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This is really interesting, Willswag is saying that actually MSAR can't be used until the end of the bioMSAR trial, which is not how I understood it previously - I understood that it could be used after the POC, and clearly that is how SC and DON understood it too. Looking over the wording of the answers to the questions again it's actually not totally clear. We have:

"Question 5: Once the MSC project PoC is completed. What is the plan for supplying MSAR? Is this dependent on the bioMSAR LONO?

No, supply of MSAR® is not dependent on the bioMSAR™ LONO. We are actively speaking with oil companies and MSC separately regarding the commercial supply of MSAR®, which is covered by the Interim LONO received following the prior vessel test. Supply of MSAR® is also required for Morocco, hence the initial focus is in the Mediterranean region."

Reading this quickly it sounds like MSAR is "good to go" after the POC, but reading it carefully, it looks like it actually is referring to the ability to get it supplied by a refiner, i.e. refiners would be willing to enter an agreement to produce it on the back of the interim LONO, but not necessarily that ships could actually use it yet. (At least Jason seems to have interpreted the question in this way, whether or not that was actually the intent of the person who asked the question).

Then we have:

Question 6: Is it still the plan for a single LONO to undertake the LONO trial on bioMSAR. What about an MSAR LONO?

Yes, it is still the plan to complete the bioMSAR™ LONO, which is the reason for collaborating with Cargill. Successful completion of this LONO trial is a crucial step towards initiating commercial bioMSAR bunker supply operations in the marine sector.

MSAR® is covered by the Interim LONO received following the prior test on the same vessel and the intention is to complete this. They have seen the previous results, and we hope to commence commercial MSAR® supply discussions with MSC once they have had their own experience with bioMSAR™ through the initial Proof of Concept test."

This too is not very clear, especially the sentence "MSAR® is covered by the Interim LONO received following the prior test on the same vessel and the intention is to complete this." If anything that sounds like a LONO on MSAR also needs to be completed before it can be used.

Though SC is correct in his transcript of the actual meeting where Jason said "the supply of MSAR is independent, we already have an interim letter of no objection for the use of MSAR on the Flex engine, so basically we're going to be using that interim letter of no objection potentially to supply MSAR, independently of bioMSAR, from the Mediterranean to MSC and potentially others" - and that does seems to be saying that it could actually be supplied to MSC on the basis of the interim LONO. Though if so then one wonders why a full LONO is needed for bioMSAR?

I think I'm going to email Quadrise to get this point absolut

JM did indeed say that MSAR can be supplied just on the basis of the interim LONO and a new POC. What I don't understand is firstly why Quadrise don't clarify/stresss that point more as it's really significant, but also I don't follow how this can be - I mean with Maersk it was always clear that the full LONO had to be completed (even if the interim LONO would be helpful to show that the fuel looked like it was working and perhaps a reason to start negotiations over commercial supply in anticipation of a likely full LONO). Surely that's the whole idea of a full LONO i.e. you need to do it to get approval from the engine manufacturer that the fues is OK to use, if an interim LONO with say half the hours is enough then why is it even called an interim LONO and why would anyone do a full LONO? This does need some clarifying, I think.

I think "Two Valkor Utah RNS’s - sample tests and $1M payment 2p Gain in SP" - is a bit optimistic. On the other hand, before jumping to the "big MSC rollout" (which would take quite a bit of time to get there) there would hopefully be a commercial agreement with OCP which should add maybe 2p. Also licensing deals with Valkor. Anyway the point clearly is that there are a lot of potential positive announcements and the company is in a much better position than it was, with plenty of potential ways of things working out well (though a lot does still depend on MSC working out well).

Comprehensive income $126m for the quarter, but nearly $100m of that was for fair value gains because of a change in market interest rates, per the presentation page 7

Trading suspended in NY

Struggling to understand semaphored, before he said "I strongly doubt anything will be announced in the next 2 weeks" - so how does that tally with the latest comment that "It can easily land between now and the AGM. "?

Not sure why that got blocked, let's try again: was on D-i-rec-- tor--s T - alk..

hf, thanks.

when you say "they stated a couple of things need to be sorted out in an interview around mid august." would you mind to confirm which interview that was? the last interview i can find was ************* on 5.8 with a transcript published on 13.8, but i couldn't find that wording there. thanks very much.

HF, thanks re your answer "At the end of July they said it should be soon then mid August they stated a couple of things still need to be sorted out. " Is that from emails they sent you and if so how did you get an answer, was it from IR or Jason directly or someone else? I have sent them questions and haven't got any answer.

Has anyone managed to get any answers recently from Quadrise about MSC?

Pennylots, you say "In fact net income was lower in the half year than it was in the first quarter!". This is not right, net income in the first quarter was a loss of $30m. In the second quarter there was net income of $53.8m, so for the whole first half net income was $23.8m, which is clearly better than the first quarter result of a loss, and this is due to the income of the second quarter.

The delay in raising funding makes me think they are confident they will get the remaining MSC deals shortly, and can wait until then before raising money. This chimes with them saying they expect to finalise the agreements by end March. At least that's what I would like to think. The pessimistic approach would be that they have to wait because they think they won't be able to raise money before doing the MSC deals. But I tend more towards the first theory because if they were worried of running ouf of funding before the MSC deals I think they would just do a fundraise anyway even if it's at a deep discount and no doubt they could raise some money just to keep things going at least for a another few months, and it would be better to do it sooner than later so they wouldn't push it off this much unless they were confident. Time will tell.

Well, taking DU's numbers then at $20/barrel for producing reserves previously then under the new EPL which we should assume will continue thus bringing the total tax to 75% instead of 40% previously, then that means the company only retains 25% instead of 60% of the profits, thus $20 becomes 20*(25/60)=$8.33. But if that was for producing reserves and this is for oil which is not yet producing and won't be for at least 2-3 years and include the risk of the operators not proceeding with FID, political risks, technical risks then that surely has to go down to $6/barrel. Then you have to assume that only Buchan will have a licence before Labour get in and not the rest of GBA, so that means we are talking about 70mn barrels and not 100mn. So that gives a value of $6 * 70mn or $420mn. But JOG only have 20% of this so we are down to $84mn or £66mn. Divide that by 32mn shares and you get £2.07, so the present share price is not really far out. Yes there is also the cash that will be left in 2026 but you can also tweak some of the numbers I used to get a slightly different answer for the value of JOG's 20%, so I don't see a major discount to fair value at present.

To be honest the main thing is the willingness to pay. Once that is there they could find an alternative solution eg selling away rights to some of their natural resources, selling YPF, whatever, I'm sure Burford's lawyers will be happy to help them find ways of raising the money.

Https://www.bloomberg.com/news/articles/2023-12-26/argentina-s-milei-lifts-imports-controls-in-free-trade-push

"Argentina’s President Javier Milei is considering issuing a perpetual bond to pay a $16 billion lawsuit award to Burford Capital stemming from the nationalization of state-run energy company YPF.

Swinging between political jabs and policy intentions, Milei suggested that the government would issue the bond without a fixed maturity while charging Argentines the “Kicillof tax,” named after Buenos Aires Governor Axel Kicillof who was the economy minister when the YPF lawsuit started.

“Here we have a problem because we don’t have the money, we don’t have $16 billion, that’s the reality — but we have the willingness to pay,” he said in a TV interview with La Nacion Tuesday night. “What we’re going to do, it’s an idea we’re working on, is to create the Kicillof tax, meaning pay this fund with a perpetual bond.”

The Economy Ministry didn’t immediately provide details about Milei’s idea. Burford Capital didn’t respond to a request for comment after business hours."

By the way, I would be very happy to hear if there is a counter-argument to this in which case I would probably want to buy back in.

(continued)..

By the way I would also point out that the investment that they did make has the fallback option that if there would be some problem extracting the oil they could sell the FPSO and get most of their money back, whereas if someone is going to pay cash for JOG's share or the whole company then if there is a problem they don't have a way of recouping the money.

Sorry to disappoint investors here, but I think there is an obvious reason why the share price is so low compared to broker targets. This is because in their estimates of future cash flows they assume that the EPL ("windfall tax") is going to end in 2028 as it is officially meant to. But many suspect that in reality the government of the day (especially if it's Labour) will find some excuse to make it carry on. This is in a background where there won't be a need to incentivise further drilling and exctraction as Labour don't want any new drilling anyway, so they can just cynically bleed existing investors with a 75% tax. This is in contrast to what the historic tax was, 40%, and what brokers are assuming will be the case again from 2028, which accounts for almost all the cashflow. So if they are assuming that the after-tax cashflow is 60% of the pretax, and in reality it is only 25%, then the value is only (25/60)*their valuation, so for say 600p that becomes 250p, which is about where we are.

The other argument (which brokers and posters have implied) is that Serica and NEO are paying about £1bn (mainly for the FPSO but also for farmout cash for JOG and other costs) for an 80% share of the cashflow, and on this basis JOG's 20% share of the cashflow should be worth a quarter of this which is £250m, or about 780p a share. I was persuaded by this at first. But the problem with this is that Serica and NEO are not really paying £1bn, they are really paying more like £100m, because the other £900m is money that they would otherwise have to pay in taxes on their other income, and which they avoid paying by investing it in oil assets, per the governments's investment allowance of about 91%. So the question comes down to whether they or someone else could buy JOG's 20% carry (or the whole company) and set the cost against their oil taxes. This has been debated here, and I haven't managed to determine this for definite. However it seems clear they if Serco and NEO get allowances on all their costs including the capex for JOG's 20% then no new buyer of the same asset would be able to get that allowance again, as that would be absurd, as it would mean that companies could keep selling assets back and forward to each other and therby avoiding the EPL. If the deal could have been structured in a way that they don't get allowances for JOG's capex and JOG would thus be free to sell their 20% for full value (780p) no doubt this would have been done, or indeed why didn't JOG insist on them buying its 20% at the beginning for an extra 780p share? Seemingly the answer must be that they were only interested in investing a very small sum of their own money (£100m) for this asset given the unfriendly UK backdrop of taxes.

(continued)

It was only a few days ago that everyone was competing to be more negative than each other. When are we planning to switch back to negative mode?

Yes