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Hi IJWT, As an alternative to the derivative structure I suggested might be a way out for CA's problem, how about RB sets up a separate 'total return' or VC fund, with HUR as its sole asset ....and with investment parameters that allow this? The existing fund sells off to 'newfund' as and when it reaches regulatory/prudential limits. Investors in oldfund who like the HUR story can buy into newfund instead/as well... IIRC you're in financial services, forgive me I forget which areas, do you think something like this might have legs...? ATB

Hi MM, The timeline certainly makes sense, let's hope that the C-B can move that quickly. This is all driven by an IMF Board meeting to approve a debt deal 'at the end of May', where did that deadline come from, pls ? Is the IMF in turn driven by the Chinese in the Kenya negotiations you mention ? ATB

Hi IJWT, ..."Think RB is pee'd off off because a big bid today solves his ownership problem but incremental increases to EPS2 alwayshave to be sold into...." I agree. I've previously wondered whether there isn't scope here for some kind of derivative arrangement, whereby CA commits to sell down its stake in phases, at an ascending strike price, but retaining some kind of participation in subsequent upside, as the resources are proved up ? That way it could satisfy its regulatory (% exposure) constraints AND share in a later (hopefully higher) take-out. With the $$$ involved, I'm sure some bright spark could come up with something....If the counterparts were potential bidder oilco's, they might be interested as an initial low-commitment stakebuild. ATB

Hi Sidneysideline, I don't think there are any. MM may have more info on the debt rescheduling talks he said were taking place with the Chinese in E Africa. It's also curious to note the differences between the 2 x press releases, 19th and 20th. The first version has the IMF team meeting the President and cites the need for C-B to depart from "past policies and practices", the second has them meeting only the PM - and omits this implied criticism. In between, of course, there's the C-B own press release congratulating itself on having met the IMF terms.... I suppose everyone's trying to put their own spin on events. ATB

Hi Afric, Thanks for this. How to win friends and influence people , eh ? ..."The delay is largely due to the IMF�s call for the government to restructure its debt, which stood at $9.14 billion, or around 110 percent of GDP, by the end of July - a level the Fund says is unsustainable.... Congolese authorities are in talks with creditors, including trading houses Trafigura and Glencore from whom it borrowing $2 billion. The BULK of its external debt, however, is owed to CHINESE ENTITIES." Does anyone (tomshare ?) have a feel for recent Chinese precedent on debt forgiveness/debt rescheduling ? ATB

Hi Afric, ..."the mission welcomes the government�s PLAN to publish a governance STUDY that will guide FUTURE reforms, in the area of governance, transparency and public finances management. The mission commended the authorities for their PLAN to establish an independent anti-corruption body with full investigation powers and an asset declaration system for high-level officials, and reinforce oversight over large investment projects and state-owned enterprises, notably the public oil company...." This strikes me as all very Churchillian ('end of the beginning,' etc), it may be they're making encouraging noises whilst serious steps (eg MM's assertions re debt rescheduling China + IMF) are going on in parallel. If there were anything substantive ready to disclose, you've gotta believe it wouldn't be the head of the Africa desk giving the presentation today but la belle Lagarde herself (politician's photo-opp , etc). I'm not clear how relations stand between the Chinese and the IMF (tomshare ?) : they've set up their own Asian infrastructure bank to compete with the US/Western-dominated World Bank. Part of China Inc is interested in infrastructure lending (port, power, roads, telcomms etc), another part (the SOE's) would presumably like their loans repaid, without taking a haircut. The IMF doesn't itself have any skin in the game, other than its mentoring/good cop role....and that it can't be too prissy about things, otherwise it wouldn't do much business ;-< You've shared that you're here for the long term, if 10 is a successful deal for ZIOP (in whatever form), where would you say we are now ? My own feeling is somewehere between 6 and 7, rising to 8 if the forthcoming update has meat to it. ATB What do you think

Hi Afric, You write ..." there you are 5-6p and 50P all in one sentence! I rest my case...." disparaging munchbox, then immediately go on to write ..." I am quite relaxed and expect significant movement ONE WAY OR ANOTHER by the end of the year." Shome mishtake, shirley ? ATB

Hi tomshare, I agree with everything you say about the desirability of the IMF leveraging C-B's current parlous state to get the country some half-way decent governance and - with it - proper exploitation of the country's resources, at least some of the proceeds cascading down to the Congolese themselves. It would, for example, be great if the IMF could somehow link the C-B govt min 10% free carry on ZIOP into an infant sovereign wealth fund or have its ZIOP dividends (we can dream !) hypothecated to pay down national debt. I'm not sure how tough the IMF can be, unless they can get all interested parties on-side. I wouldn't be invested here if I didn't think there was a reasonable chance, at some point , of a deal that makes me money - possibly quite a lot - AND helps raise the living standards of the Congolese man (or woman) in the street. However (this for Afric) I think the expectation that this is 'simples' and is a slam dunk racing certainty that is 'imminent' is misleadingly optimistic. Incidentally, I've now seen that the GM of the SNPC HAS just been replaced, the new appointee previously ran the SNPC's accounts and finance division (where most of the SNPC-related corruption and dubious oiltrade deals come from). I would suggest that this isn't likely to be the improvement in governance that the IMF has in mind. ATB

Hi all, It would be remarkable by anyone's standards, let alone the glacial (or sloth-like ?) pace of progress in C-B if the Govt managed to privatise SNPC in 3 years, never mind 3 or 4 months. Here's what SNPC does : "La SNPC de part ses attributions, est un pillier �nerg�tique et �conomique de la R�publique du Congo. Elle contribue en grande partie � l'�conomie du pays, et au budget de l'�tat pour plus de 70%. La croissance de la SNPC est aussi celle du Congo, puisque ses revenus p�troliers sont r�investis sur l'ensemble du territoire, dans les infrastructures de base comme l'�lectricit�, l'eau ou encore les infrastructures routi�res." It's responsible for 70% of the state budget and its revenues (those that don't 'disappear') are invested in national infrastructure incl. water, electricity and roads. All areas , incidentally, where C-B is notably deficient. As far as I can see, there is TALK of privatising SNPC's interests in water and electricity (both loss-making) a la Thatcher, the Ministerial meeting that Tomshare refers to is about reassuring stakeholders (employees , pensioners etc) that they won't lose out on privatisation. The stakeholders are concerned about basic things like whether they'll get their arrears in salaries and pensions........ Nothing AFAICS has actually happened yet. Happy to be corrected if there's something concrete in the Chinese press, though, tomshare. Folks "We're not in Kansas, anymore" : in many parts of the world, not just Africa, to talk about an issue is considered to have dealt with it, including the inconvenient ' actual implementation' bit. We're moving in the right direction, but this isn't a speedboat you can flip on a whim, it's a supertanker that'll change direction veeeeeeery slowly. One reason for things likely taking time at SNPC is that the President's son and heir apparent /protector if/when the old man eventually retires, currently heads up SNPC (remember, 70% of national income) , he'd need a replacement sinecure - Defence / Internal Security, maybe ? ATB

Hi adoubleuk, Rather than outright sale, it's at least possible the buyers-in would offer HUR cash + an element of free carry, no ? This would give an attractive mix of partial monetisation and ongoing interest, maybe keeping Dr T's interests aligned through to FFD and beyond... The ongoing interest would allow HUR shareholders to continue to enjoy some of the upside over the next 20-30 years or so ! Just thinking of the grandkids, here.... ATB

Hi adoubleuk, Thanks for your reply ! I think I've (again ?) expressed myself poorly : the buyer's strike I refer to isn't that no-one will buy HUR's production...it's that potential buyers will agree NOT to buy the COMPANY ... or only at a derisory price. I recently discvered the word ' monopsony' : it's like a monopoly, except by the buyer, not the seller. If the buyers all gang up on HUR, we won't see full value. Unless we can show them that we can do without them, hence dspp's suggestion that HUR position itself for a possible IFD....which in turn might inform the sequencing of well drilling. ATB

Hi IJWT, Re the GWA/GLA split structure, do you not see this as a marketing/negotiating tactic ? In business, you often put things in to be able to set them aside later, as part of a wrap-up or trade-off. FFD economics will surely save in the US$ billions if the whole resource is exploited centrally. ATB

Hi Ricfle, The buyer's strike issue is something that dspp has also addressed - people should really go over to lemonfool and read what he posts, then judge for themselves. He posits various scenarios (several oilco's @20% each, HUR with 20% free carry; 2 x groups of the 8-9 serious oilco's - given GLA/GWA potential scale; the possible complications of major Chinese involvement in view of this 'strategic asset' etc etc.) and clearly has experience of game theory and top-level negotiations. He recognises that , if HUR were a 'one trick pony' things would be a lot simpler, we have an 'embarras de richesses' which makes the various permutations /possibilities far more complicated - and seriously challenging, to make sure that our BoD don't sell themselves (or us) short. I think HUR 'get ' this....and the search for a new Chair and beefed-up Board is not mere lip service to governance issues , but tacit recognition that they need some heavyweight extra skillsets. ATB

Hi adoubleuk, Totally agree the conservatory analogy, AIUI, dspp's point is that there's a lot of value addition to capture from early exploration/appraisal wells : ..."From a valuation perspective those adjacent structures need properly appraising (Lincoln), or 'finding' (Warwick) so the wells have to happen in any case. It then becomes a decision as to whether to do exploration EWTs or to plan for production tie-backs (or both). There is so little additional spend required to properly prove up Lincoln & Warwick that I can't see it not happening, providing Lancaster is producing sufficient cash. (But northern Halifax is too far away, so that will have to be an EWT)...." HTH clarify where (I think) dspp's been coming from. The optimist sees the glass half full, the pessimist sees the glass half empty.The engineer thinks : "maybe we should change the size of the glass ?" ATB

Hi adoubleuk, dspp's reference to a larger FPSO was in the context of HUR proceeding with an Interim Field Development (or , at least, showing that we could - you're the poker player) in the event of a buyer's strike /concerted low-ball offer. ATB

Hi all, Since I appear inadvertently to have contributed to 'dissension in the ranks', by bringing over the views of a poster on another bulletin board , I thought it wa stime for a change of topic : our next Chairman. I note from an RNS today that a certain Mr Aidan Heavey, retires as Chair and founder CEO of Tullow , effective July 20. Does the team think he'd be a good fit for HUR at this juncture ? Y/N ? and if so, why ? ATB

Hi adoubleuk, You're the oilie, not me, so I'm happy for you to check with Godalming what the good Dr had in mind , when he made that statement. To me, as a layman, he seems to be suggesting that appraisal wells CAN be tied back to AM, yourobservations re logistical issues notwithstanding. I recognise, as a former banker, how profession-specific lingo can be interpreted in ways that don't always make sense to the outsider ! 'Irredeemable' being a recent case in point......;-< ATB

Hi adoubleuk, Reluctant as I am to get in between some flying handbags, I think you're wrong to suggest that dspp's post (suggesting stepout appraisal wells to Warwick and Lincoln, more than 6 KM from FPSO) conflicted with Dr T audio or the Dec results presentation. If you go, as I suggested at the time, to p 15, point (c), it clearly states : " Well placement considerations � Maximum step -out from Aoka Mizu is ~6km (based on current understanding of existing flowline solution) � Wells intended for exploration or appraisal, rather than long -term production testing, could be drilled beyond this range Hoping to turn heat into light.... ATB

Hi beardozer, When ZIOC s/p reached � 2 or thereabouts, iron ore was about USD 150 per tonne , vs abt USD 100 (high grade) now...and China still had lots of its growth /steel consumption to come. Its economy has moved up the curve from industry to services. There'll be demand for quality ore, but maybe not as pressing as back then. Plus, credit conditions are likely tighter now and there's less 'animal spirits' about, in GLEN's case as a result of their 'near death experience. Hi munchbox, Do you see 50p on the basis just of RNS contents (= progress update) or as likely final takeout price ? I'd be surprised if we got to 50p on an update.....and disappointed if that's all that we'd be offered as takeout. ATB

Hi adoubleuk / Joe Soap et al, On listening to Dr T, he says that the 6 KM constraint from AM applies to production wells, not appraisal wells. Seealso presentation p 15 (c). Assuming the appraisal wells show what we all hope, and if there's a monopsony or buyer's strike and we don't get a satisfactory nibble, Dr T / HUR would then have the flexibility of doing an IFD, bringing in a larger capacity FPSO (100Kbopd) to replace the AM, moving the AM further up Lancaster..... dspp makes the point, obvious but no harm restating, that the later we sell/the more we can prove up, the higher (other things being equal) the final exit price... ATB