Member Info for Fernan10

what happened here today has nothing to do with cash flows.

A respectable oil company took an impairment due in part to a production issue that was never informed by the operator.

If there was not such a partner, shareholders probably would have never been informed of that.

what about those projects operated by ENQ where there are no partners obligated to timely informed the market?

Fernan

1. why have you never told anything to the market about the higher water cut at Kraken (only talking about "a small number of system outages and equipment repairs" at the FPSO)?

2. are there any other significant production problems in Kraken, Magnus, or other fields operated by ENQ that you haven´t informed the market yet?

3. why should the market believe in anything you say from now on?

Regards

Fernan

Good morning. A few days ago, I sent the following email to Gil:

-------------------------

Dear Mr Holzman:

continuing with my previous email, I see from latest presentations that the cost of the first well to be drilled in Guyana will be around US$ 7,5 million (net to ECO).

This number will be substantially higher than previous estimates. Accordingly, wih the current amount of cash in hand, ECO will be able to drill only 2 or 3 wells in Guyana.

I think it would be interesting for ECO to take advantage of the amazing rise in the share price in recent weeks, in order to raise some money, to increase the funding available for drilling in Guyana.

At today´s price, ECO could raise for example US$ 22 million (the amount necessary to drill 3 additional wells) with a dilution of about 15%-20%

I think that, in such a case, the negative effect of current shareholders´dilution will be more than compensated by the fact that ECO will have the funds required to drill 5-6 wells. Given the characteristics of the Orinduik block, and its proximity to Exxon´s discoveries, the chances for ECO to make a game changer discovery in 5-6 wells will be close to 100%.

Under the current situation, ECO will be highly exposed to the results of the first 2 wells. Any negative outcome, and the share price will crater. Having additional funds available for drilling more wells will substantially reduce the risks associated with the upcoming exploration campaign

_____________________________

I would like to hear your comments on the subject

regards

Fernan

From PMO´s annual results presentation

Zama (page 21 of the presentation):

CAPEX (gross): 1,8 billion
Resource (gross): 600 mmbls
Peak production (gross): 175.000 boepd

This compares favorably with Sea Lion:

CAPEX to first oil: 1,5 billion
Resource (phase I): 220 mmbls
Peak production: 85.000 bopd

The initial investment, in US$ per barrel, will be substantially lower for Zama

Other advantages of Zama over Sea Lion (from PMO´s point of view):

- no carry obligation
- lower equity interest and then, lower net CAPEX
- lower political risk

Advantages of Sea Lion:

- far better tax rules. Zama has a production sharing contract scheme, with the government participating in the profits generated by the project through royalty, Profit oil and income tax

- Sea Lion is much more advanced in terms of pre sanction work

On the other side, the new left-sided mexican government is pressuring foreign oil companies to quickly develop their discoveries, in order not to be deprived of them. This could put Zama ahead of Sea Lion in the FID pipeline.

So, in order to decide which project will be approved first, each one has its advantages and disadvantages, from PMO´s side.

Comments?

Fernan

Thanks Nigoil.

Very interesting info.

Regards

Fernan

Hi Nigol. Thanks for your answer.

So, by the time PMO submit their formal application for ECA funding (Q2 1019), Portland Advisers will have been working as ECA financing consultants for around 2 years (since May 2017).

Is it a normal timeframe? any experts on this issue?

Thanks

Fernan

Good afternoon.

Anyone here knows if they are still working as consultants for the ECA financing of Sea Lion?

They were hired almost 2 years ago.

They have an oustanding track record of being involved with the financing of big energy projects (Yamal LNG, etc)

Regards

Fernan

Good afternoon.

I have a question about the viability of ECA funding for this particular project.

Give that Export Credit Agencies are normally government-backed entities, is there any risk of ECA funding not being available for Sea Lion, due to the fact that the project is in a jurisdiction that have been and is already contested by another country?

I understand that Argentina is still claiming its jurisdiction over the islands before the United Nations. how could it influence the involvement of other governments in the funding for the project?

And the same reasoning can be applied to bank finance.

Thanks in advance

Fernan

Page 8 of the presentation has a map with the location of the 12 wells to be drilled by Seapulse in 2019-2020

Regards

Fernan

Good afternoon.

This presentation could be interesting for you

Regards

Fernan

http://event.congresso.no/uploads/account/e/18/60e/e1860efbde903409e91c69f7a8f9e577.pdf

Lsetown:

you write:

"Surely Rockhopper could rightly claim any unused carry by offsetting other costs like those for the vendor finance or export credit etc.?"

That´s precisely my point.

The amount of the carry obligation by PMO as stated in the FO agreement is being reduced through an increase amount of project debt. If this situation keeps the same, RKH will have a 40% equity interest in a project with a higher financial leverage than originally envisaged at the time of the Farm out agreement.

Theoretically, in order to restablish the original situation, RKH could claim to PMO the difference between the amount of the carry according to the Farm Out agreement (US$ 337 million) and the actual carry (US$ 160 million under current conditions).

Regards

Fernan

Good afternoon.

I sent the following email to company:

_____________________

Dear Sirs:

My name is Fernan, and I have a question being a shareholder of Rockhopper Exploration, as follows:

As it stands, the equity element of Sea Lion will be around US$ 400 million. Due to the reason that the project will be financed 75% with project debt, PMO will be partially liberated of their obligation to carry RKH for US$ 337 million in phase 1 of the project.

According to the modified Farm out agreement, "Rockhopper to retain $337 million Development Carry for the Phase 1a".

In the current situation, PMO will carry RKH only for US$ 160 million (this amount equals to RKH´s 40% of equity in the project)

So, I understand that RKH is being financially affected (in a negative way) by the fact that, through an increased financing leverage, PMO is reducing its carry obligation from US$ 337 million to US$ 160 million

In that situation, RKH has a legitimate claim to ask PMO to somewhat compensate RKH for this. I think that one way of compensation could be through carrying RKH´s pre sanction costs.

I would like to hear your comments on the subject

Waiting for your response

Regards

Fernan

In point one, I should say: "in case of a positive result from Ombrina Mare"

Hi Grey Squirrel.

2 issues that could enhance liquidity before year end.

1. In case of a possible result from Ombrina Mare, I´m sure that, given the credit cualification of the counterparty (the government of Italy) RKH could arrange some sort of non-recourse funding against the future payment of the arbitration award.

2. As it stands, the equity element of Sea Lion will be around US$ 400 million. Due to the reason that the project will be financed 75% with project debt, PMO will be partially liberated of their obligation to carry RKH for US$ 337 million in phase 1 of the project.
According to the modified Farm out agreement, "Rockhopper to retain $337 million Development Carry for the Phase 1a".
In the current situation, PMO will carry RKH only for US$ 160 million (this amount equals to RKH´s 40% of equity in the project)
So, I understand that RKH is being financially affected (in a negative way) by the fact that, through an increased financing leverage, PMO is reducing its carry obligation from US$ 337 million to US$ 160 million
In that situation, RKH has a legitimate claim to ask PMO to somewhat compensate RKH for this. I think that one way of compensation could be through carrying RKH´s pre sanction costs.

Comments?

Regards

Fernan

Good morning sirs.

For 2019, at average Brent for the year: US$ 63/b, and according to my calculations, I expect that PMO will generate EBITDAX of US$ 835 million (US$ 832 million in 2018)

Net debt to EBITDA ratio at the end of 2019: 3.0 (see PMO press release on Feb 3, 2017 on the terms of the debt refinancing)

Maximum amount of debt allowed by the end of 2019 under the Net debt to EBITDA ratio: US$ 835 million X 3.0: US$ 2.505 million

Calculation of Net debt projected by the end of 2019:

Net debt at the end of 2018: US$ 2.300 million
Projected net debt reduction for 2019 (see today´s news release): US$ 250-350 million

So, according to PMO internal projections, net debt at the end of 2019 will be in the range of US$ 1.950-2.050 million

Debt headroom to finance PMO equity position in Sea Lion:

Maximum amount of debt allowed under the Net debt to EBITDA ratio: US$ 2.500 million
Net debt projected by PMO at the end of 2019: 1.950-2.050 million
Debt headroom to be available for the financing of Sea Lion: US$ 450-550 million
That amount will be enough to fund the equity element of the project under current terms of the proposed financing structure.

Comments?

Regards

Fernan

Good afternoon.

I understand that the value of US$ 8/b for oil in the ground should be reasonable after a few appraisal wells have been drilled to evaluate a discovery.

Pre appraislal drilling, I would take a value substantially lower than that.

Regards

Fernan

Manyana/Itsriskythat:

thanks both for you kind responses.

After performing the site suvey in Barryroe, is it necessary to apply for another permit for drilling? is it possible to have additional delays there?

Thanks in advance

Fernan

Hi Manyana. I keep reading your posts and I know that you are a seasoned investor here, one who understands the diverse issues surrounding the future development of Barryroe.

I read the long narrative of the hardships endured by the developers of the Corrib gas field over the years, including the actions taken by local communities and movements like "Shell to sea".

Living in Sudamerica, it´s difficult for me to ascertain to what extent the same kind of issues could prevent the development of Barryroe in the future.

In the case of Corrib, some of the problems came from the fact that the high pressure gas pipeline connecting the field with the gas processing plant was planned to run very close to houses, impliying a high risk for local residents. The location of the gas processing plant was the object of similar claims.

is there a chance for similar concerns to be arisen here, given the planned infraestructure for the project?

I would like to hear your comments on the subject.

Thanks in advance

Regards

Fernan

Hi Bronxville.

Good news.

Except from the application:

"This application was posted on the Department's website on 27 February 2019 and any submission received by close of business on 1 April 2019 will be considered by the Minister."

The survey will include all four planned vertical drillng locations, according to the documents attached. So, no need for another application if this one is approved.

Regards

Fernan

Hi Citizen.

Thanks for your comments.

In relation to the income tax to be paid to the italian government, I understand the following:

The arbitration panel will make the award to RKH on the basis of the NPV of the projected after-tax profits to be generated by the project (I assumed the NPV of this future after-tax profits at around US$ 8/b)

After receiving the award, RKH will have to submit their income tax filing to the italian government. In that filing, RKH will have to calculate the taxable income, as the net amount of the award and the costs already incurred in the project. This taxable income will be subject to the italian income tax at the prevailing rates.

So, it´s not a matter of a "double taxation". First, the amount of the award will be reduced in the NPV of future income taxes on projected operating profits.

Next, the income tax after receiving the award will be paid taking into account the difference between the NPV of these after-tax future profits and past costs paid by RKH or its predeccesor MOG.

So, those 2 "income taxes" are been applied on 2 different kind of taxable profits, and are not contradictory.

I hope this clarifies the issue. I know it´s a little complicated.

That´s my oppinion

Fernan