Member Info for Fernan10

Any link to the interview?

Thanks

Fernan

Good morning.

In relation to this guarantee fee to be paid by RKH to PMO, RKH´s news release on Jan 13, 2016 stated the following:

"...the joint venture partners have further progressed the financial arrangements between them as it relates to the provision of any guarantees required to allow FID to take place.
· Premier to provide parent company guarantees as required by contractors on behalf of Rockhopper prior to and at the point of sanction to allow FID to take place. Rockhopper to pay Premier a Guarantee Fee calculated on basis of a 50:50 share of Phase 1a NPV at project sanction payable post first oil via quarterly payments over the first five years of production.
· Based on the 85,000 bbls per day peak production , Rockhopper's share of projected quarterly gross revenue at oil prices of $65/bbl, $75/bbl and $85/bbl would be approximately $200 million, $230 million and $260 million respectively The quarterly Guarantee Fee is currently set at $15.9 million and was calculated based on the project at November 2014. The parties may agree to adjust the Guarantee Fee should it result in a split of project NPV that is different to 50:50 at project sanction. The agreement of the final Guarantee Fee amount will be required prior to
project sanction"

I think that, given the current amount of vendor financing to be provided by contractors (aprox. US$ 400 million) a quarterly payment of US$ 15,9 million during the first five years of production seems a ridiculously high cost for RKH.

It certainly deserves some clarification from RKS´s management

Regards

Fernan

Argos got their exploration license extended until May 2021.

Taking that into account, I dodn´t expect any issue for PMO/RKH to get the Sea Lion license extended next year, should the UKEF financing/FID not being achieved by that time. Especially taking into account all the work that the licensees have performed so far (project development plan, EIA etc)

Regards

Fernan

Good evening sirs.
Does anyone here know the exact spudding date for Carapa, and the estimated date to total depth? is the operator (Repsol) planning to perform some tests?

Regards

Fernan

I´m not saying that the argentinian government will seize the assets of any UK company doing business in Argentina
What I said is that I understand that the argentinian law imposes economic sanctions on companies involved in the development of hydrocarbon projects in the Falklands. So, if UKEF gets involved in both projects (Vaca Muerta and Sea Lion) it will be at risk of suffering an economic sanction in Argentina.

Regards

Fernan

What I tried to say is that it could present some difficulties for UKEF if it gets involved in the financing of both Vaca Muerta and Sea Lion.

Regards

Fernan

Hi Auson.
You wrote:

"Some 'interesting' ideas there, do you know who UKEF is ?
Also UKEF does not lend to Argentinian companies its job is to support UK exports."

I know that UKEF goal is to support UK exports. But one way of doing that is by providing medium/long term loans to foreign buyers of UK goods/services. See page 49 of UKEF`s last annual report.

So, my hipothetical case was the following:
1. First, UKEF makes a direct loan to an argentinian oil company developing the Vaca Muerta oil field, in order to support the export of UK goods/services to Argentina
2. The argentinian oil company is obliged to repay the loan directly to UKEF, together with applicable interest
3. After providing funding for Vaca Muerta, UKEF gets involved in Sea Lion
4. An argentinian judge imposes an economic sanction (i.e. a fine) on UKEF, due to their participation in Sea Lion
5. The argentinian judge asks the argentinian oil company to withdraw their payments fo UKEF, in order to fullfill the payment of the fine

This is the case that I try to present

Regards

Fernan

Hi Auson:

I´m saying the following: suppose UKEF make a loan to an oil company resident in Argentina.
And, then, UKEF gets involed in Sea Lion (through a direct loan, a guarantee or a political risk insurance).

In that case, an argentinian judge could impose an economic sanction (e.g. a fine) in UKEF, and then could ask the argentinian oil company (debtor of UKEF) to withdraw the payment of interest or principal to UKEF, in order to satisfy the payment of the fine.

Do you think that, after providing funding for Vaca Muerta, will UKEF be willing to accept that risk by supporting Sea Lion?

Regards

Fernan

An interesting article in The Guardian, talking about the chance of UKEF to participate in the development of the Vaca Muerta oil field in Argentina.

https://www.theguardian.com/environment/2019/oct/22/uk-to-use-1bn-meant-for-green-energy-to-support-fracking-in-argentina

The issue that I see here in relation to the potential involvement of UKEF in the financing of Sea Lion is the following: I understand that Argentina has laws that impose economic and criminal charges to companies and individuals participating in the financing and/or development of Sea Lion. For that reason, any oil company with investments in Argentina will refrain from being involved in Sea Lion.

Applying the same logic, if UKEF provides the funding for a development of an oil field in Argentina, could it prevent it from getting involved in Sea Lion?

I would like to know your views on the subject

Regards

Fernan

In my oppinion, the value of oil (already discovered) still in the ground will be greatly influenced by the breakeven price for future production (the higher the break even price, the lower the value of the oil in the ground).
In the case of Guyana discoveries, Hess has estimated that the break even price for future production is US$ 35/b
See here:
https://oilnow.gy/featured/8-wells-at-liza-will-produce-more-oil-than-delaware-basins-1400-hess/
Then, assuming a long term oil price of around US$ 60/b, a potential buyer of Eco will earn US$ 25/b above the break even price.
How much will this potential buyer be willing to pay for these barrels? A price in the range of US$ 5-8/b seems reasonable to me

Regards

Fernan

https://www.reuters.com/article/us-mexico-oil-zama-exclusive/exclusive-mexicos-pemex-seeks-control-of-u-s-oil-firms-billion-barrel-find-idUSKBN1WF11Z

https://www.reuters.com/article/us-mexico-oil-zama-exclusive/exclusive-mexicos-pemex-seeks-control-of-u-s-oil-firms-billion-barrel-find-idUSKBN1WF11Z

Hi Citizen. I understand that Sirius (SXX) asked the Government for a different type of guarantee, in this case coming from the Infrastructure and Projects Authority ("IPA"). Totally unrelated to ECA financing.

Here are some excerpts from SXX´s September 2019 financing update:

Government support

"Due to the lack of depth in the commercial bank project finance market the Company developed its original stage 2 financing plan for its North Yorkshire Polyhalite Project (the "Project") based on the anticipated participation of the Infrastructure and Projects Authority ("IPA") which is part of HM Treasury. Discussions with the IPA were paused in early 2019 to allow the Company to pursue the RCF based financing plan as per the RCF Commitment."

"Following the postponement of the proposed senior secure notes offering in August, the Company re-engaged with the UK Government. The Company had requested Government provide a commitment to enable the issue of up to US$1bn of guaranteed bonds in the event the Company was unable to issue unguaranteed bonds to refinance the RCF (after approximately at least a further 18 months of development activity and up to an additional US$2bn being invested in the Project). The Government has reviewed the case for the provision of the support requested to facilitate the financing of the Project and has decided not to provide the support requested. The Company believed this commitment would have enabled the Company's financing to be delivered as planned."

Regards

Fernan

is RKH obliged to repay the amount of PMO´s development carry, out of a share of future oil production assigned to RKH?

Regards

Fernan

Good morning.
I expect management to provide additional details/explanation in relation to the funds to be received from APEC
Living in South America, there is no way for me to assist the meeting.
If there is someone here who will do, please comment.

Thanks

Fernan

Even if the money finally arrives this week, it´s necessary for PVR´s management to clearly explain the reasons for the continous delays in the money transfer process.
what can be expected about potential delays in future payments?
was it a one-off issue (e.g. the chinese bureocracy needs to fully understand and review the deal before clearing the first payment) and this is not going to happen in the future?
or will we be obligated to pass through the same "chinese torture" with each future money transfer from China?

Regards

Fernan

Cheap is the share price that you will see after an eventual negative drilling result.

Mogger:
thanks for the info as usual.
what about Standard Chattered? are they still coordinating the commercial banks sindicate?

Regards

Fernan

any thoughts about the risk of ECO being taken over on the cheap after an eventual negative outcome of the first (and second) wells?

Regards

Fernan

1. The US$ 10 million have already been debited from APEC funders' HSBC account
2 before that, the money was previously credited to APEC funder's account, without any opposition from HSBC. Definitely it is not dirt money
3 II investors have not sold any single share here or on LOGP

regards

Fernan