RE: Rhum14 Oct 2020 07:49
Dexter
A few previous posts regards Rhum & the licence from a knowledgeable poster - Almsivi
R3 Implications. 10 Sep '20
So I mentioned before about R3 production being a profound event in the BKR deal but I didn't really illustrate it in a way that explains its significance, so here goes.
If R3 becomes operational this year or next, it would represent an increase in production equivalent to roughly double what SQZ's existing (18%) share of Erskine Produces at the moment (approx 7500 boepd at 60% ownership of Rhum through 2020 & 2021)
In 2022, when Serica takes ownership of 100% of BP's share of Rhum the increase in production relative to today would be closer to 22,500 boepd, which is about 6 x our share of Erskine or put another way, 100% of the total production of the Enquest Magnus platform.
i.e. In 2022 - you are getting the keys to a mid-range producer with no additional decommissioning costs or liabilities and you've already effectively paid for it. This how profound it is and none of it has been factored into the price of the company today.
I'll be holding until at least the September of 2022 unless someone makes a bid, in which case all bet are off.
RE: Sell off. 09 Sep 2020 10:06
Personally I think you're giving the market far too much credit. When R3 comes online, it won't be immediately obvious from an RNS - but it will result in a 50% increase in base production from Rhum. At todays gas price (a shade under 30p) That represents a difference of making £47m a year (gross) from our share of Rhum alone, to making closer to £70m
In terms of patience, you'll need to wait until April to see any of that on the balance sheet but when the market does see it, it will react. It's unthinkable that the market has priced this in already and as I already said I think you give them too much credit.
The profundity of R3 coming online cannot be overstated - once Serica owns 100% of BP's stake in Rhum it's worth an extra £40m a year (at todays spot rate) a year - and Serica are only paying 25% of the total cost to make it happen (IOC 50% and BP 25%) This deal keeps on surprising me with how much value it brings and it's baffling why people seem to be oblivious to it.
RE: Licences. 03 Sep 2020 11:30
Serica will seek OFAC licensing every year (or equivalent) as a matter of course and provided nothing changes with how IOC's share of Rhum is administered (By the UK Govt), we can assume the licence will always be forthcoming.
With regard to US Equipment (and services for that matter) - all of the topsides have been replaced with non-US equivalents so it's only the subsea equipment installed prior to the UN/EU Sanctions that really require a US Treasury waiver.
The fact the existing OFAC license was granted for 18 months is not a coincidence when you consider the speculative (as it was at the time) timetable of the R3 intervention.
Sign In
Follow the stocks
