreaves you have until Noon today to take up your allocated shares plus any excess required, together with 1:2 Warrants. Just ring the Help Desk on 0117 900 9000 - it can all be done very easily over the phone.

The future direction of travel for Rockhopper is becoming clearer and IMHO there is much to look forward to. A few take aways:

Sam agreed that once we get closer to FID, then a bigger player may, or may not, ask to join the party. Both NAV and RKH are relaxed about this - but it has been agreed that any third parties percentage will come out of NAV's 65%, still leaving RKH with 35%.

The SFB was not mentioned at all, but it's not going to go away and I think it's time will arrive once the NFB is in production.

DEM

Hmmmmm I rather like the sound of 'The Rockhopper Collective formerly known as The Borg' !

In truth, any Private Investor willing to plough line by line through the bumph, ring Salisbury and ask direct questions and contribute to Bulletin Boards in a positive way - will be less likely to stumble into the various man traps set to catch the unwary.

How many investors spotted the brief reference to the Italian decom costs in a recent RNS - probably not an issue until 2024. Or bother to use Google to translate the extremely detailed RNS released by Navitas to the Tel Aviv Stock Exchange. As an investor in ECO (Atlantic) it was apparent that compared with AIM, the TASE sets the reporting bar considerably higher. A 500 word one page RNS will turn into a 5,000 word ten page document lodged with TASE.

Last post today I think - early start in the morning to get down to Salisbury in time for breakfast with a group of LTH from the old days. Hopefully an upbeat AGM, although I suspect it may be one of the shorter ones.

DEM

DEM

Thanks SH for the explanation and I now understand where you were coming from. I actually spent more time reading articles on calculating dilution than the actual RKH calculations took. Way more complex than I ever imagined. I think the methodology behind the 23.5% dilution figure is sound when discussing share dilutions and it is based on this article - which is reasonably easy to follow for a non-mathematician.
https://www.equidam.com/dilution-101-calculation-and-examples/

All thanks to Godders who drove me to knuckle down and do the 'math' after he claimed that the dilution was 45%-50%, which I knew was a fantasy figure. It's a funny old world !

DEM

Hi SpaceHoppa
You possibly missed the following post by myself on Sat 18 June re Dilution – reprinted below. Its actually even better than your figures.

After the II Placing and PI Open Offer we will have 599m shares, £9.8m raised and dilution of 23.49%.

By 31-12-2023 (drop dead date for Warrants), assuming 100% take up – we will have 669m shares in issue, an additional £6.3m raised (total of £16.1m) with an overall dilution of 31.5%.

QUOTE: “All figures sourced from most recent RKH RNS. To provide an accurate figure 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’ (tbc)
58,571,429 Open Offer Shares
£4,100,000 Mkt Cap @7p (Launch doc)

POST PLACING & OPEN OFFER
599,236,322 (458m+82m+59m) TOTAL SHARES (excl Warrants)
£41,946,542 Mkt Cap @7p
£9,852,794 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 599,236,322 = 76.51% = 23.49% 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
29,285,714 Open Offer Warrants convert to shares

70,377,102 if all warrants exercised @9p
£6,333,939 Capital Raised

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

FINAL TOTALS
669,613,424 (599m+41m+29m) Total Shares (incl converted Warrants)
£16,186,733 Total Capital Raised (gross figure before costs of placing etc)

458,482,117 (original number of shares)
divided by 669,613,424 (original number + new shares & converted warrants)
= 68.47% = 31.53% dilution

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. 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.

2. In practice, dilution will probably be under 30% as there will inevitably be Warrants which do not get exercised for a variety of reasons.” ENDQUOTE

DEM

"DeusExMachina - Check with your broker they set there own deadlines which they stick too . hope this helps".

I already had before I posted - deadline for Hargreaves is Noon on 30th June. Will be very surprised if other brokers have a deadline any different. 'Official' deadline is 3.00pm that day - presumably giving HL three hours to collate their applications.

DEM

DEM

"deadline for 7p offer midnight" .

NO - not according to the official Open Offer timetable.
https://www.lse.co.uk/rns/RKH/open-offer-timetable-ec016lv99aau427.html

DEM

May I also confirm that my understanding of the net cost to RKH of Sea Lion Phase 1 – not covered by the two loan deals with Navitas – is around c. $43m +/- I have a very detailed explanation somewhere on my PC which I validated with Sam a year or two ago. It was based on the original higher cost estimates, so $35m feels about right.

IMHO I think it’s a cracking deal. To have retained 35% of a field the size of Sea Lion and attract a Farm In partner of the quality and financial muscle of Navitas is an excellent outcome.

Several years later than we all hoped and if you wish to blame the global collapse in the price of oil in 2016 and 2020 together with five years of financial woes at Premier – on Sam Moody and the Board – then so be it. I expect SM was also responsible for Brexit, Covid, galloping inflation and Ukraine as well.

DEM

“I am confident this is a good deal but as my wife said: ‘you have said that time and time again’ “
And yet for the past 8 years and 1672 posts you have whinged, whined, complained and denigrated the company – to the endless frustration and angst of your fellow posters.

Whilst I’m sure everybody is very sorry to hear of your financial ‘predicament’, assuming you are telling the truth, it sounds like your partner & parents have considerably more common sense than you do.

If you are really in a dark place then I would urge you to speak to your GP, Samaritans, Addiction Charity and close family for help and advice. The Bulletin Board of an AIM listed O&G company should be the last place you turn to for comfort and solace – however sympathetic we may be regarding your situation.

One final thought – if you sell up, which might be a very prudent decision, your 4.1m shares (0.9% of 458m) will fetch £288,000 – more than enough to pay for a nice holiday and a diverse portfolio of blue chip Investment Trusts for your retirement. Otherwise, the suggestion to sell 1/8th to fund the O/O shares allocated on the rest of your holding, is clearly sensible and what many others have chosen to do. Good Luck !

DEM

Interesting find SecretBlueprint, but according to The Guardian we still have 10 years to pursue the Claim. Naturally, we would all prefer an OM win in the next few weeks !

QUOTE "The compromise (ECT) agreement, which was largely designed by the EU, reduces the protection afforded to companies that have invested in oil and gas projects. But a fossil fuel exemption would not kick in until 2033 at the earliest.

Under the deal, new fossil fuel investments will cease to be protected in the EU and UK from mid August 2023. Existing fossil fuel investments in the EU and UK would lose protection after 10 years. But the 10-year phase-out for oil and gas only comes into force once the treaty has been ratified by three-quarters of the ECT’s 53 signatories.

Moreover, the fossil fuel carve-out does not bind countries. While the EU and UK have chosen to end protection for oil and gas investments, other ECT signatories, such as central Asian states, Switzerland and Japan, can maintain protection for fossil fuel investors. Member countries are expected to formally approve the deal in November, but it would still need to be ratified by each capital." ENDQUOTE

More positive news is that ICSID will at long last be implementing its new streamlined procedural changes as of 01-07-2022. Electronic lodging of docs, limits on doc length, specific timescales for each stage of the process and an Expedited Arbitration procedure option if all parties agree - will all help greatly shorten future claims. Although too late to alter the glacial pace of Ombrina Mare - there are a couple of encouraging passages which may point to a mood change in how ICSID view RoI's delaying tactics.

QUOTE "Other changes relate to, for example, the possibility of the participation of third parties in the proceedings,[10] a new rule (Rule 53) on security for costs[11] and the new factors which the tribunal will have to consider when awarding costs (including amongst others the conduct of the parties during the proceedings).[12] All of these will have a significant impact on ICSID arbitration proceedings". ENDQUOTE

https://www.acerislaw.com/the-new-icsid-arbitration-rules/

DEM

Evening LTT
Over the past few days I have had a couple of emails from Sam in reply to queries raised by myself. I’m fairly sure that he will not object to my quoting a couple of key passages:

Warrants
“Everyone will get warrants. If you hold your shares as a certificate then you will get a certificate for your warrants. If you hold your shares dematerialised into CREST via a nominee then they will settle in the same way as your shares, CREST can take the warrants. The warrants won’t be listed. If you want to exercise the warrants then you tell the broker and they send in an exercise notice. There is no preferential treatment here we are doing the same for everyone”.

Importance of the Resolutions
“I am aware there is an e mail doing the rounds …………………… suggesting people vote down the AGM resolutions. The lawyers & brokers have told me that if the relevant resolutions are voted down then we cannot do the open offer and holders will have voted themselves out of being able to participate. We have tried to make that clear in the releases but I guess people don’t understand or aren’t interested”.

This clearly refers to the campaign waged by two individuals on the LSE BB in recent months – both of whom I doubt have any more in common with Private Investors than my neighbour’s tom cat – who have now apparently mounted an email campaign, presumably using the confidential private data harvested from investors last year.

So, to repeat yet again. If either Special Resolution 8 to disapply pre-emption rights, or Ordinary Resolution 7 to allot shares, fail to be passed at the AGM by the requisite majorities - then the Open Offer cannot proceed.

Not only will Private Shareholders not have the the opportunity to subscribe for Units, comprising of Open Offer Shares and Warrants but there will be no additional monies for the company. As the Placing was oversubscribed this may not be a serious problem. However, it strikes me as very wrong that a small group of finance professionals can apparently manipulate the system to disadvantage both the company and several thousand private investors. One assumes that the only parties to gain will be any members of this apparent plan to create a conspiracy or 'concert party' be they for the benefit of individuals or institutions or both. All IMHO of course.

Due to the above I assume there will be no more info regarding the Open Offer until after the AGM.

DEM

Good Morning Ovets
Thanks very much for offering to produce a Summary of your understanding of the Placing, Open Offer & Warrants – will be extremely useful for all of us over the coming weeks. I have made a stab at trying to make sense of the numbers, with raw data sourced from the two recent RNS’.

All needs checking, but I am reasonably certain that the dilution figures will be lower than predicted by Godders & pals – no great surprise there. To provide an accurate figure 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’ (tbc)
58,571,429 Open Offer Shares
£4,100,000 Mkt Cap @7p (Launch doc)

POST PLACING & OPEN OFFER
599,236,322 (458m+82m+59m) TOTAL SHARES (excl Warrants)
£41,946,542 Mkt Cap @7p
£9,852,794 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 599,236,322 = 76.51% = 23.49% 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
29,285,714 Open Offer Warrants convert to shares

70,377,102 if all warrants exercised @9p
£6,333,939 Capital Raised

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

FINAL TOTALS
669,613,424 (599m+41m+29m) Total Shares (incl converted Warrants)
£16,186,733 Total Capital Raised (gross figure before costs of placing etc)

458,482,117 (original number of shares)
divided by 669,613,424 (original number + new shares & converted warrants)
= 68.47% = 31.53% dilution

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. 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.

2. In practice, dilution will probably be under 30% as there will inevitably be Warrants which do not get exercised for a variety of reasons.

DEM